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Microsoft Windows 8 makes lukewarm debut: sales tracker

Written By Bersemangat on Jumat, 30 November 2012 | 09.56

SEATTLE (Reuters) - Consumer sales of Windows-powered personal computers fell 21 percent overall last month, figures released by a leading retail research firm showed on Thursday, indicating a lackluster debut for Microsoft Corp's Windows 8 operating system.

Many in the industry said Windows 8 might revive slack PC sales, but a report by NPD Group, which tracks computer sales weekly using data supplied by retailers, dampened those hopes.

On the same day, Microsoft announced pricing for its latest device designed to break Apple Inc's stranglehold on the tablet and lightweight laptop market. It is offering the Surface tablet running the full version of Windows 8 from $899, pitching it somewhere between Apple's latest iPad and MacBook Air laptop.

Since the launch of Windows 8 on October 26, Windows laptop sales are down 24 percent, while desktop sales are down 9 percent compared with the same period last year, making an overall 21 percent dip, NPD Group said.

Usually, a Microsoft release boosts PC sales because many consumers hold off purchases for several months so they can obtain the latest software immediately.

If the NPD's sales trends are borne out over the rest of the holiday shopping season, it would be a huge disappointment for Microsoft and PC makers such as Dell Inc, HP and Lenovo.

"After just four weeks on the market, it's still early to place blame on Windows 8 for the ongoing weakness in the PC market," said Stephen Baker, vice president of industry analysis at NPD. "We still have the whole holiday selling season ahead of us, but clearly Windows 8 did not prove to be the impetus for a sales turnaround some had hoped for."

NPD's data neither includes Microsoft's first Surface tablet, which is only available in its own stores, nor takes account of sales of PCs to businesses, which has recently been a much stronger market.

LARGER TABLET AVAILABLE JANUARY

Microsoft's first Surface tablet runs a version of Windows called RT, created to work on the low-power chips designed by ARM Holdings, which dominate smartphones and tablets but are incompatible with old Windows applications.

A larger, heavier tablet -- officially called 'Surface with Windows 8 Pro' -- will be on sale from January, running on an Intel Corp chip that works with all Microsoft's Windows and Office applications.

Microsoft said on Thursday it would price the new Surface at $899 for a 64 gigabyte version and $999 for a 128 GB version. That does not include the optional cover, which doubles as a keyboard, costing $120 to $130.

The company describes the wifi-only device as "a full PC and a tablet". It is priced above Apple's 64 GB wifi-only iPad at $699 and at the low end of Apple's MacBook Air line of lightweight laptops which start at $999.

The Intel-based Surface is thicker and heavier than both the iPad and Surface running Windows RT, but at 2 lbs (0.9 kg) is lighter than the MacBook Air.

Since Microsoft introduced Windows 8, it has accounted for only 58 percent of Windows computing device unit sales, compared to the 83 percent Windows 7 accounted for at the same point after its launch in 2009, NPD said. That was partly caused by poor back-to-school sales that left many Windows 7 PCs on retailers' shelves, NPD said.

One patch of light for Microsoft is strong sales of touchscreen Windows 8 laptops, which accounted for 6 percent of Windows laptop sales, according to NPD.

It is still unclear how successful Microsoft's Windows 8 will be in the long term. The touch-optimized, tablet-friendly system was designed to appeal to younger users with a colorful, app-based interface, but has confused some traditional Windows customers more used to keyboard and mouse commands. Beneath the new interface design, it does not offer any radical new computing power.

On Monday, a top Windows executive said Microsoft had sold 40 million Windows 8 licenses in the month since the launch. That is ahead of Windows 7 at the same stage, but it was not clear how many of those were pre-orders, discounted upgrades, or bulk sales to PC makers.

According to tech research firm StatCounter, about 1 percent of the world's 1.5 billion or so personal computers - making a total of around 15 million - are actually running Windows 8.

(Reporting By Bill Rigby; Editing by Bernard Orr and Grant McCool)


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Sprint unveils in-car communications system for automakers

LOS ANGELES (Reuters) - Sprint Nextel Corp unveiled on Thursday an in-vehicle communications and entertainment system it hopes automakers will adopt as they seek to attract younger, more connected consumers.

Sprint Velocity allows drivers to connect mobile phones to their vehicles through Bluetooth, providing access to a range of applications, including voice-activated texting and email, navigation, news and sports updates and music.

Sprint Nextel, the No. 3 U.S. mobile carrier, is betting that Sprint Velocity will be superior to the products developed by the automakers themselves.

"They know how to make great cars. They assemble these vehicles that we all fall in love with," said Wayne Ward, Sprint's vice president of emerging solutions, at the LA Auto Show. "But when it comes to this stuff, they are not in the communications business."

Sprint Velocity powers Chrysler Group LLC's Uconnect system already offered on two of its vehicles, the new Ram 1500 pickup truck and SRT Viper. The companies have not disclosed pricing for the system, but Uconnect packages on the truck range from $465 to $970, depending on the screen size.

Some 45 percent of car buyers said navigation systems that help drivers avoid traffic are very important to their purchase decisions, while 35 percent said the same of a car's ability to respond to voice commands, according to a survey by IBM to be released soon.

About 30 percent said entertainment systems were very important, particularly buyers between the ages 18 and 29. Still, efforts by Ford, General Motors Co and other automakers have been widely panned.

Glitches in the MyFord Touch system sent Ford tumbling in Consumer Reports's annual survey of reliability. The magazine has also called GM's new CUE system for its Cadillac lineup, "convoluted and frustrating.

"This stuff is pretty hard," Sprint's Ward said. Automakers "traditionally have had to deal with every single applications vendor and tried to put these things together from a systems integration perspective themselves. And not doing it with a background and a legacy of understanding mobility."

Automakers can adopt Sprint Velocity as a turn-key system or customize it to suit their needs, Ward said. The auto market offers a big opportunity for carriers like Sprint and rivals Verizon and AT&T to reach new users.

Verizon earlier this year said it would buy Hughes Telematics Inc for $612 million in cash to beef up its enterprise business with machine-to-machine communications services in automotive and other industries.

"Where are we as carriers going to get new growth?" said Ward. "It's from this stuff. It's from vehicles."

(Reporting By Nichola Groom in Los Angeles; Editing by Leslie Adler)


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Microsoft CEO defends its innovation record, financial results

Written By Bersemangat on Kamis, 29 November 2012 | 09.56

BELLEVUE, Washington (Reuters) - Microsoft Corp Chief Executive Steve Ballmer defended his company's record on innovation and financial performance at the annual shareholders' meeting, but conceded that he should have moved faster to get into the booming tablet market dominated by Apple Inc's iPad.

Bill Gates, co-founder and now chairman of the world's largest software company, was one of the first to champion tablet-sized devices more than 10 years ago, but Microsoft failed to come up with a product that worked as well as the iPad. Gates was silent throughout the meeting, attended by about 450 shareholders.

"We're innovating on the seam between software and hardware," said Ballmer, asked why his company had fallen behind rival Apple. "Maybe we should have done that earlier."

A month ago, Microsoft launched the Surface tablet - its first own-brand computer - but has not revealed sales figures.

In the tablet market, "we see nothing but a sea of upside," Ballmer said, an acknowledgement that until now Microsoft has effectively had zero presence in the tablet market.

"I feel pretty good about our level of innovation," he added.

Ballmer said smartphones running Microsoft's new Windows software were selling four times as much as they did at this time last year. Microsoft has never given sales numbers of Windows phones, primarily made by Nokia, Samsung and HTC.

Windows currently has 2 to 4 percent of the global smartphone market, according to various independent data providers. Its overall market share will not likely grow in proportion to its own sales, given that sales of other smartphones - mostly running Google's Android system - are also growing quickly.

Ballmer, flanked by Gates and Chief Financial Officer Peter Klein, was asked by several shareholders to explain Microsoft's lackluster share price, which has been stuck for a decade, and has been outperformed by Apple and Google Inc stock in recent years.

"I understand your comment," he told one shareholder. He went on to explain that Microsoft had "done a phenomenal job of driving product volumes" and was focusing on profiting from that growth.

He suggested that whether investors recognized that value at any given time was out of his hands.

"The stock market's kind of a funny thing," he said, adding that Microsoft had handed back $10 billion in dividends and share buybacks to investors in the last fiscal year.

Several shareholders at the meeting in Bellevue, an upscale suburb of Seattle, complimented the executives on how they had grown and managed the company.

Microsoft's shares rose almost 18 percent during fiscal 2012, which ended in June of this year, compared with a 3 percent rise in the Standard & Poor's 500.

Despite such fluctuations, Microsoft's shares stand around the same level they did 10 years ago.

To see a graphic on U.S. tech share price performance, 1990 to present, click on http://link.reuters.com/rug53t

(Reporting by Bill Rigby; Editing by Gary Hill)


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Audit firms sued in HP's Autonomy acquisition

NEW YORK (Reuters) - A new shareholder lawsuit over Hewlett-Packard's acquisition of British software firm Autonomy has named Big Four audit firms Deloitte and KPMG as defendants, alleging they missed numerous red flags about Autonomy's accounting.

The lawsuit, filed on Tuesday in federal court in San Jose, California, also named HP's board of directors, officers, and former executives, alleging breach of duty and negligence for their role in HP's acquisition Autonomy.

HP is expected to face a barrage of lawsuits by investors seeking to recoup losses. Its shares fell 12 percent to a 10-year low last week after it announced an $8.8 billion write-down on its acquisition of Autonomy.

HP Chief Executive Meg Whitman has repeatedly said that the company relied on audits of Autonomy, done by the UK arm of Deloitte Touche Tohmatsu, when it paid $11.1 billion for Autonomy last year.

HP last week blamed the majority of its $8.8 billion write-down on improper accounting at Autonomy.

Whitman also said HP relied on KPMG's audits of Deloitte's work.

In a statement, KPMG said it was not engaged to do any audit work or oversee the Deloitte audit work being questioned. KPMG provided limited services not related to Autonomy's audit and "we can say with confidence that we acted responsibly and with integrity," the firm said.

Deloitte said it had nothing to add to its statement last week that it was not responsible for due diligence on the Autonomy acquisition. Deloitte also denied last week that it had any knowledge of any accounting improprieties or misrepresentations in Autonomy's financial statements.

