The Black Rider

Sunday, March 11, 2012

Reuter site - Apple's new iPad making waves in video game market

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Apple's new iPad making waves in video game market

Fri, Mar 09 21:57 PM EST

By Liana B. Baker

(Reuters) - Apple Inc's <AAPL.O> faster and sharper-looking new iPad is drawing the notice of the traditional video game industry, as developers are envisioning games for it that have more in common with the visceral 3D shooter "Call of Duty" than "FarmVille."

The company is also setting itself up to take on Microsoft <MSFT.O> and Sony <6758.T> on their home turf of game consoles.

From Electronic Arts to "Crysis" developers Crytek, industry executives are figuring out ways to migrate graphics-intensive so-called hardcore games to the iPad. Epic Games and Namco Bandai <7832.T> took the stage at Apple's iPad unveiling this week to show off what they can do with an iPad that has a faster quad core processor.

With more than 55 million iPads sold to date, including 15.43 million last quarter, the tablet is quickly catching up to the number of consoles on the market: the PlayStation 3 has sold 62 million units and Xbox 360 has moved more than 65 million units. That growing user base is drawing developers who want to see their games played on as many devices as possible.

"Apple is definitely building their devices as if they care a lot about 'triple-A' games," said Mike Capps, president of Epic Games, the studio behind "Gears of War" for consoles and "Infinity Blade" for the iPad.

The "triple-A" moniker is bequeathed to only the highest-quality video games -- those with the best graphics and that cost in the tens of millions of dollars to produce. So far, not many "triple-A" titles appear on mobile devices.

Capps, who has appeared on stage at all three of Apple's iPad launches, said he is trying to push the console manufacturers, Sony and Microsoft, to come out with more powerful devices so they do not get left behind. On Wednesday, he told the crowd in San Francisco the new iPad has better screen resolution and more memory than Microsoft's Xbox and Sony's PlayStation.

While gamers today might still prefer to play shooter games at home on big screen TVs with a handheld controller, that could soon change, Capps said, especially if a bluetooth controller is developed for the iPad.

"It is quite easy to imagine a world where an iPad is more powerful than a home console, where it wirelessly talks to your TV and wirelessly talks to your controller and becomes your new console," Capps said in an interview.

Meanwhile, the industry is bracing for change. Frank Gibeau, president of Electronic Arts' Labels <EA.O>, who oversees the company's biggest games such as "Battlefield 3" and "Star Wars: The Old Republic," said the company is eyeing Apple's moves closely.

"When the iPad gets to the processing power that's equal to an Xbox 360 and it connects to a television, that's no big deal to us. We'll put the game through the iPad and have it display through the television." Gibeau said.

BRING ON THE GAMES

EA has already brought some games from its marquee franchises to the iPad: "Dead Space" and "Mass Effect".

For publishers, "it used to be, oh hey, it's just the Nintendo, Sony and Microsoft show, but that's not the case anymore," Gibeau said.

Germany's Crytek, which developed "Crysis 2" for consoles and PCs, is working on its first game for the iPad, due out in the spring. While that game will be puzzle-based -- minus the free-wheeling pyrotechnics -- the company said it could one day bring that genre of hardcore games to the device.

"As more people come to these platforms, we have to follow our fans," said Kristoffer Waardahl, a Crytek studio manager.

While speedier iPads will soon be getting into more gamers hands, Jeremy Parish, editor in chief of gaming blog 1UP.com, said it does not necessarily put pressure on console makers to come out with a new product any faster. The Xbox 360 launched in 2005 and the PlayStation 3 came out in 2006.

"For the console makers, it has got be a little bit of an embarrassment to say that this tablet has more power and better screen resolution. But at the same time, this will not be the motivating factor to get them to jump into a new generation of consoles," Parish said.

Yet the industry is counting on a new wave of gaming hardware in the near future. Nintendo will release the "Wii U," its first console with high-definition graphics, later this year.

For now, experts are divided as to whether the new iPad will make a dent on consoles but at least one investor said he does expect sales of rival gaming products to be hurt.

"While consoles won't cease to exist, it does create pressure on them by hurting their growth and taking away some of their customers," said Michael Yoshikami, CEO of Destination Wealth Management.

Sony spokesman Dan Race said "the PlayStation 3 business is having its strongest year ever" and the "PlayStation $249 price point is resonating with gamers and families alike."

Nintendo's U.S. executive vice president of sales and marketing, Scott Moffitt said "Regardless of the device, consumers have repeatedly demonstrated that they care more about the experience than the tech specs."

