News : Google briefly blocked in China

Internet users in China were briefly unable to open Google's main sites late Wednesday, and the company said it is investigating.

Kitty Bu reports.

News : China awaits Internet filter

China's Internet software, called "Green Dam", has sparked international concerns, but the real challenge may be the nation's own PC market.

Kitty Bu reports.

News : Apple CEO Steve Jobs returns to work

By Gabriel Madway

SAN FRANCISCO (Reuters) - Apple Inc Chief Executive Steve Jobs is back at work following a near 6-month medical leave, although he will work at least initially from home for a few days a week, the company said on Monday.

The official word of his return followed months of speculation about the health of Jobs, a pancreatic cancer survivor and his future with the company he co-founded more than 30 years ago.

Jobs, 54, underwent a liver transplant in Memphis, Tennessee, while on leave. He has remained involved in strategic decisions at Apple while away, according to the company and he has been seen in recent weeks at Apple's headquarters in Cupertino, California.

"Steve is back to work," a company spokesman said. "He's currently at Apple a few days a week and working from home the remaining days. We are very glad to have him back."

Collins Stewart analyst Ashok Kumar said investors will be reassured that Jobs is back at the helm of the company he helped resuscitate over the past decade, with category-defining products such as the iPod and, more recently, the iPhone.

Kumar noted that some investors had feared Jobs would never return. "In many ways he's irreplaceable," he said. "Having him back brings the halo back to the company."

Apple shares were flat in late trading on the Nasdaq. The stock used to sink and surge with every twist in Jobs' health, but has proved to be less volatile of late as investors got used to the idea of other executives running the company in his absence.

STOCK LESS VOLATILE

Oppenheimer & Co analyst Yair Reiner said that, given the lack of information about Apple's CEO over the past six months, investors were forced to remove him from the equation.

"It really wasn't possible for someone to make an investment decision in Apple under the assumption that Steve Jobs was going to come back," Reiner said.

Jobs was treated for a rare form of pancreatic cancer in 2004. His gaunt appearance at an Apple event last summer spurred worries the cancer had returned.

In January, after initially blaming his noticeable weight loss on a hormone imbalance, Jobs announced he was taking medical leave until the end of June, saying his health-related issues were "more complex" than originally thought.

While Jobs was on leave, Chief Operating Officer Tim Cook handled Apple's day-to-day operations. Some analysts think Jobs may transition into an advisory role, focusing on products and strategy and Cook would formally become CEO.

The hospital in Memphis that performed Jobs' liver transplant said he "is now recovering well and has an excellent prognosis," but has not provided further details.

Pacific Crest Securities analyst Andy Hargreaves said questions remain and added that Apple has not shown itself very forthcoming on the subject of Jobs' health.

"The question is whether or not he's going to be there for the next several years and I don't think they've added any clarity on that," he added.

(Reporting by Gabriel Madway, editing by Richard Chang and Andre Grenon)

News : Pirate Bay founders get rich in jail

By Veronica Ek and Mia Shanley

STOCKHOLM (Reuters) - A little-known Swedish software firm has snapped up file-sharing website The Pirate Bay with the hope of turning the source of legal controversy into a money-spinner that appeals to both users and content providers.

Global Gaming Factory X AB, which operates Internet cafes and provides software, said Tuesday that it had agreed to buy Pirate Bay for 60 million Swedish crowns ($7.7 million).

The website made world headlines in April when the three Swedish founders and a financial backer were each sentenced to one year in jail and ordered to pay a combined $3.6 million in damages for breaching copyright law with the free downloading site, which was one of the biggest sites of its kind on the Internet.

Swedish News Agency TT cited one of the founders, Peter Sunde, as saying that the money would not go directly to him or any of the others sentenced in April.

Sunde told TT that the money would be placed in a company outside Swedish borders and it would be used for Internet projects other than downloading sites.

Pirate Bay could not be immediately reached for comment.

Global Gaming said it believed the website was a viable business with its plans for a new, legal business model.

"We would like to introduce (business) models which entail that content providers and copyright owners get paid for content that is downloaded via the site," the company said in a statement.

USERS AS EARNERS

Global Gaming Chief Executive Hans Pandeya told a news conference that the revamped website would generate money via advertising, supplying storage space and helping telecom operators optimize Internet traffic.

He also said users would be able to earn money by supplying storage space, which would encourage people to use the site.

"That's what is interesting. If you can earn money by file-sharing, it's no big deal to pay for what you download," Pandeya said.

Analysts were unimpressed by the move, comparing it to Napster, an online file-sharing site that quickly lost popularity after it started to charge its users.

"It looks like they are going to Napsterize it," said Leigh Ellis, intellectual property partner at Gillhams Solicitors.

Mark Mulligan, vice president at research firm Forrester, said that many of Pirate Bay's around 20 million users would move on to other free downloading options.

"The bottom line is that most people who use file-sharing networks use it because it's free. They are not likely to start paying just because the owners have a new business model," he said.

"There has not yet been a single example of a legal file-sharing network which has made a successful transition to a legal business."