It said its last audit opinion on Autonomy was for the year ended December 2010.

Tuesday's lawsuit also named as defendants Whitman, HP Chief Financial Officer Catherine Lesjak, and former HP CEO Leo Apotheker.

It said the defendants' inadequate due diligence caused billions of dollars of damages to HP and resulted in HP "grossly" overpaying for Autonomy.

A spokesman for HP declined to comment.

The lawsuit was filed by Philip Ricciardi, an HP shareholder since 2007.

The case is Philip Ricciardi, derivatively on behalf of Hewlett-Packard Co, v. various defendants, U.S. District court for the Northern District of California, San Jose, No. 12-6003

(Reporting by Dena Aubin; Editing by Howard Goller and Tim Dobbyn)


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Exclusive: Banks offer to help Sony offload battery unit - sources

Written By Bersemangat on Rabu, 28 November 2012 | 09.56

TOKYO (Reuters) - Sony Corp has been approached by at least three investment banks offering to sell its battery business as the struggling Japanese group looks to offload non-core assets and focus on reviving its consumer electronics business, banking sources said.

Selling the unit, which employs 2,700 people and had sales last year of $1.74 billion, would help Sony cut costs and generate cash as it restructures its operations, three people involved in the preliminary discussions told Reuters.

The company, a byword for innovative gadgetry in the 1970s and 80s, has been battered by weak demand for its TVs in a fiercely competitive market. The TV business has racked up huge losses; Sony's market value has slumped to below $10 billion and ratings agency Fitch last week downgraded the company's debt to "junk" status - a move likely to push up borrowing costs and make asset sales more attractive.

CEO Kazuo Hirai has pledged to rebuild Sony around gaming, digital imaging and mobile devices, while nurturing new businesses such as medical devices. He is axing 10,000 jobs, closing facilities and selling assets. Any disposals would be part of a broader "garage sale" by Japan's leading electronics groups that are hurting in weak markets and tight financing.

Potential buyers for Sony Energy Devices Corp - founded in 1975 as Sony-Eveready, a joint venture with Union Carbide Corp - could include Taiwan's Hon Hai Precision Industry and BYD Co Ltd, a Chinese carmaker backed by billionaire investor Warren Buffett, said one of the sources. Hon Hai is also in negotiations to become rival TV maker Sharp Corp's biggest shareholder.

FOREIGN INTEREST

Despite a strong yen, interest is likely to come mainly from potential foreign buyers, said the sources, who did not want to be named as the talks are private.

Selling the business overseas may not go down well with a Japanese government that in the past has kept technology at home by promoting alliances between local producers. Panasonic Corp, NEC Corp and Hitachi Ltd also make lithium-ion batteries, though the firms' fabrication technology differs.

Sony declined to comment on the possible sale of the business, which makes lithium-ion batteries used in smartphones, tablets and PCs. "At our corporate strategy announcement in April, (Hirai) said we would explore possible alliances in E-vehicle batteries and battery storage," said spokesman George Boyd.

As with TVs, Sony has struggled to compete against South Korean rivals in a battery business that is worth $18 billion a year. The small cells that power mobile devices now account for around 60 percent of the market, ahead of those used in cars and electrical tools, according to research company IHS iSuppli.

While lithium-ion battery demand has steadily expanded with the boom in mobile consumer electronics, severe price competition has resulted in razor thin margins that favor large-scale manufacturers with weak local currencies.

"The battery business is a prime example of the company's loss-making and unwanted assets. It doesn't make sense for them to keep it," said one of the banking sources.

FALLING MARKET SHARE

As Hirai doubles down on Sony's strength in consumer electronics, the company has sold a chemicals company, with 2,900 workers, and may also let go its U.S. headquarters building in New York go. At the same time, it has spent close to $2 billion on a U.S. game clouding company and a stake in medical equipment maker Olympus Corp.

Sony produced 74 million lithium-ion battery cells in July-September - almost 40 percent fewer than in the first quarter of 2008, when its output topped Samsung SDI Co Ltd's 110 million and LG Chem Ltd's 54 million, according to Techno System Research in Tokyo. Sony's market share is now 7 percent, dwarfed by Samsung SDI's 27 percent, Panasonic's 21 percent and LG Chem's 17 percent.

Sony's battery unit, which also makes button batteries for watches and smaller appliances and optical devices, has three factories in Japan and two overseas assembly plants in China and Singapore. It has yet to enter the more lucrative business for automotive batteries.

In its most recent filing, Sony valued the battery unit's fixed assets, including production sites and machinery, at 52 billion yen ($633 million). Under Sony's accounting rules, asset sales are typically booked as operating profit.

The cost to protect $10 million of Sony debt against default for five years has edged higher this week to almost $400,000. The CDS spreads had tumbled earlier this month - from above 480 basis points - after Sony said it would raise 150 billion yen ($1.9 billion) through a sale of convertible bonds.

($1 = 82.1200 Japanese yen)

(Additional reporting by Reiji Murai; Editing by Ian Geoghegan)


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Microsoft sold 40 million Windows 8 licenses in month: exec

SEATTLE (Reuters) - Microsoft Corp has sold 40 million Windows 8 licenses in the month since the launch, according to one of the new co-heads of the Windows unit, setting a faster pace than Windows 7 three years ago.

The sales number represents a solid but unspectacular start for the touch-friendly operating system designed to combat Apple Inc's and Google Inc's domination of mobile computing, which has shunted aside PCs in favor of iPads and smartphones.

Tami Reller, finance and marketing head of the Windows business, did not give a precise comparison, but sales of 40 million licenses for Windows 8, launched on October 26, appear to be ahead of Windows 7, which sold just over 60 million units in the first 10 weeks on sale at the end of 2009.

Reller did not break down the Windows 8 license sales between relatively cheap upgrades and purchases of new machines running the new software, but suggested much of the growth was coming from upgrades.

"Windows 8 upgrade momentum is outpacing that of Windows 7," said Reller, speaking at an investor conference held by Credit Suisse. Upgrading to Windows 8 costs $40, compared to $70 for the full software package or hundreds of dollars for a new PC.

The latest figure does not mean that 40 million users have adopted Windows 8. Many of the sales are to PC manufacturers, who in turn sell a large number of machines to companies, very few of which are using Windows 8 yet.

According to tech research firm StatCounter, about 1 percent of the world's 1.5 billion or so personal computers - making a total of around 15 million - are actually running Windows 8.

Reller did not disclose sales of Microsoft's new Surface tablet, its first-ever own-brand PC, designed to challenge the iPad head on.

The first Surface, based on a chip designed by ARM Holdings Plc, does not run old versions of Microsoft programs. A slightly bigger version based on an Intel Corp chip that will run the full Windows 8 Pro operating system and be fully compatible with the Office suite of applications will be available in January, Reller said.

The investor conference was the first public appearance for Reller since she was named as one of two executives to run the Windows unit after president Steven Sinofsky unexpectedly left two weeks ago. Julie Larson-Green heads the engineering side of Windows.

Reller said the Windows unit had survived Sinofsky's surprise departure.

"The team holistically is in great, great shape. And the product is in great shape," she said, responding to a question from a Credit Suisse analyst. "I think transitions are always somewhat of a challenge, but I think that timing-wise it is a reasonable time, and the team is busy."

Earlier in the day, Microsoft said it had sold more than 750,000 Xbox game consoles in the United States last week, including the day after Thanksgiving, one of the country's biggest shopping days.

That is down from 960,000 sales in the same week a year ago, in line with reduced computer game spending across the board this year, as gamers hold off on purchases in the tight economy and move toward free online games.

(Reporting by Bill Rigby; Editing by Gary Hill, Andre Grenon and Bernard Orr)


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HP hit with civil securities lawsuit over Autonomy deal

Written By Bersemangat on Selasa, 27 November 2012 | 09.56

SAN FRANCISCO (Reuters) - Hewlett-Packard Co was sued on Monday by an investor who claimed the company knew statements about its Autonomy acquisition were misleading and led the stock to fall, according to lawyers representing the plaintiff.

The proposed class action lawsuit was filed in a San Francisco federal court.

HP dropped a bombshell last Tuesday with an $8.8 billion write-down on its acquisition of British software firm Autonomy, saying the company inflated sales with improper accounting. Autonomy co-founder Mike Lynch has denied any wrongdoing.

HP bought Autonomy for a hefty $11.1 billion last year. HP has said it alerted regulators on both sides of the Atlantic.

The lawsuit, one of the first to be filed by investors on the Autonomy mess, said HP hid the fact it gained control of Autonomy based on financial statements that could not be relied upon. It also said that HP had not revealed to investors that it tried to undo the Autonomy agreement before it closed because of the accounting issues.

(Reporting By Dan Levine and Poornima Gupta; Editing by Gerald E. McCormick and Andre Grenon)


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Privacy groups ask Facebook to withdraw proposed policy changes

SAN FRANCISCO (Reuters) - Two privacy advocacy groups urged Facebook Inc on Monday to withdraw proposed changes to its terms of service that would allow the company to share user data with recently acquired photo-application Instagram, eliminate a user voting system and loosen email restrictions within the social network.

The changes, which Facebook unveiled on Wednesday, raise privacy risks for users and violate the company's previous commitments to its roughly 1 billion members, according to the Electronic Privacy Information Center and the Center for Digital Democracy.

"Facebook's proposed changes implicate the user privacy and terms of a recent settlement with the Federal Trade Commission," the groups said in a letter to Facebook Chief Executive Mark Zuckerberg that was published on their websites on Monday.

By sharing information with Instagram, the letter said, Facebook could combine user profiles, ending its practice of keeping user information on the two services separate.

Facebook declined to comment on the letter.

In April, Facebook settled privacy charges with the U.S. Federal Trade Commission that it had deceived consumers and forced them to share more personal information than they intended. Under the settlement, Facebook is required to get user consent for certain changes to its privacy settings and is subject to 20 years of independent audits.

Facebook, Google and other online companies have faced increasing scrutiny and enforcement from privacy regulators as consumers entrust ever-increasing amounts of information about their personal lives to Web services.

Facebook unveiled a variety of proposed changes to its terms of service and data use polices on Wednesday, including a move to scrap a 4-year old process that can allow the social network's roughly 1 billion users to vote on changes to its policies.

