May 30, 2012

Iran, other Mideast states hit by computer virus

LONDON - Iran and other Middle East countries have been hit with a cunning computer virus that can eavesdrop on computer users and their co-workers and filch information from nearby cellphones, cybersecurity experts said Tuesday. And suspicion immediately fell on Israel as the culprit.

The Russian Internet security firm Kaspersky Lab ZAO said the "Flame" virus is unprecedented in size and complexity, with researcher Roel Schouwenberg marveling at its versatility.

"It can be used to spy on everything that a user is doing," he said.

Computers in Iran appear to have been particularly affected, and Kaspersky's conclusion that the virus was crafted at the behest of a national government fueled speculation it could be part of an Israeli-backed campaign of electronic sabotage against the Jewish state's archenemy.

The virus can activate a computer's audio systems to listen in on Skype calls or office chatter. It can also take screenshots, log keystrokes and -- in one of its more novel functions-- steal data from Bluetooth-enabled cellphones.

Schouwenberg said there is evidence to suggest that the people behind Flame also helped craft Stuxnet, a virus that is believed to have attacked nuclear centrifuges in Iran in 2010. Many suspect Stuxnet was the work of Israeli intelligence.

Tehran has not said whether it lost any data to Flame, but a unit of the Iranian communications and information technology ministry said it has produced an anti-virus capable of identifying and removing Flame from its computers.

Israel's vice premier did little to deflect suspicion about the country's possible involvement in the attack.

"Whoever sees the Iranian threat as a significant threat is likely to take various steps, including these, to hobble it," Moshe Yaalon told Army Radio when asked about Flame. "Israel is blessed with high technology, and we boast tools that open all sorts of opportunities for us."

Researchers not involved in Flame's discovery were more skeptical of its sophistication than Kaspersky, with Richard Bejtlich of Virginia-based Mandiant saying the virus appeared similar to spyware used by the German government to monitor criminal suspects.

"There have been tool like this employed by high-end teams for many years," he said.

Colorado-based Webroot said the virus wasn't as complex or as stealthy as Stuxnet and was "a relatively easy threat to identify."

Flame is unusually large. Malicious programs collected by the British security firm Sophos averaged about 340 kilobytes in 2010, the same year that Kaspersky believes Flame first started spreading. Flame is 20 megabytes -- nearly 60 times that figure.

Alan Woodward, a professor of computing at the University of Surrey in England, said functions can be added or subtracted to the virus depending on what kind of espionage is desired, not unlike the way apps can be downloaded to a smartphone.

He was particularly struck by Flame's ability to turn an infected computer into a kind of "industrial vacuum cleaner," copying data from vulnerable cellphones or other Bluetooth wireless devices left near it.

"I don't believe I've seen it before," he said.

Udi Mokady, chief executive of Cyber-Ark, an Israeli developer of information security, said he believes four countries, in no particular order, have the know-how to develop so sophisticated a weapon: Israel, the U.S., China and Russia.

"It was 20 times more sophisticated than Stuxnet," with thousands of lines of code that took a large team, ample funding and months, if not years, to develop, he said. "It's a live program that communicates back to its master. It asks, 'Where should I go? What should I do now?' It's really almost like a science fiction movie."

It's not clear exactly what the virus was targeting. Kaspersky said it detected the program in hundreds of computers, mainly in Iran but also in Israel, the Palestinian territories, Sudan, Syria, Lebanon, Saudi Arabia and Egypt.

The company would not give details on the victims except to say that they "range from individuals to certain state-related organizations or educational institutions."

Schouwenberg said stolen data was being sent to some 80 different servers, something that would give the virus' controllers time to adjust their tactics if they were discovered.

As for Flame's purpose, "maybe it's just espionage," he said. "Maybe it's also sabotage."

by RAPHAEL SATTER - May. 29, 2012 03:05 PM Associated Press

Iran, other Mideast states hit by computer virus

May 28, 2012

Why Facebook still doesn't look cheap

NEW YORK - If you were thinking of picking up a few shares of Facebook last week, when it went public at a price of $38, you might be seriously tempted now that the stock has fallen $7 in two days.

But forget the dramatic drop. Investors should focus on the only question that matters: How much money will Facebook earn over the next several years, and is that enough to justify its market value right now?

The conclusion is hard to escape: Facebook might be a bargain someday, but not now.

Though it's a rough guide, one way to value a stock like Facebook is to divide its price by its annual per-share earnings. The result is the price-to-earnings ratio. A higher ratio suggests a stock is expensive, and lower suggests it is cheap.

When Facebook set its offering price at $38, the ratio was high -- more than 100 times its per-share earnings last year. It's still high, at 85 times earnings per share, even after a two-day drubbing left it at $31 a share.

The Nasdaq composite index of technology stocks trades at 15.7 times last year's earnings, according to FactSet, a provider of financial data. Apple trades at 13.6 times and Google 18.2 times.

Of course, investing isn't as simple as price-to-earnings ratios. Some companies grow their earnings faster than others, turning a high ratio -- and a seemingly expensive stock -- into a low ratio and a cheaper stock.

If you just looked at Facebook's earnings growth last year, an impressive 65 percent, you'd think it's just such a company.

If Facebook can keep up that pace, its $1 billion in earnings last year will be $7.4 billion in 2015. That would be enough to bring Facebook's ratio more in line with Apple's.

But that's with the stock not rising from $31. If you assume the stock rises 10 percent a year, you have to add nearly another year to that waiting period.

Then there is the problem with assuming that Facebook -- or any company, for that matter -- can maintain torrid earnings growth. One reason Apple is trading at just 13.6 times earnings is that investors don't think it can maintain its 85 percent growth rate.

Just projecting one year out is difficult. Among 10 analysts surveyed by FactSet, projections for Facebook's earnings for next year range from $333 million to $1.7 billion. On average, they expect $993 million.

Facebook reported $3.7 billion in revenue for last year. The average projections for this year is $5.1 billion.

Brian Wieser, an analyst at Pivotal Research Group, is a Facebook doubter. In a report Friday, he estimated earnings will slow, and they will be only $3.6 billion in 2015 -- half of what they would be if Facebook maintained its growth rate.

Another problem with the stock is that Facebook may have waited too long to go public.

Think of the gains investors would have made if the company had debuted in 2009, a turnaround year for Facebook. The company had lost $56 million in 2008 but was finally churning out profits. They more than doubled in 2010.

In August 2009, investors trading private shares of Facebook on Sharepost, a secondary exchange, paid $2.40 per share. Though the numbers are only roughly comparable with today's figures, that gave Facebook a market value of less than $7 billion.

The $38 offering price assigned Facebook a market value of $104 billion. Based on Tuesday's closing stock price, that had fallen to $85 billion.

If Facebook had gone public with a market value of $7 billion and that had increased to last Friday's value of $104 billion, investors in the hypothetical IPO of 2009 would have seen their investment grow 15-fold.

Of course, other companies priced themselves at high price-to-earnings ratios at their IPOs and still managed to reward shareholders. But they tended to be younger businesses than Facebook, which was born eight years ago. went public in 1997, two years after it opened for business. Back then, its business model was online bookselling. The Kindle, video downloads and cloud-computing hadn't been dreamed up.

Of course, Facebook founder Mark Zuckerberg could dream things up, too. And Facebook has a real business, real profit and real revenue today. But social media is still unproven in many aspects as a business model.

A lot of people use Facebook on their mobile devices, for example. Facebook gets 82 percent of its revenue from advertising, but no one has figured out how to make substantial money from mobile advertising. In what turned out to be very poor timing for Facebook, General Motors stopped advertising on it during the week of the IPO.

You can also turn that argument on its head. Facebook is just getting started. It will figure a way to make money on mobile, and it will come up with businesses and revenue streams no one has thought of, as Amazon did. But investors in Facebook, at least in the last two days, seem to have their doubts.

One skeptic, Scott Freeze, the president of Street One Financial, says he won't touch the stock until it falls to a level justified by its earnings. He says that might be $25 -- another steep fall from here.

by Barbara Ortutay and Bernard Condon - May. 22, 2012 05:02 PM Associated Press

Why Facebook still doesn't look cheap

Rackspace Shows Why It's Best To Take Profits - Yahoo! Finance

Sell Winners Like A Pro: First In A Series Greed, one of the Seven Deadly Sins, is defined as an excessive pursuit of wealth. But investors who sell a stock after a 20%-to-25% gain can avoid that sin while also making a nice profit.

