Nes : Video games slide amid recession

Video games sales, thought to be recession proof, are now falling victim to the tough times

Bobbi Rebell reports.

News : Music lovers build robotic orchestra

A love for music and a fascination for robotics prompt two Brooklyn men to build the world's first fully robotic Gamelan Orchestra.

Modeled after traditional Indonesian ensembles, GamelaTron is the result of a collaboration between the League of Electronic Musical Urban Robots and Taylor Kuffner, a composer.

Gemma Haines reports

News : Microsoft, Yahoo in 10-year Web search partnership

By Alexei Oreskovic and Bill Rigby

SAN FRANCISCO/SEATTLE (Reuters) - Microsoft Corp and Yahoo Inc have launched a 10-year Web search deal to challenge market leader Google but stopped short of combining other advertising businesses or suggesting any deeper ties.

The long-expected deal means Microsoft's new Bing search engine will be combined with Yahoo's experience attracting advertisers in the first serious threat to Google Inc -- if the companies get regulatory approval and can make the partnership work.

Yahoo shares fell 12 percent as some investors were disappointed by the limited scope of the deal, which did not include up-front payments for Yahoo. Some investors had expected up to $3 billion up-front, according to a Bernstein report.

"I would have preferred more money," said Ryan Jacob, chief investment officer of Jacob Asset Management, pointing to the lack of an upfront payment, as well as revenue-sharing and cost-savings terms that were not as high as he expected.

"There are risks on both sides. Big deals like this tend not to work out. It's a long-term deal that's going to take a long time to implement," said Jacob, whose $40 million fund holds some Yahoo shares. "It's better than no deal."

Microsoft shares closed up 1.4 percent, while Google shares fell 0.8 percent.

Yahoo estimated the deal would boost its annual operating income by about $500 million and yield capital expenditure savings of $200 million. Yahoo also expects the deal to boost annual operating cash flow by about $275 million.

ANTITRUST OBSTACLE

Under the deal announced on Wednesday, Microsoft's Bing search engine will power search queries on Yahoo's sites. Yahoo's sales force will be responsible for selling premium search ads to big buyers for both companies.

The partnership poses only a theoretical challenge to Google at present. It could take two-and-a-half years to get approval and be fully implemented, according to Yahoo Chief Executive Carol Bartz, which would mean the partnership would not be fully effective until early 2012.

Microsoft and Yahoo still face antitrust and privacy issues. Google dropped a planned search partnership with Yahoo last year under pressure from the U.S. Justice Department.

But experts said the deal would likely get the go-ahead after examination by Obama administration antitrust officials since it would create a stronger rival to market leader Google.

Google said only that it was "interested" in the deal, while the chairman of the U.S. Senate antitrust panel said it warrants "careful scrutiny."

Microsoft and Yahoo expected the deal to be "closely reviewed" by regulators, but they were "hopeful" it could close in early 2010.

The deal concludes a lengthy, and at times contentious, dance between the two companies. They have been in on-again, off-again talks since Yahoo rebuffed Microsoft's $47.5 billion takeover bid last year.

Microsoft CEO Steve Ballmer clashed last year with former Yahoo CEO Jerry Yang, who was strongly opposed to an all-out acquisition. Relations between the two companies improved under new Yahoo CEO Bartz, who took the reins in January and started to shake up Yahoo's management.

Ballmer and Bartz met "three or four times" over the past six months as they hammered out a deal, according to Ballmer.

HOW THE DEAL WORKS

While Bartz had previously said any deal would require a partner with "boatloads of money," she said on Wednesday the agreement provided "boatloads of value," adding the revenue- share agreement in the Microsoft deal was more valuable to Yahoo than a one-time payment.

"Having a big up-front cash payment doesn't really help us from an operating standpoint," Bartz said.

Microsoft's AdCenter technology will serve the standard sponsored links that appear alongside search results. Microsoft will pay Yahoo an initial rate of 88 percent of search revenue generated on Yahoo sites in the first five years.

That means Yahoo can concentrate on selling ads on its websites, while still generating revenue from search ads without the expense of maintaining its own search engine.

Bartz said the deal will result in "redundancies" in Yahoo's staff, although she declined to be specific. She stressed any changes would not occur until after full implementation of the partnership.

According to comScore, Google has a 65 percent share of the U.S. search market, compared with Yahoo's 19.6 percent and Microsoft's 8.4 percent.

"Microsoft will be able to report a greater share in terms of search ... And Yahoo doesn't have to spend any more money on search," said Barry Diller, CEO of IAC/InterActiveCorp, which owns rival search engine Ask.com.

Yahoo shares closed down $2.08 at $15.14 on Nasdaq, while Microsoft closed up 33 cents at $23.80 and Google shares closed down $3.61 at $436.24.

(Additional reporting by Tiffany Wu, Paul Thomasch, Robert MacMillan and Diane Bartz; editing by Derek Caney and Andre Grenon)

News : Niche social sites seek growth under Facebook's shadow

By S. John Tilak

BANGALORE (Reuters) - What do you do when you're a small online social network trying to compete against a behemoth like Facebook?

The answer may be to try to carve out a separate path by becoming a niche website for a specific audience base that advertisers, hopefully, want to target.

While this is no easy challenge -- given Facebook's intention to become everything to everyone -- some small social media sites appear to be finding their footing and growing at rapid rates, albeit from a very low base.