If proposed changes generate more than 7,000 public comments during a seven-day period, Facebook's current terms of service automatically trigger a vote by users to approve the changes. But the vote is only binding if at least 30 percent of users take part, and two prior votes never reached that threshold.

The latest proposed changes had garnered more than 17,000 comments by late Monday.

Facebook also said last week that it wanted to eliminate a setting for users to control who can contact them on the social network's email system. The company said it planned to replace the "Who can send you Facebook messages" setting with new filters for managing incoming messages.

That change is likely to increase the amount of unwanted "spam" messages that users receive, the privacy groups warned on Monday.

Facebook's potential information sharing with Instagram, a photo-sharing service for smartphone users that it bought in October, flows from proposed changes that would allow the company to share information between its own service and other businesses or affiliates it owns.

The change could open the door for Facebook to build unified profiles of its users that include people's personal data from its social network and from Instagram, similar to recent moves by Google Inc.

In January, Google said it would combine users' personal information from its various Web services - such as search, email and the Google+ social network - to provide a more customized experience. The unified data policy raised concerns among some privacy advocates and regulators, who said it was an invasion of people's privacy.

"As our company grows, we acquire businesses that become a legal part of our organization," Facebook spokesman Andrew Noyes said in an emailed statement on Monday.

"Those companies sometimes operate as affiliates. We wanted to clarify that we will share information with our affiliates and vice versa, both to help improve our services and theirs, and to take advantage of storage efficiencies," Noyes said.

(Reporting By Alexei Oreskovic; Editing by Richard Pullin)


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Professor finds profiling in ads for personal data website

Written By Bersemangat on Senin, 26 November 2012 | 09.56

LAS VEGAS (Reuters) - Dr. Latisha Smith, an expert in decompression sicknesses afflicting deep sea divers, has cleared criminal background checks throughout her medical career. Yet someone searching the Web for the Washington State physician might well come across an Internet ad suggesting she may have an arrest record.

"Latisha Smith, arrested?" reads one such advertisement.

Another says: "Latisha Smith Truth... Check Latisha Smith's Arrests."

Instantcheckmate.com, which labels itself the "Internet's leading authority on background checks," placed both ads. A statistical analysis of the company's advertising has found it has disproportionately used ad copy including the word "arrested" for black-identifying names, even when a person has no arrest record.

Latanya Sweeney is a Harvard University professor of government with a doctorate in computer science. After learning that her own name had popped up in an "arrested?" ad when a colleague was searching for one of her academic publications, she ran more than 120,000 searches for names primarily given to either black or white children, testing ads delivered for 2,400 real names 50 times each. (The author of this story is a Harvard University fellow collaborating with Professor Sweeney on a book about the business of personal data.)

Ebony Jefferson, for example, often turns up an instantcheckmate.com ad reading: "Ebony Jefferson, arrested?" but an ad triggered by a search for Emily Jefferson would read: "We found Emily Jefferson." Searches for randomly chosen black-identifying names such as Deshawn Williams, Latisha Smith or Latanya Smith often produced the "arrested?" headline or ad text with the word "arrest," whereas other less ethnic-sounding first names matched with the same surnames typically did not.

"As an African-American, I'm used to profiling like that," said Dr. Smith. "I think it's horrendous that they get away with it."

Instantcheckmate.com declined to comment. The company's founder and managing partner, Kristian Kibak, did not respond to repeated emails and phone calls over a period of several months, and other employees referred calls to management. Company officials also declined to comment when visited twice at their call center in Las Vegas. Former employees said they had signed nondisclosure agreements that barred them from speaking openly about Instant Checkmate.

Instantcheckmate.com is one of many data brokers that use and sell data for a variety of purposes. The field is attracting growing attention, both from government and consumers concerned about possible abuse. Rapid advances in technology have opened up all sorts of opportunities for commercialization of data.

Anyone can set up shop and sell arrest records as long as they stay clear of U.S. legal limitations such as using the information to determine creditworthiness, insurance or job suitability.

Companies that compete with instantcheckmate.com include intelius.com and mylife.com. An examination of Internet advertising starting last March as well as Sweeney's study did not find any rival companies advertising background searches on individual names along racial lines.

WHO CAN BE TRUSTED?

In its own marketing, Instantcheckmate.com sums up its mission like this: "Parents will no longer need to wonder about whether their neighbors, friends, home day care providers, a former spouse's new love interest or preschool providers can be trusted to care for their children responsibly."

According to preliminary findings of Professor Sweeney's research, searches of names assigned primarily to black babies, such as Tyrone, Darnell, Ebony and Latisha, generated "arrest" in the instantcheckmate.com ad copy between 75 percent and 96 percent of the time. Names assigned at birth primarily to whites, such as Geoffrey, Brett, Kristen and Anne, led to more neutral copy, with the word "arrest" appearing between zero and 9 percent of the time.

A few names fell outside of these patterns: Brad, a name predominantly given to white babies, produced an ad with the word "arrest" 62 percent to 65 percent of the time. Sweeney found that ads appear regardless of whether the name has an arrest record attached to it.

Blacks make up about 13 percent of the U.S. population but account for 28 percent of the arrests listed on the FBI's most recent annual crime statistics.

Internet advertising based on millions of name pairs has only existed in recent years, so targeting ads along racial lines raises new legal questions. Experts say the Federal Trade Commission, which this year assessed an $800,000 penalty against personal data site Spokeo.com for different reasons (related to the use of data for job-vetting purposes), would be the institution best placed to review Instant Checkmate's practices.

The FTC enforces regulations against unfair or deceptive business practices. A deceptive claim that would be more likely to get people to purchase a product than they would otherwise would be a typical reason the FTC might act against a company, said one FTC official who did not want to be identified. For example, authorities could take action against a firm that makes misleading claims suggesting a product such as records exist when they do not.

"It's disturbing," Julie Brill, an FTC commissioner, said of Instant Checkmate's advertising. "I don't know if it's illegal ... It's something that we'd need to study to see if any enforcement action is needed."

Instant Checkmate's Kibak, who is in his late 20s, works out of a San Diego office near the Pacific Ocean. The son of a California biology professor, he did not respond to repeated phone calls and emails seeking comment about his business.

"We would consider the answers to most of your questions trade secrets and therefore would not be comfortable disclosing that information," Joey Rocco, Kibak's partner according to the firm's Nevada state registration, said in an email.

Instant Checkmate LLC maintains its official corporate headquarters at an address in an industrial zone across the highway from the Las Vegas strip. At the back of a long parking lot, the company shares a warehouse building with an auto repair shop. At one end, a large roll-up garage-style door opens to the company's call center. Workers face a gray cinder-block wall, their backs to the entrance. Staff declined to answer questions.

DATA FIRMS PROLIFERATE

Professor Sweeney's analysis found that some instantcheckmate.com ads hint at arrest records when the firm's database has no record of any arrest for that name, as is the case with her own name. In other cases, such as that of Latisha Smith, the company does have arrest records for some people by that name, although not for the doctor of hypobaric medicine in Washington State.

Laura Beatty, an Internet Marketing Inc expert in helping companies achieve prominent placement in Web searches, said instantcheckmate.com appeared to choose its ads based on combinations of thousands of different first and last names and then segment them based on the first names.

"There does look like there is some definite profiling going on here," she said. "In the searches that I looked at, it seemed like the more Midwestern- and WASP-sounding the name was, the less likely it was to have either any advertisement at all or to have something that was more geared around the arrest or criminal background."

Internet firms selling criminal records and personal data to the public have proliferated in recent years, as low-cost computing enables even modest operations to maintain large databases on millions of Americans. Such sites sell access to users for a one-time fee - $29.95 in the case of instantcheckmate.com - or via monthly subscription plans.

Instant Checkmate, first registered in Nevada in 2010, said in a recent press release posted online that the firm had attracted more than 570,000 customers since its start and counted more than 200,000 subscribers.

According to alexa.com, an Amazon.Com Inc site analyzing website traffic, instantcheckmate.com has ranged roughly between the 500th and 600th most visited U.S. site in recent weeks, making it an increasingly major player in this area.

The company is able to target its ads on an individual name basis through a program called Google AdWords. Instantcheckmate.com and others companies like it use Google AdWords to bid to place small text advertisements alongside search results on major websites triggered by the names in their data base. Such ads typically cost a company far less than a dollar, sometimes just a few pennies, each time they're clicked.

Google says it does not control what names appear in AdWords. "Advertisers select all of their keywords, and ads are triggered when someone searches for that name. We don't have any role in the advertiser's selection of unique proper names," said a Google spokesman.

Some in Congress have raised concerns about developments in the use of personal data. In October, Senator John Rockefeller IV, a Democrat from West Virginia and chairman of the Senate Committee on Commerce, Science and Transportation, opened a probe into leading data brokers. "Collecting, storing and selling information about Americans raises all types of questions that require careful scrutiny," he said.

(Adam Tanner is a Reuters correspondent currently on a 2012-13 fellowship at Harvard University's Department of Government.)

(Editing by Claudia Parsons and Prudence Crowther)


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Apple seeks to add more products to Samsung patent lawsuit

(Reuters) - Apple Inc has asked a federal court to add six more products to its patent infringement lawsuit against Samsung Electronics Co, including the Samsung Galaxy Note II, in the latest in move in an ongoing legal war between the two companies.

The case is one of two patent infringement lawsuits pending in the U.S. District Court in San Jose by Apple against Samsung. An earlier lawsuit by Apple that related to different patents resulted in a $1.05 billion jury verdict against Samsung on August 24.

Apple is also seeking to add the Samsung Galaxy S III, running the new Android "Jelly Bean" operating system, the Samsung Galaxy Tab 8.9 Wifi, the Samsung Galaxy Tab 2 10.1, the Samsung Rugby Pro, and the Samsung Galaxy S III Mini, to its lawsuit, according to a court filing on Friday.

"Apple has acted quickly and diligently to determine that these newly-released products do infringe many of the same claims already asserted by Apple," the company said in the filing.

Samsung representatives did not immediately respond to requests for comment.

Apple filed the second lawsuit in February, alleging that various Samsung smartphone and tablet products including the Galaxy Nexus infringed eight of its patents.

Samsung denied infringement and filed a cross-complaint alleging that Apple's iPhone and iPad infringed eight of its patents.

A U.S. judge on November 15 allowed Samsung to pursue claims the iPhone5 also infringes its patents.