The 20% sell rule marks the first part of a nine-part Investor's Corner series that will examine strategies to help shareholders maximize profits.

These offense-style sell rules require the investor to sell into strength, locking in gains while a stock is rising and looking strong. Doing so also prevents a smart gain from turning into a loss, as all stocks eventually correct, sometimes sharply.

"The object is to make and take significant gains and not get excited, optimistic, greedy, or emotionally carried away as your stock's advance gets stronger," William O'Neil wrote in "How To Make Money In Stocks.

It's understandably frustrating to watch a stock go higher after you've sold it, but ignoring your sell rules and just hanging onto the stock can backfire. It's impossible to know whether a stock will continue to go higher. Stocks tend to pull back after rising 20% to 25% above a proper buy point. That's true even when the market is in a confirmed uptrend.

Rackspace Hosting (RAX - News) offers a tale of caution. The cloud-computing firm cleared a 45.55 buy point from a cup with handle on Feb. 2 1 and climbed 33% to a record high of 60.55 on May 3 2.

Volume on its record-setting day was high, a bullish sign (please see a daily chart). Investors who had sold after a 25% gain may have regretted missing out on an even bigger profit.

But Rackspace began edging down in heavy volume the next two days, setting up a 9% plunge on May 8 that took the stock well below its 10-week moving average 3. The steep drop reinforced why it's important to take profits after a 20% to 25% rise.
"You'll never sell at the exact top, so don't kick yourself if a stock goes still higher after you sell," O'Neil writes.

At its nadir, Rackspace gave up just about all of its gains from the breakout. Still, those who had obeyed their sell rules would have avoided a gut-wrenching roller-coaster ride.

An exception to the above rule would be if the stock were to jump 20% within three weeks after its breakout. Such stocks are rare, but they appear in every bull market and should be held for at least eight weeks. That's because stocks that break out in heavy volume and rise sharply in a short period of time have the potential to double, triple or go even higher.

But for the vast majority of stocks, it's best to take at least some profits after a 20%-to-25% run up. You offset losses elsewhere and build fresh cash to invest in other potential winners.

by Investor's Business Daily May 21, 2012

Rackspace Shows Why It's Best To Take Profits - Yahoo! Finance

Facebook Strategy In Mobile Unclear But Needed To Justify $100 Billion Valuation -

Facebook (FB) shares fell 11% Monday, highlighting the challenges the No. 1 social network faces to live up to its frothy market value.

And at the top of the challenges list for many observers is how the company can convert fast-rising numbers of mobile users into fast-rising revenue.

Facebook already has some 488 million mobile users, its fastest-growing platform, but hasn't yet unveiled a strategy to make money in the field.

The stock numbers haven't looked good yet for Facebook, but its future mobile ad numbers may tell real story. View Enlarged Image

The company doesn't "directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven," Facebook said in its IPO filings.

For analysts, and apparently plenty of investors, that wording is a red flag.

"I don't think any of us have a clue what Facebook is planning in mobile," said Trip Chowdhry, an analyst at Global Equities Research. "Mobile will not be an easy space for Facebook to crack. It's very challenging."

At its Monday closing price of 34.03, below the 38 starting price for Friday's record-setting but disappointing IPO, Facebook still is valued at more than $93 billion, nearly as much as decade-older e-tail king (AMZN), which had 13 times as much revenue as Facebook last quarter. To live up to such a value, Facebook will have to ramp up revenue.

Analysts say only two companies to date have partly unlocked the mobile ad puzzle.

Apple (AAPL) and Google (GOOG) have gained solid revenue through mobile platforms.

Google expects to surpass $800 million in mobile search and other mobile ad revenue via Android this year, and $1.27 billion in 2013, according to reports. Much of that would come from sponsored links on mobile Web searches. Google also sees opportunities to monetize music, videos, books and content accessed via mobile devices and its Android platform.

Facebook needs to develop technical skills and business relationships in mobile, which analyst Chowdhry says could take another two or three years.

At a mobile conference last week, Chowdhry said he learned Facebook might be working on two mobile ad formats. One is to place ads in-between Facebook user notifications. Another is for Facebook to display ads when users launch or shut down an application.

Facebook's many challenges in mobile include dealing with how people use the social networking platform, says Jack Gold, principal of research firm J. Gold Associates. On-the-go people use smartphones to check in and initiate quick chat sessions. But given the limited real estate on handsets, trying to stuff in some ads could be an unwanted intrusion.

"If they start pumping in ads, it could become more difficult for users to do the things they want to do," Gold said. "Will people accept ads on a small form factor when all they want to do is find out what's going on, and get in and out fast?"

Developing a mobile ad platform "is not a trivial exercise," Gold said. "Companies have been trying for a number of years to do this."

Among other things, he says Facebook needs to develop or acquire expertise in location awareness — technology that tracks where mobile users are physically located. That way, Facebook can deliver ads relevant to specific locations, such as for a nearby eatery or store.

Since 2011, Facebook has made three acquisitions directly tied to mobile. In January 2011 it bought mobile ad firm Rel8tion for an undisclosed amount. In March 2011, it bought mobile app developer Snaptu for an estimated $65 million.

In December, Facebook acquired Gowalla, a provider of location-aware services, for an undisclosed amount.

"Location awareness in mobile is a fundamental enabler," Gold said. "If you don't have it, then that's a problem long term."

Facebook's largest acquisition to date took place last month when it bought photo-sharing platform Instagram for a reported $1 billion. Instagram — for now — is not an ad platform, but it's designed for mobile users to take snapshots and post them onto Facebook.

Can Facebook connect these various pieces to bring in more mobile advertising?

"Facebook usage is rapidly shifting toward mobile devices where monetization is unproven," Richard Greenfield, an analyst for BTIG Group, wrote Monday in a report as he initiated coverage of the stock with a neutral rating. "We believe this too will take time and is not without its risks. We believe there is limited upside to Facebook's shares over the next year."

by Brian Deagon Investor's Business Daily

Facebook Strategy In Mobile Unclear But Needed To Justify $100 Billion Valuation -

Facebook Dropouts, Holdouts Say World's Biggest Social Network Is A Waste OfTime FB -

Catie Hindman, a 21-year-old psychology student at California's Diablo Valley College, had a problem with social network Facebook (FB) — she couldn't leave it alone, sometimes spending two hours a day aimlessly browsing the site.

"I found myself spending way too much time on that thing, and all I'd do is compare my current situation — with school, housing, etc. — to that of my peers," Hindman said.

Striving to finish her degree, she decided Facebook was a waste of time. Hindman quit Facebook this year, cutting ties with most of the 600-plus "friends" she'd had on the site — and becoming one of, she says, the 1% of her social group not on the site. "I guess I'm out of the loop with some things," she said, "but I'm OK with that."

With 901 million active users, roughly half the world's Internet users are on Facebook. That's one reason the company's IPO, which launched Friday, was among the most anticipated ever.

But some choose not to use it. A look at a few of those non-Facebook-users shows they don't seem too worried about privacy issues or being targeted by ads. The big gripe seems to be that it takes too much time for too little value.

"Five hours later and you've looked at 467 pictures of someone you don't even know — that was a problem for me," said Katherine Zapert, a 20-something living in Queens, N.Y., who left Facebook in 2008.

"I just didn't care enough about everyone's 'awesome' night out," said Ashli Norton, 26, who runs from Atlanta.

"I kind of did the whole Facebook 'Generation One' thing, with Friendster (a Facebook precursor)," said Sandra Kim, a lawyer in Los Angeles in her early 30s. "I learned my lesson — spent too much time trying to have as many friends as possible."

Ben Lueck, a 29-year-old graduate student at University of California at Berkeley, agrees. He never joined Facebook and says he's not interested in keeping up with high school friends.

"I find it pretty depressing to know what people I don't care about are doing," Lueck said. "And the whole idea of cultivating and curating an online personality bothers me."

Of course, a company that went public at a U.S. record $104 billion market valuation must have some value; for example, missing out on an invitation to a party. "That really happened to me," said Zapert, "and then I was chastised for not being there."

And some hiring managers might prefer that job candidates have a "presence" online, though Facebook non-users might not care.

"It feels like if you don't have any online presence you must be hiding something," Lueck said. "And that really makes me want to have even less to do with it."

by Kevin Shalvey Investor's Business Daily May 18, 2012

Facebook Dropouts, Holdouts Say World's Biggest Social Network Is A Waste OfTime FB -

May 15, 2012

Facebook IPO Hype Reaches Crescendo As Analysts Assess Dot-Com's Opportunities, Risks FB -

Facebook founder and Chief Executive Mark Zuckerberg at a conference in San Francisco.


