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In Nokia, Microsoft Bets on Apple-Like Revival

September 4, 2013 by

But Microsoft already bears a striking resemblance to Apple — the Apple of two decades ago, not the trailblazer of the mobile era. The $7.2 billion Nokia deal, which was reached late Monday, is unlikely to change that and catapult Microsoft up the ranks in the smartphone market.

That is because Microsoft, with its Windows phone operating system, is stuck in third place in that market, where all the oxygen has been drained by more established players.

Apple and Google have won the hearts and minds of developers, who design the apps that lure consumers to their devices, while Samsung is the dominant maker of mobile phones, most of which run Google’s Android operating system. Even though Microsoft’s and Nokia’s products have won praise for their quality, they have arrived late.

“What matters is not the phone per se but a dynamic app and services ecosystem,” said Brad Silverberg, a former senior Microsoft executive who is now a venture capitalist in the Seattle area.

Microsoft’s predicament is a flashback to the situation Apple found itself in during the early 1990s. At that time, Apple arguably had a superior computer product, the Macintosh, but it languished as PCs running Microsoft’s Windows operating system engulfed most of the market. One of the biggest problems for Apple then was that Microsoft had succeeded in gaining the allegiance of software developers, who produced a bounty of applications.

“They’re stuck in the same vicious cycle that Apple was in 20 years ago,” said Benedict Evans, an analyst with Enders Analysis, a research firm, and a former strategist in the wireless industry.

The challenges for the marriage of Nokia and Microsoft go far beyond support from developers. Microsoft is in the midst of the biggest organizational changes in its 38-year history. In mid-July, Steven A. Ballmer, Microsoft’s chief executive, unveiled a plan to restructure the company’s often clashing fiefs into business groups intended to cooperate more.

While the new organization seemed to set up Mr. Ballmer as the maestro in charge of keeping the various groups in harmony, he stunned the tech industry late last month by announcing his plans to retire from Microsoft within 12 months. Mr. Ballmer said he was leaving earlier than planned because he felt the company needed a leader prepared to stay longer. That fueled speculation that Mr. Ballmer had been encouraged to leave by Microsoft’s board.

Blending a major acquisition into a company is challenging enough in times of calm. Doing so with the unexpected management change at Microsoft could make it even harder, tech industry executives and analysts said.

“The issue I wonder about is the amount of complexity Microsoft is taking on its business by absorbing Nokia at the same time it is reorganizing at the same time Windows 8 is faltering,” said Michael Mace, a former executive at Palm and Apple who now runs an app development company in Silicon Valley, Zekira. “It’s scary from that standpoint.”

While Mr. Ballmer plans to leave Microsoft after a successor is found, he was very much involved in cutting the Nokia deal. Over the last several months, Mr. Ballmer and his deputies met in places like Redmond, Wash., London and Helsinki with counterparts in the talks, led by Risto Siilasmaa, Nokia’s chairman. The style of Mr. Ballmer, an exuberant leader with a booming voice, was a stark contrast to the reserved, gentlemanly manner of Mr. Siilasmaa, according to a person present during many of the meetings.

Microsoft is under enormous pressure to reinvent itself for a world where mobile devices are the animating force in technology, rather than personal computers. Sales of PCs are suffering the most prolonged decline in their history. Two powerful pistons of Microsoft’s business — Windows and the Office suite of applications — are tied to closely to the health of the PC market.

Article source: http://www.nytimes.com/2013/09/04/technology/in-nokia-microsoft-bets-on-apple-like-revival.html?partner=rss&emc=rss

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Rushdie Wins Facebook Fight Over Identity

November 15, 2011 by Leave a Comment

Would Facebook, he scoffed, have turned J. Edgar Hoover into John Hoover?

“Where are you hiding, Mark?” he demanded of Mark Zuckerberg, Facebook’s chief executive, in one post. “Come out here and give me back my name!”

The Twitterverse took up his cause. Within two hours, Mr. Rushdie gleefully declared victory: “Facebook has buckled! I’m Salman Rushdie again. I feel SO much better. An identity crisis at my age is no fun.”

Mr. Rushdie’s predicament points to one of the trickiest notions about life in the digital age: Are you who you say you are online? Whose business is it — and why?