The case is Apple Inc. v. Samsung Electronics Co., Ltd. et al, No. 12-cv-00630.

(Reporting By John McCrank; Editing by Theodore d'Afflisio)


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Sony at greater risk than Panasonic in electronics downturn: Fitch

Written By Bersemangat on Minggu, 25 November 2012 | 09.56

TOKYO (Reuters) - Panasonic Corp has a better chance than rival Sony Corp of surviving Japan's consumer electronics slump because of its unglamorous but stable appliance business of washing machines and fridges, credit rating agency Fitch said Friday.

Fitch cut Panasonic's rating by two notches to BB and Sony three notches to BB minus on Thursday, the first time one of the three major ratings agencies have put the creditworthiness of either company into junk-bond territory.

Rival agencies Moody's and S&P rate both of Japan's consumer electronic giants at the same level, just above junk status. Moody's last cut its rating on Panasonic on Tuesday.

Panasonic "has the advantage of a relatively stable consumer appliance business that is still generating positive margins", Matt Jamieson, Fitch's head of Asia-Pacific, said in a conference call on Friday to explain its ratings downgrades.

But at Sony, he added, "most of their electronic business are loss making, they appear to be overstretched."

Japan's TV industry has been bested by cheaper, more innovative models from Samsung Electronics and other foreign rivals, while tablets and smartphones built by Apple Inc have become the dominant consumer electronics devices.

Investors are focusing on the fate of Sony and Panasonic after another struggling Japanese consumer electronics firm, Sharp Corp, maker of the Aquos TV, secured a $4.6 billion bail-out by banks including Mizuho Financial Group and Mitsubishi UFJ Financial Group.

Sony and Panasonic have chosen divergent survival paths.

Panasonic, maker of the Viera TV, is looking to expand its businesses in appliances, solar panels, lithium batteries and automotive components. Appliances amount to around only 6 percent of the company's sales, but they generate margins of more than 6 percent and make up a big chunk of operating profit.

Sony, creator of the Walkman, is doubling down on consumer gadgets in a bid to regain ground from Samsung and Apple in mobile devices while bolstering digital cameras and gaming.

The latest downgrades will curtail the ability of both Japanese companies to raise money in credit markets to help fund restructurings of their business portfolios.

For now, however, that impact is limited, given the support Panasonic and Sony are receiving from their banks.

In October, Panasonic, which expects to lose $10 billion in the year to March 31, secured $7.6 billion of loan commitments from banks including Sumitomo Mitsui Financial Group and Mitsubishi UFJ, a financing backstop it says will help it avoid having to seek capital in credit markets.

Sony, which has forecast a full-year profit of $1.63 billion helped by the sale of a chemicals business to a Japanese state bank, announced plans to raise $1.9 billion through a convertible bond before the latest rating downgrade.

Thomson Reuters' Starmine structural model, which evaluates market views of credit risk, debt levels and changes in asset values gives Panasonic and Sony an implied rating of BB minus. Sharp's implied rating is three notches lower at B minus.

Standard & Poor's rates Panasonic and Sony at BBB, the second lowest of the investment grade, while Moody's Investors Service has them on Baa3, the lowest of its high-grade category. Moody's has a negative outlook for both firms while S&P sees a stable outlook for Panasonic and a negative one for Sony.

Stock markets in Japan were closed on Friday for a national holiday.

(Reporting by Tim Kelly; Editing by Mark Bendeich)


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Autonomy founder says HP allegations don't add up

LONDON (Reuters) - Mike Lynch, mathematics whiz and former boss of Autonomy, said he can't see how accusations leveled by Hewlett-Packard Co of dodgy accounting add up to a $5 billion writedown on the software business he sold them last year.

HP said on Tuesday it would write $8.8 billion off its $11.1 billion purchase of the British company, $5 billion of it due to "serious accounting improprieties" and "a wilful effort by Autonomy to mislead shareholders" revealed by a whistleblower and a forensic audit by accountants PricewaterhouseCoopers.

It has alerted regulators on both sides of the Atlantic.

Mike Lynch says he has yet to hire a lawyer and has not spoken to either HP or any investigators, but he has sat down with past accounts of the firm he founded in an attempt to answer the accusations laid out in HP's public statements.

HP's general counsel John Schultz claimed Autonomy created more than $200 million in revenue over a two-year period from 2009, which would amount to 12.5 percent of Autonomy's $1.6 billion in revenues in their annual accounts for 2009 and 2010.

While denying the allegations as "utterly wrong", Lynch said there were three areas where accounting rules gave scope for differences of interpretation.

Accounting rule setters have been working on plans for a decade for common global accounting rules so regulators and investors can compare company accounts, but until that task is complete, there are competing standards that can produce different results for companies doing broadly the same thing.

The International Accounting Standards Board (IASB) has devised International Financial Reporting Standards (IFRS), used in more than 100 countries, and the basis for Autonomy's accounts prior to HP's acquisition.

But many U.S. companies such as HP use U.S. Generally Accepted Accounting Principles (GAAP), which can differ from IFRS, notably in respect of software revenue recognition.

One of the accusations HP levels against Autonomy's former management is that the company was booking licensing revenue upfront before deals closed, thereby inflating revenue.

"Revenue recognition for software vendors can be complicated, to say the least," accountants Grant Thornton wrote in a note.

This is because software companies often bundle products and services such as licenses, installation, training and maintenance support into a single contract.

Under accounting rules, a company can establish a model for pricing different parts of the contract so that some revenue can be taken up front and the rest over the period of the contract.

Under IFRS this is governed by rule IAS 18. Under U.S. GAAP there are more stringent conditions to satisfy, requiring what is called VSOE, or vendor-specific objective evidence.

"It shouldn't be a surprise this issue is coming up. It shows how loosey-goosey IFRS is," said Lynn E. Turner, former chief accountant of the Securities and Exchange Commission, who was running the SEC department that issued Staff Accounting Bulletin 101, which set a lot of the specific rules around revenue recognition.

Lynch believes that HP might not have yet established its own VSOE model and therefore might not be recognizing revenues upfront, which might result in a restatement of Autonomy revenues.

"All of these deals went through (Autonomy's auditors) Deloitte themselves," said Lynch. "Deloitte apply the test independently of us, and it is a standard test, and it is explicitly stated in the annual report and accounts."

Autonomy would submit every single invoice to Deloitte each quarter as part of the auditing process, added Lynch.

Deloitte said it conducted its audit work "in full compliance with regulation and professional standards", and "categorically denied" any knowledge of improprieties or misrepresentations in Autonomy's financial statements.

HARDWARE

Another allegation HP has stated in public is that Autonomy mischaracterized revenue from low-margin hardware sales as software sales.

Autonomy always represented itself as a software firm but 10 percent to 15 percent of its revenue came from money-losing sales of low-end hardware, HP said.

Lynch said it was not a secret that Autonomy sells hardware. In company reports for 2009-2010, hardware sales accounted for around 8 percent of revenue. Occasionally, if a customer wanted a desktop, Autonomy would provide a package that might include desktops, for example, along with the software.

In terms of money-losing sales, Lynch acknowledged that in a small number of cases, deals were struck at a slight loss, in exchange for the client agreeing to market Autonomy products.

In those cases, the transaction would be charged as a marketing expense, not a direct cost of sales, but overall accounted for less than 2 percent of total revenues, Lynch said.

Though this "moves the gross margin a percent or two", it doesn't affect profit, he added.

RESELLERS

Another allegation made by HP is that Autonomy booked some licensing deals with partners as revenue, even though no customer bought products.

Autonomy generates most of its sales revenues through deals with over 400 clients including IBM and Wipro who resell the software to end-users.

Under IFRS, revenue can be recognized if sales are delivered in the current period, there is no right of return policy, collection is probable and the fee is fixed and determinable.

Lynch said only deals that fulfilled these criteria were booked as revenue.

Under U.S. GAAP, if Autonomy's sale was contingent on the reseller's sale, the latter must be completed before Autonomy can claim it as revenue.

Even so, Lynch said over 90 percent of resellers completed sales. In some cases, he said, it was perfectly reasonable to sell to a reseller with no end user as they might use the software themselves.

While these accounting differences could have an impact, Lynch believes it is hard to reach the dizzying figures that HP has come up with.

"There is nothing there that you can warrant such a big effect in terms of writedown," he insisted.

(Reporting By Anjuli Davies, additional reporting by Nanette Byrnes; Editing by Will Waterman)


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Sony at greater risk than Panasonic in electronics downturn: Fitch

Written By Bersemangat on Sabtu, 24 November 2012 | 09.56

TOKYO (Reuters) - Panasonic Corp has a better chance than rival Sony Corp of surviving Japan's consumer electronics slump because of its unglamorous but stable appliance business of washing machines and fridges, credit rating agency Fitch said Friday.

Fitch cut Panasonic's rating by two notches to BB and Sony three notches to BB minus on Thursday, the first time one of the three major ratings agencies have put the creditworthiness of either company into junk-bond territory.

Rival agencies Moody's and S&P rate both of Japan's consumer electronic giants at the same level, just above junk status. Moody's last cut its rating on Panasonic on Tuesday.

Panasonic "has the advantage of a relatively stable consumer appliance business that is still generating positive margins", Matt Jamieson, Fitch's head of Asia-Pacific, said in a conference call on Friday to explain its ratings downgrades.

But at Sony, he added, "most of their electronic business are loss making, they appear to be overstretched."

Japan's TV industry has been bested by cheaper, more innovative models from Samsung Electronics and other foreign rivals, while tablets and smartphones built by Apple Inc have become the dominant consumer electronics devices.

Investors are focusing on the fate of Sony and Panasonic after another struggling Japanese consumer electronics firm, Sharp Corp, maker of the Aquos TV, secured a $4.6 billion bail-out by banks including Mizuho Financial Group and Mitsubishi UFJ Financial Group.

Sony and Panasonic have chosen divergent survival paths.

Panasonic, maker of the Viera TV, is looking to expand its businesses in appliances, solar panels, lithium batteries and automotive components. Appliances amount to around only 6 percent of the company's sales, but they generate margins of more than 6 percent and make up a big chunk of operating profit.

Sony, creator of the Walkman, is doubling down on consumer gadgets in a bid to regain ground from Samsung and Apple in mobile devices while bolstering digital cameras and gaming.