($1=7.826 Swedish Crown)

(Editing by Jon Loades-Carter and Karen Foster)

News : Cisco may take on Microsoft's Office

BOSTON (Reuters) - Cisco Systems Inc is considering offering Web-based alternatives to Microsoft Corp's popular Office software as the networking giant expands on the Internet.

Cisco Senior Vice President Doug Dennerline said on Tuesday his company may develop a service that would allow business users to create documents they could draft and share through its WebEx meeting and collaboration service.

Internet-based alternatives to Microsoft Office cropped up about five years ago, but corporate users have yet to embrace them. If the approach does take off, it could become big business: Microsoft's Office division rang up sales of $60 billion in the software company's most recent fiscal year.

Google Inc sells Google Apps, an Internet-based alternative to Microsoft Office that includes a spreadsheet, word processor and presentation software.

Dennerline, who manages Cisco's online collaboration products, said he is interested in getting into that area.

"That is an interesting space. We are certainly thinking about that," he said on Tuesday during an online news conference. He did not elaborate.

WebEx services currently includes online meetings, email and instant messaging.

He also said Cisco is not interested in competing with Salesforce.com Inc in selling online applications that companies use to manage sales and marketing activities.

Analysts have long speculated that Cisco planned into that business.

(Reporting by Jim Finkle; editing by Andre Grenon)

News : China backs away from Internet filter

By Chris Buckley and David Stanway

BEIJING (Reuters) - China has delayed indefinitely a much-criticized plan to force manufacturers to bundle Internet filtering software with personal computers sold in the country, in an abrupt retreat hours before the policy was due to start.

The climbdown was reported late on Tuesday by the official Xinhua news agency, which said the Ministry of Industry and Information Technology would "delay the mandatory installation of the controversial 'Green Dam-Youth Escort' filtering software on new computers."

The "Green Dam" plan, which officials said was to stamp out Internet pornography banned in China, was to start on Wednesday, but had been assailed by critics of censorship, industry groups and Washington officials as politically intrusive, technically ineffective and commercially unfair.

No new date was given and the plan may drift into oblivion.

At a time when China's ruling Communist Party appears increasingly sure of its powers to master the economy, society and the Internet, the retreat was a vivid reminder that this sprawling government can stumble on its own ambitions.

"They never expected the backlash would be so vehement," said Wang Junxiu, an Internet entrepreneur in Beijing who has objected to Green Dam and other forms of censorship.

"This will just peter out now and the government will hope it will be soon forgotten, I'd say."

The Ministry accepted the criticisms of computer companies, but left open the possibility of the censorship scheme returning in some form. And there can be no doubt that the ruling Communist Party remains wary of the Internet, which now has some 300 million users across China.

"Some businesses pointed out the heavy amount of work, time pressures and lack of preparation," an unnamed Ministry official said in a statement on its website (www.miit.gov.cn).

The official rejected claims that the plan threatened free speech, violated international trade rules or was chosen without proper tender processes.

"The Ministry of Industry and Information Technology will further solicit opinions from all sides, improve the plan, upgrade methods and carry out related tasks," said the official.

But critics are likely to see the vague backdown, giving no fresh date for a launch, as a way for the government to escape quickly from the domestic and international controversy that erupted after the plan was revealed earlier this month, giving manufacturers little time to prepare.

"I would say we would welcome this," said Susan Stevenson, a spokeswoman for the United States' embassy in Beijing.

"DOOMED TO FAIL"

Wang Junxiu, the Internet entrepreneur in Beijing, said the plan appeared to be poorly thought out and doomed to fail.

"The leaders apparently decided the controversy and problems were too much and decided to make a break," said Wang.

"If this had been a well-prepared plan with senior support, the result would have been very different. But it wasn't."

China said the Green Dam software was designed to block objectionable images, but the policy drew opposition from industry and human rights groups and foreign governments who said it distorted fair market competition and strengthened Beijing's ability to censor political views.

On Monday, the European Chamber of Commerce in Beijing urged China to reconsider the move, saying it "poses significant questions in relation to security, privacy, system reliability, the free flow of information and user choice."

Last week, the United States also said the policy was "draconian" and the European Union urged it to be scrapped.

But the most potent opposition may have been the many Chinese Internet activists, bloggers and lawyers who threatened protests, lawsuits and other actions against the plan.

Susan Shirk, an expert on Chinese politics at the University of California, San Diego, said that earlier open criticism of "Green Dam" in the Chinese media suggested the plan did not have the backing of senior government leaders.

"They do watch public opinion very carefully," Shirk said of China's Communist Party leaders. "There's a very dynamic interaction between the Party authorities and the Internet public."

Ai Weiwei, a Beijing artist and blogger who has mobilized opposition to Green Dam, had planned a party on Wednesday to denounce it, said the party would go ahead.

"Now we'll be celebrating a victory," he said. "I expect there'll be even more drinking."

Hewlett-Packard Co, the world's No. 1 PC maker, declined to comment on the Chinese government's decision.