Microsoft declined to comment.

Apart from the iPad, Apple's fledgling TV product is also being watched closely by video game companies. Hudson Square analyst Dan Ernst said he doubts the iPad will affect console sales, but said an Apple TV with an app store could one day pose a viable threat.

(Reporting By Liana B. Baker, Editing by Edwin Chan and Bernard Orr)

Reuter site - Japan mourns tsunami dead; grapples with aftermath

Japan mourns tsunami dead; grapples with aftermath

Sun, Mar 11 09:16 AM EDT

By Yoko Kubota

OFUNATO, Japan (Reuters) - With a moment of silence, prayers and anti-nuclear rallies, Japan marked on Sunday one year since an earthquake and tsunami killed thousands and set off a radiation crisis that shattered public trust in atomic power and the nation's leaders.

The magnitude 9.0 earthquake unleashed a wall of water that hit Japan's northeast coast, killing nearly 16,000 and leaving nearly 3,300 unaccounted for. The country is still grappling with the human, economic and political costs.

In the port town of Ofunato, hundreds of black-clad residents gathered to lay white chrysanthemums in memory of the town's 420 dead and missing.

"We can't just stay sad. Our mission is to face reality and move forward step by step," said Kosei Chiba, 46, who lost his mother and wife in the disaster.

"But the damage the town suffered was too big and our psychological scars are too deep. We need a long time to rebuild."

The country observed a minute of silence at 2:46 p.m. (0546 GMT), the time the quake struck.

Residents of Ofunato gathered before a makeshift altar with a calm, sun-flecked sea behind them. Ofunato paused again 33 minutes later -- the time when a year ago a 23-metre (75-foot) tsunami engulfed the town of 41,000.

Just a kilometer (half a mile) from Tokyo Electric Power Company's (Tepco) wrecked Fukushima plant, where reactor meltdowns triggered the world's worst nuclear crisis since Chernobyl, residents of the abandoned town of Okuma were allowed back for just a few hours to honor the dead.

"It was a wonderful place. If it wasn't for all that has happened, I'd be able to come back. But thanks to Tepco, I wasn't even able to search for the bodies of my relatives," said Tomoe Kimura, 93, who lost four members of her family in the tsunami, two of whom were never found.

Authorities have imposed a 20-km (12 mile) no-go zone around the plant and residents may never be allowed back.

"My home is in Namie town, so we can't go home," said Katsuko Ishii, who had to flee from the exclusion zone.

"There are really no words for it," said Ishii, attending a memorial service with her 3-year-old daughter in Iwaki City, Fukushima prefecture.

Along the northeast coast, police and coastguard officers, urged on by families of the missing, continue their dogged search for remains despite diminishing chances of finding any.

RESOLVE AND ANGER

The prevailing mood in tsunami-hit communities was one of solemn reflection and resolve to move on despite frustration with the confused official response and slow pace of rebuilding.

In contrast, those who felt betrayed by Japan's "nuclear village" -- the powerful nexus of utilities, politicians and bureaucrats that promoted nuclear power as clean and safe -- were less forgiving.

"We are angry at Tepco and came here to show our anger," said Tomoe Suzuki, 65, a restaurant owner and chef.

"The earthquake was something that was unavoidable because it was a natural disaster, but you can't stay quiet about Fukushima because it's a man-made disaster," she said, marching with about 12,000 other protesters to form a "human chain" around the parliament building in the capital city Tokyo.

The protest was one of several around the country including in Koriyama City, where some 16,000 people gathered to express their pain and anger.

The Japanese people earned the world's admiration for their composure, discipline and resilience in the face of the disaster, while its companies impressed with the speed with which they bounced back.

As a result, the $5 trillion economy looks set to return to pre-disaster levels in coming months with the help of about $230 billion earmarked for a decade-long rebuilding effort agreed in rare cooperation between the ruling and opposition parties.

Emperor Akihito, recovering from coronary bypass surgery last month, attended a memorial service in Tokyo's National Theatre and urged people to work together, echoing his unprecedented televised address five days after the disaster.

"I hope all the people will keep the victims in their hearts and work so that the situation in the disaster-hit areas improves," the 78-year-old monarch said.

Prime Minister Yoshihiko Noda, who took over in September from Naoto Kan -- who was premier at the time the disasters struck -- pledged to work for recovery:

"Our forebears who built this country's prosperity have emerged from each crisis even stronger. We will fulfill our historic mission of realizing the rebirth of this nation."