The latest downgrades will curtail the ability of both Japanese companies to raise money in credit markets to help fund restructurings of their business portfolios.

For now, however, that impact is limited, given the support Panasonic and Sony are receiving from their banks.

In October, Panasonic, which expects to lose $10 billion in the year to March 31, secured $7.6 billion of loan commitments from banks including Sumitomo Mitsui Financial Group and Mitsubishi UFJ, a financing backstop it says will help it avoid having to seek capital in credit markets.

Sony, which has forecast a full-year profit of $1.63 billion helped by the sale of a chemicals business to a Japanese state bank, announced plans to raise $1.9 billion through a convertible bond before the latest rating downgrade.

Thomson Reuters' Starmine structural model, which evaluates market views of credit risk, debt levels and changes in asset values gives Panasonic and Sony an implied rating of BB minus. Sharp's implied rating is three notches lower at B minus.

Standard & Poor's rates Panasonic and Sony at BBB, the second lowest of the investment grade, while Moody's Investors Service has them on Baa3, the lowest of its high-grade category. Moody's has a negative outlook for both firms while S&P sees a stable outlook for Panasonic and a negative one for Sony.

Stock markets in Japan were closed on Friday for a national holiday.

(Reporting by Tim Kelly; Editing by Mark Bendeich)


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Autonomy founder says HP allegations don't add up

LONDON (Reuters) - Mike Lynch, mathematics whiz and former boss of Autonomy, said he can't see how accusations leveled by Hewlett-Packard Co of dodgy accounting add up to a $5 billion writedown on the software business he sold them last year.

HP said on Tuesday it would write $8.8 billion off its $11.1 billion purchase of the British company, $5 billion of it due to "serious accounting improprieties" and "a wilful effort by Autonomy to mislead shareholders" revealed by a whistleblower and a forensic audit by accountants PricewaterhouseCoopers.

It has alerted regulators on both sides of the Atlantic.

Mike Lynch says he has yet to hire a lawyer and has not spoken to either HP or any investigators, but he has sat down with past accounts of the firm he founded in an attempt to answer the accusations laid out in HP's public statements.

HP's general counsel John Schultz claimed Autonomy created more than $200 million in revenue over a two-year period from 2009, which would amount to 12.5 percent of Autonomy's $1.6 billion in revenues in their annual accounts for 2009 and 2010.

While denying the allegations as "utterly wrong", Lynch said there were three areas where accounting rules gave scope for differences of interpretation.

Accounting rule setters have been working on plans for a decade for common global accounting rules so regulators and investors can compare company accounts, but until that task is complete, there are competing standards that can produce different results for companies doing broadly the same thing.

The International Accounting Standards Board (IASB) has devised International Financial Reporting Standards (IFRS), used in more than 100 countries, and the basis for Autonomy's accounts prior to HP's acquisition.

But many U.S. companies such as HP use U.S. Generally Accepted Accounting Principles (GAAP), which can differ from IFRS, notably in respect of software revenue recognition.

One of the accusations HP levels against Autonomy's former management is that the company was booking licensing revenue upfront before deals closed, thereby inflating revenue.

"Revenue recognition for software vendors can be complicated, to say the least," accountants Grant Thornton wrote in a note.

This is because software companies often bundle products and services such as licenses, installation, training and maintenance support into a single contract.

Under accounting rules, a company can establish a model for pricing different parts of the contract so that some revenue can be taken up front and the rest over the period of the contract.

Under IFRS this is governed by rule IAS 18. Under U.S. GAAP there are more stringent conditions to satisfy, requiring what is called VSOE, or vendor-specific objective evidence.

"It shouldn't be a surprise this issue is coming up. It shows how loosey-goosey IFRS is," said Lynn E. Turner, former chief accountant of the Securities and Exchange Commission, who was running the SEC department that issued Staff Accounting Bulletin 101, which set a lot of the specific rules around revenue recognition.

Lynch believes that HP might not have yet established its own VSOE model and therefore might not be recognizing revenues upfront, which might result in a restatement of Autonomy revenues.

"All of these deals went through (Autonomy's auditors) Deloitte themselves," said Lynch. "Deloitte apply the test independently of us, and it is a standard test, and it is explicitly stated in the annual report and accounts."

Autonomy would submit every single invoice to Deloitte each quarter as part of the auditing process, added Lynch.

Deloitte said it conducted its audit work "in full compliance with regulation and professional standards", and "categorically denied" any knowledge of improprieties or misrepresentations in Autonomy's financial statements.

HARDWARE

Another allegation HP has stated in public is that Autonomy mischaracterized revenue from low-margin hardware sales as software sales.

Autonomy always represented itself as a software firm but 10 percent to 15 percent of its revenue came from money-losing sales of low-end hardware, HP said.

Lynch said it was not a secret that Autonomy sells hardware. In company reports for 2009-2010, hardware sales accounted for around 8 percent of revenue. Occasionally, if a customer wanted a desktop, Autonomy would provide a package that might include desktops, for example, along with the software.

In terms of money-losing sales, Lynch acknowledged that in a small number of cases, deals were struck at a slight loss, in exchange for the client agreeing to market Autonomy products.

In those cases, the transaction would be charged as a marketing expense, not a direct cost of sales, but overall accounted for less than 2 percent of total revenues, Lynch said.

Though this "moves the gross margin a percent or two", it doesn't affect profit, he added.

RESELLERS

Another allegation made by HP is that Autonomy booked some licensing deals with partners as revenue, even though no customer bought products.

Autonomy generates most of its sales revenues through deals with over 400 clients including IBM and Wipro who resell the software to end-users.

Under IFRS, revenue can be recognized if sales are delivered in the current period, there is no right of return policy, collection is probable and the fee is fixed and determinable.

Lynch said only deals that fulfilled these criteria were booked as revenue.

Under U.S. GAAP, if Autonomy's sale was contingent on the reseller's sale, the latter must be completed before Autonomy can claim it as revenue.

Even so, Lynch said over 90 percent of resellers completed sales. In some cases, he said, it was perfectly reasonable to sell to a reseller with no end user as they might use the software themselves.

While these accounting differences could have an impact, Lynch believes it is hard to reach the dizzying figures that HP has come up with.

"There is nothing there that you can warrant such a big effect in terms of writedown," he insisted.

(Reporting By Anjuli Davies, additional reporting by Nanette Byrnes; Editing by Will Waterman)


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RIM shares rally as optimism about new devices grows

Written By Bersemangat on Jumat, 23 November 2012 | 09.56

TORONTO (Reuters) - Shares of Research In Motion Ltd surged 17.3 percent in Toronto on Thursday on rising optimism around RIM's soon-to-be-launched BlackBerry 10 devices that will vie against Apple's iPhone and Android-based smartphones.

The rally in RIM shares was sparked by National Bank analyst Kris Thompson, who boosted his price target on RIM shares to $15 from $12. Thompson believes that there is more money to be made in the stock ahead of the early 2013 launch of the make-or-break new line of devices.

It was the second vote of confidence this week for the Canadian company, which has struggled to compete with the iPhone and with devices running on Google's market-leading Android operating system. On Tuesday, Jefferies & Co analyst Peter Misek, who has been one of RIM's most influential critics, raised his rating and price target on the stock.

RIM shares, which have now risen in the last seven straight trading sessions, rose to their highest level since May on the Toronto Stock Exchange on Thursday and ended the day at C$12. The U.S. market, where trade volumes usually top those in Toronto, was closed for Thanksgiving on Thursday.

It was the biggest percentage gain in the stock since April 2009, when RIM shares rallied after the company's results topped market expectations.

Thompson, who has an "outperform" rating on RIM stock, said he raised his price target due partly to the "positive sentiment building in the industry" ahead of BB10's launch.

"The new management team is executing by maintaining the BlackBerry subscriber base, managing costs and cash, and seemingly readying a February 2013 BB10 global platform launch," he said in a note to clients.

Earlier this week, Misek said a favorable reaction from telecom carriers to the new devices and the BB10 operating system that runs them was behind his decision to lift his rating and price target on RIM.

The BlackBerry maker, a smartphone pioneer, hopes BB10 will rescue it from a prolonged slump. RIM shares peaked at over $148 in 2008 before diving more than 90 percent.

The stock is up more than 90 percent in the past two months as the launch date for the BB10 devices nears. The stock has now enjoyed seven straight days of gains.

RIM promises its new devices will be faster and smoother than previous smartphones, and will have a large catalog of applications, which are crucial to the success of any new line of smartphones.

Thompson said he now expects RIM to ship about 35.5 million devices in fiscal 2014, up from an earlier estimate of 31.6 million. RIM, whose sales slump has been particularly pronounced in North America, shipped 7.4 million devices in its most recent quarter, ended September 1.

RIM has said it plans to roll out a touchscreen version of its BB10 smartphone initially. Phones with the mini QWERTY keyboards that many long-time BlackBerry users rave about will come a few weeks later, while lower-end versions of both devices will be launched later in the year.

"The shipments boost reflects about one more month of BB10 product availability plus a little extra for the positive sentiment building in the industry from our discussions," Thompson said.

Analysts had expected the new devices to go on sale in March. But RIM said earlier this month it plans to launch them on Jan 30, leading many to speculate they will hit store shelves around mid-February.

Chief Executive Thorsten Heins told Reuters last week he is confident that the new BB10s will provide RIM with a framework for growth over the next decade.

Earlier this month, the new platform and devices won U.S. government security clearance, which would allow both U.S. and Canadian government agencies to deploy the new smartphones as soon as they are available.

(Editing by Theodore d'Afflisio Janet Guttsman and Peter Galloway)


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Samsung wins U.S. court order to access Apple-HTC deal details

SAN FRANCISCO (Reuters) - A U.S. judge has ordered Apple Inc to disclose to rival Samsung Electronics details of a legal settlement the iPhone maker reached with Taiwan's HTC Corp, including terms of a 10-year patents licensing agreement.

The Korean electronics giant had earlier filed a motion to compel its U.S. rival -- with whom it is waging a bitter legal battle over mobile patents across several countries -- to reveal details of the settlement that was reached on November 10 with HTC but which have been kept under wraps.

In August, the iPhone maker won a $1.05 billion verdict against Samsung after a U.S. jury found that certain Samsung gadgets violated Apple's software and design patents.