No. 2 vendor Dell Inc said in a statement: "We respect the Chinese government's stated goal of protecting children by filtering access to pornography through the Internet." Dell said it will continue to advise customers about Web-filtering software that has been tested and the company knows works well on its PCs.

(Additional reporting by Kelvin Soh in Taipei and Gabriel Madway in San Francisco; Editing by Alex Richardson and Richard Chang)

News : Apple CEO Jobs at work on Monday

By Clare Baldwin and Sinead Carew

SAN FRANCISCO/NEW YORK (Reuters) - Apple Inc Chief Executive Steve Jobs was at the company's headquarters on Monday, underscoring speculation the pancreatic cancer survivor may have returned to work.

Jobs, who has been on medical leave since January, was seen by a Reuters reporter leaving the Apple campus in Cupertino, California dressed in his trademark black turtleneck and jeans. He walked out chatting with another person before climbing into a black car that then drove off.

Speculation has mounted that Jobs could be back at work soon, fueled in part by a Wall Street Journal article last weekend that said the CEO had a liver transplant two months ago.

On Monday, Jobs, 54, was also cited in an Apple press release for the first time in months, triggering talk that the man considered the visionary behind Apple's innovation machine had returned from his leave of absence.

"This is the first time we've heard from Steve Jobs since he reported he was taking medical leave," said Oppenheimer & Co analyst Yair Reiner. "It's a sign Apple has its CEO back."

Apple said in the release that it had sold more than 1 million of its newest iPhone 3GS in the first three days of launch, beating analysts' expectations.

"Customers are voting, and the iPhone is winning," Jobs said in the statement.

Apple, which has not disclosed details on Jobs' state of health while he's been on medical leave, declined to comment.

The company has said in the past that Jobs remains deeply involved in decision-making. He has visited Apple periodically since starting his medical leave in January, according to blog reports that follow his every move.

The Wall Street Journal reported on Saturday that Jobs had a liver transplant two months ago, but was expected back at work before the end of June.

DISTRACTIONS

Shares of Apple rose as much as 1.5 percent in early trading before falling with the broader market to end the day down 1.5 percent at $137.37. Its stock was flat to slightly lower in after-hours trading.

Analysts said the iPhone sales figures would distract some investors from concerns about Jobs' health to a certain extent.

"Investors will realize that Apple executed well on the launch in Jobs' absence," said Susquehanna Financial Group analyst Jeffrey Fidacaro.

He said the 3GS sales were strong considering it was available in only eight countries. The last iPhone was launched in 21 countries and also booked 1 million sales in its first weekend. "It shows that the iPhone momentum remains strong."

Despite the solid weekend sales, Fidacaro said some investors would still have concerns about Jobs' health and whether he can continue as a driving force at Apple.

"He's obviously the clear visionary of the company," Fidacaro said. "There is a concern about his health and what Apple has told us about his health and what role he'll be playing when he returns."

Analysts have said Jobs may soon shift to a new role focusing on big-picture issues and products at Apple, leaving Chief Operating Officer Tim Cook to manage day to day. Cook has been overseeing operations in Jobs' absence.

Shares of Apple have risen more than 60 percent this year as investors grow more comfortable with the executive bench beyond Jobs. Continued strong sales and product launches at the company have also helped.

"On the one hand, you have the Jobs news out there, which might give people some pause, but on the other hand, iPhone 3GS sales were good," said Canaccord Adams analyst Peter Misek.

Six million customers have downloaded the new iPhone 3.0 software in the first five days since its release, Apple said.

The 3GS, which offers faster speeds, longer battery life and the ability to take videos, hit stores last Friday, drawing plenty of fans but not the crowds that had swarmed previous iPhone releases, due in part to preorders.

Exclusively on AT&T Inc's network in the United States, the iPhone competes with BlackBerry phones from Research in Motion and the Pre from Palm Inc.

(Additional reporting by Sinead Carew and Gabriel Madway; Writing by Tiffany Wu; Editing by Edwin Chan & Ian Geoghegan)

News : Entrepreneur's Edge Howcast

Reuters Small Business presents expansion pitches from upstarts across the country:

Sixteen months ago a group of ex-Googlites launched their own online operation, a "how to" site filled with informative, but entertaining videos.

With a rocky start behind them, their biggest challenge now is finding a way to balance high production costs and advertising revenue, so that they can turn a profit.

Here is Sanjay Raman with their pitch

News : Alaska's Rat Island rat-free after 229 years

By Yereth Rosen

ANCHORAGE, Alaska (Reuters) - Alaska's Rat Island is finally rat-free, 229 years after a Japanese shipwreck spilled rampaging rodents onto the remote Aleutian island, decimating the local bird population.

After dropping poison onto the island from helicopter-hoisted buckets for a week and a half last autumn, there are no signs of living rats and some birds have returned, according to the U.S. Fish and Wildlife Service.

Rats have ruled the island since 1780, when they jumped off a sinking Japanese ship and terrorized all but the largest birds on the island. The incident introduced the non-native Norway rat -- also known as the brown rat -- to Alaska.