"FOURTH DISASTER"

Yet many people are increasingly disillusioned about the political establishment's ability to tell the truth and rise to the occasion, a deep lack of trust that one commentator called "the fourth disaster of March 11".

Politicians and bureaucrats drew fire for the chaotic response to the Fukushima disaster and disappointed many with their failure to seize the moment to tackle the ills which have plagued Japan for over two decades.

After a brief truce, parliamentary squabbles resumed, giving Japan its sixth leader in five years and now threatening to block an important tax reform and stall other business, including the launch of a more independent nuclear watchdog.

Tepco, criticized by many for its failure to prepare for the disaster, issued a fresh apology.

"Each and every member of our company and its group remembers March 11 and will work with our all hearts to solve challenges with safety as our first priority," Tepco President Toshio Nishizawa, who marked the anniversary at the plant, said in a statement.

Slow progress in drawing up plans for the tsunami-damaged and radiation-contaminated region is deepening the misery of survivors, about 326,000 of whom are still homeless, including 80,000 evacuated from the vicinity of the Fukushima plant.

While the government declared it had reached "cold shutdown" in December, the nation lives under a cloud of anxiety over the long-term health effects of radiation. It also faces the huge financial burden of dismantling the plant and cleaning up an area the size of Luxembourg -- a task that will take decades and technologies yet to be developed.

Taxpayers, who face proposed sales tax increases to help fund the country's debt, will also need to pay tens of billions of dollars to prop up the still politically powerful Tepco.

($1 = 81.4000 yen)

(The story corrects the location of demo to Koriyama City from Fukushima City)

(Additional reporting by Chris Meyers in Okuma, Yuriko Nakao in Koriyama City and Antoni Slodkowski and Taiga Uranaka in Tokyo; Writing by Tomasz Janowski; Editing by Linda Sieg, Robert Birsel, Daniel Magnowski)

Friday, March 9, 2012

Reuter site - Hacker combined online attacks with petty crime

Hacker combined online attacks with petty crime

Fri, Mar 09 16:46 PM EST

By Basil Katz

NEW YORK (Reuters) - A computer hacker-turned-FBI informant known as "Sabu" combined daring online attacks against governments and major companies with a life of petty crime and drugs, according to a copy of his plea agreement.

The court document, made public late on Thursday, describes how authorities agreed not to charge the hacker, whose real name is Hector Monsegur, with a variety of crimes he allegedly committed as long as he obeyed the terms of his plea deal.

Monsegur, 28, was arrested at his small apartment in a Manhattan housing complex on June 7, 2011 and two months later pleaded guilty to 12 computer crimes, prosecutors and the FBI said this week in announcing charges against him and five others.

All six were top members of LulzSec, an offshoot of the loose-knit cyber-activist hacking group Anonymous, authorities contend. The government says Monsegur became a secret FBI mole almost immediately after his arrest.

On two different occasions, Monsegur tried to sell a combined total of five pounds of marijuana, according to his August 15, 2011 cooperation agreement. In 2010, he owned a handgun that was not permitted in New York state. That same year, the document showed, Monsegur made $15,000 worth of unauthorized purchases on his then-employer's credit card. Prosecutors also listed "his purchase of various electronics and jewelry, in or about 2010, that he believed at the time to have been stolen."

Monsegur's court-appointed lawyer, Peggy Cross, could not be reached for comment on Friday.

Monsegur was freed on $50,000 bond the day after his arrest last year and later pleaded guilty in U.S. District Court in New York to charges brought in four states. The cases were consolidated in New York.

The cooperation agreement also said that while the charges carry up to 122-1/2 years in prison, with a mandatory minimum 2-year sentence, prosecutors would recommend a more lenient prison term provided he obey the terms of the deal.

The case is U.S. v. Hector Monsegur, U.S. District Court, Southern District of New York, no. 11-666.

(Reporting By Basil Katz; Editing by Richard Chang)

Reuter site - Hacker "Sabu" worked full nights online for FBI

Hacker "Sabu" worked full nights online for FBI

Fri, Mar 09 08:54 AM EST

By Basil Katz

NEW YORK (Reuters) - One late-night visit by the FBI was all it took for the notorious hacker known as "Sabu" to switch sides and become a valued snitch.

Hector Xavier Monsegur cooperated immediately in June, helping investigators close a net around five other leaders of the international hacking group Anonymous, according to court documents made public on Thursday.