Now, legal experts say the question of which patents are covered by the Apple-HTC settlement, and licensing details, could be instrumental in Samsung's efforts to thwart Apple's subsequent quest for a permanent sales ban on its products.

The Asian company has argued it is "almost certain" that the HTC deal covers some of the same patents involved in its own litigation with Apple.

The court on Wednesday ordered Apple to produce a full copy of the settlement agreement "without delay", subject to an Attorneys-Eyes-Only designation.

Representatives for the U.S. company could not immediately be reached for comment.

Samsung also requested the California court to add three newly released Apple products -- the iPod Touch 5, the iPad 4 and the iPad mini -- to the list of devices that it claims to have infringed on some of its patents, according to court documents.

The settlement of Apple and HTC ended their worldwide litigation and brought to a close one of the first major flare-ups in the global smartphone patent wars.

Apple first sued HTC in 2010, setting in motion a legal conflagration that has since circled the globe and engulfed the biggest names in mobile technology, from Samsung to Google Inc's Motorola Mobility unit.

(Reporting By Edwin Chan; Additional reporting by Miyoung Kim in SEOUL; Editing by Muralikumar Anantharaman)


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In HP-Autonomy debacle, many advisers but little good advice

Written By Bersemangat on Kamis, 22 November 2012 | 09.56

(Reuters) - When Hewlett Packard acquired Autonomy last year for $11.1 billion, some 15 different financial, legal and accounting firms were involved in the transaction -- and none raised a flag about what HP said Tuesday was a major accounting fraud.

HP stunned Wall Street with the allegations about its British software unit and took an $8.8 billion writedown, the latest in a string of reversals for the storied company.

HP Chief Executive Meg Whitman, who was a director at the company at the time of the deal, said the board had relied on accounting firm Deloitte for vetting Autonomy's financials and that KPMG was subsequently hired to audit Deloitte.

HP had many other advisers as well: boutique investment bank Perella Weinberg Partners to serve as its lead adviser, along with Barclays. Banking advisers on both sides of the deal were paid $68.8 million, according to data from Thomson Reuters/Freeman Consulting.

Barclays pocketed the biggest banker fee of the transaction at $18.1 million and Perella was paid $12 million. The company's legal advisers included Gibson, Dunn & Crutcher; Freshfields Bruckhaus Deringer; Drinker Biddle & Reath; and Skadden, Arps, Slate, Meagher & Flom, which advised the board.

On Autonomy's side of the table were Frank Quattrone's Qatalyst Partners, which specializes in tech deals and which picked up $11.6 million.

UBS, Goldman Sachs, Citigroup, JPMorgan Chase and Bank of America were also advising Autonomy and were paid $5.4 million each. Slaughter & May and Morgan Lewis served as the company's legal advisers.

While regulators in the United States and the United Kingdom, as well as the Federal Bureau of Investigation, are likely to spend many months if not years investigating what happened, legal experts said on Tuesday that it wasn't clear if any of the advisers would ultimately be held liable.

"The most logical deep pocket would be the acquired firm's auditors, who should have allegedly caught these defalcations," said James Cox, a professor at Duke University law school who specializes in corporate and securities law. Since both auditors missed the problems and it appeared to have taken HP a while to catch it after it took over Autonomy, the auditors may have a strong defense.

"You can have a perfectly sound audit and still have fraud exist," he said. A Deloitte UK spokesman said the company could not comment and would cooperate with any investigations.

The law firms and the bankers will likely argue that they were not hired to review the bookkeeping and had relied on the opinion of the auditors, securities law experts said.

Multiple sources with knowledge of the HP-Autonomy transaction added that the big-name banks on Autonomy's side were brought in days before the final agreement was struck. These sources said the banks were brought on as favors for their long relationships with the companies, in a little-scrutinized Wall Street practice of crediting -- and paying -- investment banks that actually have little do with the deal.

LAWSUITS, REPUTATIONS AT STAKE

Plaintiffs lawyers said they were taking calls from investors about HP on Tuesday. Darren Robbins, a San Diego-based plaintiff lawyer who represents shareholders, said the tech icon appears to have spent billions on a shoddy company without undertaking the proper due diligence, and thus misrepresented its finances to investors.

"I think they have serious troubles," he said.

But plaintiff lawyers may have difficulty bringing so-called derivative lawsuits against professional services firms, said Brian Quinn, an M&A professor at Boston College Law School. In those cases, plaintiff lawyers can sue third parties, such as auditors, on behalf of HP -- but they must convince a judge that HP's board is unfit to pursue those claims itself. In this situation, though, HP's board disclosed the alleged fraud itself, Quinn said.

Even if the bankers and lawyers escape any legal problems, they could suffer a reputational hit. The scrutiny could be particularly unwelcome for Perella Weinberg: the firm advised Japanese camera maker Olympus' acquisition of British Gyrus -- a transaction that prompted investigations in the United States, United Kingdom and Japan into fees and payments made by Olympus.

Olympus had hired Perella to execute the transaction, which included a fee paid to "advisers" of $687 million - way beyond the usual scale for a transaction valued at only $2 billion. Perella was not implicated in the matter.

Meanwhile, the most controversial banker involved in the HP-Autonomy deal, Frank Quattrone of Qatalyst, represented Autonomy and played a key role in getting HP to pay a high price.

A star investment banker in the 1990s, Quattrone had worked at Morgan Stanley, Deutsche Bank and Credit Suisse, and helped arrange some of the biggest tech initial public offerings of the era, including Amazon.com Inc and Cisco Systems Inc.

But his time at the top of Silicon Valley was curtailed by charges that he blocked an investigation into IPO kickbacks. After two trials failed to resolve his case, he ultimately reached a deal with prosecutors.

His return to the Silicon Valley M&A scene has impressed many in the tech world.

"His reputation is at an all-time high right now," said Dan Scheinman, the former head of mergers and acquisitions at Cisco who has worked with Quattrone on several deals.

Analysts almost uniformly deemed the $11.1 billion he got HP to pay for Autonomy as overly rich -- a compliment to him at the time, but possibly a hollow success if HP's allegations prove true.

(Reporting By Nadia Damouni and Nicola Leske in New York and Andrew Callus in London. Additional reporting by Dan Levine in San Francisco.; Editing by Peter Lauria, Jonathan Weber, Muralikumar Anantharaman, Janet McBride)


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Analysis: Intel Inside - Looking inward for CEO may be best bet

SAN FRANCISCO (Reuters) - Wanted: Visionary CEO to help world-class chipmaker expand beyond struggling personal computer market into tablets and smartphones. Experience with cutting-edge manufacturing plants and $10 billion annual capital expenditures a plus.

Intel Corp raised eyebrows on Wall Street and in Silicon Valley this week when it said it will consider an outsider to take over from outgoing Chief Executive Paul Otellini, potentially ending a four-decade tradition of internal succession. Some analysts took that as a sign the top global chipmaker might be considering a transformative hire.

Intel came under fire during Otellini's tenure for missing out on the mobile revolution, insisting that emerging markets would prop up growth while underestimating the scale of the eventual drop-off in personal computer demand, and orchestrating a push on "Ultrabook" laptops that have so far failed to excite consumers.

A future leader not steeped in Intel's insular culture could potentially open the chipmaker's prized factories for the first time to outside customers like Apple Inc or pursue other new strategies to expand into tablets and smartphones, said analyst Nathan Brookwood of Insight 64, a consulting firm.

But any investor hoping Intel will hire an outsider with a dramatic solution to the top chipmaker's PC plight may be out of luck, experts say.

While the idea of an iconic visionary like Steve Jobs stepping in to lift Intel into the mobile market - its Achilles heel - may sound attractive, it could open the chipmaker to new risks should it waver from its traditional focus on hard-core manufacturing.

Gurus with the experience to run a company with $53 billion a year in sales, a $10 billion capital spending budget and cutting-edge chip manufacturing plants are few and far between - and even rarer outside of Intel, which is struggling with falling PC sales and meager progress in mobile computing.

"If you bring someone in who hasn't run chip companies it's going to be very difficult because Intel is somewhat unique," said Patrick Henry, CEO of Entropic Communications, which makes chips for home entertainment. "It would probably surprise me if they didn't hire one of the internal guys."

Silicon Valley peer Hewlett-Packard Co exemplifies the risks of a poorly thought-out external hire, recruiters and analysts say. During his tumultuous 11-month tenure, former software CEO Leo Apotheker engineered the widely panned $11 billion acquisition of Autonomy, which HP accused this week of accounting wrongdoing enroute to swallowing an $8.8 billion charge. [ID:nL4N0902ZH] He also presided over several quarters of lackluster financial results.

"I don't think (Intel) needs a 180-degree transformation. You don't want somebody like a Leo Apotheker coming on and being your complete undoing," said JMP analyst Alex Gauna. "Because of how badly things have gone for HP, the most probable scenario for (Intel) at the end of all this in May is that it looks very much the same."

But Mel Connet, a tech industry executive recruiter at Heritage Search Partners in Menlo Park, California, said Intel's culture needs a shakeup that justifies looking for an outside candidate, while being mindful of the HP example.

"My only advice would be not to use the same search firm that HP used," said Connet, whose firm has not been contracted by Intel for its search.

INSIDE CONTENDERS

Chief Operating Officer Brian Krzanich, who is Intel's manufacturing guru, is frequently mentioned by Intel employees as a strong contender to become CEO, partly because manufacturing is at the heart of Intel and previous chief executives have been promoted from the COO position.

Chief Financial Officer Stacy Smith is well known by financial analysts and many favor him, believing he is the best bet for keeping Intel stable.

The company's other executive vice presidents are Renee James, who is in charge of Intel software; Intel Capital head Arvind Sodhani; and Dadi Perlmutter, head of Intel's push into mobile. They are well respected but are mentioned less often as potential picks.

Sanford Bernstein analyst Stacy Rasgon said a CEO hired from the ranks would have instant credibility among the company's tight-knit workforce, which includes over 4,000 PhDs.

"There's no silver bullet. The issue here is not any sort of miss-execution on their part," said Rasgon. "Their market is changing beneath their feet."

Otellini's decision to retire, announced Monday, caught the board unprepared to replace him, Intel spokesman Chuck Mulloy has said. All of Intel's previous CEO successions were planned long in advance, leaving no room for instability.