The $2.5 million Rat Island eradication project, a joint effort between the U.S. federal government, the Nature Conservancy and Island Conservation, is one of the world's most ambitious attempts to remove destructive alien species from an island.

Now there are signs that several species of birds, including Aleutian cackling geese, ptarmigan, peregrine falcons and black oystercatchers, are starting to nest again on the 10-square-mile (26-sq-km) island.

It is too soon to say that Rat Island is definitively rat-free, however. That can only be established after at least two years of monitoring, said Bruce Woods, a spokesman for the Fish and Wildlife Service in Anchorage.

"We don't know that there's not a couple of happy rats hiding away that are going to spring out and repopulate the island," he said.

(Reporting by Yereth Rosen; writing by Bill Rigby; editing by Eric Beech)

News : With digital transition, more focus on smaller TVs

By John Poirier

WASHINGTON (Reuters) - The Friday deadline for a nationwide transition from analog to crisper digital television transmission has U.S. retailers hoping for a boost in sales of smaller TVs as consumers upgrade secondary sets in spare rooms.

The digital transition has already unleashed a surge in sales of converter boxes to consumers who want to keep their existing TV sets, and an uptick in cable and satellite TV service sales for Americans who want to upgrade.

Now, retailers are hoping that consumers will turn their attention to replacing analog TVs in bedrooms and spare rooms that are not connected to cable or satellite service.

"Those are good candidates for over-the-air digital televisions," said Ross Rubin, director of industry analysis at the NPD Group, a market research firm based in Port Washington, New York.

The U.S. government spent about $2 billion and 13 years to reach the Friday deadline for the final 1,000 broadcasters to switch to digital transmission, freeing up analog signals for local police and firefighters. About 760 broadcasters already made the change before Friday.

To help American consumers get ready, the government distributed some 59 million coupons -- each worth $40 -- to help defray the cost of buying converter boxes. Only about half have been used so far, meaning there will continue to be some sales over the next 90 days until the coupons expire, according to analysts.

The exercise has been a cash cow for converter box makers and retailers like RadioShack Corp.

"Radio Shack has clearly benefited from very significant sales of converter boxes over the last several quarters," said Barclays Capital's Michael Lasser. The surge in DTV box sales -- which generated about $200 million last year -- is temporary and has already been priced into the stocks, Lasser said.

Now, he says, the trick is how well Radio Shack can capitalize on increased store traffic by placing DTV boxes next to other peripherals designed to catch the buyer's eye.

"This is just another step in the evolution of Radio Shack to define its niche in the rapidly changing marketplace for consumer electronics," Lasser said.

Cable and satellite companies saw a boost in first quarter earnings from the digital transition.

Comcast Corp and Time Warner Cable Inc posted higher-than-expected quarterly profits, and raised the possibility of more subscriber additions in the current quarter. But both also said customer growth will likely slow in the second quarter compared with the first quarter, with the U.S. economy not yet out of the woods.

COSTLY FOR INDUSTRY

The digital TV transition was initially set for February but was delayed by Congress when it became clear that nearly 6 million households were not yet ready.

Currently, about 2.5 percent of American TV-watching households, or 2.8 million, still rely on antennas to receive television shows this week, according to government officials who cited a study by the Nielsen Company.

The transition ordered by Congress to free up analog signals for public service use has been costly.

Broadcasters spent $5 billion in infrastructure upgrades and another $1.2 billion on consumer education campaigns, according to the National Association of Broadcasters.

The government is also providing AmeriCorps volunteers to help install the DTV boxes.

Commerce Secretary Gary Locke told reporters he was surprised to find elderly consumers better prepared for the transition than younger, Internet-driven consumers. "Maybe it's because they (the younger consumers) rely on new forms of media for news and programing and don't care about television anymore," Locke said.

(Reporting by John Poirier; Additional reporting by Ian Sherr in Chicago; Editing by Gary Hill)

News : Twitter helps Dell rake in sales

By Clare Baldwin

SAN FRANCISCO (Reuters) - Social media company Twitter is struggling to craft a profitable business model, but the Web-based service has helped Dell Inc chalk up millions of dollars in sales.

Dell said on Thursday it has raked in more than $3 million from Twitter followers who clicked through its posts to its Web sites to make purchases. The company, which has posted to Twitter about two years and tracks the sales with proprietary software, made more than $1 million in the past 6 months.

"We're going to watch it over time to make sure it's tracking at the right level," said Lionel Menchaca, Dell's chief blogger. "It is trending upward and that's what we're going to be looking at overall."

Three million in sales over two years is a pittance for Dell, ranked by IDC as the world's second-largest PC maker in the first quarter of 2009. Dell posted $12.3 billion of revenue in the first quarter of this year, alone.

But the PC maker has become one of the first public examples of how companies might profit from Twitter.

Twitter does not charge companies for such benefits, but does not rule out doing so in the future.

"For now, monetization of this type of activity remains unknown," Twitter spokeswoman Jenna Sampson said in a statement. "However, as the network grows, the company will be committing more resources toward profitability."

Gartner analyst Allen Weiner said such financial success could provide a model for Twitter, itself, to make money.