Ning.com, which allows users to build their own social networks, opinion aggregator Sodahead and fansite Fanpop have shown triple-digit growth and notched up a few million users very quickly.

"There will always be a place for niche sites that have a focus, whether the focus is gaming, or a regional focus, or a functional focus like Twitter, or a vertical or demographic focus," Gartner analyst Ray Valdes said, though he added that does not see them becoming as big as Facebook.

Facebook's popularity with professionals and older users might be putting off some younger users, according to Chuck Schilling, a director at Nielsen Online.

"The original people who were on Facebook -- those of college age -- are becoming a bit disenchanted and will soon find their own outlets, now that their parents are coming to Facebook in droves," Schilling said.

"People are branching out from the popular sites. They are exploring," he said. "There's a lot of room in the game."

Advertisers are spotting an opportunity with smaller sites.

"The promise of niche social networks and social networking applications is a more targeted audience around a specific interest that will be extremely attractive to advertisers seeking relevant content and conversations against which to place their ads," IDC analyst Caroline Dangson said.

BIG GAP

Clearly, the gap between the biggest social networks and the rest is huge.

Facebook had about 77 million U.S. users in June. With the exception of Facebook, News Corp's MySpace and privately held Twitter, only a couple of social media sites had more than 10 million U.S. users, comScore data shows.

But there are many rapidly growing sites with 2 million to 10 million users, including Ning, Sodahead, Fanpop and Funadvice. And steadily growing in double digits are older sites like Hi5, Digg and LinkedIn.

"The fact that this is such a growing space overall does enable other players in the space to ride the coattails of some of these bigger sites," comScore analyst Andrew Lipsman said.

Funadvice is a site where users give answers to all sorts of queries; Sodahead lets people to participate in instant polls; Fanpop gathers fans of movies, television and music under one roof.

Then there is Imeen, which focuses on music, and Eons, which targets the baby boomer generation. United Online's Classmates.com helps users track acquaintances from school and college. Along ethnic lines, BlackPlanet is for African Americans and MiGente eyes Latinos.

Behind some of these smaller sites are big names: Time Warner's AOL owns Bebo and Google owns Orkut.

Being second rung to Facebook is no fun, especially as developers of applications that attract users to these sites, such as games, tend to flock the biggest players.

Some of the second-tier social media sites have formed a consortium to address the problem. Google-led OpenSocial's members include Yahoo, Hi5, MySpace, Friendster and LinkedIn.

Advertisers go where users are, but it is no easy task to amass an audience. So some Internet startups have chosen to become an application provider rather than try build a site.

Application maker Slide had an audience of 32 million in the U.S. in June; Rock You had 26 million, said comScore's Lipsman. Zynga provides social gaming applications. The three have a strong presence on Facebook.

"In order to build a destination site, there are more challenges to gain that audience," Lipsman said. "So it's an increasingly viable business model to build an application that can reside or build off the infrastructure of other sites."

(Editing by Tiffany Wu and Jarshad Kakkrakandy)

News : Mac flaw could let hackers get scrambled data

By Jim Finkle

LAS VEGAS (Reuters) - A Mac security expert has uncovered a technique that hackers could use to take control of Apple Inc computers and steal data that is scrambled to protect it from identity thieves.

Prominent Mac researcher Dino Dai Zovi disclosed the software flaw at the Black Hat security conference in Las Vegas, one of the world's top forums for exchanging information on Internet threats.

About 4,000 security professionals are in attendance, including some who are really hackers. While experts ferret out software flaws to fix them and protect users, hackers use the same information to devise pranks or commit crimes.

It is not illegal to publish software that can be used to hack into computer systems, though it is against the law to use it to break into them.

Attacks on Apple computers are extremely rare, but security experts say that will change as Macs gain market share on PCs running Microsoft Corp's Windows operating system. Security experts have identified at least three viruses infecting Macs over the past year.

The most sophisticated of them is spread via pirated versions of Apple's iWorks software. It allows cybercriminals to take complete control of an infected Mac.

Another virus, OSXPuper a, is spread via infected websites that direct users to download what they say is a video player, but turns out to be malicious software. That software can subsequently download other types of viruses.

Dai Zovi, a security researcher and co-author of "The Mac Hacker's Handbook," said on Wednesday that once hackers start to put substantial resources into targeting Apple's computers, they will be at least as vulnerable as Windows machines.

"There is no magic fairy dust protecting Macs," he said in an interview.

The technique that Dai Zovi unveiled on Wednesday -- dubbed "Machiavelli" -- only works on machines that have already been victimized. It can take control of Apple's Safari browser, stealing encrypted data from a user's bank accounts.

An Apple spokeswoman could not be reached for comment.

SECURITY LOOPHOLES

Apple is the fourth-largest U.S. PC maker and continues to take market share. It held 9 percent of the U.S. market in the second quarter, according to Gartner.

"They are advancing. Our concern is that they are just not advancing as fast as they are gaining market share," said Charlie Miller, co-author of "The Mac Hacker's Handbook."

They said the Mac's operating system will be an easier nut to crack once hackers start to focus on it. That is because it has a lot more code in it than Windows, leaving room for more vulnerabilities and bugs that hackers can exploit.

While there is a limited supply of malicious software targeting Macs today, experts worry that the pendulum could quickly shift, leaving millions of Apple users unprotected.

"When the malware authors put out something that's really sophisticated we are going to have a whole population that is really vulnerable," said Joel Yonts, an expert in Mac security attending Black Hat.