Monsegur sometimes stayed up all night, talking with co-conspirators to help the government build its case, Assistant U.S. Attorney James Pastore told a Manhattan federal court judge at a secret hearing days before Monsegur's August 15 guilty plea, the court papers showed.

Monsegur, 28, was arrested at his small apartment in a Manhattan housing complex on June 7, U.S. authorities said on Tuesday in announcing charges against him and five others. The precise time, 10:15 p.m., was revealed in Thursday's court papers.

"Since literally the day he was arrested, the defendant has been cooperating with the government proactively," Pastore told Judge Loretta Preska.

Monsegur was freed on $50,000 bond the day after his arrest. He later pleaded guilty to each of the 12 computer crimes he was charged with in cases brought in four different states. The cases were later consolidated in New York.

Federal prosecutors said Monsegur had confessed in court after signing a cooperation agreement with the government. Details of the deal and any reduction in prison time that he hopes to receive will not be known until the court makes the information public.

Monsegur and the five others were senior members of Lulz Security (LulzSec), an offshoot of Anonymous that took credit for hacking attacks on government and private sector websites, U.S. authorities said on Tuesday. Targets included the CIA, Britain's Serious Organised Crime Agency, Japan's Sony Corp and others including in Ireland and Mexico.

Among those publicly charged this week was Jeremy Hammond, known as "Anarchaos," who was arrested in Chicago on Monday on suspicion of hacking into Strategic Forecasting Inc, or "Stratfor," a global intelligence and research firm, in December 2011.

Federal prosecutors also brought U.S. cases against Donncha O'Cearrbhail, 19, and Darren Martyn, 25, of Ireland as well as Jake Davis, 19, and Ryan Ackroyd, 23, of Britain.

Anonymous and its offshoots such as LulzSec and AntiSec were initially focused on fighting attempts at Internet regulation and blocking free illegal downloads, but have since taken on other targets including Scientology and the global banking system.

Anonymous - and LulzSec in particular - became notorious in late 2010 when they launched what they called the "first cyber war" in retaliation for attempts to shut down the Wikileaks website.

They attacked websites such as MasterCard.com that tried to block payments to Wikileaks after apparent pressure from the U.S. government following the release of thousands of diplomatic cables.

LIVING ON $400 A MONTH

As a LulzSec leader, Monsegur took responsibility for attacks on the websites of eBay Inc's PayPal, MasterCard Inc and Visa Inc between December 2010 and June 2011, according to court papers.

Despite the severity of the charges against Monsegur - the prison term could total up to 122 years - federal prosecutors argued that he should remain free on bail under the supervision of the FBI. It is highly unlikely that Monsegur would receive consecutive prison sentences.

Born in New York, Monsegur attended college and worked at technology jobs, displaying a rare combination of hacking talent, working-class sensibility and political conviction. He said he first hacked for a cause more than a decade ago when he interfered with communications during controversial U.S. Navy bombing exercises in Vieques, Puerto Rico.

At the time of his arrest in June, Monsegur was unmarried and collecting a $400 unemployment check every month, a court document showed. He had been living in a small apartment on the sixth floor of a 14-story brick housing project on Manhattan's Lower East Side, overlooking a busy highway.

The document, which detailed his bail conditions and was made publicly available on Thursday, also showed that Monsegur was paid $6,000 a month at his last job, which he said he held until April 2010. Monsegur also stated that he had parental custody over his two nieces, aged 4 and 5.

The case is U.S. v. Hector Monsegur, U.S. District Court, Southern District of New York, no. 11-666.

(Reporting By Basil Katz; Additional Reporting by Grant McCool in New York and Joseph Menn in San Francisco; Editing by Richard Chang)

Thursday, February 16, 2012

Reuter site - Apple seeks court permission to sue Kodak

Apple seeks court permission to sue Kodak

Wed, Feb 15 21:07 PM EST

NEW YORK (Reuters) - Apple Inc has asked a bankruptcy court for permission to sue Eastman Kodak, accusing it of infringing its patents.

In a court filing on Tuesday in New York federal bankruptcy court, Apple said it wanted to file a complaint against Kodak at the International Trade Commission.

Apple said the suit would seek to bar Kodak from importing various products, such as printers and digital cameras, that it believes infringes its patents.

Apple said it also wants to file a corresponding lawsuit in the Manhattan federal court, which would seek damages it has suffered since the iconic photography company filed for bankruptcy last month.

The litigation would not be the first legal battle between the two companies. In January, Kodak sued Apple for allegedly infringing its patents related to digital cameras.