"Certainly one of the ways Twitter can begin to think of itself as a money-making operation is to facilitate a lot of these things, build it as part of the infrastructure. So if you're a company, you can pay Twitter a certain amount of money and they can directly distribute coupons on your behalf, or clear transactions," Weiner said.

Twitter is building add-on tools and services for businesses and professional users, co-founder Biz Stone told the Reuters Global Technology Summit last month.

Dell said it posts 6 to 10 times a week to its DellOutlet account, which is where the majority of Twitter-based sales have come from. Stephanie Nelson, who manages the account, said almost every post includes a coupon or a link to a sale, and about half of the posts are Twitter-exclusive deals.

The PC maker, which has about 600,000 followers, is one of the Top 100 most-followed accounts on Twitter, according to private trackers TwitterCounter and Twitterholic.

Other non-media companies ranked in the Top 100 include Whole Foods Market Inc, Woot.com, Zappos.com, JetBlue Airways Corp.

Whole Foods and JetBlue said they have not tried to monetize their Twitter presence. Woot.com and Zappos.com were not available for comment.

Twitter had approximately 17 million unique U.S.-based visitors in April, and about 24 million worldwide, according to Nielsen. Its number of users has grown by more than a thousand percent over the last year.

Small companies are also finding financial success on Twitter. New Orleans-based Naked Pizza, which turns $1 million in sales annually, is "betting the farm" on its Twitter presence according to co-founder Jeff Leach.

The company, which created a Twitter presence about two and a half months ago and has about 4,300 followers, last week said nearly 69 percent of sales generated during a one-day Twitter advertising blitz came from customers drawn in from the site.

Leach posts 1 to 15 times a day and said his company sees a sustained 20 percent of sales dollars from its Twitter presence.

Leach recently put up a billboard advertising the company's Twitter presence and is planning mailings bearing the company's Twitter contact information instead of a phone number.

(Reporting by Clare Baldwin in San Francisco; Editing Bernard Orr)

News: Virgin Media Universal to offer unlimited music

By Kate Holton

LONDON (Reuters) - British cable TV operator Virgin Media is to launch an unlimited music download subscription service through a partnership with the world's largest music company, Universal.

The music industry has been desperate to boost digital sales in recent years to overcome online piracy, and the agreement comes a day before a British report sets out how the creative and telecoms industries should tackle the problem.

People familiar with the service said it would cost 10-15 pounds ($16.30-$24.50) per month, which could appeal to parents concerned by children accessing illegal sites.

The service, which both sides described as a world first, would allow Virgin Media broadband customers to both listen by streaming and download to keep as many music tracks and albums as they want from Universal's catalog.

The music will be in the MP3 format, meaning it can be played on the vast majority of music devices, including the iPod and mobile phones.

The service, which would compete with Apple's iTunes, is set to launch later this year.

Virgin said as part of its cooperation with the music industry it would also work to prevent piracy on its network by educating users and would, as a last resort for persistent offenders, suspend Internet access.

Virgin said no customers would be permanently disconnected.

Jupiter analyst Mark Mulligan said the service went further than both sides of the industry could have hoped, with Virgin agreeing to disconnect offenders, and Universal providing unlimited MP3 music without unpopular anti-piracy software.

"This really is high stakes, if this can't work then what will," he said.

The international music trade body IFPI welcomed the deal.

"This is the kind of partnership between a music company and an Internet service provider that is going to shape the future for the music business internationally," chairman and chief executive John Kennedy said.

"It also marks new ground in ISPs' willingness to take steps to protect copyrighted content on their networks, and that sets a very encouraging example to the whole industry."

Vivendi's Universal Music Group has often led the way in signing such deals.

It has agreed an online subscription music service with Britain's largest pay-TV firm BSkyB, at a range of pricing levels, and was one of the first to sign up to mobile handset maker Nokia's Comes With Music offering.

Screen Digest analyst Dan Cryan said Virgin would need to sign up other labels and noted it would be competing with other free streaming services, which could be difficult.

Virgin said it was also in talks with other major and independent music labels and publishers to offer a complete catalog by the time it launches.

"We see this as completely ground breaking," Universal Music chairman and chief executive Lucian Grainge told reporters.

"We've listened to our customers, our fans and our artists and we think that this is an opportunity to bring music to a wider audience."

(Reporting by Kate Holton; editing by Simon Jessop and Dan Lalor)

($1 = 0.6119 pound)

News : Ex-government cyber official, exec mulled for czar job

By Diane Bartz

WASHINGTON (Reuters) - Microsoft's security chief and a veteran of Clinton's and Bush's national security teams are leading candidates for cybersecurity czar, a job that needs White House access and clout to protect networks that underpin the U.S. economy.

President Barack Obama promised last month that he would personally decide who would lead the fight against an epidemic of cybercrime and organize a response to any major cyber attack.

A leading candidate for the post is Scott Charney, head of Microsoft's cybersecurity division, who has said he won't take the job, according to a source who had direct knowledge of the matter but was not authorized to discuss it. The source said, however, that Charney would change his mind if pressed.

