News : Study finds ants good house hunters

Comparing all your options isn’t always the best way to make a decision - at least not if you're an ant. 

A study on how ants choose their nests has wide reaching significance, particularly in terms of computer networks.

Julie Gordon reports.

Nes : Edges of universe in sight

A new fiber-optic network of telescopes may give astronomers an unprecedented view of space. 

Stuart McDill reports.

News : "Swinefighter" video game a Web hit

As the world worries about an imminent pandemic, a video game that capitalizes on the lighter side of swine flu is gaining momentum online.

In "Swinefighter", you must save the world - and yourself - from "killer pigs."

And while the point is entertainment, the website also offers recommendations from the U.S. Center of Disease Control on how to avoid contracting the flu.

All natural sound, no reporter narration. Swinefighter courtesy Hayzap.com

News : Facebook eyes additional funding

(Reuters) - Social-networking website Facebook has held meetings with private equity firms to explore raising another round of funding, the New York Post reported on Thursday, citing sources.

Facebook could not be immediately reached for comment.

Facebook held "valuation discussions" with Providence Equity Partners, General Atlantic, Bain Capital, Kohlberg Kravis Roberts, among others, the paper said, citing multiple sources close to or involved in the situation.

The process has been informal and no term sheets have been drawn up, the sources told the paper.

The private-equity firms value the website in the $2 billion to $3 billion range, lower than Facebook's estimate of $5 billion to $6 billion, the sources told the paper.

The talks have created friction with Facebook's existing investors, who have poured in $400 million into the website and would like a return on their investment before seeing their stakes diluted through a new round of funding, the paper said.

Facebook's existing investors include Greylock Partners, Meritech Capital Partners and Microsoft Corp.

(Reporting by Ajay Kamalakaran in Bangalore; editing by Simon Jessop)

News : Recession is latest focus of games for change

By John Gaudiosi

RALEIGH, North Carolina (Reuters) - With the recession impacting college students, MTV's college network mtvU is turning to one medium it knows will get attention to help teach students to cope with tough financial times -- a video game.

mtvU has joined with the Peter G. Peterson Foundation's Indebted Campaign to launch the online video game "Debt Ski," which was designed by a university graduate and developed by Persuasive Games that specializes in video games with an opinion.

In the game players guide a pig, Piggy Banks, on a jet ski through various obstacles to maximize his savings, limit his debt and keep him happy while buying food, housing and other items, with the aim of teaching players how to identify and manage debt.

Banks has the choice to buy the latest electronics and clothing which can make him happy -- but plunge him into debt. Spending tsunamis, such as unexpected medical bills or increases to the cost of living, can hit him along the way.

When players lose, they get debt management information.

"Arguably, the economic crisis is one of the biggest challenges facing this generation," said Ross Martin of MTV360.

"College students are dealing with a broad range of issues from rising tuition to entering one of the most daunting job markets in recent history. Students don't sit on the sidelines, they take action -- they become the creative engine driving social change."

"Debt Ski" is the third in a line of games sponsored by mtvU that deal with serious world issues, with previous games focused on Darfur refugees -- "Darfur is Dying" -- and HIV positive patients -- "Pos or Not?"

SERIOUS SIDE TO GAMING

The Peter G. Peterson Foundation was founded last year by the chairman emeritus of The Blackstone Group with a commitment of $1 billion to increase public awareness and action on the nature and urgency of key fiscal challenges threatening America.

Its Indebted Campaign seeks to educate students about their debts as well as the growing federal debt.

The foundation's president and CEO Dave Walker said there was strong appeal to using a video game as a messenger as college students spend a major portion of their day in front of computer.

"Young people, who are arguably the most important audience to reach these days when it comes to inspiring social change, are hard to reach through traditional media," said Walker.

The game was designed by 26-year-old Lehigh University graduate Brian Haveri who won a contest to come up with a video game to promote the messages of the Indebted Campaign.

Haveri won $10,000 and students are being encouraged to play "Debt Ski" with a prize of $250 a week on offer through June.

"Early data shows that there are high replay numbers, which means the audience is spending time on the site and playing the game multiple times -- increasing the odds that the core messages are coming through and have the potential to make an impact," said Martin.

Over the next few months, the Indebted Campaign is aiming to expand the ways it puts out its message, such as exploring the iPhone as a new way to reach gamers.

The Foundation has also partnered with New York-design school Parsons The New School and the National Association of Public Administration to create "Budgetball" that teaches students the trade-offs involved in responsible budgeting.

"Learning about social challenges through games is a great way to help you visualize the extent of the problem and the impact of possible solutions," said Walker.

(Editing by Belinda Goldsmith)

News : Apple building chip design capability

SAN FRANCISCO (Reuters) - Apple Inc is hiring new employees from the semiconductor industry and is building the capability to design its own chips, the Wall Street Journal reported on Wednesday.

The iPhone and iPod maker hopes its efforts will lead to new features for its devices and enable it to share fewer details about it plans with outside chip vendors, the report said, citing people familiar with Apple's plans.

An Apple spokesman confirmed the company has hired both Bob Drebin, former chief technology office of the graphics products group at chipmaker Advanced Micro Devices and Raja Koduri, who previously held the same position.

The spokesman decline to comment further. Drebin's LinkedIn page lists him as a senior director at Apple.

The hires were reported or rumored in a number of online outlets earlier in the week.

Apple has been hiring engineers to create multifunction chips that are used in cell phones, the Journal report said. Sources familiar with Apple's plans don't expect internally designed chips to emerge until next year at the earliest, it said.

Last year, Apple acquired P.A. Semi, a designer of low-power microchips, in a move analysts said bolstered its ability to customize key parts for its iPhone, iPod and Macintosh product lines.

Shares of Cupertino, California-based Apple closed up $1.24 at $125.14.

(Reporting by Gabriel Madway)

News : Galapagos volcano erupts again

The La Cumbre volcano in the Galapagos Islands in Ecuador rumbles back to life after four years of inactivity.

Pavithra George reports.

