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Bits Blog: Insurance Against Cyber Attacks Expected to Boom

December 23, 2011 by Leave a Comment

Sony has estimated that data breaches earlier this year cost it $200 million, and its losses are not insured.

Sony is still awaiting the final tally for losses related to its data breaches earlier this year. At last count, it had compromised 100 million customer accounts, and Sony anticipated the debacle would cost $200 million. With 58 class-action suits in the works, that may be wishful thinking.

Now for the really bad news: Sony’s losses aren’t insured.

In a lawsuit, Sony’s insurer, the Zurich American Insurance Company, reminded the company it does not own a cyber insurance policy. Sony’s policy only covers tangible losses like property damage, not cyber incidents.

“That’s cyber insurance in a nut shell,” said Jacob Olcott, a principal with Good Harbor Consulting’s cybersecurity team. “Everybody needs it, and most companies don’t realize they don’t have it until it’s too late.”

Despite high-profile cyber attacks at Sony, Google, Epsilon, RSA and others this year, only a third of companies surveyed by Advisen, a research group, say they have purchased a cyber insurance policy.

Experts say that more companies will buy policies in the coming year because of new Security and Exchange Commission requirements. Last October, the S.E.C. issued a new guidance requiring that companies disclose “material” cyber attacks and their costs to shareholders. The guidance specifically requires companies to disclose a “description of relevant insurance coverage.”

That one S.E.C. bullet point could be a boon to the cyber insurance industry.

Cyber insurance has been around since the Clinton administration, but most companies tended to “self insure” against cyber attacks, says Robert Ackerman, a venture capitalist at Allegis Capital who specializes in cybersecurity.

“Companies don’t want to talk about cyber attacks,” Mr. Ackerman says. “All of a sudden, breaches are now going to be more visible and people are going to have to start estimating their costs.”

There are no statistics on the size of the cyber insurance industry, but Peter Foster, a senior vice president at Willis North America, an insurance broker, estimates there may be $750 million worth of premiums placed. With the recent S.E.C. measure and the frequency and severity of cyber attacks growing, Mr. Foster predicts that figure could grow by 50 percent over the next 12 to 18 months.

The average cost of a data breach hit $7.2 million last year and cost companies $214 per compromised data record, according to the Ponemon Institute. And that’s just for a data breach. If a company’s intellectual property is stolen, it could decimate an organization.

“It is now possible to suck all the information out of a company,” said Scott Borg, chief executive of the nonprofit United States Cyber Consequences Unit.

A comprehensive cyber insurance policy should cover intellectual property theft, said Emily Freeman, a cyber insurance broker at Lockton. Most policies, Ms. Freeman said, cover the “twin risks of privacy and security,” which include the cost of lost business, notification costs, credit-monitoring services, public relations and legal and investigation expenses. It may also cover class-action lawsuits, regulatory investigations, civil fines and even extortion demands.

“There’s no one size fits all. It depends on the size of the company and their exposure,” Ms. Freeman said. “I’ve seen companies buy a million dollars of this coverage with a small deductible. Others have bought $100 million of coverage for a rainy day — the kind of rainy day you might have to disclose to the S.E.C.”

Article source: http://feeds.nytimes.com/click.phdo?i=4796d853d1b7ea77dd4f2afe9add8d8b

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Lines Are Drawn on Legislation Against Internet Piracy

December 14, 2011 by Leave a Comment

WASHINGTON — Type “download movies for free” into Google, and up pops links to sites like the Pirate Bay, directing users to free copies of just about any entertainment   — the latest “Twilight” installment, this week’s episode of “Whitney,” the complete recordings of the Red Hot Chili Peppers.

For years, pirated movies, television shows and music have been on the Internet. And for just as long, Hollywood and the entertainment business have been trying and failing to stop it.

But with more and faster broadband networks as well as powerful and speedy computers, the playing of illegally copied music and movies is booming as are sales of counterfeit goods from auto parts to pharmaceuticals.

Because most pirate sites are abroad, beyond the reach of United States law enforcement, companies have been left with a Whac-a-Mole approach to shutting them down.