Charney also led PricewaterhouseCoopers' cybercrime unit and headed the Justice Department's computer crime section.

His main competitor is likely Paul Kurtz, who led Obama's cybersecurity transition team and who worked on the National Security Council under both Bush and Clinton, the source said.

Others under consideration include former Rep. Tom Davis, a moderate Virginia Republican; Sun Microsystems executive Susan Landau; Maureen Baginski, a veteran of the National Security Agency and Federal Bureau of Investigation, and Frank Kramer, an assistant defense secretary under Clinton, the source told Reuters.

Also in the running but less likely to be picked are Melissa Hathaway, who led a cybersecurity review for the president, and James Lewis of the Center for Strategic and International Studies think tank, the source said.

John Thompson, chairman of the board of Symantec Corp, had been under consideration but turned it down, the source said.

UNDEFINED

The exact responsibilities of the new job remain largely undefined, although the position described in a report by Hathaway's team describes a coordinator who reports to both the National Security Council and the National Economic Council.

Holes in U.S. cybersecurity defenses have allowed major incidents of thefts of identity, money, intellectual property and corporate secrets. In one incident, a bank lost $10 million in cash in a day.

There have also been thefts of sensitive military information and a penetration of the U.S. electrical grid.

Susan Landau, who declined to discuss if she has been short-listed for the job, said she would urge Obama to make it a top-level position, as he promised.

"The job is very important," said Landau. "We have all sorts of different kinds of threats. ... What you want is ubiquitous security."

Landau is a Sun Microsystems engineer who has worked on digital rights, privacy and export control.

Lewis, who also declined to discuss on the record whether he was being considered, said the White House must emphasize national security expertise in picking a cybersecurity czar.

"Some guy from industry is going to write a national security strategy? No, they aren't. You don't just pick this up," said Lewis. "You need somebody who knows the national security game, who knows government and who knows about the technology."

Before becoming a senior fellow at CSIS on technology and national security, Lewis worked for the federal government as a foreign service officer with assignments on such disparate topics as global arms sales, encryption and high-tech trade with China.

Lawmakers on Capitol Hill shared Lewis' and Landau's views, said a senate staffer who has been briefed on the issue.

"The president's vision is a heavyweight," said a Senate staffer. "I'm concerned that he or she will get sort of tied up, like Gulliver, tied down by a million different reporting requirements."

(Editing by Brian Moss)

News : MySpace prepares for "massive" layoffs

NEW YORK (Reuters) - News Corp's MySpace refused to comment on Thursday on a report the previous day that said the online social network will fire a "massive" number of employees.

The online social network is preparing to lay off as many as 500 of its 1,600 workers, the TechCrunch blog reported on Wednesday, as it cuts costs while trying to stay ahead of growing competition from rival Facebook.

MySpace is part of Fox Interactive Media, which houses some of News Corp's online properties. News Corp last month ousted co-founder and Chief Executive Chris DeWolfe and has shaken up management elsewhere in its digital operations.

"Like any company with new leadership, Fox Interactive Media is reviewing every aspect of our operations, performance and structure," a MySpace spokeswoman said in a statement.

"It's no secret that we are looking for ways to improve our products, increase the value of our digital assets and enhance the overall financial strength of the company," the statement said.

The TechCrunch report comes after the Los Angeles Times reported on June 6 that Fox Interactive Media canceled a plan to move to a 420,000 square-foot office space in Playa Vista, California.

The company had committed to a 12-year, roughly $350 million lease, the Times reported, adding that it was backing off the move because of its financial difficulties.

MySpace's statement to the Los Angeles Times about the Playa Vista building was the same statement that it sent to Reuters regarding the layoffs.

News Corp's $580 million purchase of MySpace's parent company in 2005 was considered among analysts and media experts as a brilliant move by Murdoch to enhance the media conglomerate's digital portfolio.

Since then, advertising revenue has deteriorated and Facebook and Twitter have surpassed MySpace in buzz and popularity in the technology and media worlds.

A search and advertising deal with Google Inc will expire in July 2010, and it is unclear whether the two sides will renew. MySpace derives $300 million a year from that deal, and most Wall Street analysts believe there is no chance that Google will forge a deal on similar terms.

News Corp shares rose 11 cents, or 1.05 percent, to $10.62 on Nasdaq at mid-afternoon.

(Reporting by Robert MacMillan; Editing by Richard Chang)

News : Japan's robo-chefs

What's cooking at Tokyo's International Food Machinery and Technology Expo? For this robo-chef, it's okonomiaki, Japanese pancakes.

Dan Sloan reports.

News : Monitor leader TPV aims low with cheap "nettop" PCs

By Doug Young

HONG KONG (Reuters) - Top global PC monitor maker TPV Technology on Wednesday said it is developing a low-cost, all-in-one desktop PC optimized for the Internet, in a bid to replicate the success of low-cost portable PCs known as netbooks.

The gambit is an important one for TPV, as it looks for new revenue streams to maintain growth as its core desktop monitor business slows with the broader consumer move toward portable notebook PCs.