The once-dominant photography company filed for bankruptcy protection last month.

The bankruptcy case is in re: Eastman Kodak Co et al, U.S. Bankruptcy Court, Southern District of New York. No. 12-1202

(Reporting by Andrew Longstreth; Editing by Kim Coghill)

Wednesday, February 15, 2012

Reuter site - In Brazil, Google paves Facebook's path to the top

In Brazil, Google paves Facebook's path to the top

Wed, Feb 15 09:36 AM EST

By Asher Levine

SAO PAULO (Reuters) - Facebook's popularity in Brazil has exploded over the past year, and the company may have its biggest competitor to thank for it.

In its recent initial public offering filing, Facebook said its number of active users in Brazil had nearly tripled in 2011, finally placing it ahead of Google Inc's Orkut service as the No. 1 social network in the country.

"I can't think of an example where Facebook has grown so quickly," said Andrew Lipsman, vice president of industry analysis at research firm comScore. "It really just skyrocketed."

In Brazil, the birthplace of co-founder Eduardo Saverin, Facebook found a market primed for growth, with rapidly expanding Internet access, increasing rates of computer ownership, and rabid demand for social media.

Much of the credit for that may belong to Google, analysts say. While a growing economy and easier credit gave Brazilians the ability to purchase computers and broadband connections, Google's Orkut gave them a reason to do so in the first place.

"Until Orkut came along in 2004, Internet use in Brazil was stagnant," said analyst José Calazans of market research firm IBOPEnielsen in São Paulo. "When people here started buying computers and going to Internet cafes, it was specifically to access Orkut. Now many of those people are moving to Facebook."

Orkut offered Brazilians their first taste of social media, with a simple interface and Portuguese language option making it easier to use than competing sites such as Friendster and MySpace. In a highly social culture such as Brazil's, where even business meetings end in hugs, the site became a national phenomenon.

"Everyone was getting on Orkut," recalls Raquel Recuero, a professor who specializes in social media at the Catholic University of Pelotas in Brazil. "You would add people you didn't even know, and people would compete to see who had the most friends."

Orkut's rise coincided with an economic boom that lifted millions out of poverty, with many Brazilians gaining access to computers and the Internet for the first time. That turned into a double-edged sword, both expanding Orkut's user base while alienating more-affluent early adopters.

"After the lower classes started to come on, there was a culture clash that happened within Orkut, which was amplified by the media," said Recuero. "For instance, we would see reports on the news of criminals stalking their victims on Orkut. People started to rethink how they used the site and started becoming aware of concepts like online privacy."

Orkut's failure to innovate in line with users' expectations created an opportunity for Facebook to step in, offering new applications and games, as well as the ability to connect with people beyond Brazil.

Over time, Brazilians came to see Facebook as a way for them to start their online lives over from scratch, helping lead to its widespread adoption.

IS BRAZIL BIG ENOUGH FOR BOTH?

Orkut still holds a very large share of the social networking space in Brazil, with more than 34 million users compared with Facebook's 36 million, according to comScore. Yet, its days may be numbered.

"If you think back to the U.S., Facebook and MySpace were very competitive for a while going back to about 2009," said comScore's Lipsman. "You can co-exist for a while, but what tends to happen is that people tend to consolidate around one or the other."

Facebook will try to maintain its momentum in Brazil, which it called a "key source of growth" in its IPO filing.

According to IBOPEnielsen, more than 85 percent of active Internet users in Brazil use social networking sites, compared with 74 percent in the United States and 77 percent in Japan. Brazilians also spend much more time on those sites, averaging almost eight and a half hours a month, compared with six and a half hours in the United States, and slightly more than four hours in Japan.

That kind of engagement is particularly valuable for Facebook, where each page view or interaction adds to the company's bottom line.

While Facebook's growth in Brazil will continue to hinge on attracting more Orkut users, it could be limited by infrastructure in the country, where less than 30 percent of households have Internet access.

Brazil's government will play a key role in addressing that. President Dilma Rousseff has made it a goal of her administration to offer Internet access to more than 70 percent of Brazilian households, through investments in fiber optic networks, community Internet centers, and 4G telephony in World Cup host cities.

"Not even half the population is on the Internet yet, so Facebook has a lot of room to grow," said IBOPEnielsen's Calazans. "But that will also depend on the Internet growing just as fast."