News : Unique Roman glass dish found at London grave site

By Stefano Ambrogi

LONDON (Reuters) - Archaeologists have unearthed a Roman glass bowl, thought to be a unique find in the Western Roman Empire, at an ancient cemetery beyond the walls of the old city of London.

The "millefiori" dish (a thousand flowers), believed to date from around the 2nd to 3rd century A.D., is a mosaic of hundreds of indented blue petals with white bordering.

"For it to have survived intact is amazing. In fact, it is unprecedented in the western Roman world," said Jenny Hall, curator of the Roman collection at the Museum of London.

"We are still checking out whether there are similar examples surviving in the eastern part of the empire, in ancient Alexandria for example, but it's the only one in the West," she told reporters.

Archaeologists said the dish was colored bright red when it was first pulled from the earth, as the intricate design was imbedded in opaque red glass.

The bright vermilion color has slowly disappeared since excavation as the water-saturated glass dried out. The moisture had preserved the original coloring, but some of the pigment is still distinguishable around the rim.

The artifact was found 2.5 to 3 meters (yards) down at a sprawling ancient cemetery in Aldgate, east London, just beyond the old city walls. Romans were required by law to bury their dead outside the city gates.

It formed part of a cache of grave goods found close to a wooden container holding the ashes of a probably wealthy Roman citizen from the ancient imperial outpost of Londinium, now mostly hidden beneath modern-day London.

Other artifacts recovered with the bowl included ceramic pottery and glass flasks which once contained perfumed oil used to anoint the body.

Guy Hunt, director of commercial archaeology services firm L-P: Archaeology who was in charge of the six-month dig at the site, said the cemetery covers a massive area.

"No-one knows how big the cemetery really is. Some think it could be up to 16 hectares (40 acres), disappearing under roads and buildings," he said.

Hunt said the section of the cemetery that was excavated originally sat under Victorian houses flattened during World War Two.

Subsequently turned into a car park and now about to be redeveloped, the site offered an opportunity for proper exploration. The rubble from the shattered buildings helped to inter the finds, Hunt said.

"It is a miracle of preservation."

The dish goes on show at the Museum of London Docklands in the southeast of the British capital from the end of April.

(Editing by Paul Casciato)

News : EU says Microsoft replies to antitrust charges

BRUSSELS (Reuters) - Microsoft has responded to EU antitrust charges that it sought to thwart rivals by bundling its web browser with its Windows PC operating system, the European Commission said on Wednesday.

"We will study it carefully," a Commission spokesman said.

The European Union executive charged the U.S. software giant on January 15 with infringing EU rules by abusing its dominant position.

(Reporting by Foo Yun Chee)

News : U.S. Justice Department looks into Google books deal

By Diane Bartz

WASHINGTON (Reuters) - The U.S. Justice Department is making inquiries about a class action deal that Google Inc struck giving it the right to digitize and sell entire libraries, two experts on digitization told Reuters on Tuesday.

Under a proposed settlement last October between Google and the Authors Guild and the Association of American Publishers, Google agreed to pay $125 million to create a Book Rights Registry, where authors and publishers can register works and receive compensation from institutional subscriptions or book sales.

Google's plan is to let readers to search through millions of copyrighted books online, browse passages and purchase copies.

But the deal also would allow Google -- and only Google -- to digitize so-called orphan works, which has raised some eyebrows in antitrust circles. Orphan works are books or other materials that are still covered by U.S. copyright law, but it is not clear who owns the rights to them.

"Essentially, it gives Google a free pass for infringement for selling all these books," said James Grimmelmann, who teaches at the New York Law School. "Publishers (who are part of the settlement) would be happy to share the monopoly with Google."

Grimmelmann said he was part of a recent conference call with Justice Department lawyers, who asked questions about Google's proposed settlement.

Grimmelmann said the Justice Department lawyers did not indicate what their concerns were.

"I have no idea what they're thinking," he said.

Peter Brantley of the Internet Archive, which also digitizes books, said his organization had "multiple conversations" with the Justice Department about the Google plan.

"There are legitimate antitrust issues related to Google's ability to solely commercialize this content," Brantley said, adding he hoped the settlement agreement would be rejected by U.S. District Judge Denny Chin.

"We would like the court to say: 'This is fine theoretically, but these orphan books, they don't have anyone to speak for them, so let's take them out of the agreement,'" he said.

Neither Google nor the Justice Department had any immediate comment.

Judge Chin granted a four-month extension on Tuesday to a group of authors deciding whether they want to opt out or object to the settlement.

The judge set a final settlement hearing on October 7 for court approval. If approved, it would bring to a close an almost four-year long legal challenge of Google's plan to make many of the world's great books searchable online.

(Reporting by Diane Bartz; Editing by Andre Grenon)

News : Many Twitters are quick quitters

SYDNEY (Reuters) - Today's Twitters are often tomorrow's quitters, according to data that questions the long-term success of the latest social networking sensation used by celebrities from Oprah Winfrey to Britney Spears.

Data from Nielsen Online, which measures Internet traffic, found that more than 60 percent of Twitter users stopped using the free social networking site a month after joining.

"Twitter's audience retention rate, or the percentage of a given month's users who come back the following month, is currently about 40 percent," David Martin, Nielsen Online's vice president of primary research, said in a statement.

"For most of the past 12 months, pre-Oprah, Twitter has languished below 30 percent retention."

San Francisco-based Twitter was created three years ago as an Internet-based service that could allow people to follow the 140-character messages or "tweets" of friends and celebrities which could be sent to computer screens or mobile devices.

But it has enjoyed a recent explosion in popularity on the back of celebrities such as actor Ashton Kutcher and U.S. talk show host Oprah Winfrey singing its praises and sending out "tweets" which can alert readers to breaking news or the sender's sometimes mundane activities.

President Barack Obama used Twitter during last year's campaign and other prominent celebrities on Twitter include basketballer Shaquille O'Neal and singers Britney Spears and Miley Cyrus.

Twitter, as a private company, does not disclose the number of its users but according to Nielsen Online, Twitter's website had more than 7 million unique visitors in February this year compared to 475,000 in February a year ago.

But Martin said a retention rate of 40 percent will limit a site's growth to a 10 percent reach figure over the longer term.