(Reporting by Jim Finkle; Additional reporting by Gabriel Madway; Editing by Richard Chang)

News : Motel life a "stepping stone"

In the Dallas-Fort Worth metropolitan area, the Wilson family turned to a budget motel as a transition between a homeless shelter and an apartment.

After a move from Minnesota to Texas, the family has rapidly made the shift from homeless status to paid employment.

Annette Wilson has just landed a job as a bus driver, while husband Frederick said he will work in an office that offers clerical support to Medicaid patients.

Photos and audio by Jessica Rinaldi

News : Website publishes sensitive hacked Twitter info

By David Lawsky

SAN FRANCISCO (Reuters) - Technology news website TechCrunch published on Wednesday sensitive internal documents belonging to Twitter, including financial projections, offering a rare glimpse into the wildly popular microblogging site.

Twitter has a targeted revenue run rate of $140 million by the end of 2010, with the expectation it would record its first revenue -- a modest $400,000 -- in the third quarter of this year, according to a document Techcrunch published that it said was sent by a hacker.

Dated February, the document was labeled a Financial Forecast and outlined how Twitter expected to take in $4 million in revenue by the fourth quarter and maintain $45 million of cash in the bank.

By the end of 2013, Twitter hoped to sign up 1 billion users, post $1.54 billion in revenue, employ 5,200 people and make $111 million in net earnings, according to TechCrunch.

Techcrunch, which said it negotiated the publication with Twitter itself, added in the report that the document was unofficial and "certainly no longer accurate."

Twitter was not immediately available to comment on the projections. The document published by TechCrunch did not provide details about how Twitter planned to get the revenue.

"We are in touch with our legal counsel about what this theft means for Twitter, the hacker, and anyone who accepts and subsequently shares or publishes these stolen documents," Twitter said in an official blog post.

TechCrunch said earlier on Wednesday that an anonymous hacker had gained "easy access" to hundreds of pieces of internal Twitter information -- from pass codes to meeting minutes -- and then forwarded the data to the news website.

TechCrunch initially posted a single document, a discussion about a proposed reality television show. Within hours of its posting, hundreds of readers condemned the site for the move.

Michael Arrington, founder and co-editor of TechCrunch, defended its right to make the material public, saying it would exercise restraint on material such as personnel records.

"We've spent most of the evening reading these documents. The vast majority of them are somewhat embarrassing to various individuals, but not otherwise interesting," Arrington wrote.

"But a few of the documents have so much news value that we think it's appropriate to publish them."

Twitter, which permits users to post "Tweets" of up to 140 characters, has won a loyal fan following of millions and catapulted to prominence after it was used by protesters in Iran following a disputed election there.

The company is trying to parlay the popularity of its free service, into a money-making business. Twitter co-founder Biz Stone told Reuters earlier this year the company had decided to generate revenue in 2009, a year earlier than planned.

Stone also said Twitter was more interested in generating revenue from premium add-on features, such as analytic tools, than from traditional online advertising.

Twitter's surge in popularity, and its real-time search feature, have captured the attention of Web giants such as Google Inc, which has had unspecified discussions with the company, according to Google CEO Eric Schmidt.

"Obviously Twitter is a very attractive target for hackers or attackers, because of its high profile as a very popular media website," said Joris Evers, a spokesman and security expert at McAfee, which protects against Internet threats.

(Additional reporting by Alexei Oreskovic; editing by Richard Chang and Andre Grenon)

News : Danish troops in Afghanistan get Facebook warning

By Teis Jensen

COPENHAGEN (Reuters) - Danish soldiers in Afghanistan have been told to be more cautious after some were found to have discussed operations on the social networking website Facebook, Denmark's armed forces said Friday.

"Just as we use technology to find out the Taliban's intentions, it would be silly of us to believe they are not doing the same thing to us," Lieutenant-Colonel Kim Astrup of the army's operational command told Reuters.

The army had no evidence covert data had been intercepted, but Astrup said some information sent via the Internet had been gleaned by outsiders. He did not disclose by whom.

Astrup said soldiers' private information shared online with friends and family could put missions at risk.

He said the army would not ban the use of Facebook and other social networking sites since it was important for the troops' well-being to communicate with friends and relatives.

"We are just urging them to use their common sense," Astrup said.

He said he did not believe passwords or the use of the Danish language would prevent the Taliban from eavesdropping on private chatting on the Internet.

Denmark has about 700 combat soldiers serving with NATO in Afghanistan, mainly in the southwestern province of Helmand. A total of 25 Danes have been killed there since the mission began.

(Editing by Andrew Dobbie)

News : Microsoft and Yahoo near ad deal

NEW YORK (Reuters) - Microsoft Corp and Yahoo Inc are close to a long-discussed search and online advertising deal, which could be announced in the next week, according to the AllThingsDigital blog.

The two companies have talked about cooperating for months, after Microsoft's bid to buy Yahoo was rebuffed last year and Yahoo's attempt to seal a search advertising deal with Google Inc fell apart under regulatory scrutiny.

The latest discussions involve Microsoft paying Yahoo "several billion dollars upfront to take over its search advertising business and guarantee certain payments back to Yahoo," according to AllThingsDigital's Kara Swisher.

Yahoo is likely to take the lead on selling display advertising for the companies, she wrote.