Now, however, two bills, broadly supported on both sides of the political aisle, aim to cut off the oxygen for foreign pirate sites by taking aim at American search engines like Google and Yahoo, payment processors like PayPal and ad servers that allow the pirates to function.

Naturally the howls of protest have been loud and lavishly financed, not only from Silicon Valley companies but also from public-interest groups, free-speech advocates and even venture capital investors. They argue — in TV and newspaper ads — that the bills are so broad and heavy-handed that they threaten to close Web sites and broadband service providers and stifle free speech, while setting a bad example of American censorship.

Google itself has hired at least 15 lobbying firms to fight the bills; Mozilla has included on its Firefox browser home page a link to a petition with the warning, “Congress is trying to censor the Internet.” A House committee plans to take up one of the bills, the Stop Online Piracy Act, on Thursday

On the other side, some of the biggest business lobbies like the Motion Picture Association of America and the United States Chamber of Commerce are supporting the bills. Both sides, in fact, plan to spend millions of dollars for advertisements aimed at swaying consumer sentiment.

Even newly proposed changes that the House panel will consider fail to address all the legislation’s ills, opponents say. People involved in the drafting of the latest version, however, say the bill now specifically singles out only “foreign rogue Web sites.”

“Our mistake was allowing this romantic word — piracy — to take hold,” Tom Rothman, the co-chief executive of Fox Filmed Entertainment, said in an interview last week in Washington. “It’s really robbery — it’s theft — and that theft is being combined with consumer fraud. Consumers are purchasing these goods, they’re sending their credit card information to these anonymous offshore companies, and they’re receiving defective goods.”

Those goods include not just movies shot surreptitiously in a theater with a jiggly hand-held video camera, the companies argue, but dangerously flawed pharmaceuticals, faulty brake pads and defective smoke alarms, to name a few categories of illegally copied goods.

Each bill has attracted dozens of co-sponsors and broad support. The Senate bill, called the Protect IP Act, was overwhelmingly approved by the Judiciary Committee; a revised House bill, intended to address some initial criticisms, is scheduled to be marked up and voted on in committee before Congress adjourns for the holidays.

Many in the Internet world, however, see ominous aspects even in the revision. “There are some provisions that have improved,” said Markham Erickson, executive director of NetCoalition, a group of technology companies that includes Facebook, LinkedIn and eBay.

“Unfortunately,” Mr. Erickson said, “the amendment also creates new problems in other places and fails to correct some of the original concerns we have raised since the start of the debate.” Among them, he said, the amendment allows anyone to seek court action to restrain a Web site’s activities, even those of sites based in the United States.

Representative Lamar Smith, a Texas Republican who is the primary sponsor of the bill and chairman of the House Judiciary Committee, which is working on the legislation, said the immediate rejection of the amendment by technology companies showed that they were simply protecting their financial interests — and sacrificing intellectual property rights in the process.

“That’s because they’ve made large profits by promoting rogue sites to U.S. consumers,” Mr. Smith said in a statement.

Article source: http://feeds.nytimes.com/click.phdo?i=32c46fe589e5065628d5693c5e06fe79

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Bits Blog: Privacy Fades in Facebook Era

December 12, 2011 by Leave a Comment

Privacy is a rare commodity today with the high amount of information being posted on social networking sites such as Facebook.David Paul Morris/Bloomberg NewsPrivacy is a rare commodity today with the high amount of information being posted on social networking sites such as Facebook.

As much as it pains me to say this: privacy is on its deathbed. I came to this sad realization recently when a stranger began leaving comments on photos I had uploaded to Instagram, the iPhone photo-sharing app.

After several comments — all of which were nice — I began wondering who this person was. Now the catch here is that she had used only a first name on her Instagram profile. You would think a first name online is enough to conceal your identity.

Trust me, it’s not.

So I set out, innocently and curiously, to figure who she was.

I knew this person lived in San Francisco, from her own photos. At first I tried Google, but a first name and city were not enough to narrow it down. Then I went to her photos and looked for people whom she had responded to in the comments. Eventually I found a conversation with someone clearly her friend. I easily found that person’s full name, went to the person’s Facebook friend list and searched for my commenter’s first name.

