Google has responded to a U.S. congressman's series of questions about its privacy practices, with the company defending its use of consumer data.
Representative Joe Barton, a Texas Republican, sent a letter to Google Chairman and CEO Eric Schmidt Dec. 12, after privacy groups raised questions about the implications of Google's $3.1 billion acquisition of online ad server DoubleClick.
During an earlier meeting with Schmidt, Barton had "voiced concern regarding the potential consumer protection and privacy implications of the merger," Barton said in his letter. "I believe Google's participation in our research into and consideration of the consumer protection implications of a merger of any online search engine and any behavioral or targeted advertising firms is vital to crafting sound national policy."
In response to Barton's questions about the privacy implications of the merger, Google repeated its calls for Congress to pass a national privacy law that would create a "uniform framework for privacy."
"Concerns about online privacy cannot be solved by one company alone," said the Google letter, by Alan Davidson, the company's head of U.S. public policy. "Moreover, both technologies and best practices for protecting privacy are changing rapidly. We therefore encourage you and your staff to ask these questions of other providers of online services."
Barton, ranking minority member of the House Energy and Commerce Committee, had asked Google to respond to his letter before Dec. 18, about when the U.S. Federal Trade Commission was expected to complete its examination of the antitrust implications of the merger. Google's response was dated Friday, one day after the FTC announced it would not block the DoubleClick acquisition. Google hosted Barton's staff at its headquarters Wednesday and Thursday, however.
The FTC approval is the last U.S. hurdle for the merger; the European Union is still reviewing it.
Barton's letter asked several questions about Google's privacy practices, including how long Google retains search queries, e-mail drafted on Google's Gmail service and Web histories. Barton also asked why Google needed to retain data.
The IP (Internet Protocol) addresses associated with search queries will be partially deleted after 18 months, as Google previously has announced, the letter said. In other services, such as Gmail and Google Web History, the privacy preferences are customized by individual users, the letter said.
Google retains data about searches as a way to improve its search algorithms and to improve services such as the spell checking feature on Google search, the letter said. The company also uses the data to fight click fraud and other malicious efforts, the letter said.
Barton also asked if Google plans to merge its consumer data with DoubleClick's after the merger. He asked what was the benefit of the merger if Google did not plan to merge data.
"We are new to the third-party display ad serving business, so we have not yet decided whether or how we would merge DoubleClick and Google data," Davidson's letter said.
The merger would create "numerous efficiencies" not related to DoubleClick's data, Davidson added. "Acquiring DoubleClick's expertise in display ad serving will assist Google in its efforts to design an integrated interface for advertisers to manage their texts and display advertising campaigns," the letter said. "In addition, the acquisition will allow Google to provide advertisers with better metrics for the display ads the place in our advertising network."
Wednesday, December 26, 2007
Wikia search project to launch Jan. 7, Wales says
Wikipedia founder Jimmy Wales has set Jan. 7 as the launch date for an open-source search project that eventually hopes to challenge Google and other established players.
The Wikia Search project has assembled the basic technologies for a search engine, including a search application, search algorithm and Web crawler. The project will allow technology enthusiasts to help filter sites and rank search results, using a community model akin to that of Wikipedia.
The idea is to challenge the established players by offering a search service that is more transparent to end users, meaning they can see how search results are arrived at. Wales has described Yahoo and Google as opaque services that don't explain how results are arrived at.
Wales has started to invite a handful of people to test an early version of the search platform, which will be publicly launched on Jan. 7, he wrote in an email to the Wikia mailing list Monday.
The search tool will take time to evolve, and the initial service won't match the capabilities of the leading search engines. Contributors will have to develop the search platform over time, in a similar way that Wikipedia took time to get enough entries to be useful.
The search project is part of Wales' for-profit company, Wikia Inc., which offers a software platform that anyone can use to build wikis. In a similar way, the Wikia Project will allow other people to build their own search engines.
Wikia Inc. was started in 2004 and has received investment money from Amazon.com and Bessemer Venture Partners.
The Wikia Search project has assembled the basic technologies for a search engine, including a search application, search algorithm and Web crawler. The project will allow technology enthusiasts to help filter sites and rank search results, using a community model akin to that of Wikipedia.
The idea is to challenge the established players by offering a search service that is more transparent to end users, meaning they can see how search results are arrived at. Wales has described Yahoo and Google as opaque services that don't explain how results are arrived at.
Wales has started to invite a handful of people to test an early version of the search platform, which will be publicly launched on Jan. 7, he wrote in an email to the Wikia mailing list Monday.
The search tool will take time to evolve, and the initial service won't match the capabilities of the leading search engines. Contributors will have to develop the search platform over time, in a similar way that Wikipedia took time to get enough entries to be useful.
The search project is part of Wales' for-profit company, Wikia Inc., which offers a software platform that anyone can use to build wikis. In a similar way, the Wikia Project will allow other people to build their own search engines.
Wikia Inc. was started in 2004 and has received investment money from Amazon.com and Bessemer Venture Partners.
Cisco green plan looks beyond routers
Cisco Systems wants to turn the enterprise data network into an electricity meter.
Using open standards, the company wants to get server and storage vendors to collect and share information about their equipment and send it to Cisco routers and switches. The data could include power consumption, operating temperature and more. It's becoming a critical job, and because the network touches all IT resources across the enterprise, data collection should happen there, according to Paul Marcoux, vice president of green engineering.
Marcoux joined Cisco from American Power Conversion only about six weeks ago, after Cisco created the position to overlook energy issues across all parts of the company. Networking gear itself makes up a much smaller portion of IT power consumption than do servers or storage, but Cisco plans to go beyond just making its own products more efficient.
Power is a growing issue in data centers as the cost of energy rises and concerns about global climate change increase. Being able to collect and analyze information about power usage is a big part of the battle and becoming more crucial in the age of virtualization, according to Marcoux. Distributing storage and processing cycles without regard for power issues is not just inefficient, it's dangerous, he said.
If virtualization software looks at a process that requires more computing power or storage space, then enlists servers or storage devices that are near to overheating or running out of power, it could send a rack of servers over the edge and shut it down, Marcoux said. For that reason, the virtualization system needs to know the power status of all the resources it may call upon, he said.
By the same token, consolidated data centers typically serve many departments of an enterprise and consume a lot of power, but those groups generally don't have to pay for their part of the power. In fact, the electricity bill often bypasses even the IT department, going to building management instead, Marcoux said. Collecting data about the power consumed by each device, and eventually by individual transactions, would allow enterprises to bill each department for the power it uses, he said.
Software on routers and switches would collect the information and then take actions or forward it on to separate building management, energy management or virtualization control systems, Marcoux said. Given the large amount of energy data to be processed, Cisco may introduce daughtercards for its platforms to provide extra computing power, he said. He hopes the technology will be in place and collecting information in enterprises within three years.