Microsoft Senior Vice President of Online Audience Business Group Yusuf Mehdi, search head Satya Nadella, top digital executive Qi Lu and others flew to Silicon Valley on Thursday to iron out remaining issues, related with technology deployment, the blog said.

If all goes well, a deal could be announced within the next week, Swisher wrote, citing sources at both companies. But she cautioned that an agreement was not certain, since both companies have been in talks before.

Representatives for Microsoft and Yahoo declined comment. Yahoo is scheduled to report quarterly results next Tuesday, and Microsoft on Thursday.

Yahoo Chief Executive Carol Bartz said in May that any deal to spin off or combine its search assets will require a partner with "boatloads of money." She said at the time that Yahoo was talking "a little bit" with Microsoft, but gave no details.

Microsoft withdrew its $47.5 billion offer to buy Yahoo in May 2008 after Yahoo's board said the price was too low. The software giant then offered to buy Yahoo's search advertising assets for $1 billion upfront, and guarantee $2.3 billion in annual revenue for five years.

Google is the dominant player in the search market, with a 65 percent market share in June, according to comScore. Yahoo was second with 19.6 percent, while Microsoft was third with 8.4 percent. While Microsoft's share remains small, its new search engine Bing has won positive early reviews.

Shares of Yahoo rose 3.9 percent to $16.82 in morning Nasdaq trading. Oppenheimer raised its price target on Yahoo shares to $19 from $13.25, with a 'perform' rating, saying the company was likely to benefit from a rebound in large advertiser spending.

(Reporting by Tiffany Wu; Editing by Derek Caney)

News : Google sees YouTube profitable in near future

NEW YORK (Reuters) - Web video site YouTube will be profitable for Google Inc in the near future, the Internet search leader said on Thursday.

Google acquired YouTube for $1.65 billion in 2006, but has lost money on the site that lets people post and share videos free.

Analysts have raised concerns about the huge costs involved in streaming millions of videos with only a tiny swathe of them being supported by advertising.

"YouTube is now on a trajectory that we're very pleased with," Google Chief Executive Eric Schmidt said during an earnings call on Thursday.

He added that Google is helping marketers and advertising agencies create "great ads easily" for YouTube.

Google executives have recently made bullish remarks on YouTube's revenue growth. Schmidt told reporters at the Sun Valley technology and media conference this month that new advertising formats, such as pre-roll ads that appear before a Web video program, will draw in more revenue.

On Thursday, Google's head of product management and marketing, Jonathan Rosenberg, said "monetized views" -- people viewing videos that are supported by advertising -- more than tripled in the past year.

"We're now monetizing billions of views of partner videos every month," he said.

In response to an analyst question, Google Chief Financial Officer Patrick Pichette said recent efforts to introduce new ad formats and promote videos have helped to establish YouTube's home page among advertisers as relevant and "desirable for customers."

"We're really pleased both in terms of (YouTube's) revenue growth, which is really material to YouTube, and... in the not long, too-long-distant future, we actually see a very profitable and good business for us," Pichette said.

Google reported a quarterly profit on Thursday that beat Wall Street expectations, but its revenue growth was not as stellar as some investors had hoped, sending its shares down nearly 3 percent.

(Reporting by Anupreeta Das; Editing by Tiffany Wu and Tim Dobbyn)

News : Black holes fuel cosmic blobs

After ten years of study, scientists have discovered that super-massive black holes power the lights of mysterious "cosmic blobs."

Tony Pyle reports.

News : Iceland to lock up CO2 in stone

Scientists in Iceland are set to begin an experiment that will see CO2 exhaust gas from one of Iceland's geothermal power stations pumped below ground into the bedrock.

Stuart McDill reports.

News : Palm shares sink after Apple closes iTunes sync

NEW YORK (Reuters) - Shares of Palm Inc fell more than 3 percent on Thursday after Apple Inc closed a loophole in iTunes that had allowed the music management software to be synchronized with Palm's Pre phone.

On Wednesday, Apple released an update to iTunes -- which complements the iPod and iPhone devices -- meant to fix software bugs and "addresses an issue with verification of Apple devices."

"It also disables devices falsely pretending to be iPods, including the Palm Pre. As we've said before, newer versions of Apple's iTunes software may no longer provide syncing functionality with unsupported digital media players," said Apple spokesman Tom Neumayr.

A representative for Palm did not immediately respond to requests for comment.

Before the June launch of the Pre, whose introduction has helped revive Palm's fortunes and fueled a sharp increase in its stock price this year, Palm had touted its smartphone as one that "synchronizes seamlessly with iTunes."

"Simply connect Pre to your PC or Mac via the USB cable, select "media sync" on the phone, and iTunes will launch on your computer desktop," the company said in a press release.

Analyst Shaw Wu of Kaufman Bros. said he was not surprised by Apple's move, which he said was "the right thing" to do to protect its intellectual property.

"The last thing Apple needs is someone having access to its hard-earned technology for free," he said in a note to clients. "We view this as a modest negative for Palm as syncing with iTunes was a feature that was touted and we think could impact some customers' decisions."

The Pre can still access music on a user's computer hard drive, and can download songs from Amazon.com's MP3 store directly on the Pre.

Shares of Palm traded at $14.47, down 45 cents, in midday trade on Nasdaq, after hitting a session low of $14.22. The stock is still up more than four-fold so far this year.