The new models, which TPV has tentatively dubbed "nettops" will combine a computer with a monitor in a single unit, similar to Apple's iMac and other products on the market.

But unlike most of those products, which typically cost more than $1,000 each, nettops would sell for $400 to $600, said Jason Hsuan, TPV's chairman and chief executive. Models could eventually retail for as little as $300, he added.

TPV is working with smaller PC makers to develop the PCs, although Hsuan declined to name any.

The computers, with screens of around 20 inches, were set to hit stores in the third or fourth quarter, he said.

"After two to three years, they will become a driving force for our future growth," Hsuan said at a media event to discuss his company's first-quarter results.

TPV put its global market share for PC monitors at 27.4 percent in the first quarter, ahead of No.2 Innolux Display at 21.2 percent and No.3 Samsung Electronics at 15.6 percent.

However, TVP projected global monitor sales to drop 8 percent this year from 2008, and then drop slightly again next year as the market matures and more people opt for slimmer, increasingly affordable notebook computers.

Portable PC sales are expected to overtake sales of desktop models for the first time this year, as more buyers choose the more versatile models whose prices have dropped steeply with the advent of low-cost netbooks.

Since their introduction by Taiwan's Asustek in 2007, most of the world's major PC makers, including Acer, Lenovo and Hewlett-Packard, have joined the netbook trend, even as some worry that the cheaper portable PCs could cannibalize business from more expensive laptops.

Asustek has also introduced a low-cost, all-in-one desktop PC called the Eee Top, with a suggested price of $550, that has been less fast to take off.

(Additional reporting by Joanne Chiu; Editing by Chris Lewis)

News : New Google tool targets Microsoft business users

SAN FRANCISCO (Reuters) - Google Inc introduced software to make it easier for businesses using Microsoft Corp's Outlook to switch to its Web-based communications and collaboration products.

The Internet company said on Tuesday that its new software can easily transfer data from a Microsoft Exchange server to Google's cloud-based online service.

The new product allows business users to continue using the Outlook client for email and other tasks, but the back-end functionality and data storage would move to Google, instead of residing on a company's internal servers running Microsoft software.

The product, Google Apps Sync for Microsoft Outlook, will be available immediately as part of the existing Premier version of Google apps, which costs $50 per business user but is also available to educational and nonprofit customers for free.

Google product manager Chris Vander Way said the new product does not signal that Google is backing away from efforts to convince businesses to use its Web-based email, dubbed Gmail.

"We look at this as a way to provide choice for users who like to do things the old, Outlook way," said Vander Way.

The company said it currently has 1.75 million business users, including Genentech and Avago. Dave Girouard, president of Google's enterprise business, would not break down how many of those customers use the fee-based version of Google apps and how many use the free, ad-supported versions.

Girouard said the enterprise apps business generates "hundreds of millions" of dollars in revenue a year and is profitable and growing.

(Reporting by Alexei Oreskovic; Editing by Gary Hill)

News : Apple unveils cheaper notebook, Jobs absent

By Alexei Oreskovic and David Lawsky

SAN FRANCISCO (Reuters) - Apple Inc unveiled a cheaper notebook with revamped software on Monday, kicking off a closely watched annual conference with low-key announcements amid speculation visionary leader Steve Jobs might appear after a months-long absence from public view.

Shares in Apple slid 2.9 percent to $140.48 -- after a 6.5 percent climb in the week leading up to the much-anticipated event. The stock briefly headed even lower after CNBC reported that Apple planned to price new iPhones "aggressively," and refresh its entire line of the popular smartphones.

Among other incremental announcements, the consumer electronics giant showed off a new 15-inch notebook with improved battery life, a $300-cheaper Mac Air -- its thinnest laptop -- and, as expected, its highly previewed "Snow Leopard" Mac operating system software.

Apple's new MacBook Air notebook now starts at $1,499. The company also unveiled a new 13-inch MacBook Pro starting at $1,199, and a 15-inch laptop with longer battery life, addressing a perennial consumer concern.

Apple's stock is historically volatile during the company's June developer conference. It dropped about 7 percent over the course of the conference in 2008 and about 4 percent in 2007.

Chief Executive and founder Jobs had not appeared halfway through the event.

Suspense and speculation had mounted in the months before Apple's annual Worldwide Developers' Conference, with hopes ranging from a cameo by Jobs -- out till the end of June on medical leave -- to revelations of a game-changing tablet mini-PC or cheaper iPhone.

Jobs, a pancreatic cancer survivor, has not appeared despite speculation he would, after springing his leave of absence on stunned markets in January by saying his health problems were more complex than previously thought.

Despite a slowing product line, worsening consumer spending and an uncertain succession plan, investors have quickly got comfortable with the idea of a Job-less Apple. Shares in the maker of the iPod and iPhone have surged 85 percent since shortly after the bombshell was dropped on January 14.

Jobs, a college dropout, co-founded Apple in 1976 with his friend Steve Wozniak in a Silicon Valley garage. After a falling-out with the board, he left the company in 1985.