Because data centers contain gear from so many vendors, open standards are the only way to make such a system work, according to Cisco. Fortunately, there already are several available standards, Marcoux said. Having standards already in place will help speed up adoption, Marcoux said.
"We're not trying to reinvent the wheel, we're just trying now to utilize the wheel," Marcoux said.
Cisco's proposal would represent a whole new role for networks beyond communications, said Burton Group analyst Dave Passmore. Server vendors might go along with the plan, but Cisco can't count on smooth sailing, he said. Centralized power regulation would play a role in overall management of the data center, an area where Cisco is attempting to make inroads with other initiatives as well.
"Who controls virtualization in the data center is going to be the new battleground," Passmore said.
Using open standards, the company wants to get server and storage vendors to collect and share information about their equipment and send it to Cisco routers and switches. The data could include power consumption, operating temperature and more. It's becoming a critical job, and because the network touches all IT resources across the enterprise, data collection should happen there, according to Paul Marcoux, vice president of green engineering.
Marcoux joined Cisco from American Power Conversion only about six weeks ago, after Cisco created the position to overlook energy issues across all parts of the company. Networking gear itself makes up a much smaller portion of IT power consumption than do servers or storage, but Cisco plans to go beyond just making its own products more efficient.
Power is a growing issue in data centers as the cost of energy rises and concerns about global climate change increase. Being able to collect and analyze information about power usage is a big part of the battle and becoming more crucial in the age of virtualization, according to Marcoux. Distributing storage and processing cycles without regard for power issues is not just inefficient, it's dangerous, he said.
If virtualization software looks at a process that requires more computing power or storage space, then enlists servers or storage devices that are near to overheating or running out of power, it could send a rack of servers over the edge and shut it down, Marcoux said. For that reason, the virtualization system needs to know the power status of all the resources it may call upon, he said.
By the same token, consolidated data centers typically serve many departments of an enterprise and consume a lot of power, but those groups generally don't have to pay for their part of the power. In fact, the electricity bill often bypasses even the IT department, going to building management instead, Marcoux said. Collecting data about the power consumed by each device, and eventually by individual transactions, would allow enterprises to bill each department for the power it uses, he said.
Software on routers and switches would collect the information and then take actions or forward it on to separate building management, energy management or virtualization control systems, Marcoux said. Given the large amount of energy data to be processed, Cisco may introduce daughtercards for its platforms to provide extra computing power, he said. He hopes the technology will be in place and collecting information in enterprises within three years.
Because data centers contain gear from so many vendors, open standards are the only way to make such a system work, according to Cisco. Fortunately, there already are several available standards, Marcoux said. Having standards already in place will help speed up adoption, Marcoux said.
"We're not trying to reinvent the wheel, we're just trying now to utilize the wheel," Marcoux said.
Cisco's proposal would represent a whole new role for networks beyond communications, said Burton Group analyst Dave Passmore. Server vendors might go along with the plan, but Cisco can't count on smooth sailing, he said. Centralized power regulation would play a role in overall management of the data center, an area where Cisco is attempting to make inroads with other initiatives as well.
"Who controls virtualization in the data center is going to be the new battleground," Passmore said.
Sunday, December 23, 2007
Google's DoubleClick deal brings greater focus on privacy
Nearly lost in the news about the U.S. Federal Trade Commission's approval on Thursday of Google's acquisition of DoubleClick was another action by the agency: the publication of a proposed set of privacy principles governing online behavioral advertising.
The release of the privacy principles is an important and welcome step, said Peter Swire, a senior fellow at the Center for American Progress, a liberal think tank, and a law professor at Ohio State University. Although some privacy groups blasted the FTC for approving Google's DoubleClick deal, the acquisition has helped place focus on the entire online advertising industry's privacy practices, Swire said.
"It's good that the FTC is shining a spotlight on this industry," Swire said Friday. "Online advertising is in its second boom. They're trying lots of new techniques; some of those techniques have privacy problems."
The FTC hosted a workshop on behavioral advertising and privacy in November. The agency's proposed privacy principles, a series of "self-regulatory" steps the FTC is recommending for online advertisers, come in part from that workshop.
Among the FTC's proposals:
-- Web sites that collect information for behavioral advertising should provide a "clear, consumer-friendly, and prominent statement" about the reason for collecting that data. Consumers should be able to choose whether they will allow that information to be collected.
-- Any company that collects or stores consumer data for behavioral advertising should provide "reasonable security" and should keep data only as long as necessary to fulfill legitimate business or law enforcement needs.
-- Companies should only collect sensitive data for behavioral advertising if they obtain express consent from the consumer.
The Center for Democracy and Technology (CDT), a group focused on online privacy and civil liberties, also praised the FTC for releasing its privacy principles. The principles are a "clear sign that the commission does not believe that the industry's current self-regulation framework is sufficient to protect consumers today,” CDT Deputy Director Ari Schwartz said in a statement.
CDT also called on Google to "step up and make a clear, public statement about its plans for proactively protecting consumer privacy." Consumer privacy in the behavioral advertising market remains an industrywide concern that requires the focus of consumers, policymakers and companies, CDT said.
The release of the privacy principles should send a signal to online advertisers, said Leslie Harris, CDT's president. "In releasing these principles, the FTC hasn't closed the door to other options," she said in a statement. "Self-regulation is part of the solution for protecting consumer privacy, but clearly self-regulation hasn't lived up to its promises. ... We'll need a rigorous mix of self-regulation backed by regulatory enforcement."
Other privacy groups criticized the FTC for its ruling allowing Google's acquisition of DoubleClick to move forward. The agency had reason to act on privacy concerns raised by the merger and failed, said Marc Rotenberg, executive director of the Electronic Privacy Information Center (EPIC), one of three privacy groups that asked the FTC to block the merger or impose privacy conditions.
The FTC could have established "the necessary safeguards for personal data and competition that could have allowed a global [privacy] framework to emerge," Rotenberg said. "[The FTC's] sole purpose is to protect the public interest. It failed to do so ... in a case that will have far-reaching implications for the Internet economy and the privacy rights of American consumers."
Joseph Turow, a communication professor at the University of Pennsylvania, agreed. The European Union is still investigating the Google-DoubleClick deal, with a decision not due until April, and it is likely that regulators there will take a harder look at privacy issues, he said.
Consumer tracking and privacy should be part of the FTC's antitrust review when it looks at online advertising deals, he said. "You can't talk about the digital advertising market today without talking about competition in targeting Americans," he said.
Google supports the FTC's efforts to create privacy guidelines, David Drummond, the company's senior vice president for corporate development and chief legal officer, said in a blog post. "The FTC’s decision publicly affirms what we and numerous independent analysts have been saying for months: Our acquisition does not threaten competition in what is a robust, innovative, and quickly evolving online advertising space," Drummond wrote. "In fact, we firmly believe the transaction will increase competition and bring substantial benefits to consumers, web publishers, and online advertisers."