(Reporting by Franklin Paul; Editing by Derek Caney and Matt Daily)

News : Facebook has privacy gaps - Canadian watchdog

By Randall Palmer

OTTAWA (Reuters) - The popular social networking site Facebook is not doing enough to protect the personal information it gets from subscribers, and it gives users confusing and incomplete information about privacy matters, Canada's privacy commissioner said on Thursday.

"It's clear that privacy issues are top of mind for Facebook, and yet we found serious privacy gaps in the way the site operates," Privacy Commissioner Jennifer Stoddart said in a report on an investigation into Facebook.

The report said Facebook violates Canada's privacy laws by keeping the personal information of people who have deactivated their accounts in its databases indefinitely.

It provides confusing information about privacy practices, for example showing users how to deactivate accounts but not how to delete them.

Facebook told the commissioner it needed to keep personal data for those who shut down accounts because about half of users reactivate accounts that they had deactivated.

The report said Facebook had strenuously objected to some of the commissioner's preliminary conclusions, and the company said on Thursday it would continue to work with her to address outstanding areas and to raise awareness of privacy controls.

Facebook has 200 million active users, including about 12 million in Canada -- more than one in three Canadians.

The report will set a precedent for other networking sites operating in Canada, and could influence practice in other countries. Stoddart said she believed Canada was the first to publish a formal privacy investigation of Facebook's practices.

Stoddart also said Facebook lacked adequate safeguards to prevent unauthorized access to users' personal information by third-party developers. There are more than 950,000 developers in 180 countries.

She said Facebook had resolved some issues and she gave it 30 days to comply with a series of "recommendations", and said she could take it to Federal Court to enforce the recommendations.

Facebook's chief privacy officer, Chris Kelly, told Reuters in San Francisco he did not expect this to be necessary.

"Given that we've had very productive conversations, I would be surprised if things move in that direction. Now, that being said, we don't believe that there is any violation of Canadian law here and we think that a court would find that, were either party to go in that direction," he said.

He also said Facebook did not want to end up with too many notifications interrupting users, and said any solutions should "reflect the fact that people come to Facebook to share information as opposed to hide it."

The investigation was launched in response to complaints by the Canadian Internet Policy and Public Interest Clinic (CIPPIC) at the University of Ottawa.

In a written statement, Facebook said it was "pleased that the Canadian federal privacy commissioner has dismissed the most of the inaccurate claims brought by CIPPIC, and that we were able to collaboratively resolve other issues raised in the complaint."

(Additional reporting by Alexei Oreskovic in San Francisco; editing by Janet Guttsman and Peter Galloway)

News : Google quarterly profit beats expectations

SAN FRANCISCO (Reuters) - Google Inc's quarterly profit and revenue rose in the second quarter despite the tough advertising market, beating Wall Street expectations.

The Web search leader said on Thursday that revenue in the three months ended June 30 totaled $5.52 billion, compared with $5.37 billion a year earlier. Analysts were looking for $5.49 billion, according to Reuters Estimates.

Google posted net income of $1.48 billion, or $4.66 a share, compared with $1.25 billion, or $3.92 a share, in the year-ago period.

Excluding certain items Google earned $5.36 a share, ahead of the $5.08 per share expected by analysts.

The Mountain View, California, company did not provide a financial outlook, in keeping with its custom.

Shares of Google fell to $432.00 in after-hours trade on Thursday, from their Nasdaq close of $442.60.

(Reporting by Alexei Oreskovic; Editing by Steve Orlofsky)

News : Poor IT job market may fuel online crime Cisco

WASHINGTON (Reuters) - The ever-weakening job market could well lead to an increase in online crime as laid-off workers, especially those with computer skills, turn to scams to support themselves, Cisco Systems Inc said in a mid-year security report to be released on Tuesday.

Disgruntled employees may target their former employers, and Cisco warned that insiders "can be especially damaging for an organization because insiders know security weaknesses."

A former information technology analyst at the Federal Reserve Bank of New York was arrested in April along with his brother on suspicions of taking out loans using false identities. FBI investigators found a flash drive attached to the bank employee's computer with applications for $73,000 in loans in the names of stolen identities, the report said.

Cisco warned companies which use short-term IT consultants or who contract out the tasks to "be particularly vigilant about the level and term of their access to sensitive data."

The report included snippets of a conversation with a botmaster, or someone who remotely takes over computers without users' knowledge and often sells the resulting access to spammers.

The hacker declined to say how much he earned but said "'a guy I know'" can earn $5-10K weekly, by phising (sic) bank accounts." Phishing is the practice of convincing a victim to give up valuable information -- like a password to a bank account. The account can then be emptied.

(Reporting by Diane Bartz; Editing by Richard Chang)

News : Shock Offices lose productivity to Facebook

Posted by: Yinka Adegoke

We think you saw this one coming: Employers are losing a whopping 1.5 workers per 100 in employee productivity to the social networking phenomenon that is Facebook.

This number was uncovered by the clever folk at Nucleus Research, who surveyed 237 randomly selected office workers. They discovered that some of you spend more time than you probably should poking, adding and making inane comments on friends’ pages.

In fact some of you may be horrified to learn that Nucleus is advising corporations to consider restricting Facebook access at work to reclaim that productivity — all the more important in a global recession and rising unemployment they say.