In case you've been living in a deep-sea cave and missed it, Facebook has to be the most anticipated IPO at least since Google (GOOG) debuted in 2004. Everything about it seems outsized. Its expected $10.6 billion raise would be the fifth largest in U.S. history. Its list of 33 underwriters seems to include everyone who ever had coffee on Wall Street. And when it put its investor presentation up on, the site had to host it on a separate page so it wouldn't crash the server.

The gigantism suits Facebook itself, whose customer base includes a significant chunk of planet Earth. At the end of the first quarter, its online social network had more than 900 million monthly active users, and some uncounted number of less frequent communicants who add up to 125 billion "friend" connections. As a result, Facebook comes to market with financials more like the debutante Google than your typical overhyped dot-com, with $3.7 billion in revenue last year and several years of solid profitability.

Sterne Agee analyst Arvind Bhatia took the unusual step of initiating coverage with a buy before the stock even priced, and made the Google analogy explicit.

"Just like Google did less than a decade ago, we believe Facebook is disrupting the worldwide advertising market," he wrote in his May 7 report. "We think FB can more than triple its revenue and EBITDA over the next four to five years."

Others were a bit more tempered, noting the youth of both the company and its founder. In a report issued May 11, Morningstar analysts called the firm "prepubescent" and concluded: "The enthusiasm for Facebook is not misplaced, but the market may be underestimating several near-term challenges for the company."


As has been much chronicled, Mark Zuckerberg founded Facebook in 2004 when he was a Harvard student. At first, it used static profiles more like LinkedIn (LNKD), but over time it has gone in a more narrative direction. By now, users can share where they are, what they're reading, what music they're listening to, whom they're with, and practically anything else in a time-stamped sequence.

Since creating and using a profile is free, Facebook derives its revenue from two other sources. Advertising provides more than 85%, which the company can sell based on its enormous but finely sliceable audience. Ads can display only for users of certain ages, gender, "likes" and so on. Advertisers can pay by impressions, by clicks, or by bidding. Facebook also offers an analytics platform for advertisers to track use.

The rest of the company's revenue comes from its cut of payments made to developers of third-party apps, mostly games. Games such as Zynga's (ZNGA) FarmVille are free to play, but players buy virtual goods as they go along. Facebook takes 30% of each payment.

Facebook's site was developed for desktop computers, but its more recent mobile app has some 488 million monthly active users. It did not actually start including ads in it until two months ago. But its purchase of photo-sharing site Instagram last month was one of its preparations for a mostly mobile future.

Geographically, Facebook's user base is extremely global, with some 80% of users outside the U.S. The big hole in its map, however, is China, which blocks the site. Analysts say the possible opening of China is a "wild card" that could change the company's future.


Facebook's extremely short history with mobile advertising has raised some concerns. The prospectus notes that "increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered." Thus, revenue per user is lower.

Return on investment in Facebook advertising is also a concern. "The most common theme we heard in talking to advertisers and agencies was the lack of standards and clear ROI in running social advertising campaigns," wrote Morningstar's analysts. "If agencies and advertisers are not able to develop acceptable tools for measurement, growth in social advertising may stall and the value of Facebook will be as generic as any other website that drives traffic."

Morningstar also notes that the Instagram deal reportedly occurred with little involvement from the Board of Directors, as Zuckerberg retains voting control of the company. This raised questions about what kind of controls there might be on overspending.

The company's extensive use of stock-based compensation has made the quarters look lumpier than they are on an operating basis. Analyst Bhatia calculated that first-quarter EBITDA rose 33% over a year ago, but stock compensation led to a net decline.

Many users have complained about privacy and Facebook's use of their data, making it likely that governments will regulate it as it turns into more of an institution. Since sharing user data is one of Facebook's key selling points to advertisers, that could damage its revenue.


Revenue in the first quarter rose 45% over the year-earlier quarter to $327 million. Net income reversed its past growth trend and declined 12% to $205 million, due mostly to an increase in share-based compensation expense.


Facebook expects to raise $5.6 billion from its offering of 337 million shares, or $5.8 billion if the underwriters exercise their options in full. It will use the money for working capital and general corporate purposes.


Mark Zuckerberg

Chief executive and chairman

Founded the company; became CEO in 2004 and chairman in January. Studied computer science at Harvard University.

Sheryl Sandberg

Chief operating officer

Joined in 2008 after seven years in various positions at Google. Formerly chief of staff at the U.S. Treasury Dept., consultant with Mc-Kinsey, and economist at the World Bank. She holds an MBA from Harvard University.

David Ebersman

Chief financial officer

Joined in 2009 after working as CFO and executive vice president of Genentech, now part of Roche (RHHBY). Previously worked as a research analyst at Oppenheimer. He holds a BA in economics from Brown University.

Facebook Inc.

Menlo Park, Calif.

(650) 308-7300

Lead underwriters: Morgan Stanley, JPMorgan and Goldman Sachs

Offering price: $28-$35

Expected date: May 17

Ticker: FB

by Amy Reeves Investor's Business Daily May 14, 2012

Facebook IPO Hype Reaches Crescendo As Analysts Assess Dot-Com's Opportunities, Risks FB -

May 13, 2012

Bing to duel Google with Facebook-friendly format

SAN FRANCISCO - Microsoft's Bing search engine is heading in a new direction as it drills deeper into Facebook's social network and Twitter's messaging service to showcase information unlikely to be found on Google.

The changes, unveiled Thursday, will reshape how Bing displays its search results. It represents Microsoft's most dramatic shift in Internet search since the software maker introduced Bing as a "decision engine" nearly three years ago.

Microsoft Corp. is counting on the new format to loosen Google's stranglehold on the lucrative Internet search market. In the process, Microsoft hopes to turn a profit in its online division, which has lost more than $6.3 billion since Bing's June 2009 debut.

Bing replaced "Live Search," a mostly futile attempt to challenge Google. Microsoft touted Bing as a Google alternative that would provide more meaningful results by helping people make important decisions, such as picking a doctor and finding the best time to buy an airline ticket.

For the past two years, Bing has been taking advantage of Microsoft's close relationship with Facebook to make search results more personalized and more relevant to users. It's an advantage Bing has over Google because its rival is shut out from the personal data Microsoft has access to on the world's largest network. But Bing has failed to come up with an approach compelling enough to lure away most Web surfers from Google.

Bing is trying to fix that with the latest changes, which come out next month. Microsoft plans a marketing blitz on television and the Internet to promote the changes. Anyone seeking a peek during the next few weeks of testing can go to Thursday to sign up for an invitation. The testing period will begin Tuesday.

The revised system presents Bing's results in three columns, or panes.

The left column will feature the familiar blue links drawn from Bing's computer formula for finding the most relevant results.

The middle section, called "Snapshot," is reserved for completing tasks, such as getting directions, making a hotel reservation or buying movie tickets. This feature isn't expected to be available during the testing phase.

Once available, Snapshot will provide a space featuring movie show times and an option to buy tickets in response to a search for "The Avengers." Searches for hotels will bring up pictures of rooms and information on amenities, as well as the ability to make reservations.

The "Sidebar" column on the far right side will be the centerpiece of the new Bing.

Sidebar is where Bing users logged into Facebook will see recommendations culled from their Facebook network. From there, people will be able to pose questions for their friends on their own Facebook pages without leaving the results page. The results from a Bing search can even be shared on Facebook.

For instance, a search for "Kauai hotels" might list your Facebook friends who have been to the island. You can then use the Sidebar box to post a note about it on Facebook and even seek advice from a specific friend.

The Sidebar column also will highlight relevant tweets, including those from people you might not follow. The feature will also suggest experts on topics related to certain search requests and list their Twitter handles, along with any blogs or other websites where they share their insights.

Most of the personal data that Bing is pulling from Facebook and Twitter is unavailable to Google because its search engine doesn't have the same access to those information-sharing hubs as Microsoft does through its partnerships.

"This is a big, bold bet that we think is going to surprise a lot of people," said Lisa Gurry, Bing's senior director. "It's a fundamentally different way of looking at search."

It's also an admission by Bing that its previous attempts to incorporate Facebook data into its search results haven't worked out.

Although Bing has been far more successful than Live Search, virtually all of its gains have come at the expense of Yahoo Inc., which began relying on Microsoft's search technology in 2010 as part of a 10-year partnership between the companies. Bing's latest changes won't affect how Yahoo users get search results.