Critics failed to show specific privacy harms, added Thomas Lenard, president of iGrowthGlobal, a conservative think tank. "I don’t see a problem because nobody has demonstrated the acquisition will result in any privacy harm to consumers," he said. "All the allegations are very hypothetical. Privacy advocates assert that Google’s and DoubleClick’s activities injure consumers, but they don’t provide any evidence."
If the FTC had blocked the deal, it would be "penalizing success, and that would send a bad signal to the marketplace," Lenard added. "That would also be bad for consumers."
The release of the privacy principles is an important and welcome step, said Peter Swire, a senior fellow at the Center for American Progress, a liberal think tank, and a law professor at Ohio State University. Although some privacy groups blasted the FTC for approving Google's DoubleClick deal, the acquisition has helped place focus on the entire online advertising industry's privacy practices, Swire said.
"It's good that the FTC is shining a spotlight on this industry," Swire said Friday. "Online advertising is in its second boom. They're trying lots of new techniques; some of those techniques have privacy problems."
The FTC hosted a workshop on behavioral advertising and privacy in November. The agency's proposed privacy principles, a series of "self-regulatory" steps the FTC is recommending for online advertisers, come in part from that workshop.
Among the FTC's proposals:
-- Web sites that collect information for behavioral advertising should provide a "clear, consumer-friendly, and prominent statement" about the reason for collecting that data. Consumers should be able to choose whether they will allow that information to be collected.
-- Any company that collects or stores consumer data for behavioral advertising should provide "reasonable security" and should keep data only as long as necessary to fulfill legitimate business or law enforcement needs.
-- Companies should only collect sensitive data for behavioral advertising if they obtain express consent from the consumer.
The Center for Democracy and Technology (CDT), a group focused on online privacy and civil liberties, also praised the FTC for releasing its privacy principles. The principles are a "clear sign that the commission does not believe that the industry's current self-regulation framework is sufficient to protect consumers today,” CDT Deputy Director Ari Schwartz said in a statement.
CDT also called on Google to "step up and make a clear, public statement about its plans for proactively protecting consumer privacy." Consumer privacy in the behavioral advertising market remains an industrywide concern that requires the focus of consumers, policymakers and companies, CDT said.
The release of the privacy principles should send a signal to online advertisers, said Leslie Harris, CDT's president. "In releasing these principles, the FTC hasn't closed the door to other options," she said in a statement. "Self-regulation is part of the solution for protecting consumer privacy, but clearly self-regulation hasn't lived up to its promises. ... We'll need a rigorous mix of self-regulation backed by regulatory enforcement."
Other privacy groups criticized the FTC for its ruling allowing Google's acquisition of DoubleClick to move forward. The agency had reason to act on privacy concerns raised by the merger and failed, said Marc Rotenberg, executive director of the Electronic Privacy Information Center (EPIC), one of three privacy groups that asked the FTC to block the merger or impose privacy conditions.
The FTC could have established "the necessary safeguards for personal data and competition that could have allowed a global [privacy] framework to emerge," Rotenberg said. "[The FTC's] sole purpose is to protect the public interest. It failed to do so ... in a case that will have far-reaching implications for the Internet economy and the privacy rights of American consumers."
Joseph Turow, a communication professor at the University of Pennsylvania, agreed. The European Union is still investigating the Google-DoubleClick deal, with a decision not due until April, and it is likely that regulators there will take a harder look at privacy issues, he said.
Consumer tracking and privacy should be part of the FTC's antitrust review when it looks at online advertising deals, he said. "You can't talk about the digital advertising market today without talking about competition in targeting Americans," he said.
Google supports the FTC's efforts to create privacy guidelines, David Drummond, the company's senior vice president for corporate development and chief legal officer, said in a blog post. "The FTC’s decision publicly affirms what we and numerous independent analysts have been saying for months: Our acquisition does not threaten competition in what is a robust, innovative, and quickly evolving online advertising space," Drummond wrote. "In fact, we firmly believe the transaction will increase competition and bring substantial benefits to consumers, web publishers, and online advertisers."
Critics failed to show specific privacy harms, added Thomas Lenard, president of iGrowthGlobal, a conservative think tank. "I don’t see a problem because nobody has demonstrated the acquisition will result in any privacy harm to consumers," he said. "All the allegations are very hypothetical. Privacy advocates assert that Google’s and DoubleClick’s activities injure consumers, but they don’t provide any evidence."
If the FTC had blocked the deal, it would be "penalizing success, and that would send a bad signal to the marketplace," Lenard added. "That would also be bad for consumers."
McAfee to pay $13.8 million to settle backdating lawsuits
McAfee has taken two major steps toward closing the stock-option backdating scandal that has plagued the company for the past two years.
On Friday, the security vendor filed 10 years' worth of restated financial reports, a process that was set off by the scandal. The company also said it had reached a tentative settlement in a class-action lawsuit relating to its accounting practices.
Charges for the restatement will be $137.4 million. McAfee has also set aside US$13.8 million to cover lawsuits filed in 2006 on behalf of McAfee shareholders, the company said in a statement released on Friday.
McAfee is one of more than 100 U.S. companies that have been investigated by the U.S. Securities and Exchange Commission (SEC) for improper backdating of options. In backdating, companies would alter the date that stock options grants were made to certain employees so they could be purchased at a lower price and ultimately sold by the employee at a greater profit. The practice, while not illegal, was often improperly disclosed in regulatory filings, leading to SEC investigations of many high-profile companies, including Apple, Dell and Broadcom.
Earlier this year, McAfee's former legal counsel, Kent Roberts, was indicted on fraud charges related to the scandal.
The restated reports cover the period from 1995 until the first quarter of McAfee's fiscal 2006 year. The company has also filed 10-Q reports for the first three quarters of its fiscal 2007 year, putting it up-to-date with the SEC for the first time since March 2006.
On Friday, the security vendor filed 10 years' worth of restated financial reports, a process that was set off by the scandal. The company also said it had reached a tentative settlement in a class-action lawsuit relating to its accounting practices.
Charges for the restatement will be $137.4 million. McAfee has also set aside US$13.8 million to cover lawsuits filed in 2006 on behalf of McAfee shareholders, the company said in a statement released on Friday.
McAfee is one of more than 100 U.S. companies that have been investigated by the U.S. Securities and Exchange Commission (SEC) for improper backdating of options. In backdating, companies would alter the date that stock options grants were made to certain employees so they could be purchased at a lower price and ultimately sold by the employee at a greater profit. The practice, while not illegal, was often improperly disclosed in regulatory filings, leading to SEC investigations of many high-profile companies, including Apple, Dell and Broadcom.
Earlier this year, McAfee's former legal counsel, Kent Roberts, was indicted on fraud charges related to the scandal.
The restated reports cover the period from 1995 until the first quarter of McAfee's fiscal 2006 year. The company has also filed 10-Q reports for the first three quarters of its fiscal 2007 year, putting it up-to-date with the SEC for the first time since March 2006.