There it was: a full name. With that, I searched Google and before I knew it, I had this person’s phone number, home address and place of employment.

Creepy, right? I even had a link to a running app that she uses that showed the path of her morning run. This took all of 10 minutes.

Nearly everyone has done something like this. Often, you don’t even need a first name to find someone. Google, after all, has a feature that allows people to search with an actual image. No words or names required.

A friend who works in technology recently told me I would never be able to figure out her age online. She had gone to great lengths to hide it. It took me exactly two minutes. How? I found a photo on Facebook from her birthday party two years earlier. In the photo, on the corner of a table, sat a birthday cake that said “Happy Birthday,” and two candles that said “24.”

“We used to have privacy through obscurity online, so even if people had that information out there, the steps that it would take to aggregate it all were too great,” said Elizabeth Stark, a lecturer in law at Stanford who teaches about privacy on the Internet. “Previously you could have searched every photo on the Internet for a photo of Nick Bilton until you eventually found one, but that would take a lifetime. Now, facial recognition software can return more images about someone instantly.”

So who is at fault for this lack of privacy protection? Most people are oblivious. The companies won’t stop collecting information. And the government is slow to protect consumer privacy.

The Federal Trade Commission, set up to protect consumers, didn’t act until late last month when it cited Facebook for “unfair and deceptive” practices. This is great, but it is more than six years and 800 million users after Facebook began.

Maneesha Mithal, the associate director of the Federal Trade Commission’s division of privacy and identity protection, acknowledged in a phone interview that technology had moved quicker than the government could act. The F.T.C.’s investigation of Facebook, she said, “has been a bit of a moving target.”

Ms. Stark of Stanford says she doesn’t believe that privacy is completely dead. She says people have learned from each privacy debacle. But the companies are not slowing down.

The tools that aggregate information are only getting smarter. The government isn’t getting faster. And Ms. Mithal said not much could be done about the damage already inflicted. “Our order only provides protection going forward,” she said. “The only real option to protect information going backwards would be to delete your Facebook account.”

Now which one of us is going to do that?

Article source: http://feeds.nytimes.com/click.phdo?i=ea0671e3c371398d04aff0cfb479161d

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With New Smartphones, High Hopes for Nokia and Microsoft

October 26, 2011 by Leave a Comment

Nokia’s chief executive, Stephen Elop, presented the Lumia 800, a €420 ($584) flat-screen device aimed at high-end users, and the Lumia 710, priced at €270, which is aimed at cost-conscious consumers. Both devices are being sold this month in six European countries and later this year in parts of Asia.

The smartphones are the result of an eight-month collaboration between Nokia and Microsoft that saw executives meet periodically in Iceland to oversee the project.

Analysts said the alliance could help Nokia stem its declining share of the smartphone market, where it trails Google’s Android phones and Apple’s iPhone.

“Nokia really needed this to happen today, and this is a new start for the company,” said Pete Cunningham, an analyst in London with the research firm Canalys. “This helps stop the bleeding and will help Nokia get back in the game.”

The new lineup aims to revive Nokia’s tarnished reputation as an innovative force in mobile phones, an industry it pioneered and dominated until Apple and Google leveraged more user-friendly software to wrest control of the smartphone business four years ago.

Mr. Elop, a former Microsoft executive who made the decision to enter the software alliance with his former employer last February, said the new Lumia cellphones showed that Nokia was delivering on its promised turnaround.

“This signals our intent to be today’s leader in smartphone design and craftsmanship,” Mr. Elop said.

The Lumia 800, whose design is based on Nokia’s N9 smartphone, a product of its now-defunct alliance with the chipmaker Intel, seeks to exploit the capabilities of Microsoft’s Windows Phone operating system, which has struggled commercially and has only 2 percent global market share, according to International Data Corp., a research firm.