Apple floundered, setting the scene for his return in 1997. The company has flourished under Jobs 2.0, rolling out the concept of a computer as a 'digital hub' along with the now-ubiquitous iPod and iPhone.

(Additional reporting by Clare Baldwin; Writing by Edwin Chan; Editing by Peter Henderson and Richard Chang)

News : No gas for this air-powered car

The first car to run on compressed air should go on sale in France next year, boasting zero pollution and a cheaper alternative to traditional gas guzzlers.

Julie Gordon reports.

News . Apple's Jobs ready to return from leave

SAN FRANCISCO (Reuters) - Apple Inc CEO Steve Jobs is on track to return to the company from his medical leave of absence as planned, the Wall Street Journal reported, citing a person who had seen Jobs in recent weeks.

The report that Jobs will return by the end of the month comes ahead of Apple's Worldwide Developer Conference in San Francisco on Monday, an event at which Jobs unveiled Apple's 3G iPhone a year ago but had not been expected to attend this time.

Jobs, 54, had said his medical leave would run until the end of June when he initially announced the move in January, setting the stage for a July return. Company representatives had said repeatedly he remained involved in strategic decisions and would return as scheduled.

Apple's spokesman did not return calls for comment.

Some analysts and investors feared that Jobs, a survivor of pancreatic cancer, might not return if his health problems did not improve.

Jobs was treated for a rare type of pancreatic cancer in 2004. He appeared gaunt at an Apple event last June and in January said he would take a leave of absence because his health problems were "more complex" than originally thought.

The Apple CEO's recovery "is coming along," the Journal reported.

The report also said two people who do business with Apple have been told by Apple managers that the company is trying to coordinate Jobs' return with a product launch or public event.

Jobs, a college dropout, co-founded Apple in 1976 in a Silicon Valley garage. After a falling-out with the board, he left the company in 1985.

Apple floundered, setting the scene for his return in 1997. The company has flourished under Jobs 2.0, rolling out the concept of a computer as a 'digital hub' along with the iPod and iPhone.

(Reporting by Alexei Oreskovic; Editing by Gary Hill.)

News : Suspense builds ahead of Apple extravaganza

By Alexei Oreskovic

SAN FRANCISCO (Reuters) - Apple Inc kicks off its annual developers' extravaganza on Monday under a tight lid of secrecy, with investors expecting the electronics maker to unveil new or cheaper versions of its popular iPhone.

Thousands of customers, developers and investors are set to convene in San Francisco for Apple's Worldwide Developers' Conference, hoping to catch a glimpse of its latest high-tech wonders.

But while Apple made waves with its unveiling of the 3G iPhone at last year's event, this year's takes place against a more uncertain backdrop.

Steve Jobs, Apple's charismatic CEO and master showman, is still on medical leave and not due back until July. And the first credible challenger to Apple's iPhone, Palm Inc's new Pre smartphone, makes its grand debut on store shelves just two days before Apple's gala.

While many analysts believe Apple has a variety of new gadgets in the pipeline -- from new iPhone models to a long rumored, so-called tablet mini-PC -- the company has said the conference will focus on important but less sexy software operating system upgrades.

Others on Wall Street believe the stage is set for a surprise product announcement.

Apple's shares have risen about 17 percent in the past two weeks, compared with a 5.7 percent gain in the Dow Jones Industrial Average during the same period.

"The consensus expectation is that they will also announce the next iteration of the iPhone," said Oppenheimer & Co analyst Yair Reiner.

A few Internet blogs have cited allegedly thin iPhone retail inventories as a tell-tale sign that Apple is clearing the decks to release a new model.

Speculation on a new iPhone has ranged from a model with a physical keyboard to handsets that boast more flash memory and faster processors.

WISH LIST

A less expensive, $99 iPhone is also on wish lists, as is the possibility of a model with a cheaper data plan or one sold through a carrier other than AT&T Inc, with which Apple has an exclusive distribution agreement.

Given the proximity to the launch of the Palm Pre smartphone on Saturday, some analysts reckon Apple will hold off on announcing any new iPhones.

"It gives you some time to study the Pre, see what the problems are and roll out a campaign against it," said Rob Enderle, principal analyst at the Enderle Group consulting firm.

Piper Jaffray analyst Gene Munster expects new iPhones to ship in July, regardless of whether or not Apple announces them at the conference or a later date, while he has forecast a 2010 release date for an Apple tablet PC.

Munster deemed a surprise appearance by Jobs at the show "unlikely," although he said in a recent note to investors he expects Jobs to be back by the end of the month.

According to Apple, the new iPhone 3.0 operating system unveiled at the conference will include 100 new features, including the ability to cut and paste text and improved search functionality. Apple has also said it will showcase its new Snow Leopard operating system for Mac computers.

With expectations so high, some analysts warn Apple's stock will be under pressure no matter what the company announces.

"We still like Apple's long term prospects, but believe at current prices, we could see some sell-off post-WWDC," BMO Capital Markets analyst Keith Bachman wrote in a recent investor note.

(Reporting by Alexei Oreskovic; Editing by Edwin Chan and Andre Grenon)