U.S. trade agency to investigate antivirus patent claims
The U.S. International Trade Commission (ITC) has voted to investigate claims by Trend Micro of competitors' patent infringement involving antivirus products.
Trend Micro filed a trade complaint Nov. 21 against fellow cybersecurity vendors Barracuda Networks of Campbell, California; Panda Software International, based in Spain; and Panda Distribution of Glendale, California.
Trend Micro's complaint accuses the three companies of infringing its patent for virus detection and removal apparatus for computer networks. The technology "represents a dramatic departure from the traditional antivirus methods of safeguarding individual computers," the company says in its complaint.
The Trend Micro complaint accuses Barracuda of importing antivirus software that infringes its patent. The complaint says Barracuda uses code from the open-source antivirus product ClamAV, which is written in part in Europe and Australia. Barracuda also imports hardware components, the complaint says.
Panda's products also contain code imported into the U.S., the Trend Micro complaint says.
A Barracuda spokeswoman said the complaint is curious. "It is interesting that the ITC has decided to take up an investigation, given Barracuda Networks manufactures all of its products in the United States and does not import anything of significance," said Kylie Heintz.
A Panda representative didn't immediately respond to a request for comments.
The ITC case will be referred to an administrative law judge, who will schedule and hold an evidentiary hearing. The judge will make an initial determination as to whether there is a violation of section 337 of the Tariff Act of 1930. That initial determination is subject to commission review.
The ITC will make a final determination in the investigation at the earliest practicable time, the commission said in a news release. Within 45 days, the ITC will set a target date for completing the investigation.
Trend Micro filed a trade complaint Nov. 21 against fellow cybersecurity vendors Barracuda Networks of Campbell, California; Panda Software International, based in Spain; and Panda Distribution of Glendale, California.
Trend Micro's complaint accuses the three companies of infringing its patent for virus detection and removal apparatus for computer networks. The technology "represents a dramatic departure from the traditional antivirus methods of safeguarding individual computers," the company says in its complaint.
The Trend Micro complaint accuses Barracuda of importing antivirus software that infringes its patent. The complaint says Barracuda uses code from the open-source antivirus product ClamAV, which is written in part in Europe and Australia. Barracuda also imports hardware components, the complaint says.
Panda's products also contain code imported into the U.S., the Trend Micro complaint says.
A Barracuda spokeswoman said the complaint is curious. "It is interesting that the ITC has decided to take up an investigation, given Barracuda Networks manufactures all of its products in the United States and does not import anything of significance," said Kylie Heintz.
A Panda representative didn't immediately respond to a request for comments.
The ITC case will be referred to an administrative law judge, who will schedule and hold an evidentiary hearing. The judge will make an initial determination as to whether there is a violation of section 337 of the Tariff Act of 1930. That initial determination is subject to commission review.
The ITC will make a final determination in the investigation at the earliest practicable time, the commission said in a news release. Within 45 days, the ITC will set a target date for completing the investigation.
AT&T, Vonage finalize patent lawsuit settlement
A patent infringement lawsuit filed by AT&T against voice-over-IP telephony provider Vonage has been settled, Vonage said late Friday.
The settlement brings an unusually speedy end to the lawsuit, which was filed by AT&T on Oct. 17. It alleged Vonage wilfully infringed an AT&T patent related to telephone systems that allow people to make VOIP (voice-over-Internet Protocol) calls using standard telephone devices. A breakdown in talks between the two companies over the issue led to the lawsuit, said AT&T at the time.
Less than a month later, on Nov. 7, the two companies said they had tentatively agreed to a settlement. At that time Vonage said it would pay AT&T around US$39 million under the terms of the settlement.
Final terms were not disclosed on Friday when, in a brief statement, Vonage said the dispute had been settled.
Vonage previously settled a patent suit with Verizon Communications for $80 million to $120 million, depending on the results of its appeal of a court ruling on two patents, and with Sprint Nextel for $80 million. As part of the Sprint Nextel deal Vonage agreed to license more than 100 patents covering technology for connecting calls from a traditional phone network to an IP network. The Verizon settlement came after a court found Vonage had infringed upon the carrier's patents.
The settlement brings an unusually speedy end to the lawsuit, which was filed by AT&T on Oct. 17. It alleged Vonage wilfully infringed an AT&T patent related to telephone systems that allow people to make VOIP (voice-over-Internet Protocol) calls using standard telephone devices. A breakdown in talks between the two companies over the issue led to the lawsuit, said AT&T at the time.
Less than a month later, on Nov. 7, the two companies said they had tentatively agreed to a settlement. At that time Vonage said it would pay AT&T around US$39 million under the terms of the settlement.
Final terms were not disclosed on Friday when, in a brief statement, Vonage said the dispute had been settled.
Vonage previously settled a patent suit with Verizon Communications for $80 million to $120 million, depending on the results of its appeal of a court ruling on two patents, and with Sprint Nextel for $80 million. As part of the Sprint Nextel deal Vonage agreed to license more than 100 patents covering technology for connecting calls from a traditional phone network to an IP network. The Verizon settlement came after a court found Vonage had infringed upon the carrier's patents.
Lucent agrees to pay fines for China dealings
Alcatel-Lucent has agreed to pay $2.5 million in fines to resolve allegations that it provided Chinese government officials with free trips to Disneyland and other tourist attractions.
The company has to pay $1 million to resolve U.S. Department of Justice charges that it violated the Foreign Corrupt Practices Act (FCPA) when providing travel and other perks to Chinese government officials, the DOJ said Friday. The company also agreed to pay a $1.5 million civil fine to the U.S. Securities and Exchange Commission.
The agreement with the DOJ wraps up a multiyear investigation into whether Lucent, before its November 2006 merger with Alcatel, provided things of value to the Chinese officials and improperly accounted for the expenses.
The company cooperated fully with the DOJ and SEC investigations, an Alcatel-Lucent spokeswoman said. The company is "glad to put the matter behind us" and looks forward to successful business dealings in China in the future, she said.
From about 2000 to 2003, Lucent spent millions of dollars on more than 300 trips for Chinese government officials that included sightseeing, entertainment and leisure, the DOJ said. The trips were approved by senior Lucent Chinese officials, with the support of Lucent employees in the U.S.
Lucent improperly recorded expenses for these trips and failed to implement internal controls to monitor the provision of travel and other things of value to Chinese officials, the DOJ said in a press release.
In 2002 and 2003, there were 24 Lucent-sponsored trips for Chinese government customers, and at least 12 trips were primarily for sightseeing, the DOJ said. The people participating in these trips were senior government officials, including the heads of state-owned telecommunications companies in Beijing and the leaders of provincial telecommunications subsidiaries.
Between 2000 and 2003, Lucent provided Chinese government officials with trips to the U.S., Europe, Australia and elsewhere that were often characterized as "factory inspections" or "training," the DOJ said. By 2001, Lucent had outsourced most of its manufacturing and no longer owned factories for its customers to tour. These trips were primarily sightseeing tours to locations such as Disneyland, Universal Studios and the Grand Canyon, and typically lasted 14 days and cost between $25,000 and $55,000 per trip, the DOJ said.