For the past year, Bing has been customizing search results based on the recommendations expressed by the number of times a user's Facebook network had pressed a "like" button on topics related to a search request. Gurry said Bing discovered that most Web surfers didn't want the results influenced by their friends to be co-mingled with answers generated by a computer program.

That culminated in the decision to create Sidebar so a separate area of the results page is devoted to the social-networking suggestions.

Bing's experience underscores the difficulty that all search engines have had figuring out how to blend the influence of social networking into their results, said Altimeter Group analyst Rebecca Lieb.

"Different parts of the social graph are good for different reasons," she said. "When I am looking for advice about a movie, I probably don't want to see a recommendation from one of my 'foodie' friends. What Bing is doing looks like a very elegant approach, but it remains to be seen if people are going to like it."

Lieb doesn't believe it's a coincidence that Bing is announcing its Facebook-friendly makeover as the world's largest social network prepares to complete the biggest initial public offering of stock in Silicon Valley history. The media frenzy surrounding Facebook Inc.'s IPO, expected next week, can only make more people more curious to see how Bing is highlighting results from the social network, Lieb said.

Microsoft has been working closely with Facebook since it bought a 1.6 percent stake in the social network for $240 million in 2007. It has proven to be a tremendous investment. Microsoft's Facebook stake is now worth $900 million to $1.2 billion, depending on the price set in the IPO.

And now Bing can pore through the reams of information being posted by Facebook's more than 900 million users, 18 times more than the social network had when Microsoft bought its stake.

Twitter also has been selling Microsoft expanded access to its tweets since 2009. Google Inc. lost its special privileges to the same stream of data last summer because Twitter didn't renew a licensing agreement.

That partnership unraveled right around the same time Google launched its Plus social network to counter the growing popularity of Facebook and Twitter. In a move that has amplified questions about its objectivity, Google began this year to favor results drawn from Plus while excluding publicly available information from Facebook and Twitter -- data Google doesn't need a licensing deal for.

The bias has provided more fodder for an intensifying Federal Trade Commission investigation into allegations that Google has been stifling competition by highlighting its own services and burying or completely ignoring links to its rivals' websites.

Despite Microsoft's massive investments in search, Bing hasn't been able to ding Google so far. Microsoft has nearly doubled the 8 percent share of the U.S. search market that it held when it rolled out Bing, but virtually all of those gains have come at the expense of Yahoo.

Google ended March with a 66 percent share of the U.S. search market, up by a percentage point from June 2009 when Bing entered the fray, according to the research firm comScore Inc. Bing's share currently a distant second at 15 percent.

Unlike its rival, Bing intends to include relevant recommendations from a wide range of social-networking services, including Google Plus.

"We are not trying to build an empire by favoring some services over others," Gurry said.

by Michael Liedtke - May. 10, 2012 02:56 PM AP Technology Writer

Bing to duel Google with Facebook-friendly format

Consumers Lost Nearly $500 Million From A Variety Of Internet Scams In 2011 -

Crime on the Internet is becoming more devious and costly.

Consumers lost nearly $500 million last year from Internet scams ranging from crooks impersonating FBI agents to others using romantic relationships to extract cash, says a new report released late Thursday.

Cyber scam artists also used a combination of auto fraud, work from home and loan intimidation scams to steal big bucks from consumers last year, says the report, produced by the Internet Crime Complaint Center, a partnership between the FBI, the National White Collar Crime Center, and the federal Bureau of Justice Assistance.

The report shows crooks are using a combination of intimidation, the lure of a good deal in a bad economy and the growth of the Internet to their advantage, says Gartner analyst Avivah Litan.

"Most people don't have it in their head that there is fraud out there," she said. "They (crooks) are just very good social engineers."

Last year, IC3 collected 314,246 complaints of fraud, up from 303,809 in 2010 but down from the record 336,655 it received in 2009.

Dollar losses in 2011 totaled $485.3 million. This is the first time IC3 has provided a loss estimate .

The amount of losses from fraud isn't that surprising given the millions of people using the Internet every day in the U.S., says IDC analyst Phil Hochmuth.

"There is always some spectacular dollar loss tied to cyberfraud; it is a big problem and it's happening more frequently than ever," he said. "It just follows the trends in online digital life — more commerce, financial services, banking is all moving online and the fraud moves with it."

Last year, FBI-related scams ranked as the most common form of reported fraud with 35,764 complaints filed with IC3.

In many cases, crooks posed as FBI agents to bilk victims via email. Fraud losses from FBI impersonation scams cost consumers more than $3.5 million last year.

Scammers are likely hoping to intimidate their victims by using the FBI name, says IDC's Hochmuth.

"If a fake agent has contacted you, you might be more likely to respond to them," he said.

Identity theft scams, in which criminals use a consumer's personal information to commit fraud, came in second with 28,915 complaints. Advance fee fraud, where crooks convince victims to pay for goods they never receive, ranked third with 27,892 complaints.

Last year, lovelorn Internet users became one of the most battered victims of cybercrime.

by Pete Barlas Investor's Business Daily May 10, 2012

Consumers Lost Nearly $500 Million From A Variety Of Internet Scams In 2011 -

Facebook IPO Sets Records For Hype - Yahoo! Finance

Will Facebook (FB) soar like a rocket after its public debut expected next week, mimicking a trajectory that former market megastar Google took in 2004

Or will the "greater fool" theory kick into motion, causing an initial swan dive like other hyped-up issues have taken, such as Chinese Internet phenom Baidu (BIDU - News) in August 2005

Or neither? Instead, will the fast-growing champion in Web-based social networking move sideways, stay in a trading range for months, then follow the general direction of the market

It's impossible to say. What's absolutely true is that over the medium to long term, the stock's success will depend on factors that range from the strength of top- and bottom-line growth to the ability of Facebook's top brass to take risks and stay on the cutting edge.

For now, the dynamics of the stock market will matter a lot.

The offering price that Facebook's underwriters — Goldman Sachs (GS - News), JPMorgan Chase (JPM - News) and Morgan Stanley (MS - News) — ultimately achieve will have a direct impact on the stock's near-term move.

Facebook plans to sell 337.4 million shares at $28 to $35 a share, according to the S-1 filing with the SEC. The high end of the range would raise as much as $13.6 billion before fees, including overallotments of shares.

The higher the ultimate offering price, the better for insiders and venture capitalists planning to sell shares. But if the greater investing public — the thousands of mutual funds, banks, insurers, pension plans and other big market players — judge the price as too rich, the greater the chance of a sudden downward swing.

Post-IPO Depression

Consider Baidu (BIDU - News). With a $43 billion market cap today, it's been the most successful Chinese Internet play, and it has enriched investors who know how to analyze chart patterns and buy on proper breakouts.

But in the early innings, the stock flopped fast. After the initial offering was priced at 27 a share, it roared as high as 153.98 before closing at 122.54 on its first day of Nasdaq trade on Aug. 5, 2005. Then it slid 41% the next two weeks.
At its opening-day peak, using 2005 earnings per share, Baidu's P-E ratio exceeded 500.

Baidu tried to form a narrow cup base but never broke out. By early February 2006, the stock sank to 44.44, 71% off its peak.

With an estimated 2.14 billion common shares outstanding, the market value of Facebook, even before shares spill onto the Nasdaq, will instantly make it a large cap ($75 billion) that could quickly grow to megacap status.

This is in sharp contrast to, say, Home Depot (HD - News), which began its legendary stock market journey in September 1981 with a market capitalization well less than $100 million. Home Depot's market value today? $76 billion.

Without question, Facebook is going public with beefier results.

According to SEC filings, Facebook's net income soared from $229 million in 2009 to $1 billion in 2011, good for a 109% annualized growth rate. Revenue shot up from $777 million to $3.71 billion over the same period, a 119% growth rate.

Those numbers compare well with Google's (GOOG - News) pre-IPO numbers. From 2001 to 2003, the king of Internet search boosted net income at a 289% compounded rate and revenue 312% (from $86 million to $1.47 billion).

However, Facebook recently reported a 9% decline in Q1 profit to 10 cents a share. Revenue grew 45% to $1.06 billion, the smallest increase in years.

Tech industry veterans acknowledge Facebook's rare ability to revolutionize markets, particularly in advertising, marketing and games. They see a long runway for growth as Facebook seeks to offer more business services and build relationships with large enterprise customers.

But in the long term, the company's ability to keep a spirit of risk taking will be critical.