Mr. Elop said Nokia planned to introduce several cellphones in the United States, the world’s largest smartphone market, by early 2012. He did not give details on which handsets Nokia planned to sell in the United States, where it has only a 1.2 percent share of the smartphone market. He said the phones would be made to work on both the 3G and CDMA standard networks used by ATT, Verizon Wireless, T-Mobile USA and Sprint.

The Nokia-Microsoft alliance is a last-chance effort of sorts for both companies to find traction and market share in the critical, fast-growing smartphone business, devices that are rapidly becoming the favored cellphone sold in many markets.

Nokia and Microsoft are being forced play catchup, as Apple, Google and Samsung, the U.S. market leader and largest seller of phones that run Google’s Android operating system, have distanced themselves from Nokia during the software transition.

Phone operators, which sell the vast majority of phones, abandoned Nokia phones bearing its in-house operating system, Symbian, during the eight-month transition.

Shares of Nokia rose 1 percent in European trading to €4.88 following the announcement. One investor said that Nokia and Microsoft must overcome skepticism surrounding the success of the venture, which faces an uphil battle to catch Apple and Google.

“I have seen no evidence that Nokia and Microsoft are making a game of it — yet,” said Jeffrey P. Davis, the chief investment officer at Lee Munder Capital Group, an investment manager in Boston. “Android is winning the mind space on the consumer front. The business world will probably follow.”

But many network operators are hoping the alliance will be successful, giving them more leverage to negotiate lower purchase prices from Apple and the makers of Google’s Android handsets. Critical for the venture will be enlisting more handset makers besides Nokia to make Windows smartphones, said Francisco Jeronimo, an analyst with IDC in London.

“Without that, the Nokia-Microsoft handsets will just be a single option or two for consumers, not enough to elevate the brand into the mainstream of consciousness,” Mr. Jeronimo said.

Samsung and HTC, a Taiwanese handset maker, produce a limited number of Microsoft phones, preferring to either use their own operating systems or marry Google’s Android operating system to their hardware. That in part is because the companies must pay royalty fees to Microsoft.

Neil Mawston, an analyst at Strategy Analytics in Milton Keynes, England, estimated that Nokia was paying $15 to Microsoft for each Windows smartphone it produces, less than the estimated $20 other handset makers are paying. The new Windows phone lineup, he said, has the potential to help restore Nokia’s fortunes in the smartphone market.

“One thing I have learned in this business is to never say never,” Mr. Mawston said.

Article source: http://feeds.nytimes.com/click.phdo?i=abd0cf0f716103a2dd23589f189b1feb

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Research in Motion Pins Hopes on Its Next OS

October 17, 2011 by Leave a Comment

Starting Tuesday, the company will hold its annual conference for software developers in San Francisco. Normally, the conference, with sessions like, “Alice.js: A Lightweight Independent CSS Engine,” would grab little attention. But this conference is for the developers RIM must persuade to build the apps for the next generation of BlackBerrys and PlayBook tablets. Without those apps, people are less likely to buy the devices and restore the company’s former glory.

“The meeting is important and it’s going to be really difficult for RIM,” said Kevin Burden, an industry analyst with ABI Research. “It’s going to have to get up there and talk about real timelines. You can’t have half-baked products and half-baked plans.”

Research in Motion, which is led by Jim Balsillie and Mike Lazaridis, has an entirely new mobile operating system, and developers hope the company will reveal details at the conference about the next generation of smartphones to be built around it. But the company has said little about those phones and has given developers no specific timeline for their introduction. It has continued to promote its devices’ security and, until last week, technical reliability as the main attractions of the current BlackBerry long after Apple’s iPhone and phones using Google’s Android operating system had made mobile devices into pocket-size computers as well as communications devices.

Because the BlackBerry operating system now on the market is descended from the one installed in the first BlackBerrys 12 years ago, RIM has been unable to match rivals’ performance. As a result, the company is in somewhat the same position as Ford Motor when Henry Ford stubbornly persisted with the Model T well into the 1920s, long after consumer tastes had shifted toward more sophisticated cars.

RIM’s recovery plan is to introduce a new generation of BlackBerrys that will use a more capable operating system known as QNX (pronounced CUE-nix). But despite the importance of those products, RIM has been cagey about their features and design and vague about when they will be offered for sale next year.