"There simply aren't enough new users to make up for defecting ones after a certain point," he said in a statement.

Martin said Facebook and MySpace, the more established social network sites, enjoyed retention rates that were twice as high and those rates only rose when they went through their explosive growth phases.

Both currently have retention rates of about 70 percent with Facebook having about 200 million users.

"Twitter has enjoyed a nice ride over the last few months, but it will not be able to sustain its meteoric rise without establishing a higher level of user loyalty," said Martin.

(Writing by Belinda Goldsmith, Editing by Miral Fahmy)

News : Medical robot learns to diffuse bomb

A robot designed to perform surgery may also be a key tool in preventing a dirty bomb explosion.

Remotely operated robots have been used to inspect suspicious packages and detonate them from a safe distance for years.

But what happens when a bomb can't be blown up, because it would release dangerous radioactive material?

A surgical robot mounted on a Segway system may be the answer.

Soundbites:

TOM LOW, PROGRAM DIRECTOR, SRI INTERNATIONAL

News : Telescope snaps most distant object

WASHINGTON (Reuters) - Astronomers tracking a mysterious blast of energy called a gamma ray burst said on Tuesday they had snapped a photograph of the most distant object in the universe -- a smudge 13 billion light-years away.

Hawaii's Gemini Observatory caught the image earlier this month after a satellite first detected the burst.

"Our infrared observations from Gemini immediately suggested that this was an unusually distant burst, these images were the smoking gun," said Edo Berger of the Harvard Smithsonian Center for Astrophysics.

Distortions in the light signature of the object show it is 13 billion years old -- at the speed of light, 13 billion light-years away. A light-year is 6 trillion miles (10 trillion km).

This makes it easily the most distant object ever seen by humanity, Berger said.

Gamma-ray bursts are luminous explosions that mostly occur when massive stars run out of fuel and begin collapsing into either a black hole or a neutron star.

"I have been chasing gamma-ray bursts for a decade, trying to find such a spectacular event," said Berger. "We now have the first direct proof that the young universe was teeming with exploding stars and newly-born black holes only a few hundred million years after the Big Bang," he said.

(Reporting by Maggie Fox; Editing by Bill Trott)

News : IBM, Brocade boost ties as Cisco rivalry heats up

NEW YORK (Reuters) - Network equipment maker Brocade Communications Systems Inc is bolstering its partnership with IBM, in a sign it may be gaining market share from industry leader Cisco Systems Inc.

International Business Machines Corp will rebrand ethernet switching and routing products made by Brocade as IBM products and sell them to mutual corporate customers, the companies said on Tuesday.

"I think what you're going to see is an expansion of revenue because of the sheer reach that IBM has and their ability to include it in their own branded products and solutions that they develop," said Brocade Chief Executive Michael Klayko. "This is some interesting upside opportunity

for us."

Brocade shares have risen around 27 percent since Reuters first reported the plan earlier this month, citing sources with knowledge of the matter.

The move to bolster this partnership comes amid increasing rivalry between IBM and Cisco, which recently announced that it will start selling computer servers. Cisco's move was widely seen as a direct challenge to IBM and Hewlett-Packard Co, which help sell Cisco's routers and other network equipment through partnerships.

IBM already sells some Brocade equipment, such as storage-related devices, and accounts for at least 10 percent of Brocade's sales.

But the latest move expands on that relationship by including switches and routers made by Foundry Networks, which Brocade acquired late last year.

An IBM spokesman said the company's relationship with Cisco is unchanged and that it aims to provide a wider range of options for customers. But analysts said Brocade may be beginning to benefit from the increased rivalry between Cisco and IBM.

Yankee Group analyst Zeus Kerravala said the announcement showed Brocade's acquisition of Foundry was yielding the intended benefits.

"This is one of the most tangible proof points of the growth strategies for the data networking business that Brocade identified when it acquired Foundry Networks," he said.

In February, Brocade forecast 2010 revenue of $2.1 billion to $2.2 billion, but said a successful integration of Foundry could take it higher, to around $2.2 billion to $2.6 billion.

Brocade has been identified by analysts as a potential takeover target by IBM or other large technology companies. Klayko declined to comment on that possibility, but said he was satisfied with the current relationship with IBM.

"Essentially I've been married to them for over a dozen years, and we have a very, very good marriage," he said.

(Reporting by Ritsuko Ando; Editing by Richard Chang)

News : Online gambling bill coming Frank

By Kevin Drawbaugh

WASHINGTON (Reuters) - U.S. Rep. Barney Frank, chairman of the House of Representatives Financial Services Committee, said on Tuesday he would introduce a bill next week to overturn a three-year-old U.S. ban on Internet gambling.

The legislation, likely to be opposed by anti-gambling Republicans, would overturn a law imposed during the Bush administration that has hurt U.S. trade ties with the European Union. Frank said the bill was being drafted this week.

"We'll be introducing it next week and I plan to move on it," said Frank, a Democrat, speaking at the Reuters Global Financial Regulation Summit in Washington.

The bill had been expected earlier, but Frank said his committee has been busy with other measures addressing the credit crisis and proposals to reform financial regulation.

The European Commission, the EU's executive, said late last month in a draft report that a U.S. Justice Department crackdown on European online gambling companies violated U.S. commitments under the World Trade Organization.

But the commission, which oversees trade policy for the 27-nation EU bloc, said it would seek a negotiated solution with the United States rather than file a WTO complaint.

EU online gambling firms lost billions of euros in value after the U.S. Congress in 2006 made it illegal for banks and credit card companies to make payments to online gambling sites.

Republicans controlled the White House and Congress when the law was approved. Now, Democrats are in control in both branches of the government, but it is unclear how the Obama administration will handle the issue.

While EU companies like PartyGaming and 888.com subsequently withdrew from the United States, they still face possible U.S. criminal prosecution for their activities in the U.S. market prior to 2006.

(For summit blog: blogs.reuters.com/summits/)

Nes : Yahoo pulls the plug on GeoCities

SAN FRANCISCO (Reuters) - Yahoo Inc is shutting down GeoCities, a free service that hosts personal home pages for consumers, which it acquired for more than $4 billion 10 years ago during the heyday of the dotcom boom.