(Additional reporting by Walter Brandimarte in New York; Editing by Brian Winter, Todd Benson and Lisa Von Ahn)

Reuter site - In Brazil, Google paves Facebook's path to the top

In Brazil, Google paves Facebook's path to the top

Wed, Feb 15 09:36 AM EST

By Asher Levine

SAO PAULO (Reuters) - Facebook's popularity in Brazil has exploded over the past year, and the company may have its biggest competitor to thank for it.

"I can't think of an example where Facebook has grown so quickly," said Andrew Lipsman, vice president of industry analysis at research firm comScore. "It really just skyrocketed."

Over time, Brazilians came to see Facebook as a way for them to start their online lives over from scratch, helping lead to its widespread adoption.

IS BRAZIL BIG ENOUGH FOR BOTH?

Facebook will try to maintain its momentum in Brazil, which it called a "key source of growth" in its IPO filing.

That kind of engagement is particularly valuable for Facebook, where each page view or interaction adds to the company's bottom line.

"Not even half the population is on the Internet yet, so Facebook has a lot of room to grow," said IBOPEnielsen's Calazans. "But that will also depend on the Internet growing just as fast."

(Additional reporting by Walter Brandimarte in New York; Editing by Brian Winter, Todd Benson and Lisa Von Ahn)

Friday, February 10, 2012

Reuter site - BlackBerry out at U.S. climate agency, iPhone in

BlackBerry out at U.S. climate agency, iPhone in

Fri, Feb 10 15:06 PM EST

By Alastair Sharp

TORONTO (Reuters) - Research In Motion's BlackBerry smartphone has struggled to win over U.S. consumers but the Canadian company has long been able to rely on the loyalty of corporate and government clients who depend on its secure email. No more.

The National Oceanic and Atmospheric Administration, a U.S. federal agency that studies climate and the environment, plans to replace some of its employees' BlackBerrys with Apple iPhones and get rid of the servers that power RIM's smartphones by June.

"It all comes down to economics," Joe Klimavicz, NOAA's chief information officer, said in a phone interview on Friday. "I've got a lot of pressure to cut our operating costs."

RIM charges a fee for use of its servers and data centers, which compress and encrypt email and other sensitive data. The company's early success was due to a reliance on BlackBerry smartphones by lawyers, bankers, politicians and bureaucrats.

But with budgets under pressure and competitors improving their security bone fides, BlackBerry is no longer the only game in town.

Earlier this week, oilfield services company Halliburton said it plans to switch 4,500 BlackBerry-toting employees to iPhones, saying that the Apple device is better suited to its needs. Several banks have already welcomed rival devices.

Klimavicz said NOAA's move was made possible after it switched its desktop-based software to Google Apps for Government last December. Another U.S. agency, the General Services Administration, has also moved to Google Apps, Klimavicz said.

Google's enterprise business offers Web-based versions of word processing, spreadsheet and other common software applications in a direct challenge to Microsoft. For a set price Google includes mobile-device management capabilities similar to what RIM offers for its BlackBerrys.

When Google's mobile management is coupled with Apple's tightly controlled software, NOAA can enforce password policies and it can control who can gain access to what data, which is a major concern for a range of government bodies and corporations.

Klimavicz said that in the future his agency will be able to use devices using Google's Android mobile software, but that it would have to approve each on an individual basis.

For now, the agency will buy iPhones to replace at least some of the 3,000 BlackBerrys used by its workers and is also using a small number of iPads, he said.

Klimavicz's office oversees annual spending of around $600 million on information technology. He declined to specify how much money the move away from RIM would save.

In response to queries, RIM said its security remains unmatched and pointed out that its latest operating system for smartphones and the PlayBook tablet computer have received certification from U.S. and Canadian authorities.

"RIM continues to work closely with its more than one million government customers in North America who rely on the unmatched security of the BlackBerry platform," spokeswoman Tenille Kennedy said in an email.

(Reporting by Alastair Sharp; Editing by Peter Galloway)

Thursday, February 9, 2012

Reuter site - Analysis: Investor activists see little to "like" in Facebook

Analysis: Investor activists see little to "like" in Facebook

Thu, Feb 09 01:08 AM EST

By Paritosh Bansal

NEW YORK (Reuters) - A new crop of companies entering the U.S. public markets, including such high-profile offerings as Facebook, are turning the clock back on the way U.S. corporations are run.

Facebook, Groupon Inc, LinkedIn Corp, Zynga Inc and others have put in place governance provisions that go against a long-term swing towards more shareholder-friendly rules.