Many analysts do not expect RIM’s executives to use the developers’ conference to unveil those new phones. But they do agree that RIM will have to offer specifics about the arrival dates for the QNX phones as well as their features and broad capabilities.

“There’s plenty of them to explain about how they’re going to remain a relevant player in the smartphone market,” said Nick Dillon, an analyst with Ovum in London. “They’re going to have to get right into their plan and describe how that transition will work.”

But long before RIM has to sell consumers on the QNX BlackBerrys, it needs to persuade developers, like those attending the conference, to create apps that will run on them.

The BlackBerry PlayBook, the company’s first tablet computer and its first QNX device, noticeably lacks apps, months after going on sale.

“It’s nice hardware but there’s not much you can do on the PlayBook,” said Kunal Gupta, the chief executive of Polar Mobile, a company in Toronto that creates apps for broadcasters, publishers and sports leagues.

RIM’s executives have acknowledged in earlier interviews that their company must improve its relationship with developers. (RIM did not make anyone available for interviews for this article.)

Mr. Gupta said that the fresh start with QNX and the new phones would most likely make BlackBerry more attractive to developers who have avoided the system. Mr. Gupta, however, is something of an old hand with the BlackBerry. About 300 of the 1,200 applications Polar has developed are for BlackBerrys.

Beyond that, Mr. Gupta said it would be critical for RIM to convince developers at the conference that its QNX operating system will become a major software platform with a long-term future, unlike, say, webOS, which was recently abandoned by Hewlett-Packard. “RIM needs to position this as a new opportunity,” said Mr. Gupta, who will send some of his employees based in San Francisco to the conference. “RIM needs to bring transparency and clarity about what the potential upside is for developers, what’s the potential profit.”

Jamie Murai, a co-founder of Maide, a small apps developer, provoked widespread online discussion earlier this year by posting an open letter to RIM about the shortcomings of its application development process for the PlayBook. “I can only assume that you are trying to drive developers away by inconveniencing them as much as humanly possible,” wrote Mr. Murai, who lives in Waterloo, Ontario, where RIM is based.

Among the factors that frustrated Mr. Murai was the complexity of RIM’s tools for creating and testing BlackBerry applications and the bureaucratic process. For example, the company required developers to provide notarized copies of their identification.

Among those who responded to Mr. Murai was Tyler Lessard, who as RIM’s vice president for global alliances and developer relations at the time, arranged a personal meeting. Mr. Lessard left RIM late last month.

RIM presents its developers with a set of complications. In addition to having to make apps work on two current operating systems as well as the coming QNX system, BlackBerry apps must be tweaked to account for the different screen sizes of various BlackBerrys. Apps have to be compatible with both touch screens and conventional displays. Make it too difficult, and developers could choose to write software for Apple or Android devices, particularly in North America, where the company’s decline has received widespread publicity.

In an interview last week, Mr. Murai said that he had seen some changes at RIM since then, but noted that the company still had some distance to go. “I’ve seen some improvement, but it’s still a different world than Apple’s tools,” Mr. Murai said.

In the end, the small sales of PlayBooks dissuaded Mr. Murai from developing any apps for them. He is, however, attending the developer’s conference.

“RIM gave me a free ticket and I was actually going to be in San Francisco anyway,” he said.

Article source: http://feeds.nytimes.com/click.phdo?i=284f5076caf4ab2126c36fc9aec66d28

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Google Reports Strong Earnings and Exceeds Expectations

October 13, 2011 by Leave a Comment

Google easily surpassed analysts’ expectations, reporting that revenue climbed 33 percent and net income rose 26 percent.

“I don’t love a lot of the things that Google’s doing, but their core business is a powerhouse,” said Colin W. Gillis, an analyst at BCG Partners. “When they bust out revenues above expectations, all the sins are forgiven.”

In after-hours trading, shareholders responded favorably to the earnings report, as shares rose 6 percent.