A posting on a Yahoo Help page for GeoCities on Thursday said the service was no longer accepting new customers and that it will be closing later this year, with more details about how individuals can save their data coming this summer.

The move comes a few days after Yahoo said it would lay off nearly 700 workers, or 5 percent of its workforce.

Since Chief Executive Carol Bartz took the reins in January, Yahoo has pruned various products and properties to cut costs and focus on fundamentals, as it seeks to revive growth in a tough economy and fierce competition from Google Inc.

Last week, Yahoo said it was shutting down Jumpcut, an online service for editing videos.

Yahoo acquired GeoCities in 1999 in a stock deal valued at roughly $4.6 billion, Reuters reported at the time.

GeoCities was among the first companies to build online communities, with more than 3.5 million websites hosted on its service in the late 1990s.

But GeoCities fell out of favor in recent years, as a generation of social network sites such as Facebook and News Corp's Myspace have become popular among Web users.

"We have decided to discontinue the process of allowing new customers to sign up for GeoCities accounts as we focus on helping our customers explore and build new relationships online in other ways," Yahoo said in a statement.

"As part of Yahoo's ongoing effort to build products and services that deliver the best possible experiences for consumers and results for advertisers, we are increasing investment in some areas while scaling back in others."

Shares of Yahoo were up a penny to $14.49 in afternoon trading on the Nasdaq.

(Reporting by Alexei Oreskovic, editing by Leslie Gevirtz)

News : Facebook surfing while sick costs Swiss woman job

ZURICH (Reuters) - A Swiss insurance worker lost her job after surfing popular social network site Facebook while off sick, her employer said on Friday.

The woman said she could not work in front of a computer as she needed to lie in the dark but was then seen to be active on Facebook, which insurer Nationale Suisse said in a statement had destroyed its trust in the employee.

"This abuse of trust, rather than the activity on Facebook, led to the ending of the work contract," it said.

The unnamed woman told the 20 Minuten daily she had been surfing Facebook in bed on her iPhone and accused her employer of spying on her and other employees by sending a mysterious friend request which allows access to personal online activity.

Nationale Suisse rejected the accusation of spying and said the employee's Facebook activity had been stumbled across by a colleague in November, before use of the social network site was blocked in the company.

(Reporting by Emma Thomasson, editing by Paul Casciato)

News : Conficker virus begins to attack PCs

By Jim Finkle

BOSTON (Reuters) - A malicious software program known as Conficker that many feared would wreak havoc on April 1 is slowly being activated, weeks after being dismissed as a false alarm, security experts said.

Conficker, also known as Downadup or Kido, is quietly turning an unknown number of personal computers into servers of e-mail spam, they added.

The worm started spreading late last year, infecting millions of computers and turning them into "slaves" that respond to commands sent from a remote server that effectively controls an army of computers known as a botnet.

Its unidentified creators started using those machines for criminal purposes in recent weeks by loading more malicious software onto a small percentage of computers under their control, said Vincent Weafer, a vice president with Symantec Security Response, the research arm of the world's largest security software maker, Symantec Corp.

Conficker installs a second virus, known as Waledac, that sends out e-mail spam without knowledge of the PC's owner, along with a fake anti-spyware program, Weafer said.

The Waledac virus recruits the PCs into a second botnet that has existed for several years and specializes in distributing e-mail spam.

Conficker also carries a third virus that warns users their PCs are infected and offers them a fake anti-virus program, Spyware Protect 2009 for $49.95, according to Russian-based security researcher Kaspersky Lab. If they buy it, their credit card information is stolen and the virus downloads even more malicious software.

Weafer said that while he believes the number of infected machines that have become active is relatively small, he expects a consistent stream of attacks to follow, with other types of malware distributed by Conficker's authors.

"Expect this to be long-term, slowly changing," he said of the worm. "It's not going to be fast, aggressive."

Researchers feared the network controlled by the Conficker worm might be deployed on April 1 for the first time since the worm surfaced last year because it was programed to increase communication attempts from that date.

The security industry formed a task force to fight the worm, bringing widespread attention that experts said probably scared off the criminals who command the slave computers.

That task force thwarted the worm partially by using the Internet's traffic control system to block access to servers that control the slave computers.

Viruses that turn PCs into slaves exploit weaknesses in Microsoft's Windows operating system. The Conficker worm is especially tricky because it can evade corporate firewalls by passing from an infected machine onto a USB memory stick, then onto another PC.

The Conficker botnet is one of many such networks controlled by syndicates that authorities believe are based in eastern Europe, southeast Asia, China and Latin America.

(Editing by Jason Szep)

News : Microsoft still sees potential in Yahoo partnership

COLOGNE, Germany (Reuters) - U.S. software company Microsoft still sees value in a potential partnership with Yahoo even though it is no longer wants to buy it, chief executive Steve Ballmer said on Friday.

"I have said many times that we no longer are interested in acquiring Yahoo, but we'd see the potential to create real value by partnering with Yahoo," he said at an industry event in Germany.

"I have said many times that when the time is right I'm sure we will have such discussions and I've said many times I'm not going to tell you when the time is right."

Technology blog All Things Digital reported this month the chief executives of Microsoft and Yahoo had met to discuss potential partnerships between the companies' Internet search and advertising operations. At the time, both companies declined to comment on the report.

Earlier this week, Ballmer said Microsoft was not interested in buying a hardware company following Oracle Corp's proposed takeover of Sun Microsystems.

Ballmer, speaking a day after Microsoft said third-quarter profit fell 32 percent, said integrating those two companies would be "very tough" given "a lot of overlap."

(Reporting by Christoph Steitz; Editing by Dan Lalor)

News : Smallest earth-like planet found

Scientists say they have discovered a new exoplanet that is more similar to Earth than anything ever seen before.

An international team said that the solar system Gliese 581 revealed a new planet labeled "E".

It is the smallest planets ever found outside our own solar system.

While "E" is similar to Earth, it is too close to the star it orbits around to be able to sustain life.