Among the findings from Nucleus’ interviews with said randomly selected workers:

• Nearly two-thirds of those who have Facebook access visit the site during working hours.
• Those who visit Facebook at work do so for an average of 15 minutes each day.
• 87 percent of those who use Facebook at work couldn’t define a clear business reason for using it.
• 
  
• Of those who do visit Facebook at work, 6 percent never use it anywhere else, meaning one in every 33 workers built their entire Facebook profile during work hours.
• There are also serious security concerns as IT departments can’t monitor Facebook messages.

It wasn’t immediately clear if Nucleus’s survey took lunch-break time into account (some people might only visit Facebook during break-time). Either way, one imagines if a survey of 237 workers can ever be used as an adequate sample, then there will be a lot of unhappy workers out there in the office world, should all those IT departments take Nucleus’ advice. As Nucleus concludes in its press release:

Companies should evaluate their Facebook policy and the cost to the organization in allowing access to Facebook, as today blocking Facebook may actually result in a 1.5 percent gain in productivity.

In other words blocking Facebook will give you 1.5 more workers for every 100 workers. Nice.

(Photo: Facebook CEO Mark Zuckerberg/Reuters)

News : Microsoft takes on Google as Office moves to Web

By Jim Finkle

BOSTON (Reuters) - Microsoft Corp will release three versions of its dominant Office software that users can access over the Web, catching up with products that rival Google Inc launched three years ago.

The news helped send shares in the world's largest software maker up 2.7 percent by midday, more than double the gain in the Nasdaq Composite Index.

It is the latest salvo in an intensifying war between Microsoft and Google. Google announced plans last week to challenge Windows with a free operating system. Microsoft introduced a new search engine, Bing, last month.

"Microsoft is finally making the conversion through the Web-based world. First, we saw that through Bing. Now we are seeing that through Office," said Jefferies & Co analyst Katherine Egbert.

Microsoft will offer for free to consumers Web-based versions of its Office suite of programs, including a word processor, spreadsheet, presentation software and a note-taking program.

Microsoft will also host one Internet business version of Office at its own data centers, charging companies a yet-to- be-announced fee. Companies with premium service contracts will have the choice of running a second Web-based version from their own data centers at no extra cost.

The company hopes to make money by using the free software to lead users to its ad-supported websites, including Bing. Analysts have said that Bing's early signs of success suggest Microsoft may be rounding the corner in efforts to turn around its money-losing Internet division.

Still, a free version of Office could hurt sales of Microsoft's top-selling and most profitable unit. One of Office's most popular titles is a home version that sells for $150. It includes the four programs that Microsoft will give away.

"Microsoft is in a tough spot. Their competition isn't just undercutting them. They are giving away the competitive product," said Sheri McLeish, an analyst with Forrester Research.

The Office division rang up operating profit of $9.3 billion on sales of $14.3 billion in the first three quarters of the software maker's current fiscal year.

McLeish expects Microsoft to overtake Google in the market as the hundreds of millions of people who use Office flock to try out the Internet version.

Microsoft will release the web offerings when it starts selling Office 2010, it next major release of the product, sometime in the first half of next year. Its current version came out in January 2007.

The software maker unveiled an early release on Monday at a conference for business partners in New Orleans. It will be distributed to tens of thousands of testers.

Company spokeswoman Janice Kapner said the free Web version will provide "a very rich experience" and probably have more functionality than Google.

Office 2010 is among a wave of upgrades to Microsoft programs planned over the next year. A new version of its ubiquitous Windows operating system is coming out in October and a new version of its widely used email server is also in the works.

Microsoft shares rose 2.7 percent to $23, while the Nasdaq was up 1.2 percent at 1777.50

(Reporting by Jim Finkle; editing by Richard Chang and Andre Grenon)

News : London nightlife by iPhone app

A new breed of iPhone applications aims to provide a modern guide to the historic British capital city.

Matt Cowan reports.

News : Big media seek 21st century business models

By Yinka Adegoke

SUN VALLEY, Idaho (Reuters) - Media moguls at this week's Sun Valley conference have spent as much time discussing how to reconfigure business models disrupted by the Web as they have worrying about the weak economy.

With difficult credit markets and an unclear future, talk of dealmaking has been at a minimum this year. Yet there has never been a more important time for media conglomerates and their financiers to act and adapt to the Internet age.

The mood at the conference was described as "somber" and "very bearish" by executives. While the recession was a key reason, the other was the uncertainty over how future profits can be made from distributing news and entertainment online and across devices like smartphones.

"We're not using long-form content on the Web because it's not clear to us that's the way people want to consume content, said David Zaslav, chief executive of Discovery Communications Inc, which owns the Discovery Channel.

"But also the business model isn't there yet, so we're taking it slow," he said in an interview on the sidelines of the event organized by boutique investment bank Allen & Co.

In the late-night bar at the Sun Valley Lodge, from which the press was banned, most of the discussions were around the issue of free versus paid content, said one senior executive who asked not to be named as his conversations with other executives were private.

The challenge is how media companies can keep alive the lucrative cable business model at a time when consumers are increasingly used to getting content for free online. Cable operators pay affiliate fees to cable networks for their programing, and both share advertising revenue.

Plans such as Time Warner Inc's "TV Everywhere" and Comcast Corp's "On Demand Online" seek to preserve that business model by offering cable shows on the Web to authenticated, paying cable TV subscribers.

"Authentication is an interesting intermediate step and is something that we're looking at," said Zaslav.

The conversations about TV Everywhere are heating up. Google Inc CEO Eric Schmidt confirmed to reporters that he has had early talks with Time Warner about the possibility of getting paid cable shows up on YouTube. But he did not elaborate.