Still, others question whether Google’s search business will keep up its steady rate of impressive growth, particularly as more searches are done on mobile phones, where people are less likely to click on ads, and as advertisers spend more money on display and social ads, compared with ads in search.

“Google’s position is less secure than what many investors would like you to believe,” said Jordan Rohan, an analyst at Stifel Nicolaus who last week downgraded Google stock from buy to hold. “In the near term, Google still counts for half of online advertising revenues and has a blocking position in desktop search, but in the long term, that position may not help thwart competition in the social or mobile arenas.”

Virtually all of Google’s revenue comes from advertising, the vast majority from search ads. The company does not separately account for revenue from display, video or mobile ads.

Google reported net income for the period ending Sept. 30 of $2.73 billion, or $8.33 a share, up from $2.17 billion, or $6.72 a share, a year ago. Excluding the cost of stock options and the related tax benefits, Google’s third-quarter profit was $9.72 a share. Analysts had expected $8.74 a share.

The company said revenue was $9.72 billion, up from $7.29 billion in the year-ago quarter. Net revenue, which excludes payments to ad partners, was $7.51 billion, up from $5.48 billion, above analysts’ expectations of $7.2 billion.

“We had a great quarter,” said Larry Page, Google’s chief executive, in a statement. He highlighted the popularity of Google+, its new social network and Facebook competitor, which he said now has 40 million users. “People are flocking into Google+ at an incredible rate and we are just getting started!”

Google so far seems to be sheltered from the economic doldrums that have hurt other Web sites and publications that rely on advertising. In the past, it has been protected from swings in ad budgets because during hard times, advertisers often turn to search ads because it is easier to track their effectiveness.

Clicks on ads on Google and other Web sites increased 28 percent over the same quarter last year and 13 percent over the second quarter this year, Google said. The amount that Google got paid for clicks increased 5 percent over last year, but decreased 5 percent over the second quarter of this year.

Despite the positive results, many analysts fault Google for making large bets in high-risk areas, like jumping into hardware manufacturing with its $12.5 billion acquisition of Motorola Mobility.

“We’re still skeptical on the deal,” said Mark S. Mahaney, an analyst at Citi. “There’s a lot of risk. Maybe the counterargument is it’s worse not to take the risk, but it will be very hard to become a hardware company for a search and advertising company.”

Analysts also criticize Google’s spending on aggressive hiring. In the third quarter, it hired 2,585 people, up from 1,526 new people in the year-ago quarter, bringing the total to 31,353.

Such worries — along with concerns about continuing antitrust investigations, competition from Facebook and deteriorating economic conditions — have caused Google’s share price to drop 8 percent this year.

Article source: http://feeds.nytimes.com/click.phdo?i=4737b763fce38dff4f781c52ea56e132

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Europe Approves Microsoft Purchase of Skype

October 7, 2011 by Leave a Comment

BERLIN — The European Commission on Friday approved Microsoft’s $8.5 billion purchase of Skype, saying it had no objections to a deal that would link the world’s largest software maker with the leading Internet communications service.

While the assent from the European competition commissioner, Joaquín Almunia, is not the final antitrust hurdle for the transaction — regulators in Russia, Ukraine, Serbia and Taiwan are still deliberating — the positive review from Brussels was considered the last significant threat to what would be Microsoft’s largest takeover to date.

The U.S. Federal Trade Commission approved the transaction in June.

In voicing no objections to the deal, Mr. Almunia, a Spanish economist, chose not to act on a complaint from an Italian competitor to Skype, Messagenet of Milan, which had asked that the deal be blocked unless Microsoft opened Skype’s 124-million user network to competitors.

Mr. Almunia in February approved Microsoft’s purchase of the search advertising business of Yahoo. This time, the competition commissioner said he was approving the purchase of Skype “because the deal would not significantly impede effective competition,” according to a statement by his office.

In the consumer communications business, the commission said Microsoft and Skype overlapped only in video communications, which Microsoft offers separately through its Windows Live Messenger program.

“However, the commission considers that there are no competition concerns in this growing market where numerous players, including Google, are present,” the commission said in its statement.