News : Cuddly robot purrs for hospital kids

Belgian scientists have unveiled a cuddly green robot designed to make life easier for children spending a long time in the hospital.

The robot, called Probo, responds to touch and informs children about operations.

It can smile, purr, talk and even be hugged.

While Probo cannot hug back yet, the dream is to build a machine that can be a child's friend through difficult moments in hospitals.

Soundbites:

KRISTOF GORIS, ELECTRO-MECHANICAL ENGINEER

IVAN HERMANS, INVENTOR OF PROBO

News : Apple profit beats forecast

Apple's quarterly profit surged past Wall Street expectations.

Kitty Bu reports

News : Apple profit beats expectations on iPhones, iPods

By Gabriel Madway

SAN FRANCISCO (Reuters) - Apple Inc's quarterly profit soared past Wall Street expectations on strong sales of iPhones and iPods, underscoring the popularity of the company's relatively expensive products even in the midst of a weak economy.

Known for giving conservative outlooks, Apple projected profit and revenue for the current quarter below average Wall Street estimates, but that did not discourage investors, who drove its shares up 3 percent after-hours on Wednesday.

"As the world economy began to spiral the big question on investors' minds was if the Apple brand was going to be resilient or particularly susceptible," said Oppenheimer analyst Yair Reiner. "I think that what these results show is that Apple and this brand are relatively resilient."

In the first quarter since Chief Executive Steve Jobs went on medical leave, net profit rose to $1.21 billion, or $1.33 a share, compared to $1.05 billion, or $1.16 a share, a year ago. Analysts had expected earnings of $1.09 a share, according to Reuters Estimates.

Revenue rose 8.7 percent to $8.16 billion in the fiscal second quarter ended March 28, beating the average Street forecast of $7.96 billion.

"I think in a better economy our sales certainly would have been higher but ... we have just reported the best non-holiday quarter in Apple's history despite the economy that we find ourselves in," Chief Financial Officer Peter Oppenheimer told Reuters in a telephone interview.

When asked about Jobs on a conference call, he said, "We look forward to Steve returning to Apple at the end of June."

LOWER COMPONENT COSTS

Apple's gross margin rose to a higher-than-expected 36.4 percent, from 32.9 percent a year ago, benefiting from favorable commodity and component costs.

The company forecast fiscal third-quarter earnings of 95 cents to $1.00 a share on revenue of $7.7 billion to $7.9 billion. That compared to Street estimates for earnings of $1.12 a share on revenue of $8.3 billion.

Apple said the revenue outlook reflects its decision to delay revenue recognition for iPhones sold on or after March 17 until its new iPhone operating system is released. Apple did the same thing last year when it updated software.

While some analysts said it may be prudent for Apple to be conservative given the economy, Pacific Crest Securities analyst Andy Hargreaves pointed to some worries that sales may slow as consumers anticipate new products coming to the market, including a possible new iPhone.

"There is going to be concern in this quarter due to purchasing delays in front of new June product releases, but outside of that, it's really clean," he said of the results.

Apple shipped 3.79 million iPhones in the March quarter, better than the roughly 3.3 million units analysts were expecting but down from 4.4 million in the December period.

Chief Operating Officer Tim Cook said Apple was happy with its relationship with AT&T Inc, the exclusive U.S. carrier for the iPhone, and had no plans to change it. Apple also said it would like to begin selling the iPhone in China in the next year.

More than 21 million iPhones have now been sold since launch in 2007. Combined with the iPod touch, which uses the same software as the iPhone, around 37 million units have been sold. Apple expects to see the 1 billionth iPhone application downloaded from its online store on Thursday.

MAC SHIPMENTS IN LINE

Apple sold 11.01 million iPods during the quarter, above the 10 million forecast by analysts. Mac computer shipments totaled 2.22 million, down from last year but in line with expectations.

"Apple has been one of a few companies where business has been pretty strong throughout this economic downturn," said Eric Kuby, chief investment officer for Northstar Investment Management Corp.

Shares of Apple rose to $125.10 in extended trading, after closing the regular Nasdaq session down 25 cents at $121.51.

The stock has gained more than 50 percent since hitting a 52-week low in January, despite some concerns about Jobs.

"Apple is a $30 billion company. It's an institution and clearly Jobs has been an iconic leader but ... there is a deep bench of talented people there at all levels," said Barry Jaruzelski, partner at Booz & Co.

The company ended the quarter with $29 billion in cash and marketable securities on its balance sheet, but Oppenheimer said there were no plans to announce a stock buyback or other forms of returning cash to shareholders.

(Additional reporting by Gina Keating and Sue Zeidler in Los Angeles; Writing by Tiffany Wu; Editing by Gary Hill, Carol Bishopric)

News : MySpace co-founder DeWolfe to step down

NEW YORK (Reuters) - Rupert Murdoch's News Corp said on Wednesday that MySpace co-founder Chris DeWolfe will not be renewing his contract and will step down from the chief executive post.

DeWolfe will continue to serve on the board of MySpace China and be a strategic advisor to the company, News Corp said in a statement. It said the decision was "by mutual agreement."

News Corp may be courting a former top executive at social network Facebook to replace the chief executive and co-founder of its top rival MySpace, All Things Digital, a media and technology website, reported on Wednesday.

News Corp's recently appointed digital chief, Jonathan Miller, had been considering getting rid of DeWolfe, Peter Kafka reported on Wednesday afternoon on his Media Memo blog, which is part of All Things Digital.

News Corp officials have been gauging former Facebook Chief Operating Officer Owen Van Natta's interest in replacing him, Kafka reported.

News Corp's Miller is also in discussions with the company's other co-founder, Tom Anderson, about assuming a new role in the organization, News Corp said in a statement. Their contracts are set to expire this fall.

The possibility of DeWolfe's departure was first reported by Michael Arrington on his TechCrunch blog on Tuesday.

Van Natta did not return a telephone call seeking comment.

News Corp has been trying to freshen MySpace -- once viewed as evidence of News Corp Chief Executive Rupert Murdoch's willingness to embrace the Internet generation after a life in newspapers -- as its revenue growth has slowed and Facebook grows ever more popular.