Lucent admits to all of this conduct in the agreement announced on Friday. The agreement also requires Lucent to adopt new or modify existing internal controls, policies and procedures. Those internal controls must ensure that Lucent keeps fair and accurate books, the DOJ said. The agency has agreed not to prosecute Lucent if it complies with all of the requirements in the agreement over a two-year term.
The company has to pay $1 million to resolve U.S. Department of Justice charges that it violated the Foreign Corrupt Practices Act (FCPA) when providing travel and other perks to Chinese government officials, the DOJ said Friday. The company also agreed to pay a $1.5 million civil fine to the U.S. Securities and Exchange Commission.
The agreement with the DOJ wraps up a multiyear investigation into whether Lucent, before its November 2006 merger with Alcatel, provided things of value to the Chinese officials and improperly accounted for the expenses.
The company cooperated fully with the DOJ and SEC investigations, an Alcatel-Lucent spokeswoman said. The company is "glad to put the matter behind us" and looks forward to successful business dealings in China in the future, she said.
From about 2000 to 2003, Lucent spent millions of dollars on more than 300 trips for Chinese government officials that included sightseeing, entertainment and leisure, the DOJ said. The trips were approved by senior Lucent Chinese officials, with the support of Lucent employees in the U.S.
Lucent improperly recorded expenses for these trips and failed to implement internal controls to monitor the provision of travel and other things of value to Chinese officials, the DOJ said in a press release.
In 2002 and 2003, there were 24 Lucent-sponsored trips for Chinese government customers, and at least 12 trips were primarily for sightseeing, the DOJ said. The people participating in these trips were senior government officials, including the heads of state-owned telecommunications companies in Beijing and the leaders of provincial telecommunications subsidiaries.
Between 2000 and 2003, Lucent provided Chinese government officials with trips to the U.S., Europe, Australia and elsewhere that were often characterized as "factory inspections" or "training," the DOJ said. By 2001, Lucent had outsourced most of its manufacturing and no longer owned factories for its customers to tour. These trips were primarily sightseeing tours to locations such as Disneyland, Universal Studios and the Grand Canyon, and typically lasted 14 days and cost between $25,000 and $55,000 per trip, the DOJ said.
Lucent admits to all of this conduct in the agreement announced on Friday. The agreement also requires Lucent to adopt new or modify existing internal controls, policies and procedures. Those internal controls must ensure that Lucent keeps fair and accurate books, the DOJ said. The agency has agreed not to prosecute Lucent if it complies with all of the requirements in the agreement over a two-year term.
Saturday, December 22, 2007
NetBooks aims at 'S' of SMB
If the success of NetSuite's IPO this week was any indication, the market for on-demand ERP (enterprise resource planning) software is red-hot. Startup NetBooks hopes to capitalize on that.
NetBooks recently began offering hosted ERP software. But the company, based in Rohnert Park, California, has set its sights on a particular class of customer: the millions of small, owner-managed U.S. businesses with between two and 50 employees. "It's the backbone of the economy," said NetBooks' founder, Ridgely Evers.
Evers has long played in this space. While at Intuit, he led the creation of QuickBooks, the popular accounting software.
NetBooks' core suite covers marketing, sales, inventory and finance, but doesn't include functions like e-mail or calendaring. "We're not a Microsoft Office replacement," Evers stressed.
The product is engineered for ease of use, he said: "For our target market, IT is the word 'it.'"
NetBooks has added other capabilities through partnerships, including PayCycle for payroll and UPS Online Shipping. The firm will make major new partner announcements in early 2008 and release new software features throughout the year, according to Evers.
Evers declined to discuss how many customers the firm has landed so far, saying only, "we're very early in our growth."
NetBooks costs US$200 per month, or $1 per hour, for five users, along with free access for a customer's bookkeeper, accountant and "marketing coach." Unlimited support -- accessed by clicking a button within the NetBooks software -- and free upgrades are included in the price. The company also says that if a customer signs up for the service at a given price, they will never pay more for it.
One analyst said NetBooks shows promise but faces many challenges.
"If they do in fact do all the things they claim to do, this is great," said Marc Songini of Nucleus Research in Wellesley, Massachusetts.
"They're doing a smart thing by offering these [third-party] integrations so customers don't have to do it," he added.
Still, he said, "They're very small, and don't have a lot of recognition. It's going to be tough for them to get up and running and get critical mass."
For one thing, NetSuite does sell its service to small businesses, Songini said. Also, if a giant like Google began offering a similar suite of hosted applications, startups like NetBooks would be hard-pressed to succeed, he said.
The other challenge centers on marketing. Larger ERP and CRM (customer relationship management) vendors have clear sales targets: C-level executives. The small business market may be immense, but it is also broad.
"Obviously, that bottom segment of the market is wide-open, but the problem has been, how do you sell to it," Songini said.
Songini said one possibility would be for NetBooks to strike reseller deals with computer manufacturers and retailers like Dell or Radio Shack.
NetBooks recently began offering hosted ERP software. But the company, based in Rohnert Park, California, has set its sights on a particular class of customer: the millions of small, owner-managed U.S. businesses with between two and 50 employees. "It's the backbone of the economy," said NetBooks' founder, Ridgely Evers.
Evers has long played in this space. While at Intuit, he led the creation of QuickBooks, the popular accounting software.
NetBooks' core suite covers marketing, sales, inventory and finance, but doesn't include functions like e-mail or calendaring. "We're not a Microsoft Office replacement," Evers stressed.
The product is engineered for ease of use, he said: "For our target market, IT is the word 'it.'"
NetBooks has added other capabilities through partnerships, including PayCycle for payroll and UPS Online Shipping. The firm will make major new partner announcements in early 2008 and release new software features throughout the year, according to Evers.
Evers declined to discuss how many customers the firm has landed so far, saying only, "we're very early in our growth."
NetBooks costs US$200 per month, or $1 per hour, for five users, along with free access for a customer's bookkeeper, accountant and "marketing coach." Unlimited support -- accessed by clicking a button within the NetBooks software -- and free upgrades are included in the price. The company also says that if a customer signs up for the service at a given price, they will never pay more for it.
One analyst said NetBooks shows promise but faces many challenges.
"If they do in fact do all the things they claim to do, this is great," said Marc Songini of Nucleus Research in Wellesley, Massachusetts.
"They're doing a smart thing by offering these [third-party] integrations so customers don't have to do it," he added.
Still, he said, "They're very small, and don't have a lot of recognition. It's going to be tough for them to get up and running and get critical mass."
For one thing, NetSuite does sell its service to small businesses, Songini said. Also, if a giant like Google began offering a similar suite of hosted applications, startups like NetBooks would be hard-pressed to succeed, he said.
The other challenge centers on marketing. Larger ERP and CRM (customer relationship management) vendors have clear sales targets: C-level executives. The small business market may be immense, but it is also broad.