One stark example of this reversal is in the number of companies that have classified or staggered boards, where only a handful of directors come up for election each year rather than all of them, making it hard for an activist investor or unwanted suitor to take control of the board through a proxy context.

Another is the creation of dual-class stock structures, which allow founders and early investors to gain greater voting control than their economic interest would otherwise suggest.

In the past 10 years, many of the biggest publicly traded companies in the U.S. have been getting rid of such provisions. Currently, for example, only about 24 percent of S&P 500 companies have classified boards, down from 61 percent in 2002, according to FactSet SharkRepellent.

But there hasn't been such a significant change among new arrivals. Of the 76 companies that went public last year, nearly 65 percent had classified boards. In 2002, 82 percent of IPOs had the feature.

Of the eight high-profile IPOs in the social networking and new media space last year, all either had classified boards or dual-class structures, with some having both.

Of these companies, Zillow Inc and LinkedIn had both, Angie's List Inc, Jive Software Inc and Pandora Media Inc had classified boards, while Groupon, FriendFinder Networks Inc and Zynga had dual-class structures.

While new companies are generally more likely to seek protections against corporate raiders and activist hedge funds, the extent of the barriers and some of the actions taken to shore up defenses are being questioned, especially given the high-profile nature of some of the companies involved.

It has some major investors feeling dissed.

"These are companies who for one reason or another decided that they are going public, but they do not want to have to answer to the public market," said Janice Hester-Amey, a portfolio manager in the corporate governance unit at the California State Teachers' Retirement System.

"The big issue is that you take money from the public market, and the reason that companies do this is so that they can acquire other companies, expand their business," Hester-Amey said. "So the money is worth some respect."

Angie's List, Facebook, Groupon, Zillow and Zynga declined to comment. A spokesman for LinkedIn said that "we believe our corporate governance structure allows us to execute on our strategic plans, enabling us to maximize long term value for our company and our shareholders."

The other companies did not respond to requests for comment.

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Graphic: Turning back the clock http://link.reuters.com/zag56s

Reuters Insider: Facebook governance "troubling" http://reut.rs/wzC9xJ

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CalSTRS, a $145 billion behemoth that invests the pension funds of California's more than 852,000 current and retired teachers, has already taken up some of its concerns with Facebook, sending a letter on Tuesday to Chief Executive Mark Zuckerberg that calls for increasing the size and diversity of its board.

Hester-Amey noted that Zuckerberg had a board that was all white, and all male, even though Chief Operating Officer Sheryl Sandberg and a large portion of its users are women.

It is particularly surprising that Sandberg doesn't get a board seat despite being widely seen as hugely influential not only within Facebook but with advertisers and women in the wider business community - including starring at events like the World Economic Forum in Davos. She has also served on Starbucks Corp and Walt Disney Co boards.

As these newly public companies break from the trend of giving shareholders greater say, investors and corporate governance experts bemoan the lost lessons of past disasters --from Enron to Lehman Brothers - which they say at least partly resulted from boards and shareholders who wielded little power over management.

But they also say there is not much investors can do about it.

"These guys running tech companies are probably hyper paranoid," said Eric Jackson, founder of activist hedge fund Ironfire Capital LLC. "But they have the power to insist on these kind of structures and control, and the markets are so far willing to still buy into the company."

"Until there is a real renouncement by investors of these structures through a lower share price they will continue to do this," Jackson said.

NOT MUCH TO 'LIKE'

At Facebook, corporate governance provisions effectively give the 27-year-old Zuckerberg complete control, so much so that the Harvard University drop-out even has the right to appoint his own successor before he dies.

Zuckerberg, who benefits from Class B shares entitled to 10 votes each, has also struck voting agreements with other shareholders. Altogether, he will control just under 57 percent of the vote.

If Class B shareholders lose control of the majority of the voting power, the board will become staggered to give it an extra defense.

Another potential point of irritation for investors eyeing Facebook is the lack of influence they will have over a so-called evergreen equity incentive plan, through which the number of shares reserved for employees' stock awards automatically rise by up to 2.5 percent every year through 2022.

"Institutional investors don't want to see 2.5 percent of their equity value diluted every year," said Brandon Cherry, a principal at consulting firm Hay Group. "They want to have control over when the plan increases."

AGAINST THE TREND

As many as 26 companies, or roughly one-third of those that went public last year, including Angie's List, Pandora, Jive, Zynga and Zillow, had evergreen equity incentive plans, according to Hay Group's IPO Pay Reporter data.