TV VS PRINT AND MUSIC

Television studio executives do not want to repeat the experience of their colleagues in the hard-hit newspaper and music businesses, and are worried that consumers will expect TV shows, movies and all professional programing to be free.

Hulu.com, owned by News Corp, NBC Universal and Walt Disney Co, offers broadcast TV shows and movies for free on the Web, but there has been talk at Sun Valley among executives of introducing a paid content model.

Wired editor Chris Anderson argues in his book 'Free' that many companies, with media at the forefront, could build bigger and better businesses around the notion of giving away their content for free.

Many executives in Sun Valley would not agree. 'Free' -- supported by advertising -- is not a new concept. After all, broadcast TV is free but its dominance has been eroded by cable channels and its future as an advertising outlet is bleak.

Newspapers owned by News Corp and others are fervently examining news-bundling pricing models to seek ways to get users to pay to read news online. One consideration may be to bundle different properties along vertical lines, such as business and sports news, for a monthly fee.

Far from free, what media moguls would want to preserve on the Web and mobile platforms is the dual-revenue stream from subscriptions and advertising.

"The big thing for these guys is how do you come up with that dual revenue streams online," said Jeremy Alliare, chief executive of Brightcove, an online video company that partners with many major media companies. "Cable TV is a part of that but I think it's a broader industry discussion."

(Reporting by Yinka Adegoke, editing by Tiffany Wu and Richard Chang)

News : Six in 10 companies plan to skip Windows 7

SAN FRANCISCO (Reuters) - Six in 10 companies in a survey plan to skip the purchase of Microsoft Corp's Windows 7 computer operating system, many of them to pinch pennies and others over concern about compatibility with their existing applications.

Windows 7 will be released October 22, but has already garnered good reviews, in contrast to its disappointing current version, Windows Vista.

Many of the more than 1,000 companies that responded to a survey by ScriptLogic Corp say they have economized by cutting back on software updates and lack the resources to deploy Microsoft's latest offering.

ScriptLogic Corp, which provides help to companies in managing their Microsoft Windows-based networks, sent out 20,000 surveys to information technology administrators to learn the state of the market.

Many companies have rejected Windows Vista as unstable. For example, the chip maker Intel Corp, Microsoft's long- time partner in producing personal computers, has stayed with the older XP system.

The survey found about 60 percent of those surveyed have no plans to deploy Windows 7, 34 percent will deploy it by the end of 2010 and only 5.4 percent will deploy by year's end.

Forty-two percent said their biggest reason for avoiding Windows 7 was a "lack of time and resources."

That dovetailed with another part of the survey, which found that 35 percent had already skipped upgrades or delayed purchases to save money.

But there were reasons other than money for staying away from Windows 7. Another 39 percent of those surveyed said they had concern about the compatibility of Windows 7 with existing applications.

The survey quoted Sean Angus, a senior personal computer technician at Middlesex Hospital, as saying he would wait until the first "service pack" was released for Windows 7.

"The IT department must complete thorough testing to ensure that the applications we rely on each day, specifically radiology information systems and financial applications, will be compatible, before deploying any new platforms or software to our 1,500 desktops," he added.

(Reporting by David Lawsky; editing by Andre Grenon)

News : Microsoft takes on Google with free Office programs

By Jim Finkle

BOSTON (Reuters) - Microsoft Corp will release a free version of its dominant Office software that users can access over the Web, catching up with products that arch rival Google Inc launched three years ago.

The world's largest software maker will offer a word processor, spreadsheet, presentation software and a note-taking program with the same look and feel of their counterparts in the Office suites that it sells for personal computers.

It is the latest salvo in an intensifying war between the two technology giants. Google announced plans last week to challenge Windows with a free operating system. Microsoft introduced a new search engine, dubbed Bing, last month, that has taken a small amount of market share from Google.

A free version of Office could hurt sales of Microsoft's top-selling and most profitable business unit. One of Office's most popular titles is a home version that sells for $150. It includes the four programs that Microsoft will give away.

"Microsoft is in a tough spot. Their competition isn't just undercutting them. They are giving away the competitive product," said Sheri McLeish, an analyst with Forrester Research.

The Office division rang up operating profit of $9.3 billion on sales of $14.3 billion in the first three quarters of the software maker's current fiscal year.

McLeish said she expects Microsoft to overtake Google in the market as the hundreds of millions of people who use Office flock to try out the Internet version.

Microsoft will seek to make money by using it to lead those users to its ad-supported websites, including the Bing search engine. Analysts have said that Bing's early signs of success suggest Microsoft may be rounding the corner in efforts to turn around its money-losing Internet division.

Microsoft will release the free offering when it starts selling Office 2010, it next major release of the product, sometime in the first half of next year. Its current version came out in January 2007.

The software maker unveiled an early release on Monday at a conference for business partners in New Orleans. It will be distributed to tens of thousands of testers.

Company spokeswoman Janice Kapner said the free Web version will provide "a very rich experience" and probably have more functionality than Google.

Office 2010 is among a wave of upgrades to Microsoft programs planned over the next year. A new version of its ubiquitous Windows operating system is coming out in October and a new version of its widely used email server is also in the works.

Microsoft also plans two other Internet versions of Office for businesses.

It will host one of them at its own data centers, charging a yet-to-be-announced fee for that service. Businesses with premium service contracts will have the choice of running the Web-based version from their own data centers at no extra cost.