"Obviously, that bottom segment of the market is wide-open, but the problem has been, how do you sell to it," Songini said.
Songini said one possibility would be for NetBooks to strike reseller deals with computer manufacturers and retailers like Dell or Radio Shack.
Oracle's Ellison: SOA migration a slow process
Scoffing at reports alleging the adoption of SOA is slowing, Oracle CEO Larry Ellison said this week that moving to SOA is a slow process but one that presents an opportunity for Oracle.
Speaking on Oracle's earnings conference call Wednesday, Ellison said he had read news articles about the slowing adoption of SOA. But he stressed that SOA requires a change in architecture, which takes time to implement.
"While I've read [these articles], people have to understand when you have a fundamentally new computer software architecture, SOA, it takes a long time for adoption," Ellison said. Moving to SOA is not as easy as flipping a switch, he said.
"It takes about 10 to 20 years before [you can] rewrite all of your applications," he said. But Oracle sees this process accelerating in its middleware business.
"We think it's a long-term growth story, it's a very rapid growth story," said Ellison. "It takes a long time for our customers to have a majority of their applications modernized and we think this is a growth story for a decade for us," he said.
For the quarter ending November 30, Oracle reported revenues of US$5.3 billion, a 28 percent increase over the $4.16 billion reported for the same quarter last year. Net income was $1.3 billion, a 35 percent increase over the $967 million reported for the same time period in 2006.
Speaking on Oracle's earnings conference call Wednesday, Ellison said he had read news articles about the slowing adoption of SOA. But he stressed that SOA requires a change in architecture, which takes time to implement.
"While I've read [these articles], people have to understand when you have a fundamentally new computer software architecture, SOA, it takes a long time for adoption," Ellison said. Moving to SOA is not as easy as flipping a switch, he said.
"It takes about 10 to 20 years before [you can] rewrite all of your applications," he said. But Oracle sees this process accelerating in its middleware business.
"We think it's a long-term growth story, it's a very rapid growth story," said Ellison. "It takes a long time for our customers to have a majority of their applications modernized and we think this is a growth story for a decade for us," he said.
For the quarter ending November 30, Oracle reported revenues of US$5.3 billion, a 28 percent increase over the $4.16 billion reported for the same quarter last year. Net income was $1.3 billion, a 35 percent increase over the $967 million reported for the same time period in 2006.
Wall Street Beat: Uncertainty rules '08 outlook
In the last full trading week of the year, the NetSuite IPO, acquisition news and earnings reports from Oracle, Palm and RIM highlighted technology sector gains, but also concerns for 2008.
Oracle on Wednesday reported net income of US$1.3 billion for the quarter ending Nov. 30, up 35 percent from a year earlier. The report validated its acquisition strategy at the end of what is bound to be a record year for M&A in the tech sector. Oracle's results show it is leveraging homegrown as well as acquired products, cross-selling a broad variety of business applications. Company shares closed Thursday at $22.10, up by $1.34.
The U.S. Federal Trade Commission's approval on Thursday of Google's acquisition of online ad-server DoubleClick helped boost Google shares by $12.32, to close at $689.69, even though the deal requires other government body approvals.
Through November 2007, tech M&A amounted to about $449 billion, close to the total for 2006, according to a report released this week by the 451 Group. With a strong December for M&A, 2007 "could be the first year in tech M&A history to top a half-trillion dollars' worth of transactions," according to the report.
There are a variety of reasons for the banner M&A year, but underlying them all were strong vendor earnings. Next year, though, will likely see a slowdown in deals.
The U.S. housing slump and resulting turmoil in financial markets have raised fears of an overall slowdown in the economy. This could affect consumer and business buying plans as well as the financial results of tech vendors.
"There's a sense of muted expectation," according to the 451 Group's Brenan Daly. "Corporate buying activity reflects to some degree consumer activity. If you are flush with cash and expecting good things from the economy, chances are you're more willing to go out buying."
Meanwhile, the IPO of software-as-a-service vendor NetSuite on Thursday reflected a year for public offerings that was ultimately stronger than expected. Company shares closed at $35.50 after opening at $26.00. IPOs this year underscored confidence in sectors such as SaaS and storage, noted the 451 Group report. In the SaaS arena, SuccessFactors and DemandTec had strong IPOs. In the storage sector, Data Domain and 3Par had solid IPOs, 451 noted.
But the same factors that are likely to contribute to a slowdown in M&A will also probably cause a slump in IPO activity in 2008.
Most IT market researchers are forecasting a slowdown for at least the first half of next year. Growth in U.S. IT investment, for example, will drop to 4.8 percent in 2008 from 5.3 percent in 2007, according to Forrester Research.
In a year of tepid sales, only the best-run companies are expected to have the full confidence of investors. This week's earnings reports from Palm and RIM are a case in point. Palm shares dropped to their lowest point in four years on Wednesday, closing at $5.52, after the company reported a quarterly loss of $9.6 million for the quarter ending Nov. 30. Last year the company earned $12.8 million for the period. Palm stock has dropped about 50 percent in the past two months.
Reporting Thursday on the same quarter, RIM said BlackBerry sales boosted earnings to $370.5 million, compared to $175.2 million last year. Shares jumped by about $10 in after-hours trading, about an hour after the announcement.
Handset markets are booming, but vendors face some of the same pressures as PC makers: Competition has lowered margins. Vendors need to get it all right: good products, good management, and well-managed logistics.
"We view RIM as extremely well-positioned due to carrier partnership strategy, talented management and technology," said Citi Investment Research in a market commentary. On the other hand, Citi fretted that "we are increasingly concerned with Palm's internal controls."
Especially in the most competitive sectors -- such as PCs, handheld devices, telecom and Internet-based businesses -- 2008 will leave much less room for error than 2007, which, despite economic turmoil, turned out to be a strong year for tech earnings overall.
Oracle on Wednesday reported net income of US$1.3 billion for the quarter ending Nov. 30, up 35 percent from a year earlier. The report validated its acquisition strategy at the end of what is bound to be a record year for M&A in the tech sector. Oracle's results show it is leveraging homegrown as well as acquired products, cross-selling a broad variety of business applications. Company shares closed Thursday at $22.10, up by $1.34.
The U.S. Federal Trade Commission's approval on Thursday of Google's acquisition of online ad-server DoubleClick helped boost Google shares by $12.32, to close at $689.69, even though the deal requires other government body approvals.
Through November 2007, tech M&A amounted to about $449 billion, close to the total for 2006, according to a report released this week by the 451 Group. With a strong December for M&A, 2007 "could be the first year in tech M&A history to top a half-trillion dollars' worth of transactions," according to the report.
There are a variety of reasons for the banner M&A year, but underlying them all were strong vendor earnings. Next year, though, will likely see a slowdown in deals.
The U.S. housing slump and resulting turmoil in financial markets have raised fears of an overall slowdown in the economy. This could affect consumer and business buying plans as well as the financial results of tech vendors.