Phil McKinney, former chief technology officer of the $40 billion personal systems group at Hewlett-Packard (HPQ - News) and author of "Beyond the Obvious: Killer Questions That Spark Game-Changing Innovation," says Facebook must figure out what its business model is going to be in overseas markets, where social customs and views over personal information and privacy differ greatly from the U.S. And that's not all. "The key is can you create a long-term culture and mindset where innovation plays a core part of long-term growth," McKinney told IBD. "Bill (Hewlett) and Dave (Packard) would take risks. But as more CEOs arrive, the risk profile changes. The word on the street is that Facebook doesn't shy away from experimenting.

Fawning Coverage

Post-IPO traders should also consider this: The media hype couldn't be hotter.

Fortune put CEO Mark Zuckerberg blowing a huge gum bubble on its July 25, 2011, issue titled "TECH BUBBLE 2.0.

Eight months later, Fortune featured the firm on its cover again with the headline "Inside Facebook: How Does the Social Media Giant Really Work? Read This Story Before You Buy the Stock.

Last month's cover of Fast Company magazine offered two headlines: "American Idol: An Intimate Portrait of the World's Most Famous CEO" and "What You Don't Know About Facebook.

That sort of fawning coverage typically occurs at the end of a great stock's run, not the beginning. Yet Google raised nearly $2 billion in August 2004 amid months of intense media scrutiny over its Dutch auction of distributing shares.

It broke out of a narrow IPO base a month later and nearly doubled in eight weeks, en route to a peak gain of nearly 800%.

by Investor's Business Daily May 10, 2012

Facebook IPO Sets Records For Hype - Yahoo! Finance

Tax cheats steal IDs via public list of dead

WASHINGTON - Benny Watters, 5, died of a brain tumor in September 2010. Ten months later, when his parents sought to file their taxes and claim him as a dependent, they found that an identity thief already had done so, using government data about Benny's death on a fraudulent return.

"It was almost like somebody had stolen him from us," said his mother, Lisa Watters of Lake Forest, Ill., who described how she quickly found the data needed to co-opt her dead son's identity on the Internet.

The information about Benny and more than 89 million other people resides in the Social Security Administration's Death Master File, a compilation of records the agency uses to stop paying benefits and start paying survivors after people die. Updates to the file also provide raw material for identity thieves who obtain tax refunds before the legitimate returns arrive at the Internal Revenue Service.

U.S. lawmakers working with identity-fraud victims are trying to limit or prohibit access to the Death Master File. The most restrictive proposals are meeting resistance from credit-reporting companies, pension funds and life insurers that use the data to prevent fraud and administer benefits. A House panel held a hearing on the subject Tuesday.

The IRS must balance accuracy and fraud prevention with taxpayers' need to get their returns and refunds processed quickly. Once the IRS sends a refund to a disposable debit card, the government's money is gone, said Sen. Bill Nelson, D-Fla., who sponsored legislation that would limit access to the file.

More than 460,000 people have been the victims of tax-related identity theft since 2008, according to the IRS. The agency has been trying to flag deceased taxpayers' final returns and prevent anyone else from using those Social Security numbers. As of mid-March, it had stopped 66,000 returns this year for that reason.

by Richard Rubin - May. 8, 2012 11:24 PM Bloomberg

Tax cheats steal IDs via public list of dead

May 7, 2012

Privacy on Facebook is paramount

Did you know that more than 150 million people in the U.S. have a Facebook page? It doesn't surprise me, because I log on to the site daily. It's almost a ritual, just like that morning cup of coffee.

Each day, a large amount of information -- much of it personal data that can be used against you if you don't employ the proper privacy settings -- is posted on the website. And nearly 13 million U.S. users are unaware of, or don't employ, Facebook's privacy controls, according to a recent study by Consumer Reports. That's scary stuff when you consider the type of information Facebook users share on the site. The magazine estimated:

4.8 million people posted where they'd be on a certain day, a tip-off to burglars who may want to break into their homes.

4.7 million users "liked" a page about medical conditions or treatments, details a health insurer could use against them.

Facebook users in 7 million homes have been harassed, been threatened or had users log into their accounts without permission.

Employers and schools can also look at your posts. Even the government tracks your data. Consumer Reports uncovered a 2009 IRS training manual that shows employees how to use social media to assist in resolving taxpayer cases.

The best line of defense is to keep your private and/or sensitive information off of Facebook or to employ strict privacy settings.

If you care about your privacy, you may not have much of it left on Facebook unless you use the proper privacy settings.

by Veronica Sanchez - May. 6, 2012 08:13 PM 12 News

Privacy on Facebook is paramount

May 4, 2012

Online Marketing in 2012 – What You Need To Know [Infographic] « « Prestige Marketing Inc. Blog Prestige Marketing Inc. Blog

Online Marketing Strategy Infographic

The ecommerce market changes every year – in fact, it seems to change every few weeks or months! So it only make sense that marketing focuses should shift regularly too. Here’s an infographic with some of the top tips for targeting your online marketing this year.


# Mobile searches increased by 400% in 2011.

# 70% of all social networkers are also online shoppers.

# Over 50% of ecommerce store visits occur when consumers are logged onto Facebook.

# 68% of businesses plan to integrate social media marketing with their e-mail marketing.

# Conversion rates are 105% higher for consumers that interact with ratings and reviews.

Online Marketing in 2012 – What You Need To Know [Infographic] « « Prestige Marketing Inc. Blog Prestige Marketing Inc. Blog

Is Pinterest the next Facebook? - Fortune Tech

FORTUNE -- Ben Silbermann can't stop staring at the refrigerators. The Pinterest co-founder and CEO and I are standing in the break room of his company's garage-size Palo Alto office. He's just flown back from Austin's SXSW interactive festival, and a redesign of his website is two days away. It's all a little overwhelming. But at this mom
ent his full attention is focused on three glowing refrigerators. Sometime during his brief absence, a service has delivered them fully stocked and branded with the company logo. They're wedged into the tiny backroom behind the foosball table that three employees -- roughly 15% of his workforce -- are using for a conference. "I've been gone for one day, and it's so upscale," he says. "We used to just run to Costco all the time."

That was before. Before Mitt Romney's wife, Ann, began organizing family photos on Pinterest. Before Reese Witherspoon gushed to Conan O'Brien that it was "a collection of the most amazing, wonderful craftiness on the earth!" Before the U.S. Army issued a guide for how to use it, and before Pinterest emerged as the fastest-growing website of all time. In March the site registered 17.8 million users, according to Comscore, a 52% jump in just one month -- and it isn't even open to everyone (would-be "pinners" must still request an invitation to join).

Pinterest, for the uninitiated, is a deceptively simple-sounding, insanely addictive social media site that lets users collect and share images on digital pinboards. Most social-networking sites have first become popular among tech's early adopters along the country's coasts. But Pinterest found its most passionate users among the Midwestern scrapbooking set -- a mostly female group -- who have turned to it to plan weddings, save recipes, and post ideas for kitchen renovations.

This growth has thrust Silbermann, 29, into the spotlight as investors and businesses alike try to figure out how they can get in on the action. Brands -- from large companies like Gap (GPS) and West Elm to online boutiques -- are tripping over themselves to establish a presence on it, and some are starting to reap the rewards of being "pinned," a de facto referral that prompts followers to click on product pictures to learn more. In February Pinterest drove more traffic to websites than Twitter, Google+, LinkedIn (LNKD), and YouTube combined. Meanwhile, the same (mostly male) investors who initial

Amid all the noise, Silbermann must now build out a company that can keep up with Pinterest's user explosion. This type of hypergrowth has been a challenge for companies to manage -- remember the "fail whale" that signaled Twitter was suf
fering under the weight of its own popularity? In recent weeks Silbermann and his team have held a Monday meeting -- usually in the form of a coffee run to Bistro Maxine -- to figure out how to keep the site running on Thursday. (Writing a check to Amazon's web service unit usually does the trick.) Oh, and Silbermann must figure out how to make money. To that end, Fortune has learned, Pinterest just hired Tim Kendall, who spent many years as Facebook's director of monetization, to build out the business.

Silbermann seems to be maintaining an almost eerily level head about Pinterest's success as well as the stress of running Silicon Valley's current "it" company. He talks so quietly that during our conversation I felt compelled to dro
p my own volume to match his. His eye is always on the wall-mounted flat screen that displays real-time data about how pinners are using the service. He takes a regular turn at answering customer-support e-mails, a mundane task that, he says, helps him make Pinterest even better. And while Pinterest's Palo Alto digs feature a poster with the words move fast and break things, a mantra at Facebook, Silbermann talks about Pinterest the way one talks about a fragile heirloom. "When you open Pinterest, it should feel like someone has hand-made a book for you," he explains. "Every item should feel like it's handpicked for you by a person you care about."