Facebook is trying to catch up to MySpace in the United States, where it has 54.5 million monthly unique visitors versus 76 million for MySpace, according to figures released by Comscore in March.

Facebook's growth rate outstripped MySpace at the time. It already has surpassed MySpace in worldwide users.

Earlier this year, MySpace lost three executives including former chief operating officer Amit Kapur after they resigned to begin a startup company.

MySpace also has a $900 million search-advertising deal with Google that expires in June 2010. Several financial analysts have said that there is little chance that Google would continue its relationship with MySpace.

News Corp shares rose 2 cents to close at $7.78 on the Nasdaq stock market.

(Reporting by Robert MacMillan; Editing by Gary Hill)

News : Get SMS-ing, U.S. tech execs urge Web-starved Iraq

BAGHDAD (Reuters) - Rather than wait for decent broadband and Internet access to arrive in their war-battered nation, Iraqis can use an abundance of cellphones to exploit the Web, a group of U.S. technology executives urged on Wednesday.

The executives from Google Inc, AT&T Inc, Twitter and other high tech companies paid a visit to Iraq this week, under the auspices -- and heavy protection -- of the U.S. State Department.

Quizzed about whether the visit was premature given only 5 percent of Iraqis have access to the Internet, the executives insisted desk-top PCs with hard-wired Internet connections were passe; the Web could be used via SMS, or text messages.

Eighty-five percent of Iraqis now have cellular telephones, they said.

"While there are many challenges and there is definitely a long way to go for Internet access, we were very impressed at how many Iraqis, there is near ubiquity, use mobile phones," said Richard Robbins, director for social innovation at AT&T.

"While networks are still emerging, there is a huge amount of capability for using mobile phones and text messaging for communication, for interacting among citizens and for government and NGOs to interact with citizens."

Twitter founder Jack Dorsey said his network had originally been built to accommodate text messaging but the company hadn't been promoting that basic access much until recently. Twitter was now going around the world, bit by bit, establishing codes that people could text messages through.

In order for text messaging to function, of course, the cellphone network needs to work.

Using cellphones in Iraq in the past few months has become all but impossible due to what the two main networks, including Kuwait's Mobile Telecommunications Co (Zain), have told the government are technical problems.

The tech execs hosted by the U.S. government said at a roundtable discussion with foreign journalists they were impressed with the improved security in Iraq six years after the U.S. invasion triggered massive sectarian bloodletting.

They said an air of normality in the chaotic streets of Baghdad contrasted with TV news images of suicide bombings.

Overall violence in Iraq has fallen dramatically in the past year, and the Iraqi government has called on foreign companies to turn up and invest, but insurgents including al Qaeda continue to carry out frequent and devastating attacks.

The U.S. executives flew by helicopter from Baghdad airport to the U.S. embassy, where they stayed. They went on few outside excursions and then only under heavy guard in armored cars. But they did spend several nights in Baghdad, a feat few visiting foreign businessmen have been willing to undertake to date.

(Reporting by Michael Christie; Editing by Matthew Jones)

News : In app store war, BlackBerry, Google hold own

By Sinead Carew

NEW YORK (Reuters) - Mega-malls may be big, but when you need a fart noise generator, sometimes it's the smaller shops that do the trick -- at least that's true of the crop of virtual mobile retailers called "app stores."

Without doubt, Apple Inc's iTunes App Store rules the roost. But virtual shopping outposts on BlackBerry and Android phones offer interesting benefits of their own.

Diehard iPhone fans were skeptical that BlackBerry App World from mobile e-mail pioneer Research In Motion Ltd would appeal to the broad range of consumer app tastes.

But shoppers will find that all of the stores -- BlackBerry App World, Apple Inc's app store and Google Inc's Android Market -- work well in practice.

Each offers apps -- small software programs you can download to a phone -- for practical use (news services and weather reports) or special interests (virtual pets or weapons sounds). But the smaller stores have some benefits such as easier searching and flexibility moving between apps.

SEARCHING THE STORE

If you're looking for variety, there's' no question who wins: RIM's store has around 1,000 apps; Google counted roughly 2,300 in March. Both are dwarfed by Apple's array of 25,000 -- and it has sold about 1 billion apps in less than a year.

But because of the abundance, there is room to improve the store's search feature.

"It would be nice if the search results came back in more of a catalog," said Current Analysis analyst Avi Greengart. For example, sorting through 100 search results might be easier if they were grouped in categories like gaming or reference.

This is less of an issue in the smaller Android and BlackBerry stores. Still, users might have to invest some time deciding which app they want.

"There's a slight case of options overload sometimes," said Dan Jones, a user of G1 Android phone and editor of Unstrung.com web, a wireless industry news site. His favorites are translators, guitar chord guides and social network apps.

BlackBerry App World has a sleek layout for featured apps, as users can easily scroll between displays which include the logo, price and a short description of favorite apps.

In comparison, users of G1, based on Google's Android system and made by HTC Corp, have to select the category for its featured apps and then scroll. To seek a specific Android App, you first click on the menu button to find the search option. Then you select search, type in your term and touch the search icon before your results show.

BlackBerry App World makes it easy by keeping a search box on top of the list. Simply type "Sudoku" in the Puzzles section and the list automatically loads -- although sometimes the feature causes a heavily used BlackBerry to crash.

SWITCHING BETWEEN APPS

One advantage G1 users have over iPhone users is that the G1 can run more than one app at a time. For example, G1 can automatically broadcast your location, search for nearby friends or let you receive an instant message, all while you're in another app.

Apple's users will have to wait for an upcoming software upgrade for iPhone to get alerts of new instant messages when they are in a different application.

On BlackBerry, some apps were easier to pop in and out of than others.

Each store has its own payment methods. Apple's is often cited as the easiest because iPhone users have already set up an iTunes account, and logged in a credit card, when they buy the phone.

BlackBerry App World customers must have an account with eBay's Inc's online payments service PayPal, a potentially off-putting notion for those unwilling to sign up for yet another service and remember yet another password.

Android Market uses Google Checkout, which requires your credit card details for your first transaction. After that, it stores your information for follow-up purchases.