As the Internet becomes the place for all kinds of transactions, from buying shoes to overthrowing despots, an increasingly vital debate is emerging over how people represent and reveal themselves on the Web sites they visit. One side envisions a system in which you use a sort of digital passport, bearing your real name and issued by a company like Facebook, to travel across the Internet. Another side believes in the right to don different hats — and sometimes masks — so you can consume and express what you want, without fear of offline repercussions.

The argument over pseudonyms — known online as the “nym wars” — goes to the heart of how the Internet might be organized in the future. Major Internet companies like Google, Facebook and Twitter have a valuable stake in this debate — and, in some cases, vastly different corporate philosophies on the issue that signal their own ambitions.

Facebook insists on what it calls authentic identity, or real names. And it is becoming a de facto passport vendor of sorts, allowing its users to sign into seven million other sites and applications with their Facebook user names and passwords.

Google’s social network, Google+, which opened up to all comers in September, likewise wants the real names its users are known by offline, and it has frozen the accounts of some perceived offenders.

But Google has indicated more recently that it will eventually allow some use of aliases. Vic Gundotra, the Google executive responsible for the social network, said at a conference last month that he wanted to make sure its “atmosphere” remained comfortable even with people using fake names. “It’s complicated to get this right,” he said.

Twitter, by sharp contrast, follows a laissez-faire approach, allowing the use of pseudonyms by WikiLeaks supporters and a prankster using the name @FakeSarahPalin, among many others. It does consider deceitful impersonation to be grounds for suspension.

The debate over identity has material consequences. Data that is tied to real people is valuable for businesses and government authorities alike. Forrester Research recently estimated that companies spent $2 billion a year for personal data, as Internet users leave what the company calls “an exponentially growing digital footprint.”

And then there are the political consequences. Activists across the Arab world and in Britain have learned this year that social media sites can be effective in mobilizing uprisings, but using a real name on those sites can lead authorities right to an activist’s door.

“The real risk to the world is if information technology pivots to a completely authentic identity for everyone,” said Joichi Ito, head of the Media Lab at the Massachusetts Institute of Technology. “In the U.S., maybe you don’t mind. If every kid in Syria, every time they used the Internet, their identity was visible, they would be dead.”

Of course, people have always used pseudonyms. Some, like Mark Twain, are better known by their fake names. Some use online pseudonyms to protect themselves, like victims of abuse. Still others use fake names to harass people.

Facebook has consistently argued for real identity on the grounds that it promotes more civil conversations.

“Facebook has always been based on a real-name culture,” said Elliot Schrage, vice president of public policy at Facebook. “We fundamentally believe this leads to greater accountability and a safer and more trusted environment for people who use the service.”

Real identity is also good for Facebook’s business, particularly as it moves into brokering transactions for things like airline tickets on its site.

Article source: http://www.nytimes.com/2011/11/15/technology/hiding-or-using-your-name-online-and-who-decides.html?partner=rss&emc=rss

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Mario Draghi to Head Europe’s Central Bank

June 25, 2011 by Leave a Comment

Mr. Draghi, the 63-year-old governor of the Bank of Italy, will succeed Jean-Claude Trichet as Europe’s most powerful central banker, according to a communiqué from the 27 member states at a two-day summit meeting that ended Friday.

The announcement had been delayed because of concern expressed by France over losing a powerful voice when Mr. Trichet, a Frenchman, leaves his post in autumn. France asked that another French citizen be appointed to the central bank’s executive board to bolster France’s influence. To do so, a vacancy had to be created, and because Mr. Draghi is Italian, the obvious candidate to go, in France’s view, was Lorenzo Bini Smaghi, an Italian on the six-member board.

Mr. Bini Smaghi had to be persuaded to leave voluntarily before his term expired in 2013 because board members cannot be fired. But the Italian prime minister, Silvio Berlusconi, had refused to provide one possible incentive: giving Mr. Bini Smaghi the job at the Bank of Italy soon to be vacated by Mr. Draghi.

But after speaking Friday with Herman Van Rompuy of Belgium, who led the summit meeting as president of the European Council, Mr. Bini Smaghi called the French President Nicolas Sarkozy to say that he would step down. That is expected to occur by the end of the year, Mr. Berlusconi said.