"There's a sense of muted expectation," according to the 451 Group's Brenan Daly. "Corporate buying activity reflects to some degree consumer activity. If you are flush with cash and expecting good things from the economy, chances are you're more willing to go out buying."
Meanwhile, the IPO of software-as-a-service vendor NetSuite on Thursday reflected a year for public offerings that was ultimately stronger than expected. Company shares closed at $35.50 after opening at $26.00. IPOs this year underscored confidence in sectors such as SaaS and storage, noted the 451 Group report. In the SaaS arena, SuccessFactors and DemandTec had strong IPOs. In the storage sector, Data Domain and 3Par had solid IPOs, 451 noted.
But the same factors that are likely to contribute to a slowdown in M&A will also probably cause a slump in IPO activity in 2008.
Most IT market researchers are forecasting a slowdown for at least the first half of next year. Growth in U.S. IT investment, for example, will drop to 4.8 percent in 2008 from 5.3 percent in 2007, according to Forrester Research.
In a year of tepid sales, only the best-run companies are expected to have the full confidence of investors. This week's earnings reports from Palm and RIM are a case in point. Palm shares dropped to their lowest point in four years on Wednesday, closing at $5.52, after the company reported a quarterly loss of $9.6 million for the quarter ending Nov. 30. Last year the company earned $12.8 million for the period. Palm stock has dropped about 50 percent in the past two months.
Reporting Thursday on the same quarter, RIM said BlackBerry sales boosted earnings to $370.5 million, compared to $175.2 million last year. Shares jumped by about $10 in after-hours trading, about an hour after the announcement.
Handset markets are booming, but vendors face some of the same pressures as PC makers: Competition has lowered margins. Vendors need to get it all right: good products, good management, and well-managed logistics.
"We view RIM as extremely well-positioned due to carrier partnership strategy, talented management and technology," said Citi Investment Research in a market commentary. On the other hand, Citi fretted that "we are increasingly concerned with Palm's internal controls."
Especially in the most competitive sectors -- such as PCs, handheld devices, telecom and Internet-based businesses -- 2008 will leave much less room for error than 2007, which, despite economic turmoil, turned out to be a strong year for tech earnings overall.
Hitachi considering 'all options' for hard-disk unit
Hitachi is considering a shake-up of Hitachi Global Storage Technologies (HGST), the hard-disk drive maker that it acquired from IBM in 2003.
The Tokyo company said in a statement to the Tokyo Stock Exchange that it is considering "all options" regarding the subsidiary.
The statement was issued in response to a report in the Friday morning edition of The Nikkei newspaper that said Hitachi is in talks with U.S. investment fund Silver Lake over the sale of just under half the company. The Nikkei said that the two parties are trying to come up with a deal by January however agreement remains some way off because there are disagreements on price.
Hitachi declined to comment beyond its statement.
Despite coming up with several market-leading drives, such as the first terabyte hard-disk drive at the beginning of this year, the company hasn't yet been able to make a profit under Hitachi's ownership. It is the third-largest manufacturer of hard-disk drives behind Seagate and Western Digital.
Hard-disk drive makers have been enjoying better business conditions in the market in the second half of 2007. Early in the year prices fell about 20 percent per quarter but those sharp price declines have now steadied and prices dropped just 5 percent in the fourth quarter, according to a recent report from iSuppli.
The research agency said worldwide shipments of drives hit 132 million units in the third quarter, a 15 percent jump from the 115 million shipped in the second quarter. It predicted the seasonably strong fourth quarter will see a further 11 percent jump in shipments from the previous quarter.
The Tokyo company said in a statement to the Tokyo Stock Exchange that it is considering "all options" regarding the subsidiary.
The statement was issued in response to a report in the Friday morning edition of The Nikkei newspaper that said Hitachi is in talks with U.S. investment fund Silver Lake over the sale of just under half the company. The Nikkei said that the two parties are trying to come up with a deal by January however agreement remains some way off because there are disagreements on price.
Hitachi declined to comment beyond its statement.
Despite coming up with several market-leading drives, such as the first terabyte hard-disk drive at the beginning of this year, the company hasn't yet been able to make a profit under Hitachi's ownership. It is the third-largest manufacturer of hard-disk drives behind Seagate and Western Digital.
Hard-disk drive makers have been enjoying better business conditions in the market in the second half of 2007. Early in the year prices fell about 20 percent per quarter but those sharp price declines have now steadied and prices dropped just 5 percent in the fourth quarter, according to a recent report from iSuppli.
The research agency said worldwide shipments of drives hit 132 million units in the third quarter, a 15 percent jump from the 115 million shipped in the second quarter. It predicted the seasonably strong fourth quarter will see a further 11 percent jump in shipments from the previous quarter.
IBM buys in-memory database company Solid
IBM is buying Solid Information Technology, a maker of high-performance databases and a close partner of IBM rival MySQL.
Solid makes an embedded database with an in-memory database engine, which means it can store and retrieve data from main memory, giving faster performance than traditional disk-based systems.
That makes it popular for applications that require very fast processing times, such as routing calls in a phone network or trading stocks. Solid's customers include Cisco Systems, Siemens, TeliaSonera and Nokia, according to its Web site.
IBM agreed to acquire the company for an undisclosed sum and expects the deal to close in the first quarter of 2008, IBM announced Friday. It said the deal will enhance its database line-up by adding real-time data access capabilities. IBM rival Oracle acquired an in-memory database two years ago, from TimesTen.
The IBM acquisition may be seen as a setback for MySQL, since it marks the loss of independence of another company that makes a high-performance transaction engine for MySQL's database.
Two years ago Oracle bought Innobase, which made the most popular MySQL transaction engine. Oracle continues to license InnoDB to MySQL, but the acquisition prompted MySQL to look for alternatives.
One of those was Solid, which joined MySQL's storage engine certification program and released an open source version of its database engine for MySQL. IBM did not say in its statement if it would continue to develop the MySQL product.
However, MySQL is also developing its own transaction engine, so in the long term it will be less dependant on partners. Called Falcon, the engine is due to ship with MySQL 6.0, which is due for wide release late next year.
The acquisition of Solid is IBM's twelfth acquisition this year, it said.
Solid makes an embedded database with an in-memory database engine, which means it can store and retrieve data from main memory, giving faster performance than traditional disk-based systems.
That makes it popular for applications that require very fast processing times, such as routing calls in a phone network or trading stocks. Solid's customers include Cisco Systems, Siemens, TeliaSonera and Nokia, according to its Web site.
IBM agreed to acquire the company for an undisclosed sum and expects the deal to close in the first quarter of 2008, IBM announced Friday. It said the deal will enhance its database line-up by adding real-time data access capabilities. IBM rival Oracle acquired an in-memory database two years ago, from TimesTen.
The IBM acquisition may be seen as a setback for MySQL, since it marks the loss of independence of another company that makes a high-performance transaction engine for MySQL's database.