While Intel said it would include external candidates in its search for a new CEO, it also announced the promotion of Krzanich, Smith and James to executive vice presidents, suggesting that they remain serious potential candidates.

Mulloy has said Intel veterans will have a natural advantage in winning the CEO position because they are familiar with the company's manufacturing-intensive business model and insular, engineering culture.

TATTERED ALLIANCE

The Santa Clara, California-based company has long been king of PC chips, particularly through its historic "Wintel" alliance with Microsoft Corp, which led to breathtakingly high profit margins and an 80 percent market share.

Its cutting-edge fabrication plants are the envy of rivals like Samsung Electronics Co Ltd and Taiwan Semiconductor Manufacturing Co Ltd (TSMC), and helped it cement its leadership over decades.

But more recently, Intel has struggled to adapt its powerful PC processors for battery-powered smartphones and tablets, and Wall Street increasingly worries the chipmaker may be left behind in the fast-growing mobile market.

It has pinned its mobile hopes on its superior manufacturing technology, but that strategy has yet to pay off. To date Intel's market share for smartphones is less than 1 percent, trailing Qualcomm Inc and Samsung.

Since all but a handful of U.S. chipmakers have shuttered their fabrication plants in the past two decades and outsourced production overseas, few executives have experience planning and running advanced plants that cost nearly $10 billion each to build.

"The perfect choice, which I don't think exists right now, is somebody who can manage massive fabs - and also mobility. They don't exist outside of Samsung, and that's just not going to happen. There's a culture clash," said Patrick Moorhead, of Moor Insights & Strategy.

Insight 64's Brookwood believes a "Lou Gerstner-type" of executive with a fresh approach could shake up Intel but said such a candidate need not come from outside.

Gerstner left RJR Nabisco to run International Business Machines Corp in 1993 and is widely seen as saving the struggling technology giant by focusing on IT services instead of products, in a radical shift.

Intel believes its manufacturing strength is its key to succeeding in mobile computing, even if it takes a while for that strategy to pay off. Gauna said Intel's future CEO should stick to that strategy, although it would be good for that person to have better ties to the mobile world as well as software companies seen as vital for tablets and smartphones.

For example, Intel-based smartphones running the Android platform debuted just this year but could have been launched sooner had Otellini been more aggressive, Gauna said.

"How they weave in the software strategy and the partnerships within the software and (manufacturing customer) marketplace - that's where it gets really interesting," Gauna said. "If I could paint a picture of what it needs to look like I'd put my hat in the ring myself."

(Reporting by Noel Randewich; Editing by Richard Chang)


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Microsoft vs. Google trial over patents finishes up

Written By Bersemangat on Rabu, 21 November 2012 | 09.56

SEATTLE (Reuters) - A Google expert witness testified on Tuesday that Microsoft will make roughly $94 billion in revenue through 2017 from its Xbox game console and Surface tablet that use Google's patented wireless technology.

Michael Dansky, an expert for Google's Motorola Mobility unit, testified on the last day of a high stakes trial over patents between Microsoft and Google in Seattle. The $94 billion figure he cited also includes a wireless adapter that Microsoft no longer sells. It was not clear how far back he was counting past revenues.

Microsoft declined comment on the figure.

The week-long trial in a Seattle federal court examined how much of a royalty Microsoft Corp should pay Google Inc for a license to some of Motorola's patents. Google bought Motorola earlier this year for $12.5 billion, partly for its library of communications patents.

Motorola had sought up to $4 billion a year for its wireless and video patents, while Microsoft argues its rival deserves just over $1 million a year.

If U.S. District Judge James Robart decides Google deserves only a small royalty, then its Motorola patents would be a weaker bargaining chip for Google to negotiate licensing deals with rivals.

The rapid rise of smartphones has sparked an explosion of litigation between major players disputing ownership of the underlying technology and the design of handsets.

Apple Inc and Microsoft have been litigating in courts around the world against Google and partners like Samsung Electronics Co Ltd, which use the Android operating system on their mobile devices.

Apple contends that Android is basically a copy of its iOS smartphone software, and Microsoft holds patents that it contends cover a number of Android features.

In return, Motorola and some other Android hardware makers launched countering legal action.

Before trial, Robart said testimony about patent license agreements between Microsoft, Motorola and other tech companies could be disclosed to the public, along with other sensitive financial information.

However, the judge reversed himself this week and said he was bound by appellate precedent to keep that information secret. On Tuesday he cleared the courtroom and heard two hours of testimony in secret.

During the open session, Dansky said Motorola's video patents are crucial to Microsoft and other tech companies, and deserve a high royalty.

"You will have a difficult time selling smart phones or tablets," Dansky said, without Motorola's technology.

Robart is not expected to release a ruling for several weeks as both companies must file further legal briefs.

The case in U.S. District Court, Western District of Washington is Microsoft Corp. vs. Motorola Inc., 10-cv-1823.

(Reporting by Lisa Dembiczak; Writing by Dan Levine; Editing by Richard Pullin)


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Jury convicts NY man accused of AT&T-iPad hacking

(Reuters) - A federal jury convicted a New York man on Tuesday of hacking into AT&T Inc servers and stealing the email addresses and other personal data of about 120,000 Apple Inc iPad users, a U.S. attorney in New Jersey said.

Andrew Auernheimer, 27, was convicted by a Newark, New Jersey, jury of one count of conspiracy to access the servers without permission, as well as one count of identity theft, said U.S. Attorney Paul Fishman.

The defendant faces a maximum five years in prison and $250,000 fine on each count. A co-defendant, Daniel Spitler, pleaded guilty to the same charges in June 2011 and is awaiting sentencing.

Prosecutors said Auernheimer and Spitler were affiliated with Goatse Security, a group of Internet "trolls" that tries to disrupt online content and services.

According to the government, the men used an "account slurper" that was designed to match email addresses with "integrated circuit card identifiers" for iPad users, and which conducted a "brute force" attack to extract data about those users, who accessed the Internet through AT&T's network.

The authors of the slurper then provided stolen information to the website Gawker, which published an article naming well-known people whose emails had been compromised, including ABC News anchor Diane Sawyer, New York Mayor Michael Bloomberg and current Chicago Mayor Rahm Emanuel, prosecutors said.

Tor Ekeland, a lawyer for Auernheimer, said his client was free on bail, and planned to appeal the verdict to the 3rd U.S. Circuit Court of Appeals in Philadelphia.

"We disagree with the prosecutors' interpretation of what constitutes unauthorized access to a computer under the Computer Fraud and Abuse Act," Ekeland said in a phone interview. He called the prosecutors' interpretation of that federal law "extremely expansive."

The trial lasted about one week, excluding a disruption related to Hurricane Sandy, and jurors deliberated for a couple of hours, Ekeland added.

AT&T has partnered with Apple in the United States to provide wireless service on the iPad. After the hacking, it shut off the feature that allowed email addresses to be obtained.

The case is U.S. v. Auernheimer, U.S. District Court, District of New Jersey, No. 11-00470.

(Editing by Peter Cooney)


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Google should not be accused of "unfair" acts: lawmakers

Written By Bersemangat on Selasa, 20 November 2012 | 09.56

WASHINGTON (Reuters) - Two lawmakers urged the Federal Trade Commission on Monday to steer clear of expanding its authority as it investigates allegations search engine company Google violated antitrust law.

The two California Democrats in the House of Representatives, who count Google as a major campaign contributor, asked the FTC not to accuse the company of "unfair" acts if it believes it broke antitrust law.

Anna Eshoo, on the Energy and Commerce Committee, and Zoe Lofgren, who is on the Judiciary Committee, said there were reports to suggest the FTC planned to use the unfair standard to avoid proving some elements required in an antitrust claim.

They said such a move could lead to over-broad authority for the FTC that could create legal uncertainties for firms and stifle economic growth.

"Such a massive expansion of FTC jurisdiction would be unwarranted, unwise, and likely have negative implications for our nation's economy," the lawmakers wrote in the letter, which was dated November 19 and sent to the five FTC commissioners.

The FTC is looking into a long list of complaints brought by rivals of Google, which is also accused of using its dominance to squash competitors in vertical search areas such as shopping and travel.

The FTC staff has reportedly given the commission a report urging them to file a complaint against Google for suing competitors based on standard essential patents and asking for injunctions to stop the sales of their products. Standard essential patents are supposed to be broadly licensed at a fair rate.

Google is the seventh largest contributor to Eshoo, donating $13,000 during the 2012 election cycle, according to data from the Center for Responsive Politics. It is the third largest contributor to Lofgren, who got $14,500 from Google. The donations came from a Google political action committee and employees and lobbyists associated with Google.

Complaints about Google to the FTC over standard essential patents arise from a raft of litigation between Apple Inc, Google and Microsoft Corp, which have sued each other numerous times in various countries, each alleging that their respective patents are being infringed upon by rivals in the highly competitive smartphone market.

In many cases, the companies ask that their rivals' products be banned from stores. Many antitrust enforcers believe it is inappropriate for companies to ask for sales bans based on the infringement of essential patents.

FTC Chairman Jon Leibowitz, who is expected to leave the agency soon, said in mid-September that he expected a decision in the case by the end of the year. A decision could be in the form of a lawsuit or, more likely, a settlement.

Google has settled with U.S. law enforcement agencies in the past.

For example, it settled with the FTC following privacy gaffes during the botched roll-out of its social network, Buzz. Later, it paid $22.5 million to settle charges that it bypassed the privacy settings of customers using Apple's Safari browser.

Google also paid a $500 million settlement in 2011 to the Justice Department for knowingly accepting illegal advertisements from Canadian pharmacies selling in the United States.

FTC spokesman Peter Kaplan confirmed that the commission had received the letter but said the agency declined comment.

(Reporting By Diane Bartz; editing by Andrew Hay)


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U.S. ITC will review Apple, Samsung patent decision

WASHINGTON (Reuters) - The U.S. International Trade Commission will review a judge's decision which found that Apple did not violate patents owned by Samsung Electronics in making the iPod touch, iPhone and iPad.

An administrative law judge at the ITC had said in a preliminary ruling in September that Apple was innocent of violating the patents. The ITC, which could have opted to simply uphold the judge's decision, said that it would take up the matter. A final decision is expected in January.

If Apple is found to infringe, its devices can be banned for sale in the United States.

Apple and Samsung have taken their bruising patent disputes to some 10 countries as they vie for market share in the booming mobile industry.