Aside from straining relations between France and Italy, the dispute over the executive board had also been seen by some as a test of the independence of the central bank. At one point, Mr. Bini Smaghi had appeared to compare his predicament to that of Thomas More, who was sentenced to death in 1535 in Britain for defying King Henry VIII.

Mr. Draghi has not signaled plans to make any major policy shifts in his new job, which he is to assume on Nov. 1.

On the contrary, Mr. Draghi has kept a low profile since he emerged as the default candidate earlier this year. In an interview in February he stuck to the central bank’s hymn sheet, refusing to talk about himself and emphasizing his credentials as a crusader against inflation.

Monetary policy should “first and foremost be geared toward price stability,” Mr. Draghi said.

Mr. Draghi is already an influential member of the central bank’s broader governing council, and is well known in international policy-making circles as chairman of the Financial Stability Board, a European Union panel that is formulating new banking rules intended to prevent future financial crises. He is expected to retain that post.

He will take over the bank as it navigates the worst crisis since the euro was introduced in 1999. Because the 17-nation euro zone lacks a strong central government, the bank has been forced to act as crisis manager, providing emergency funds to stricken banks, buying government bonds to try to stabilize markets, while often clashing with political leaders on policy.

So far, Mr. Draghi seems to have many of the same qualities as Mr. Trichet, including discretion born of years of government service and an ability to stand up to political pressure.

Once in office he could forge his own path, but it would be a surprise if he made any striking changes. At the Bank of Italy, Mr. Draghi has been known for being cautious and deliberate, to the point where some said he was too slow to make decisions.

Germany had been expected to name the next president of the central bank, but the selection process was thrown open in February after Axel Weber, the president of the Bundesbank, unexpectedly announced he would resign and took himself out of the running.

Unlike Mr. Weber, who now teaches at the University of Chicago, Mr. Draghi has not dissented publicly from other members of the bank’s governing council in responding to the sovereign debt crisis involving Greece. Analysts regard Mr. Draghi as a hard-liner on inflation, though less so than Mr. Weber would have been.

Mr. Draghi, who holds a doctorate in economics from the Massachusetts Institute of Technology, was the consensus choice of economists for the job but had to overcome political resistance because he is from a country that, unlike Germany, is associated with fiscal irresponsibility.

Mr. Draghi also overcame questions from the European Parliament about his stint from 2002 to 2005 as vice chairman and managing director of Goldman Sachs. The American investment bank was the lead manager in a 2001 derivatives transaction that allowed Greece to dress up its books in a way that helped it become one of the countries using the euro.

“I joined Goldman after these operations had been undertaken, and that’s it,” Mr. Draghi said in February. “I was never involved in this.”

Before joining Goldman, Mr. Draghi spent a decade as the top bureaucrat in the Italian treasury, where he was known for deftly navigating the minefield of Italian power politics. He became governor of the Bank of Italy at the end of 2005, and since then has sometimes annoyed Italian leaders by pushing them to do more to make the economy competitive and reduce public debt.

Article source: http://feeds.nytimes.com/click.phdo?i=88a17a7cf40c67dce02e6f372b8373c7

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Political Divide Poses Risks for Portugal in Bailout Talks

April 7, 2011 by Leave a Comment

Political leaders in Lisbon will begin the task of setting aside their domestic differences in order to negotiate acceptable bailout terms with international creditors.

The European Commission, meanwhile, received Portugal’s formal request for aid on Thursday. That should allow finance ministers meeting this weekend to give the go-ahead for Brussels negotiators to head for Lisbon.

Portugal’s Socialist prime minister, José Sócrates, bowed to market pressures on Wednesday night and requested a bailout from the European Commission, joining Greece and Ireland.

The rescue call, however, comes amid a leadership vacuum in Portugal that might not even be resolved by a general election on June 5. Mr. Sócrates resigned last month when center-right opposition lawmakers led by the Social Democratic Party rejected his austerity package.

Politicians from both sides are due to meet in the coming days to hammer out what kind of bailout package Portugal will request. One estimate by a European official put Portugal’s needs at about 75 billion euros ($106.5 billion), but some analysts have suggested that the amount could be as much as 110 billion euros. Last year, Greece secured a rescue package worth 110 billion euros and Ireland 85 billion euros.