In the sale of Internet communications to businesses, Skype had only “a limited presence,” the commission concluded, which did not overlap with Microsoft’s Lync Internet communications software, used by large companies.

Microsoft, in a statement, called the European approval “an important milestone. We look forward to completing the final steps needed to close the acquisition.”

The approval from Brussels will expedite the fusion of Microsoft, maker of the ubiquitous Windows computer operating system and Office business application suite, with Skype, an Internet seller of free and low-cost audio and video telephony founded in 2003 by Niklas Zennstrom, a Swede, and Janus Friis of Denmark.

During the past eight years, Skype has become the largest provider of Internet-based communications. But profitability has remained elusive.

A previous owner, eBay, which bought Skype for an estimated $2.6 billion in October 2005, was not able to integrate Skype profitably into its online auction business. In October 2007, eBay took a $1.4 billion impairment charge reflecting what it estimated that it had overpaid for Skype.

Last November, eBay sold a 70 percent stake in Skype to an investor group led by Silver Lake Partners for an estimated $2 billion.

Microsoft, which announced its agreement to buy Skype on May 10, is paying nearly three times Skype’s market value, as measured by the sale of eBay’s stake almost a year ago to private investors.

Leif-Olof Wallin, an analyst in Stockholm for Gartner, said Microsoft would use Skype to bolster its push into Internet-based telephony around its Lync software for businesses. With Skype’s huge user base, Microsoft will be able to greatly expand the availability of low-cost Internet telephony, Mr. Wallin said.

He added that Microsoft’s distribution of Skype through its Windows operating system would improve the image of Internet calling, especially among businesses, which are increasingly encouraging workers to use their own computers and software for company business.

That will make Microsoft more of a direct competitive threat to Cisco Systems and Avaya, the two biggest companies that sell Internet-based telephone service software for businesses.

But it will also accelerate downward pressure on long-distance and international calling prices, Mr. Wallin said.

“Once it is preloaded on a device, whether it is a computer or a phone, it becomes more convenient to use,” Mr. Wallin said. “That will make consumers more likely to discover and try it.”

Whether Microsoft can generate a profit from Skype, or create profitable synergies with its other software services and products remains unclear, said David W. Cearley, an analyst for Gartner in Stamford, Connecticut.

“I do not believe that direct revenue was the main reason for the purchase,” Mr. Cearley said. “The main thing that Microsoft is buying with Skype is brand presence on the Web and a customer base.”

Article source: http://feeds.nytimes.com/click.phdo?i=b0eeca887e677618f1848c0d9107ba35

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Intel Reaches Deal to Acquire Telmap

October 3, 2011 by Leave a Comment

TEL AVIV (Reuters) — The chip maker Intel has agreed to acquire Telmap, a maker of mobile navigation software based in Israel, Telmap’s chief executive said on Sunday.

Details of the deal were not disclosed, but Israeli media said Intel was paying $300 million to $350 million.

The Telmap chief executive, Oren Nissim, said the deal was expected to close before the end of the year.

Telmap, which offers location-based services to provide details on traffic data and local offerings, expects to post revenue of $33 million in 2011 and be profitable for the second consecutive year.

Telmap will become a wholly owned subsidiary of Intel, which has two plants and four development centers in Israel, and will retain its brand, management and 210 employees.

“The unique thing about this transaction is that here comes a giant and says, ‘We really like what you’re doing, we believe in your strategy, we want to enhance and go forward. We’re not here to swallow you up,’ ” Mr. Nissim said.

Teaming up with Intel will enable Telmap to provide a “true alternative” to offerings from giants such as Nokia and Google, Mr. Nissim said.

Peter Riddle, general manager of Intel’s AppUp developer program, said in a blog post that the deal was a step toward expanding Intel’s capabilities in mobile software services.

“Telmap delivers great multiplatform consumer experiences every day, and we’re looking forward to combining that focus and excellence with Intel’s to significantly grow their business,” he wrote.

Intel, the world’s No. 1 chip maker, has become a larger provider of software and services after its acquisitions of McAfee and Wind River.