(Reporting by Jim Finkle; Editing by Richard Chang)

News : Tokyo zoo's baby boom

Animals are born in enclosure after enclosure at Tokyo's Ueno Zoo as the keepers' breeding programme delivers a host of summer babies.

Sophia Soo reports

News : PCs could be hit next in Web attack: South Korea

By Jon Herskovitz

SEOUL (Reuters) - Cyber attacks slowing U.S. and South Korean websites could enter a new phase on Friday by attacking personal computers and wiping out hard disks, a South Korean government agency and web security firm said.

North Korea was originally a prime suspect for launching the cyber attacks, but the isolated state was not named on a list of websites from five countries where the attacks may have originated, the Korea Communications Commission (KCC) said.

The attacks targeting dozens of government and business sites in South Korea and the United States did not cause major damage or security breaches, experts said, but the KCC warned a new phase at 1500 GMT on Friday could cause severe damage to PCs.

Leading South Korean web security firm Ahnlab, which has closely examined the attacks, said the new phase would target data on tens of thousands of infected personal computers.

"The affected computers will not be able to boot and their storage files will be disabled," said Lee Byung-cheol of Ahnlab.

Almost all of the websites that were out of service this week, including the South's Defense Ministry, were up and running while Lee said the damage to Internet locations was dwindling due to better safeguards.

FIVE COUNTRIES NAMED

The KCC said host websites believed behind the original attacks were based in Germany, Austria, Georgia, the United States and South Korea. The location of the hackers behind the attacks was still unknown, it said.

South Korean MPs briefed by the National Intelligence Service said although websites in North Korea were not on the list, Pyongyang was still considered a suspect, Yonhap news agency said.

Internet access is denied to almost everyone in impoverished North Korea, a country that cannot produce enough electricity to light its cities at night. Intelligence sources say leader Kim Jong-il launched a cyber warfare unit several years ago.

Some analysts have questioned the North's involvement, saying it may be the work of industrial spies or pranksters.

The attacks will likely be seen by the North's leadership as a victory for Kim Jong-il -- even if Pyongyang was not involved -- because they added a new dimension to the threats posed by the state, which rattled regional security with a nuclear test in May and ballistic missile tests last week.

The attacks saturated target websites with access requests generated by malicious software planted on personal computers. This overwhelmed some targeted sites and slowed server response to legitimate traffic.

The so-called "distributed denial of service" hacking attack spreads viruses on PCs, turning them into zombies to simultaneously connect to specific sites, unbeknown to owners, experts said.

U.S. officials would not speculate on who might be behind the attacks but noted that U.S. government websites face attacks or scams "millions of times" a day.

(Additional reporting by Rhee So-eui and Christine Kim; Editing by Nick Macfie)

News : Bloggers test boundaries in Saudi Arabia

By Asma Alsharif

JEDDAH (Reuters) - Armed with a computer, an internet connection and his own intellect Ahmed Al-Omran is one of a few Saudi bloggers trying to push for change and make themselves heard in the conservative Gulf Arab monarchy.

Blogging provides a rare platform for speech in a country which has no elected parliament, where clerics have strong influence on public opinion, newspapers often parrot the official line and public demonstrations are banned.

"I want to do this because I want to be part of the change that is taking place in the country, I want to push for the changes to go faster," said Omran, a student who writes on his Saudi Jeans blog (saudijeans.org).

King Abdullah has tried cautious reforms since taking office in 2005 and removed two hardline clerics from top positions in a cabinet reshuffle in February while promoting reformers.

Saudi Arabia recently allowed foreign media to expand their presence in the kingdom and the new information minister even signed up for his own facebook page, but analysts and diplomats say conservatives remain wary of changes.

"In the end, we care about something, we desire something and through blogging we call for the change. We ask for it. We sponsor it," Fuad Alfarhan said in a rare gathering of bloggers in Jeddah, the kingdom's most liberal city.

"Now for the first time we, as individuals in our society, have this power in our hands to call for change," Alfarhan told the meeting which was meant to encourage bloggers to continue despite difficulties.

PROBLEMS

Farhan himself has not resumed blogging since he was arrested in 2007 and held for five months after campaigning on behalf of nine detained reformers. He was released without charges.

Saudi researchers say there are up to 10,000 blogs in the kingdom. But many are now inactive or have refrained from discussing politics since Alfarhan's arrest.

Many blogs also steer clear of Islam, a sensitive issue, focusing more on daily life and challenges for society.

"Alfarhan's incident showed that there are red lines that are not known," said Khaled al-Nasser, another blogger.

Abdulrahman al-Hazza, spokesman for the information ministry, said blogs were generally not monitored.

But bloggers are worried about a law enacted earlier this year under which anyone who "touches upon the general order, religious values, or general conduct" can be prosecuted, according to the information ministry.

"Anyone can accuse me of that," said Omran. "My only fear is if the government would use the law against people who want to express themselves freely online. It could be used as a scare tactic."

The Committee to Protect Journalists listed Saudi Arabia in April as one of the worst countries for bloggers, citing detentions, monitoring and blocking of 400,000 websites.

But Abdullah Al-Alami, a columnist and blogger from the liberal enclave of Khobar, said things would improve over time.

"When King Abdullah instituted reform in February (the cabinet reshuffle) he started a social revolution against 'old age thinking'," he said.

(Reporting by Asma Alsharif; Editing by Dominic Evans)