Prices make a more striking difference. Android and iPhone have lots of free apps and many priced below $1. RIM has some freebies, but its sales start at $2.99 per application.

High fees may encourage better quality, but some users are perplexed. In a user review of the $2.99 Associated Press news app for BlackBerry, one customer opined: "Why is iPhone version free?"

However, the price tag did not deter others, "I had the free version and felt AP deserved its 2.99" one fan wrote.

As to the logic of fart simulators on BlackBerry, which has a big following among business users and politicians: "The teenage boy is never too far from the grown up executive," Greengart explained. "I think it's great they can say the BlackBerry is not just about email."

(Reporting by Sinead Carew, editing by Gerald E. McCormick)

News : Susan Boyle Unlikely pop star

Instant global media sensation Susan Boyle talks about her sudden fame.

Cindy Martin, ReutersSOUNDBITE: Susan Boyle, Talent Show Contestant

News : Physicist Stephen Hawking "comfortable" in hospital

LONDON (Reuters) - Physicist Stephen Hawking, the author of "A Brief History of Time" who is almost completely paralyzed by motor neurone disease, was comfortable in hospital on Tuesday, his university said.

Hawking, 67, was rushed on Monday to Addenbrooke's hospital in Cambridge, the city where he is a professor of applied mathematics and theoretical physics.

"Professor Hawking is being kept in for observation at Addenbrooke's hospital this morning. He is comfortable and his family is looking forward to him making a full recovery," the university said in a statement on Tuesday.

Hawking, who is only able to speak through a computer-generated voice synthesizer, had been ill for a couple of weeks, with his condition deteriorating since he returned from a trip to the United States at the weekend, a source said.

He canceled an appearance at Arizona State University on April 6 due to a chest infection. A pre-recorded lecture was played to a science conference instead.

Hawking is renowned for his work on black holes, cosmology and quantum gravity.

His books have helped to bring complex theories of physics and time to a mass audience. He achieved global recognition with the publication in 1988 of "A Brief History of Time," an account of the origins of the universe.

Hawking began suffering from motor neurone disease in his early 20s but went on to establish himself as one of the world's leading scientific authorities, and is constantly called upon to comment on new discoveries in astronomy and physics.

News : Cisco offers security for "cloud" computing

NEW YORK (Reuters) - Cisco Systems Inc on Tuesday introduced new network security products to help protect companies' Web-based software and services from attacks on their networks.

Large companies are moving more of their software and services online, trends often called "cloud computing" and "software as a service," to help users communicate and share information.

Such services, delivered through data centers, help companies use less space and computing power. But worries about viruses and external attacks on corporate data and computer systems, due to the open nature of such services, has been an obstacle to greater adoption.

Cisco, known for making routers and switches, has been expanding into a wider range of products including software. It has identified collaborative software and cloud computing as key areas of growth.

The new security products will include software that filters through online traffic as well as services that help companies assess their overall technology security, it said.

Cisco also said on Tuesday that it was upgrading its WebEx online meeting software by introducing more advanced routing systems that help handle the increase in online traffic.

Cisco bought WebEx, a company specializing in web-conferencing software that incorporates features like instant messaging and document sharing, in 2007.

(Reporting by Ritsuko Ando; Editing by Derek Caney)

News : Cyberspies hack into U.S. fighter project

WASHINGTON (Reuters) - Computer spies have repeatedly breached the Pentagon's costliest weapons program, the $300 billion Joint Strike Fighter project, The Wall Street Journal reported on Tuesday.

The newspaper quoted current and former government officials familiar with the matter as saying the intruders were able to copy and siphon data related to design and electronics systems, making it potentially easier to defend against the plane.

The spies could not access the most sensitive material, which is kept on computers that are not connected to the Internet, the paper added.

Citing people briefed on the matter, it said the intruders entered through vulnerabilities in the networks of two or three of the contractors involved in building the fighter jet.

Lockheed Martin Corp is the lead contractor. Northrop Grumman Corp and BAE Systems PLC also have major roles in the project. Lockheed Martin and BAE declined comment and Northrop referred questions to Lockheed, the paper said.

The Journal said Pentagon officials declined to comment directly on the matter, but the paper said the Air Force had begun an investigation.

The identity of the attackers and the amount of damage to the project could not be established, the paper said.

The Journal quoted former U.S. officials as saying the attacks seemed to have originated in China, although it noted it was difficult to determine the origin because of the ease of hiding identities online.

The Chinese Embassy said China "opposes and forbids all forms of cyber crimes," the Journal said.

The officials added there had also been breaches of the U.S. Air Force's air traffic control system in recent months.

(Writing by Peter Cooney; Editing by John Stonestreet)

News : Yahoo to cut 5 percent of jobs

SAN FRANCISCO (Reuters) - Yahoo Inc said it would cut 5 percent of its workforce worldwide after reporting quarterly profit that met Wall Street expectations.

Shares of the Internet company rose 1 percent in after-hours trading.

In the first full three-month period under the leadership of CEO Carol Bartz, Yahoo generated revenue of $1.58 billion, compared with $1.82 billion at this time last year. Excluding traffic acquisition costs, Yahoo's revenue was $1.16 billion compared with the average analyst expectation of $1.2 billion according to Reuters Estimates.

The Sunnyvale, California-based company reported a net profit in the first quarter of $118 million, or 8 cents a share -- down from $537 million, or 37 cents a share, a year earlier. Wall Street analysts, on average, had forecast earnings at 8 cents a share, according to Reuters Estimates.

Yahoo projected that sales in the current quarter will range between $1.425 billion and $1.625 billion.

(Reporting by Alexei Oreskovic; Editing by Gary Hill)

News : Jail for internet pirates in Sweden

A Swedish court has jailed four defendants in a copyright test case involving The Pirate Bay, one of the world's biggest, free file-sharing websites.

Andrew Potter, Reuters

News: Microsoft CEO "very surprised" by Oracle-Sun deal

By Maria Kiselyova

MOSCOW (Reuters) - Microsoft's chief executive said on Monday he was 'very surprised' by Oracle Corp's plans to buy Sun Microsystems Inc.