A collection of pictures of Pinterest co-founder and CEO Silbermann
Silbermann took a somewhat circuitous path to Internet stardom. The son of doctors from West Des Moines, Iowa, he collected things -- stamps, leaves, insects -- as a child. His sisters became doctors, and he was premed at Yale and majored in political science. Upon his 2003 graduation, he moved to Washington, D.C., where he took a "cube job" running data for a consultancy. That was right around the birth of Web 2.0, and he became hooked on tech blogs. He remembers the first time he stumbled across TechCrunch. Something was happening in Silicon Valley. He wasn't a coder, but he was a huge history buff, and he fell in love with the romantic notion that the Internet defined his generation. "It felt like this was the story of my time, and I just wanted to be close to it," he says. He and his girlfriend (now his wife) moved across the country to Palo Alto, where she became a recruiter at Facebook and he got a job working in customer support and sales at Google (GOOG).

Silbermann credits Google with helping him dream big -- here was a company that decided to take a photograph of every street in the world -- but without an engineering degree, he was never going to gain credibility there. And everyone around him was trying to start a tech company. "This is a really strange place," he explains of Silicon Valley. "They love technology here like people I grew up with love sports." So in 2008, even as the economy crashed, Silbermann left Google and hooked up with a college buddy, Paul Sciarra, to try out some startup ideas. Silbermann had held on to his obsessive love for collecting things. So they looped
in Evan Sharp, a designer friend who was studying at Columbia's architecture school, to help create a site for people to build collections. Silbermann's wife came up with the name over Thanksgiving dinner.

By January 2010, Silbermann and his co-founders were e-mailing friends and family to invite them to try the service. It was slow going. For one thing, they were hard up for cash, and no one wanted to invest in a startup with three nontechnical founders. (Upon graduation, Sharp took a job as a designer at Facebook, where he worked until last spring, to pay the bills.) What's more, in 2008 most startups were focused on curating real-time information, particularly for mobile platforms. By contrast, Pinterest was all about helping people save things for later -- and the bigger the screen, the better the experience. Also, none of the investors who reviewed Pinterest could understand why anyone would want to spend so much time collecting things. Four months in, Pinterest had just a few hundred users.

But then the site began to catch on among friends back in Iowa. Early on, Silbermann traveled to a Utah design conference, and that group began to use it. A home-schooling parent kept and shared boards of lesson-plan ideas. It was more than a game or some form of entertainment for his core audience. Says Silbermann: "I realized that people were using it for projects that were important in their real lives." Once Pinterest began growing, it didn't stop. Since inception, the site has added an estimated 40% to 50% more subscribers each month.

Last summer Omaha Steaks president Todd Simon and his wife were building a new home near Omaha. A friend recommended Pinterest. Soon they were pinning and "liking" decorating concepts. "For the previous year, we'd been flipping through design magazines, cutting pictures and pinning them to the wall," he said. "This was the equivalent."

Simon took the idea to work, only to discover that his marketing team was one step ahead of him. They'd been noticing customers pinning photographs of their mail-order steaks and other products to digital pinboards for months. In December Omaha Steaks built its own profile and began pinning photos of its delicacies on boards with names like "Delicious discoveries" and "Recipes we want to share." While it's too early to say, the company believes it's having a direct and positive impact on sales.

Essentially, Pinterest excels at something that's very hard to do on the web -- help people discover new things. If you can name what you want, after all, Amazon (AMZN) and Google are pretty good tools for helping you find it. But what if you don't know what you want? Social-networking sites have helped businesses influence people, but they are imperfect. People use Facebook and Twitter to talk to each other, not necessarily to discuss things they might want to buy. In contrast, Pinterest users are more often in a shopping mindset when they are using the service. If you're keeping a pinboard called "Spring handbags I'm considering," there's a good chance you'll click through and make a purchase.

Over time, Pinterest has the potential to translate more quickly to sales dollars than other social-networking sites. Katia Beauchamp, CEO of Birchbox, has already seen that. Pinterest is among the top 10 traffic drivers to the site, which sells beauty products as well as sample-sale subscriptions. It doesn't yet drive as much traffic as, say, Facebook, Beauchamp says, but it results in more direct sales. At this point, businesses can't spend money marketing on Pinterest even if they want to; Silbermann is not ready to talk about how he plans to make money off it. Targeted ads seem like a no-brainer, and new hire Kendall is sure to have some ideas for how to help companies better reach consumers on the site. But Pinterest also could become a platform for would-be entrepreneurs seeking to cash in on their hobbies, much the way eBay (EBAY) unleashed a new class of mom-and-pop vendors.

Pinterest's rise hasn't been all corporate love and celebrity mash letters. Lawyer and photographer Kristin Kowalski sparked a firestorm last month when she blogged about her concerns that Pinterest was letting its users publish other people's content without explicit permission. The terms of service indemnify the company from its users' copyright violations, but the service itself, critics say, encourages users to violate copyrights.

When Silbermann read Kowalski's blogged concerns, he called her up. They spoke for more than an hour. The company will shortly update its terms of service, though Silbermann notes they follow the Digital Millennium Copyright Act. Pinterest also has introduced an opt-out code web publishers can embed in their sites -- Yahoo's Flickr (YHOO) has done so too -- to prevent pinners from republishing material. Eventually publishers may decide to make more material available if the site becomes a major destination.

Silbermann's handling of the potentially volatile situation shows how his good manners can be an asset. After Kowalski spoke to him, she wrote a lengthy follow-up praising the young CEO. "He didn't yell at me. He didn't accuse me of being a hater," she wrote. "I also truly believe that he is going to work his young, brilliant little butt off to address [my concerns] and remedy the quirks to the best of his and his legal team's ability." She now calls herself a Pinterest cheerleader.


In mid-March Pinterest unveiled a redesigned profile page. During our visit Silbermann and co-founder Sharp walk me through the highlights. "The idea is to help you discover other people," says Silbermann, pointing to a box that now shows the people and brands that pinners repin the most. Click on their handles to see who they follow, and you jump on an endless train of interesting images.

It's clear from the new user page that the Facebook ethos has rubbed off on Pinterest. Each user can upload a profile photo, and there's a stream of continually updating pinboards, not unlike the information on Facebook. Pinterest uses Facebook Connect to let Facebook members log on to Pinterest and opt to publish their activity to their Facebook newsfeed. But as Pinterest gains traction, it becomes a potential threat to the social media giant. Facebook has pretty much captured the U.S. market for subscribers, so its growth is likely to come from engagement -- keeping users on the site longer. As more people spend more time pinning -- and revealing to marketers the kinds of hobbies and objects they covet -- it may cut into the time they have to spend on Facebook.

But this flash popularity does not guarantee success, not for today's web upstarts. More people are connected -- one-seventh of the world's population has a Facebook profile -- and most of them are mobile. And with such a low barrier to entry, new social services pop up all the time. Pinterest must continue to be better than its competitors if it's going to thrive. Silbermann is already working on the next set of product improvements.

So what does it feel like to be a social site on the verge? "There should be a word for it," says Sharp, shifting to face his co-founder.

Says Silbermann: "It's the intersection of the Venn diagram of fear and joy."

by Jessi Hempel Mar 22, 2012

Is Pinterest the next Facebook? - Fortune Tech

Facebook sets $28 - $35 IPO price range, raises offer size - May. 3, 2012

facebook ipo price
Facebook founder Mark Zuckerberg plans to sell stock worth around $1 billion in Facebook's IPO.

NEW YORK (CNNMoney) -- It's the day techies and investors have been waiting for: Facebook set a price range of $28 to $35 per share for its initial public offering. It also upped the maximum size of its offering to $13.6 billion, up from its previous $5 billion estimate.

Facebook currently has around 2.1 billion shares outstanding, so if its IPO prices at the top of the range, the company would be valued at just shy of $75 billion.

Many Facebook employees and executives, including Zuckerberg, hold unexercised stock options. The company itself is also holding some shares for future employee equity grants. If all of those shares were exercised, Facebook's outstanding share count would rise to around 2.8 billion, pushing its valuation closer to $98 billion.