Article source: http://feeds.nytimes.com/click.phdo?i=ebb647a62c1027819f6a3d3f88cab44c

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Bits Blog: Is New York’s Tech Boom Sustainable?

September 27, 2011 by Leave a Comment

The battle royale brewing between New York and Silicon Valley to be the nation’s dominant epicenter for tech innovation and hot start-ups wages on.

On Monday night in downtown Manhattan, Paul Graham stood before a jam-packed auditorium of 800 entrepreneurs, developers, programmers and others who were curious about what makes a city a fertile environment for a thriving community of start-ups. Mr. Graham is a well-known investor and esteemed figure in Silicon Valley because he created Y-Combinator, an incubator in Menlo Park, Calif., that has given seed money and mentorship to start-ups,

At the Y-Combinator event, Mr. Graham raised the question of the sustainability of New York’s future as a hotbed of technology innovation and whether the city could ever grow to rival Silicon Valley.

“The truth is that I don’t know what’s going to happen,” he said. “Hubs tend to stay hubs.”

Mr. Graham gave the keynote talk of the evening, but also welcomed several Y-Combinator alumni to the stage, including Sam Altman of Loopt, Alexis Ohanian of Reddit and Joe Gebbia of Airbnb. Mr. Graham kidded that his keynote talk could have been titled “On the Other Hand,” because for each theory he had about why New York, a decade after the dot-com bust, is springing back to life and might give rise to the next Facebook or Google, he had a counterpoint to rival it.

He said that geographically speaking, there are several elements that contribute to a healthy ecosystem to nurture young start-ups. After all, he acknowledged, most start-ups don’t make it past their infancy.

“But places aren’t sprayed with start-upicide,” he said. “A start-up needs keys to success.”

He noted that New York, like Silicon Valley, had the same density of tech-savvy types working in similar industries that is required for the kinds of happenstance encounters and introductions that could revive a company’s flailing fortunes and help right its trajectory.

He recalled the serendipitous sidewalk meeting of Mark Zuckerberg and Sean Parker, the founder of Napster, who helped shape Facebook in its early days and became its founding president.

“The antidote for a failing start-up is Sean Parker,” he said.

However, Mr. Graham also said that New Yorkers tended to prize making money above all other goals — which could prove to be advantageous or disastrous for a fledging company or business idea.

“The Valley is a magnet for nerdy visionaries,” he said. “New York is for rapacious dealmakers.”

Mr. Graham went on to list a few other factors that detract from New York’s viability, including the distractions of city life and other, more lucrative industries, like Wall Street, along with the Valley’s perennially sunny climate.

But he did note that New York had surpassed Boston, long considered a nexus of technology and start-up culture.

“New York is solidly No. 2 right now,” he said.

New York, Mr. Graham said, was ripe for the kinds of companies that can disrupt and transform some of the city’s legacy businesses, like fashion, advertising and finance. Whether or not they can give rise to a large-scale technology company along the lines of Google and Facebook, he said, remains to be seen for now.

However, even Mr. Graham isn’t immune to the siren call of the hot start-ups cropping up around the boroughs of New York. Although he said he had no plans to bring a version of his incubator to the East Coast, like Ron Conway, a lauded angel investor, and Accel Partners, a well-known investment firm, who each have turned a keener eye to New York in recent months, Mr. Graham did say that he hoped to lure more New Yorkers to the annual Y-Combinator start-up class.

But for those entrepreneurs who are accepted into Y-Combinator and, after finishing their three-month incubation period, want to move back to New York? He wishes them the best of luck on their journey.

“I don’t try to stop them,” he said.

Article source: http://feeds.nytimes.com/click.phdo?i=07a28879481c7c566d6822cc20a3df3a

Filed Under: Business News Tagged With: , ,

PERSONAL TECHNOLOGY: Google Wallet

September 23, 2011 by Leave a Comment

Google Wallet is intended to replace the credit cards in our actual wallets, but we should not cut up our plastic quite yet.

Article source: http://feeds.nytimes.com/click.phdo?i=6ad7a8e3a97fff53530b8f2790ef6b35

Filed Under: Business News Tagged With: , ,
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