Two years ago Oracle bought Innobase, which made the most popular MySQL transaction engine. Oracle continues to license InnoDB to MySQL, but the acquisition prompted MySQL to look for alternatives.
One of those was Solid, which joined MySQL's storage engine certification program and released an open source version of its database engine for MySQL. IBM did not say in its statement if it would continue to develop the MySQL product.
However, MySQL is also developing its own transaction engine, so in the long term it will be less dependant on partners. Called Falcon, the engine is due to ship with MySQL 6.0, which is due for wide release late next year.
The acquisition of Solid is IBM's twelfth acquisition this year, it said.
Russians close to prosecuting 'Pinch' Trojan authors
Russia may soon prosecute the authors of the "Pinch" Trojan, an easy-to-use malicious software program available on the Internet that steals a variety of data.
Nikolay Patrushev, who heads Russia's Federal Security Services, said earlier this week that Pinch's authors had been identified and would be taken to court, according to a blog posting by Russian security vendor Kaspersky Lab.
Kaspersky said the arrest of the Pinch writers, identified as Ermishkin and Farkhutdinov, would be on the same level as the 2005 prosecution of German Sven Jaschan for creating the NetSky and Sasser worms, which caused thousands of infected computers to crash worldwide.
With Pinch, "it's impossible to estimate what financial losses have been caused over the years since this Trojan first saw the light of day," Kaspersky said.
Pinch's sellers would customize the program for buyers and offer support, illustrating a growing underground economy for hacking tools, Kaspersky said.
Thousands of versions of Pinch, which comes in Russian and English language versions, are still circulating on the Internet. Kaspersky said its security software can detect some 4,000 variants of Pinch, where the basic code is the same but aspects of the program have been modified in order to evade detection by security software.
Pinch has a highly-developed user interface that can be used for sorting information it steals off other computers, according to F-Secure.
It can steal e-mail account passwords, pilfer other password information stored in the Internet Explorer, Firefox and Opera browsers, and snap screenshots.
That stolen information can also be encrypted before it is sent back to the hacker, according to Panda Security, another security vendor.
Pinch could also be customized to have the victimized computer join a botnet, or a network of computers set up to hide other malicious activity by the hacker. Botnets are often used to send spam or mount other hacking attacks.
Nikolay Patrushev, who heads Russia's Federal Security Services, said earlier this week that Pinch's authors had been identified and would be taken to court, according to a blog posting by Russian security vendor Kaspersky Lab.
Kaspersky said the arrest of the Pinch writers, identified as Ermishkin and Farkhutdinov, would be on the same level as the 2005 prosecution of German Sven Jaschan for creating the NetSky and Sasser worms, which caused thousands of infected computers to crash worldwide.
With Pinch, "it's impossible to estimate what financial losses have been caused over the years since this Trojan first saw the light of day," Kaspersky said.
Pinch's sellers would customize the program for buyers and offer support, illustrating a growing underground economy for hacking tools, Kaspersky said.
Thousands of versions of Pinch, which comes in Russian and English language versions, are still circulating on the Internet. Kaspersky said its security software can detect some 4,000 variants of Pinch, where the basic code is the same but aspects of the program have been modified in order to evade detection by security software.
Pinch has a highly-developed user interface that can be used for sorting information it steals off other computers, according to F-Secure.
It can steal e-mail account passwords, pilfer other password information stored in the Internet Explorer, Firefox and Opera browsers, and snap screenshots.
That stolen information can also be encrypted before it is sent back to the hacker, according to Panda Security, another security vendor.
Pinch could also be customized to have the victimized computer join a botnet, or a network of computers set up to hide other malicious activity by the hacker. Botnets are often used to send spam or mount other hacking attacks.
Sharp and Toshiba to team up on LCD TV screens and chips
Sharp and Toshiba plan to closely cooperate in the flat-panel TV business, buying screens and semiconductor chips from each other, they said Friday.
Toshiba will turn to Sharp for the 32-inch and larger flat-panel displays used in its LCD (liquid crystal display) televisions while Sharp will procure from Toshiba the chips used in its TVs. The cooperation will begin during the year from April and will slowly build towards 2010 when two goals are expected to be reached: Sharp will supply Toshiba with 40 percent of its LCD modules and Toshiba will sell to Sharp 50 percent of the chips it needs.
The deal provides both companies with a steadier supply of vital components for LCD TVs. The market for such televisions has grown from 161 million units in 2003 to an estimated 192 million this year and is expected to keep on rising on the back of strong demand and competition.
Some of the display panels headed for Toshiba will come from a state-of-the-art ¥380 billion (US$3.36 billion) LCD manufacturing plant Sharp is building in Osaka's Sakai City. Production is scheduled to begin in 2009. The plant will handle mother glass -- the large sheets on which several display panels are made -- of 2.85 meters by 3.05 meters. This size, dubbed 10th generation, is larger than that used by any other display manufacturer and will make the Sakai plant the world's most advanced LCD production center.
The large glass sheets also bring a cost advantage for Sharp. The per-inch price of LCD panels drops with increases in the size of mother glass, so the panels are likely to be more competitive than those from rivals. That's especially important in the TV market, where strong competition has made price a key to success.
Toshiba currently holds a stake in IPS Alpha Technology Ltd., an LCD manufacturing joint venture created with Panasonic and Hitachi. The IPS line uses an older 6th-generation technology and will need substantial investment if it is to remain competitive in the market.
Toshiba will turn to Sharp for the 32-inch and larger flat-panel displays used in its LCD (liquid crystal display) televisions while Sharp will procure from Toshiba the chips used in its TVs. The cooperation will begin during the year from April and will slowly build towards 2010 when two goals are expected to be reached: Sharp will supply Toshiba with 40 percent of its LCD modules and Toshiba will sell to Sharp 50 percent of the chips it needs.
The deal provides both companies with a steadier supply of vital components for LCD TVs. The market for such televisions has grown from 161 million units in 2003 to an estimated 192 million this year and is expected to keep on rising on the back of strong demand and competition.
Some of the display panels headed for Toshiba will come from a state-of-the-art ¥380 billion (US$3.36 billion) LCD manufacturing plant Sharp is building in Osaka's Sakai City. Production is scheduled to begin in 2009. The plant will handle mother glass -- the large sheets on which several display panels are made -- of 2.85 meters by 3.05 meters. This size, dubbed 10th generation, is larger than that used by any other display manufacturer and will make the Sakai plant the world's most advanced LCD production center.
The large glass sheets also bring a cost advantage for Sharp. The per-inch price of LCD panels drops with increases in the size of mother glass, so the panels are likely to be more competitive than those from rivals. That's especially important in the TV market, where strong competition has made price a key to success.
Toshiba currently holds a stake in IPS Alpha Technology Ltd., an LCD manufacturing joint venture created with Panasonic and Hitachi. The IPS line uses an older 6th-generation technology and will need substantial investment if it is to remain competitive in the market.
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