Facebook's target price range isn't binding, and could change several times before Facebook actually makes its debut. The company will set its final price the night before it begins trading. That's expected to happen sometime in mid-May, with May 18 the current target date.
Institutional investors who purchase shares directly from Facebook's underwriters, including lead banker Morgan Stanley, will buy in at the IPO price. Regular investors will get their shot the next day, when Facebook begins trading on the tech-heavy Nasdaq exchange under the ticker "FB."
The target range set on Thursday could be lowballing. Facebook said in a filing last month that it internally valued its shares at $30.89 each, as of January 31 -- up from $29.73 a month earlier.

Facebook's user base is growing. The site had 901 million monthly active users as of March 31, up 33% compared to the same date last year. User growth is fastest in Brazil, India, and the United States, Facebook said.

Zuck's windfall: Facebook CEO and founder Mark Zuckerberg plans to sell 30.2 million shares in the IPO offering. If Facebook prices at the top of its range, that will net Zuckerberg about $1 billion -- cue the Sean Parker "you know what's cool?" jokes.

But Zuckerberg won't be hanging on to his cash. The company said he will use the "substantial majority" of the windfall to cover the whopping tax bill he'll be hit with, thanks to his plan to exercise a large stock-options grant that will substantially increase his ownership stake in the company he founded.

In 2011, Facebook CEO Zuckerberg pulled in a $500,000 base salary. But he requested -- and will receive -- only $1 per year in salary starting January 1, 2013.

Zuckerberg, who remains the largest shareholder in the company he created, still takes home a hefty pay package. His total compensation in 2011 came to $1.48 million, according to Facebook's calculations.

Although he only owns around a quarter of Facebook, Zuckerberg's shares carry extra voting rights. After the IPO, Zuckerberg will control around 57.3% of the voting power in Facebook.

Financials: Last week, Facebook revealed its first-quarter financials. The company earned $205 million on sales of $1 billion. Both revenue and profit fell from the fourth quarter of 2011, which Facebook chalked up to typical advertising sales slowness in the first quarter compared to the fourth.

Though sales grew by 45% compared to the first quarter of 2011, net income was down 12% from the same period.
Meanwhile, Facebook's closely-watched cash hoard remained virtually unchanged in the first quarter of 2012 from the $3.9 billion it reported in the prior quarter.

That could change, thanks to Facebook's spending spree in April. The company shelled out $550 million to buy part of a large patent portfolio that Microsoft (MSFT, Fortune 500) had previously bought from AOL (AOL).

Facebook is also forking over a cool $1 billion to buy mobile photo sharing startup Instagram, though only $300 million of that is cash. The rest of the purchase is being paid in Facebook shares -- almost 23 million of them. If Facebook prices at $35 a share, Instagram's purchase price is now closer to $1.1 billion.

The company said it forecasts capital expenditures of up to $1.8 billion in 2012.
How Facebook makes money: Advertising accounted for 82% of Facebook's first-quarter revenue, or $872 million.

Facebook's other revenue stream is Facebook Credits, its payment system for purchases within apps and games. Facebook keeps 30% of the revenue from those payments, and passes the remaining 70% on to the app developer. Those fees brought in $186 million for Facebook last quarter.

Revenue from Zynga (ZNGA), which makes FarmVille and other games played on Facebook, represented 11% of Facebook's total revenue in 2011.

by Julianne Pepitone May 3, 2012

Facebook sets $28 - $35 IPO price range, raises offer size - May. 3, 2012

May 1, 2012

B&N, Microsoft team up on Nook

NOOK Tablet - 8GB

NEW YORK - Books and bits united Monday as Microsoft provided an infusion of money to help Barnes & Noble compete with top electronic bookseller Amazon. In exchange, Microsoft gets a long-desired foothold in the business of e-books and college textbooks.

Microsoft Corp.'s $300 million investment sent Barnes & Noble Inc.'s stock zooming up $9.15, or 67 percent, to $22.83 in early-afternoon trading.

The opening price of $26 was a three-year high. Microsoft's stock rose 2 cents, to $32.

The two companies are teaming up to create a subsidiary for Barnes & Noble's e-book and college-textbook businesses, with Microsoft taking a 17.6 percent stake.

The deal gives Barnes & Noble ammunition to fend off shareholders who have agitated for a sale of the Nook e-book business or the whole company.

But the companies said Monday that they are exploring separating the subsidiary, provisionally dubbed "Newco," entirely from Barnes & Noble. That could mean a stock offering, sale or other deal.

The deal also puts to rest concerns that Barnes & Noble doesn't have the capital to compete in the e-book business with market leader Inc. and its Kindle, said David Strasser, an analyst at Janney Capital.

For Microsoft, the investment means that it will own part of a company that sells tablet computers based on Google Inc.'s Android, one of the main competitors of Windows Phone 7, Microsoft's smartphone software.

Microsoft also said the deal means that there will be a Nook application for Windows 8 tablets, set to be released this fall. The app is likely to get a favored position on Windows 8 screens.

There already is a Nook application for Windows PCs, but none for Windows phones.

William Lynch, CEO of Barnes & Noble, said Nook software will continue to be available on devices like the iPhone that compete with Windows Phone.

He declined to say whether it was Barnes & Noble or Microsoft that initiated the discussions, but he said the talks had been going on since before the beginning of the year.

"We have been circling the relationship for quite a long time," Microsoft President Andy Lees added.

Barnes & Noble currently runs 691 bookstores in 50 states.

by Peter Svensson - Apr. 30, 2012 05:52 PM AP Technology Writer

B & N, Microsoft team up on Nook

Free speech, social media collide at Goodyear school

For two weeks in March, students, teachers and administrators at Millennium High School in Goodyear were besieged with anonymous Facebook comments ridiculing their work ethic, social status, physical appearance and sexual relationships.

Because of Facebook's online-privacy policies and vague state laws governing such posts, officials were powerless to stop the comments, even though some felt they were disruptive to the school environment.

The Millennium case illustrates the difficulty administrators have in balancing student privacy, the right to freedom of expression and the need to protect young people from online harassment or bullying.

Nationally, concerns over cyberbullying have escalated after several high-profile cases in which teenagers committed suicide after being bullied online.

Although there's no evidence that students at Millennium High were pushed to the brink after the "Millennium High School Memes Page" was posted on Facebook, the comments were clearly crude and embarrassing. A meme is an idea or concept that becomes part of the culture after being transmitted on the Internet, often through photos or videos, like the popular LOLcats.

The Millennium page was created by anonymous users and featured comments and pictures accusing some teachers of engaging in child pornography and unprofessional conduct. Student names were splashed all over the page, along with comments about their social status, sex lives, sexual experiences and sexual orientation.

A page created on March 22 was removed after several students and school officials protested to Facebook because their names were published in embarrassing comments.

But another page surfaced on March 26, which Facebook officials refused to take down, Millennium Principal John Speer said.

District's hands tied

Cyberbullying and free-speech experts said memes like the Millennium page are an example of how social networks are an emerging jurisdiction problem for schools that want to stop bullying, electronic or otherwise, and lawmakers who fear encroaching on online free speech.

In the Millennium case, district officials say they are powerless to discipline the students without knowing who they are, and Facebook refuses to identify users, citing privacy rights, Speer said. Facebook officials did not return multiple requests for comment.

Another problem officials face is that the meme creators may have posted the pictures off campus with private computers.

Arizona has laws that protect against bullying and that require districts to investigate incidents and discipline students.

But state law doesn't give districts authority to discipline online activity that happens off- campus. That makes it difficult for districts to stop online behavior that is offensive or that bullies students and teachers.

Last year, Gov. Jan Brewer signed House Bill 2415, which prohibits harassment, bullying and intimidating with campus technology.

This year, the Legislature introduced House Bill 2549, prohibiting using any electronic communication with the intent to terrify, intimidate, threaten or harass a specific person. The bill, which passed the state Senate and was awaiting transmission to the Governor's Office on Monday, specifies that electronic communication includes any wired or wireless communication device. However, its sponsors say it is aimed more at cyberstalking than cyberbullying.

Experts criticized the initial bill as overly broad and said it restricted speech that, although offensive, should still be protected by law. The bill's initial language prohibited communications that were perceived as annoying or offensive.

On Monday, amendments to the bill included exemptions for constitutionally protected speech. Bill sponsors said they were trying to keep up with new technology that is used for stalking, particularly computers and smartphones.

"I don't believe the intent was cyberbullying. It was one-on-one harassment established consistently through traceable e-mail or phone contact," said Rep. Vic Williams, a Republican from northwestern Pima County, one of the bill's sponsors.