There are other blockages being set up too. Some 68 percent of the companies that went public last year do not allow shareholders to call special meetings, 82.9 percent do not allow them to act by written consent and all of them have advance notice requirements that make it harder to put up director nominees or other proposals on the agenda at annual meetings, according to the Factset SharkRepellent data.

It isn't much different from the situation 10 years ago before Enron and other frauds triggered a big push for change by activist shareholders - aided by the Sarbanes-Oxley corporate reform law, which came in that year.

That law, with its rigorous rules on corporate governance and accounting, is also sometimes blamed for a drop off in the number of IPOs in recent years as companies decide to remain private rather than having to face the cost in money and time of complying with the regulations.

"It's a judgment that the bankers and companies make, as to how much these defensive provisions would cost them in terms of investors that would be less willing to participate in the IPO," said Richard Grossman, a partner at law firm Skadden Arps, without referring to any specific company.

A wish to protect themselves from unwanted advances at an early stage of their development is at play here as well. At Groupon, for example, the dual class stock structure will automatically end in five years.

DON'T LIKE IT? DON'T BUY

While Facebook's corporate governance goes against the trend, the company has also taken steps that are drawing praise from some experts.

Jeffrey Sonnenfeld, a Yale University professor and founder of the Yale Chief Executive Leadership Institute, said investors should focus on how "enormously transparent" Facebook is around its financial results.

Sonnenfeld said in structuring control, Zuckerberg likely drew lessons from Steve Jobs, the late Apple Inc CEO who was once driven out of the computer-maker he founded before returning to triumph some years later.

"This is an argument that if you are buying Facebook, you are buying into the vision of Mark Zuckerberg," Sonnenfeld said. "If this is a risk that's not right for you, don't buy it."

(Reporting By Paritosh Bansal; additional reporting by Soyoung Kim; Editing by Martin Howell)

Wednesday, February 8, 2012

Reuter site - TomTom satnavs to tell good drivers from bad

TomTom satnavs to tell good drivers from bad

Wed, Feb 08 06:38 AM EST

By Roberta Cowan

AMSTERDAM (Reuters) - TomTom satnavs will in future help insurers tell the difference between a good driver and a bad one under a scheme designed to revive the Dutch navigation device maker's flagging fortunes.

The company, which made its name as a maker of vehicle-based personal navigation devices (PNDs), said it had teamed up with UK-based insurance firm Motaquote to offer its first new insurance product, called Fair Play, which gives the safest drivers lower premiums.

"Our entry in the insurance market with our proven fleet management technology puts us at the forefront of a move that could help to revolutionize the motor insurance industry," said Thomas Schmidt, managing director TomTom Business Solutions.

Schmidt said the focus in 2012 is to expand the product to other insurance firms in Europe, where he expected thousands of customers to use the plan.

The scheme gives drivers control over their own policy by using driving ability and behavior to allocate premiums, rather than risk factors used by insurers such as postcode, gender, and age or vehicle, Schmidt told Reuters.

"Drivers using the insurance product will have a TomTom tracking unit fitted in their vehicles, allowing driver behavior and habits to be monitored by insurers and by improving driving style, you can drive down your premiums," Schmidt said.

Consumers that agree to the plan will pay for the TomTom tracking kit themselves and start paying lower premiums immediately, providing the driver takes on the feedback from the TomTom tracking device, according to TomTom's Richard Piekaar.

TomTom's Business Solutions unit, including its fleet tracking division, which use the same tracking technology to track and monitor truck drivers, fetches around 5 percent of group sales, or an estimated 65 million in euros in 2011.

Analysts were skeptical about the actual growth potential of the new insurance product but several agreed Tomtom's move to monetize its rich data base of real time and historical driving data is a good sign.

"It is positive they are looking for alternative business models and are being innovative. Linking the insurance market to telematics is new, but there are uncertainties with regards to the business model," said Martijn den Drijver, SNS Securities analyst.

TomTom faces intense competition in its core PND market as consumers increasingly opt for free or cheap navigation software as well as cooler gadgets like smartphones and tablet computers.

It is now targeting higher-growth areas and new markets. It increasingly sells navigation devices built into car and truck dashboards, rather than the standalone versions, and sells mapping data and real-time traffic services through smartphone apps and other devices.

TomTom, whose founders have a majority stake in the company, competes in the PND market with Garmin and in the commercial digital map market with Google and Nokia Oyj.

(Reporting By Roberta B. Cowan. Editing by Jane Merriman and Andrew Callus)

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Reuter site - TomTom satnavs to tell good drivers from bad

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