Apple won a huge victory in August when a U.S. jury found the South Korean firm had copied key features of the iPhone. Apple was awarded $1.05 billion in damages. That ruling is under appeal.

In its announcement that it would review the case, the ITC asked for briefings on how it should consider standard essential patents, which are normally expected to be licensed widely and on fair, reasonable and non-discriminatory terms. The use of standards helps companies ensure devices are interoperable.

Some antitrust enforcers have argued that it is wrong for companies which own standard essential patents to ask for infringing devices to be barred from the country except in extreme instances.

The commission is reviewing a decision by ITC Judge James Gildea, who said in September that Apple did not violate the four patents at issue in the case, which was filed in mid-2011.

The two standard essential patents in the complaint are related to 3G wireless technology and the format of data packets for high-speed transmission.

Apple has a parallel complaint filed against Samsung at the ITC, accusing Samsung, a major Apple chip provider as well as a global rival, of blatantly copying its iPhones and iPads. An ITC judge said in that case that Samsung infringed on four Apple patents. The full ITC will issue a final decision in February.

Apple has waged an international patent war since 2010 as it seeks to limit growth of Google's Android system. The fight has embroiled Samsung, HTC and others who use Android.

Google's Android software, which Apple's late founder Steve Jobs denounced as a "stolen product," has become the world's No. 1 smartphone operating system.

Samsung is the world's largest smartphone maker, while Apple is in third place. Many experts consider Samsung's Galaxy touchscreen tablets the main rival to the iPad, although they are currently a distant second to Apple's devices.

Samsung is also a parts supplier to Apple, producing micro processors, flat screens and memory chips - both dynamic random access memory (DRAM) chips and NAND memory chips - for the iPhone, iPad and iPod. Apple has reduced orders from Samsung for chips and screens.

The case at the International Trade Commission is No. 337-794.

(Reporting By Diane Bartz; Editing by Bernard Orr and David Gregorio)


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Exclusive: Facebook offering e-retailers sales tracking tool

Written By Bersemangat on Senin, 19 November 2012 | 09.56

SAN FRANCISCO (Reuters) - Facebook Inc wants more credit for making online cash registers ring.

Facebook will begin rolling out on Friday a new tool which will allow online retailers to track purchases by members of the social network who have viewed their ads.

The tool is the latest of the new advertising features Facebook is offering to convince marketers that steering advertising dollars to the company will deliver a payoff.

Facebook, with roughly 1 billion users, has faced a tough reception on Wall Street amid concerns about its slowing revenue growth.

"Measuring ad effectiveness and outcomes is absolutely crucial to all types of businesses and marketers," said David Baser, a product manager for Facebook's ads business who said the "conversion measurement" tool has been a top customer request for a long time.

The sales information that advertisers receive is anonymous, said Baser. "You would see the number of people who bought shoes," he said, using the example of an online shoe retailer. But marketers would not be able to get information that could identify the people, he added.

The conversion tool is specifically designed for so-called direct response marketers, such as online retailers and travel websites that advertise with the goal of drumming up immediate sales rather than for longer-term brand-building.

Such advertisers have long flocked to Google Inc's Web search engine, which can deliver ads to consumers at the exact moment they're looking for information on a particular product.

But some analysts say there is room for Facebook to make inroads if it can demonstrate results.

"The path to purchase" is not as direct on Facebook as it is on Google's search engine, said Debra Aho Williamson, an analyst with research firm eMarketer. But she said that providing information about customer sales conversion should help Facebook make a stronger case to online retailers.

"It lets marketers track the impact of a Facebook ad hours or days or even a week beyond when someone might have viewed the ad," said Williamson. "That allows marketers to understand the impact of the Facebook ad on the ultimate purchase."

Marketers will also have the option to aim their ads at segments of Facebook's audience with similar attributes to consumers that have responded well to a particular ad in the past, Baser said.

Online retailer Fab.com, which has tested Facebook's new service, was able to reduce its cost per new customer acquisition by 39 percent when it served ads to consumers deemed most likely to convert, Facebook said. Facebook defines a conversion as anything from a completed sale, to a consumer taking another desired action on a website, such as registering for a newsletter.

NEW OPPORTUNITIES

Shares of Facebook, which were priced at $38 a share in its May initial public offering, closed Thursday's regular session at $22.17.

In recent months, Facebook has introduced a variety of new advertising capabilities and moved to broaden its appeal to various groups of advertisers.

Chief Operating Officer Sheryl Sandberg said in October that Facebook saw multi-billion revenue opportunities in each of four groups of advertisers: brand marketers, local businesses, app developers and direct response marketers.

Facebook does not disclose how much of its ad revenue, which totaled $1.09 billion in the third quarter, comes from each type of advertiser. Pivotal Research Group analyst Brian Wieser estimates that brand marketers and local businesses account for the bulk of Facebook's current advertising revenue.

Earlier this year, Facebook introduced a similar conversion measurement service for big brand advertisers, such as auto manufacturers, partnering with data mining firm Datalogix to help connect the dots between consumer spending at brick-and-mortar and Facebook ads.

And Facebook has rolled out new marketing tools for local businesses such as restaurants and coffee shops, including a revamped online coupon service and simplified advertising capabilities known as promoted posts.

The new conversion measurement tool is launching in testing mode, but will be fully available by the end of the month, Facebook said.

(Reporting By Alexei Oreskovic; editing by Carol Bishopric)


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Cisco to buy cloud-networking start-up Meraki for $1.2 billion

(Reuters) - Networking equipment company Cisco Systems Inc said it will buy privately held cloud networking company Meraki for $1.2 billion in cash as part of its cloud and networking strategy.

Cisco said the acquisition of Meraki, which was founded in 2006 by members of MIT's Laboratory for Computer Science, is expected to close in the second quarter of Cisco's 2013 fiscal year and is subject to regulatory approval.

Cisco's second quarter runs until the end of January.

Meraki - funded by Sequoia Capital and Google Inc - offers Wi-Fi technology, switching, security and mobile device management from the cloud with a focus on mid-sized businesses.

"This is a very logical move for Cisco," said ZK research analyst Zeus Kerravala.

He said the deal will allow Cisco to offer alternative solutions to traditional Wi-Fi deployment models like smaller competitors, such as Aruba Networks and Ruckus Wireless, which debuted on Friday.

"Cisco didn't really have anything to counter that before," Kerravala noted.

Meraki's Chief Executive Sanjit Biswas said in a letter to employees posted on the company website that Cisco had approached the company several weeks ago.

The company's founders had at first rejected the offer in favor of continuing Meraki's strategy aimed at an initial public listing.

"After several weeks of consideration, we decided late last week that joining Cisco was the right path for Meraki," Biswas said.

He also said that Meraki had achieved a $100 million bookings run rate, grown to 330 employees and had a positive cash flow.

(Reporting by Nicola Leske, editing by Gary Crosse)


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Exclusive: Facebook offering e-retailers sales tracking tool

Written By Bersemangat on Minggu, 18 November 2012 | 09.56

SAN FRANCISCO (Reuters) - Facebook Inc wants more credit for making online cash registers ring.

Facebook will begin rolling out on Friday a new tool which will allow online retailers to track purchases by members of the social network who have viewed their ads.

The tool is the latest of the new advertising features Facebook is offering to convince marketers that steering advertising dollars to the company will deliver a payoff.

Facebook, with roughly 1 billion users, has faced a tough reception on Wall Street amid concerns about its slowing revenue growth.

"Measuring ad effectiveness and outcomes is absolutely crucial to all types of businesses and marketers," said David Baser, a product manager for Facebook's ads business who said the "conversion measurement" tool has been a top customer request for a long time.

The sales information that advertisers receive is anonymous, said Baser. "You would see the number of people who bought shoes," he said, using the example of an online shoe retailer. But marketers would not be able to get information that could identify the people, he added.

The conversion tool is specifically designed for so-called direct response marketers, such as online retailers and travel websites that advertise with the goal of drumming up immediate sales rather than for longer-term brand-building.

Such advertisers have long flocked to Google Inc's Web search engine, which can deliver ads to consumers at the exact moment they're looking for information on a particular product.

But some analysts say there is room for Facebook to make inroads if it can demonstrate results.

"The path to purchase" is not as direct on Facebook as it is on Google's search engine, said Debra Aho Williamson, an analyst with research firm eMarketer. But she said that providing information about customer sales conversion should help Facebook make a stronger case to online retailers.

"It lets marketers track the impact of a Facebook ad hours or days or even a week beyond when someone might have viewed the ad," said Williamson. "That allows marketers to understand the impact of the Facebook ad on the ultimate purchase."

Marketers will also have the option to aim their ads at segments of Facebook's audience with similar attributes to consumers that have responded well to a particular ad in the past, Baser said.

Online retailer Fab.com, which has tested Facebook's new service, was able to reduce its cost per new customer acquisition by 39 percent when it served ads to consumers deemed most likely to convert, Facebook said. Facebook defines a conversion as anything from a completed sale, to a consumer taking another desired action on a website, such as registering for a newsletter.

NEW OPPORTUNITIES

Shares of Facebook, which were priced at $38 a share in its May initial public offering, closed Thursday's regular session at $22.17.

In recent months, Facebook has introduced a variety of new advertising capabilities and moved to broaden its appeal to various groups of advertisers.

Chief Operating Officer Sheryl Sandberg said in October that Facebook saw multi-billion revenue opportunities in each of four groups of advertisers: brand marketers, local businesses, app developers and direct response marketers.

Facebook does not disclose how much of its ad revenue, which totaled $1.09 billion in the third quarter, comes from each type of advertiser. Pivotal Research Group analyst Brian Wieser estimates that brand marketers and local businesses account for the bulk of Facebook's current advertising revenue.

Earlier this year, Facebook introduced a similar conversion measurement service for big brand advertisers, such as auto manufacturers, partnering with data mining firm Datalogix to help connect the dots between consumer spending at brick-and-mortar and Facebook ads.

And Facebook has rolled out new marketing tools for local businesses such as restaurants and coffee shops, including a revamped online coupon service and simplified advertising capabilities known as promoted posts.

The new conversion measurement tool is launching in testing mode, but will be fully available by the end of the month, Facebook said.

(Reporting By Alexei Oreskovic; editing by Carol Bishopric)


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