Williams said the bill's wording may be too broad, but its focus is not to restrict free speech or burden private networks like Facebook and other social-media sites.

Cyberbullying vs. speech

Sheri Bauman, director of the school-counseling master's degree program at the University of Arizona, researches cyberbullying and the challenges it presents for schools, parents and students.

"It is intentionally harmful," Bauman said, adding that the Millennium High School Memes Page had posts naming specific teachers and students that could create enough emotional response to justify discipline based on disruption of a school environment.

"Imagine being a teacher who was defamed or humiliated (online) and trying to stand up and teach or impose discipline on those students," Bauman said.

Another issue is that online comments can never be permanently removed. They can persist in cyberspace even after they're deleted and can crop up when employers search for names on the Internet, possibly affecting someone's ability to get a job, Bauman said.

"Ultimately, the courts haven't been helpful," Bauman said, adding that a district's best option is to provide students with anonymous- reporting resources and instruction about responsible online behavior.

Robert Schlosser, a teacher and department chair of international languages at Millennium, said he used the meme page to teach students about Internet protocol and communication. He was not identified on the page.

Schlosser talked to students about the page during their advisory lesson, a class designed to build rapport between students and faculty. He said most students felt personal attacks about specific people were inappropriate.

"We're addressing it and working through it together. I would say that we are definitely going to try to build our community at Millennium to be stronger because of that," Schlosser said.

Schlosser said, however, that he didn't feel the page was a disruption to the school environment because students were able to learn from the experience.

Free-speech concerns

Free-speech experts say that disciplining private online behavior isn't an option because students and adults use it as a medium for the democratic right to free expression.

"Not just to say what you want, but the right to democratic expression and to criticize authority when they have legitimate concerns," said James Weinstein, a professor of constitutional law at the Sandra Day O'Connor College of Law at ASU.

Weinstein said students' rights to free speech are treated differently from adults only if districts can prove that the speech has substantially disrupted the school environment.

In 1969, the U.S. Supreme Court ruled that students don't shed constitutional rights at the schoolhouse gates. A district's burden of proof of a substantial disruption of the school environment was decided in the case of Tinker vs. Des Moines Independent Community School District, in which students wore black armbands protesting the war in Vietnam.

The Des Moines Independent Community School District suspended the students, but the court upheld the students' right to free speech on campus. The case has since been used to gauge school disciplinary rights in relation to students' First Amendment rights.

Weinstein said courts are wary of restricting Internet activity. "The Supreme Court expressly recognizes the Internet as an essential medium of democratic discourse (and) has ferociously protected the Internet from government regulation," Weinstein said.

Officials for the Arizona School Boards Association shy away from advising districts to establish policies that give districts rights to discipline students who post online material off campus.

"The challenge for school officials is to show that there is a nexus with school. If you can show substantial conversation is occurring," said Chris Thomas, director of legal and policy services for the association.

Students on Facebook

Millennium High School Memes creators stated on the page that the comments they posted were free speech and thus protected by the First Amendment. As of March 30, the page had 419 "likes," more than 100 posts and photos, and several comments from students.

"Positive or negative, attention is attention. You get dissed," the anonymous administrator said in a post on March 28. The post tells critics they can't do anything to stop posts and orders them to "shut up" and stop complaining.

The page is currently unavailable, but it is unclear if Facebook or page administrators removed it. A similarly titled page is less abusive and has only a small following.

Some pictures described situations like being late for class, cutting in line at lunch or talking about prom. But other memes were sexually charged. Some refer to Millennium's freshmen as prostitutes or ask why none of them are virgins. Other posts make comments about specific students engaging in sexual acts and cheating on their partners.

Some students encouraged the material and called it funny. Others said posts should stop and called the posts harassment and bullying.

"They (page administrators) probably took it too far out of context," said Austin Glendinning, 16, a Millennium student who had seen the page but was not mentioned on it.

What schools can do

Dennis Runyan, superintendent of the Agua Fria Union High School District, said he believes that the memes page was a disruption but that the district is unlikely to take any action.

"We don't have the resources or the time," Runyan said.

Last month, Agua Fria district officials proposed a new technology policy that requires the district to instruct students about appropriate online behavior, including interaction with other individuals on social networks.

The policy only establishes monitoring and filtering systems for technology used on campus.

Millennium High School already monitors and filters certain websites on its school computers, but the district website does not contain any information concerning cyberbullying.

The district's governing board did not take formal action on the policy but will review it again this month.

by Eddi Trevizo - Apr. 30, 2012 11:03 PM The Republic |

Free speech, social media collide at Goodyear school

House approves cybersecurity bill

WASHINGTON - The House ignored Obama administration objections Thursday and approved legislation that encourages voluntary action by corporations to help stop electronic attacks on critical U.S. infrastructure and private companies.

On a bipartisan vote of 248-168, the GOP-controlled House backed the Cyber Intelligence Sharing and Protection Act, which would encourage companies and the federal government to share information collected on the Internet to prevent electronic attacks from cybercriminals, foreign governments and terrorists.

"This is the last bastion of things we need to do to protect this country," Rep. Mike Rogers, R-Mich., chairman of the House Intelligence Committee, said after more than five hours of debate.

More than 10 years after the Sept. 11 terrorist attacks, proponents cast the bill as an initial step to deal with an evolving threat of the Internet age.

The information sharing would be voluntary to avoid imposing new regulations on businesses, an imperative for Republicans.

The legislation would allow the government to relay cyberthreat information to a company to prevent attacks from Russia or China. In the private sector, corporations could alert the government and provide data that could stop an attack intended to disrupt the country's water supply or take down the banking system.

The Obama administration has threatened a veto of the House bill, preferring a Senate measure that would give the Homeland Security Department the primary role in overseeing domestic cybersecurity and the authority to set security standards.

The Senate bill remains stalled. House Speaker John Boehner, R-Ohio, said the administration's approach is misguided.

"The White House believes the government ought to control the Internet, government ought to set standards and government ought to take care of everything that's needed for cybersecurity," Boehner told reporters at his weekly news conference.

"They're in a camp all by themselves."

Several Republicans and Democrats warned of potential government spying on its citizens with the help of employers.

by Donna Cassata - Apr. 26, 2012 11:24 PM Associated Press

House approves cybersecurity bill

Conference showcases real-estate technology

Real-estate agents and brokers have been deluged in recent years with hundreds of different software applications promising to make them more efficient, competitive and successful.

The problem with so many options is figuring out the best tools to choose and learning how to use them, according to representatives of the organization that maintains the Phoenix area's real-estate listings.

In an effort to provide information and guidance, the Arizona Regional Multiple Listing Service, or ARMLS, hosted its fourth annual Technopalooza, a daylong conference highlighting the latest real-estate technology and how best to take advantage of it.

"Technology has infiltrated virtually every facet of real estate," said Chris Heagarty, ARMLS director of communication and professional and business development.

As a result, ARMLS has since 2009 hosted two annual events: Technopalooza, to showcase the latest technology tools; and in October the Learn-A-Thon, which focuses on high-tech training.

One of the instructors presenting to about 700 attendees at Wednesday'sTechnopalooza was Victor Lund, founding partner of real-estate consulting firm the WAV Group, in Arroyo Grande, Calif.

Lund walked the audience through more than a dozen software applications many real-estate agents and brokers regard as the best and most useful tools available to the profession.

He also encouraged the group to adopt technologies that incorporate cloud computing, scannable QR codes, mobile alerts and digital social networking into their businesses.

"Some people have resisted getting on social networks," Lund said. "Don't resist -- this isn't going away."

Among the applications Lund presented was Open Home Pro, which lets agents and brokers create listing pages for their properties and manage open houses from an iPad,iPhone or Androidsmartphone.

Another app, called Cloud CMA, allows agents to quickly create and send electronically to their clients reports known as comparative market analyses. A comparative market analysis uses information about recently sold, similar properties in the same area to estimate the value of a client's property.

"This is the coolest technology that has ever happened," Lund said.

Another application, although still in relatively rough form, represents a sort of Holy Grail for real-estate professionals known as transaction management, he said.

The software, called DotLoop, lets all parties to a real-estate transaction upload, download, edit and sign digital documents, as well as monitor the progress of the transaction.

"Transaction management has been the dream of real-estate people forever," Lund said.

by J. Craig Anderson - Apr. 25, 2012 06:54 PM The Republic |

Conference showcases real-estate technology


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