But consensus among Portugal’s political leaders will not be easy. While opposition leaders agree that Portugal needs a bailout, policy makers in Lisbon know they will must get all sides to support the austerity measures that will be demanded by the international lenders.

To complicate matters, the negotiations are taking place in the midst of an election campaign that will probably be dominated by the question of who is to blame for Portugal’s predicament. The leader of the main Social Democratic opposition party, Pedro Passos Coelho, supported the decision to seek outside help, but he and Mr. Sócrates are blaming each other for forcing Portugal to seek a bailout in the first place.

“What the election campaign is now about is who should assume the responsibility for inviting international creditors into Portugal,” said Diogo Ortigão Ramos, a specialist on fiscal legislation at a law firm, Cuatrecasas, Gonçalves Pereira.

The cabinet minister in the caretaker government, Pedro Silva Pereira, told Reuters that the government could not yet comment on the size of aid, and the next steps will be defined by the European Commission.

The French finance minister, Christine Lagarde, said European ministers could start discussing conditions for a deal on Friday. “We need to get ready to reply to this request and examine the conditions to which the loan will be subject,” Ms. Lagarde told journalists, a day ahead of a finance meeting in Hungary.

“I am leaving for Budapest tonight and we will start discussing it tomorrow morning,” Ms. Lagarde said, according to Reuters.

If the pattern of previous bailouts is repeated, it could take several weeks for a team of Brussels and perhaps International Monetary Fund officials to discuss the conditions of a bailout with Lisbon, which will ultimately need to be approved by European finance ministers.

Mr. Pereira said Portugal’s caretaker government had asked President Anibal Cavaco Silva to talk to the opposition parties about the aid request. On Thursday, President Cavaco Silva called in a Facebook message for “responsible cooperation” on the part of the opposition parties to help negotiate an acceptable deal.

European officials in Brussels are hoping that all sides in Portugal can reach some agreement on a bailout package and avoid the political volatility that they saw with the last request for a rescue, in Ireland. Leaders in Dublin negotiated an assistance package before an election earlier this year. Now the new Irish government wants to re-open the terms to which its predecessor agreed.

“Everyone wants to avoid a repetition of Ireland,” said one European diplomat speaking on condition of anonymity due to the sensitivity of the subject.

However another diplomat said there were signs that Portuguese politicians had seen the danger and would compromise.

“When your house is on fire, you don’t argue about how to put it out, you call the fire brigade,” the official said.

The most recent opinion polls suggest that neither party will be able to secure a parliamentary majority in June.

Before any financial help can be put in place Portugal faces a rendezvous with the financial markets with a bond redemption of 4.2 billion euros on April 15. European Union finance ministers meeting in Hungary Friday and Saturday expect to hear from their Portuguese counterpart regarding how much of this amount has already been raised.

Some officials say Portugal might need to seek bilateral loans from other nations to tide it over, though others hope that the effect of Wednesday’s announcement will be to drive down the cost of short-term borrowing for Portugal.

Lisbon’s request for aid now puts pressure on Spain, which has undertaken major economic reforms, budget cuts and a banking clean-up to stay out of danger.

Spain, however, held a successful bond auction on Thursday, raising 4.1 billion euros at a yield that was little changed from three months ago. Separately, France also 9.49 billion euros of bonds on Thursday, drawing strong demand.

The Spanish sale “confirms that there are no signs of a contagion spreading to Spain at present,” said Chiara Cremonesi, fixed-income strategist at UniCredit In London. “Spain continues to be perceived by investors as part of the “safer” periphery countries group.”

Portugal’s rescue call came after it was forced on Wednesday to sell Treasury bills at a much higher cost than last month. That followed a series of downgrades by leading credit rating agencies, as well as a warning by the country’s leading banks that they would not buy more Portuguese sovereign debt.

The country could end up with a hung Parliament after the June vote, according to an opinion poll carried out by the Catholic University of Portugal and released Wednesday. Thirty-seven percent of respondents said they would vote for the Social Democrats while 7 percent support its conservative ally, the Popular Party. The Socialists, meanwhile, would win 33 percent of the vote, with other left-wing parties securing the outstanding share of the votes, the poll found.

Raphael Minder reported from Lisbon and Stephen Castle from Brussels.

Article source: http://www.nytimes.com/2011/04/08/business/global/08euro.html?partner=rss&emc=rss

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