"I just learnt it ... I need to think about it. I am very surprised," Steve Ballmer told Reuters in Moscow.

Earlier on Monday Oracle unveiled a plan to buy Sun for more than $7 billion, after the high-end computer server and software maker's talks with IBM fell apart.

Microsoft Corp is itself talking to Yahoo Inc on an Internet search advertising partnership which could help it turn around its money-losing online business and challenge rival Google's dominant position.

Ballmer told a news conference in Moscow it was the right time to invest in that business. "We are clearly losing money. We will make money some day. Now it is the right time to invest."

"I think that advertising will be the most important way for us to make money in the online business, search, in display advertising, and partnership with Facebook is a part of that."

Last year Microsoft took a $240 million stake in internet social network Facebook, beating out Google and expanding its advertising partnership with the social networking company.

Analysts say the potential deal with Yahoo may help it turn around its online business and challenge Google's dominant and growing share of the U.S. search market.

Ballmer also said the economic crisis was the right time to invest in innovations, adding Microsoft will spend a total of $9 billion on research and development this year.

RUSSIA INVESTMENT

He said Microsoft planned to invest 10 billion roubles ($299 million) in projects in Russia in the next three years to support small businesses and promote computer literacy.

The initiatives range from projects to increase computer literacy to the creation of innovation and research facilities, Ballmer said, adding they aimed to help Russia respond to the current economic crisis and build sustainable economic growth.

"We view Russia not only as a market of great strategic importance for Microsoft but also as an important center for future innovation, entrepreneurship and economic growth ... despite the challenges we face I am extremely optimistic about the long-term future," Ballmer said.

($1=33.46 roubles)

(Editing by Greg Mahlich)

News : Oracle to buy Sun Micro, enters hardware market

By Jim Finkle

BOSTON (Reuters) - Oracle Corp plans to enter the computer hardware market by buying Sun Microsystems Inc for more than $7 billion, swooping in after Sun's talks with IBM fell apart.

The announcement on Monday surprised many Oracle watchers, who believe the company can boost profitability at Sun's software businesses but were unsure if it can be as successful with Sun's hardware unit amid stiff competition from IBM, Hewlett-Packard Co, Dell Inc and new entrant Cisco Systems Inc.

"It's an out-of-the-box, left-field type of a deal because Oracle is buying a predominantly hardware business," said Jefferies & Co analyst Ross MacMillan. "The push-pull of the deal is the uncertainty of the hardware business with the earnings accretion of the software business."

The deal would make Oracle the world's fourth-largest maker of servers, with the No. 2 slot in the high-end of the market, which was worth about $17 billion last year. It is already the world's No 2 maker of business software after IBM.

Oracle will pay $9.50 a share for Sun, which values the high-end server and software maker at about $7.06 billion, based on 743 million shares outstanding as of the end of its fiscal second quarter on December 28, according to Sun.

Sun had previously rejected IBM's offer to pay up to $9.40 a share, according to sources with knowledge of the matter.

Shares of Santa Clara, California-based Sun jumped 36.3 percent to $9.12 in Nasdaq trading, while Redwood City, California-based Oracle shares fell 1.7 percent to $18.74. Shares of IBM, which declined to comment, fell 0.32 percent.

Oracle President Safra Catz said on a conference call that Oracle intends to make the hardware division profitable. Sun's top-selling products are high-end servers and storage gear.

Catz said the acquisition, which the companies expect to close this summer, will add at least 15 cents per share to earnings in the first full year after closing.

It will be more profitable on a per share basis in the first year than Oracle had planned for its previous purchases of BEA, PeopleSoft and Siebel combined, Catz said.

OLD FRIENDS

The companies said the transaction is valued at $5.6 billion net of cash and debt. Sun's board -- which includes a seat held by its top shareholder Southeastern Asset Management with 22 percent stake -- had unanimously approved the deal, which is subject to shareholder and regulatory approval.

Oracle Chief Executive Larry Ellison and Sun Chairman Scott McNealy are two Silicon Valley pioneers who have become close friends over the years as their businesses worked together to take on rivals including Microsoft Corp and IBM.

Oracle and Sun have been partners for more than 20 years; Oracle's database and related software already work closely with Sun's Java software and Solaris operating system.

"The deal would strengthen Oracle's position against IBM. Oracle has done a good job on acquisitions it has done earlier," said Robert Jakobsen, analyst at Jyske Bank in Copenhagen. "It makes sense also historically. Oracle has been more successful commercializing software than Sun."

Sun would add more than $1.5 billion to Oracle's operating profit in the first year, rising to more than $2 billion in the second year, Oracle said. Analysts expect Oracle revenue of $22.7 billion this year, according to Reuters Estimates.

Sun rose to prominence in the 1990s but never fully recovered from the dotcom bubble burst in the early 2000s, when demand for its high-end servers cratered.

The company has been looking for a buyer for months, a person with knowledge of the matter said, with IBM, Oracle, HP, Dell and Cisco having all been cited as possible buyers.

Last month, IBM emerged as the lead contender to buy Sun but those talks collapsed primarily because the two sides were unable to agree on guarantees that IBM would not walk away from the deal under antitrust regulatory scrutiny, the source said.

Sun was more comfortable striking a deal with Oracle because the two operate complementary rather than overlapping businesses, and antitrust roadblocks are less likely, the source said on condition of anonymity.

Oracle expressed its interest in buying Sun's assets several weeks before the two sides started formal negotiations late last Thursday, the source added.

Analysts have said the sale of Sun could signal a new wave of mergers and partnerships in the data center market as companies strive to provide more comprehensive services that tie hardware and software offerings together.

"It moves Oracle more into the competition with HP and IBM and Microsoft. It makes them a player in the space," said Shannon Cross of Cross Research. "It gets hardware, which should be interesting to see since Oracle doesn't make things. It's going to give them access to customers who weren't using the Oracle database."

(Additional reporting by Anupreeta Das, Franklin Paul and Ritsuko Ando in New York, Tarmo Virki in Helsinki; Writing by Tiffany Wu; Editing by Derek Caney)