Facebook builds tighter integration with music, TV

By Alexei Oreskovic

SAN FRANCISCO | Thu Sep 22, 2011 9:00pm EDT

(Reuters) – Facebook unveiled new ways for users to listen to music and watch TV, offering tie-ups with the likes of Spotify and Hulu, as it attempts to make media an integral part of its social networking service.

The features, which Facebook unveiled at its annual f8 developers’ conference in San Francisco on Thursday, will vastly expand the types of activities that users of the social networking service can notify their friends about, from the news articles they read to the title of each song they listen to throughout the day.

Facebook users will also be able to listen along to whatever song a friend is listening to, provided they both subscribe to the supported third-party streaming music services, such as Spotify.

The media push comes as Facebook faces fresh competition from Google, which in June launched a rival social networking service, Google+. In recent weeks, Facebook, which counts more than 750 million users, has rolled out a bevy of changes to its service.

“Facebook is positioning itself as not just your social graph online, but your life online,” said Forrester Research analyst Sean Corcoran.

“These changes not only help trump rival Google but will open up new opportunities,” he said. “But concerns around privacy and immaturity in how to do these things effectively will make it a slow go.”

Dressed in a gray T-shirt, jeans and sneakers, Zuckerberg said the music companies partnering with Facebook, including Rhapsody and Turntable.fm, were reinventing the music industry and the business models that underlie the industry.

“They believe that the key to making the music business work isn’t trying to block you from listening to songs you haven’t bought,” said Zuckerberg.

“It’s trying to help you discover so many songs that you end up buying even more content than you ever would have otherwise,” he said.

Joining Zuckerberg on stage was Netflix Chief Executive and Facebook board member Reed Hastings, who said he was excited to offer tighter integration with Facebook but did not give details.

The Washington Post Co. unveiled its Social Reader, which lets people read and share stories from the newspaper within Facebook.

For Facebook, a deeper integration of music, movies and other media into its service makes it more likely that users will spend more time on its site, enabling the company to generate more advertising dollars.

The company, which generated $1.6 billion in revenue in the first six months of 2011 according to a source familiar with the matter, is being closely watched by investors hoping for an initial public stock offering next year.

Facebook also introduced an overhaul of users’ personal profiles on Thursday which arranges past photos and other information into a rich, magazine-like layout. Dubbed “Timeline,” the new profile serves as a sort of diary of a person’s life, organized by each year they’ve been on Facebook.

With Thursday’s new features, Facebook users will have new ways to flag content beyond the now familiar “like” button which people click to endorse various items on the Web, from news articles to running shoes.

Software developers whose services connect with Facebook will be able to customize the types of notifications that are broadcast to a Facebook user’s friends, with terms like “watched” a video, “read” an article or even “ate” a certain dish.

All that extra information could be a boon for advertisers.

“With Facebook now able to collect more data in terms of what people are watching, reading, running, doing, that’s more metadata which is now going to feed into what brands and marketers target,” said Hussein Fazal, the CEO of AdParlor, a firm that runs Facebook advertising campaigns for companies including Groupon.

“You’re going to get more relevant advertising to the users, you’re going to get higher click-through rates,” said Fazal. “In the end that means more revenue and more ad dollars going to Facebook,” he said.

(Reporting by Alexei Oreskovic and Jennifer Saba; Editing by Bob Burgdorfer)

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Schmidt says Google has not cooked search results

By Diane Bartz and Malathi Nayak

WASHINGTON | Wed Sep 21, 2011 6:58pm EDT

(Reuters) – Google Inc has not cooked its search results to favor its own products and listings, Executive Chairman Eric Schmidt told a U.S. Senate hearing looking into whether the search giant abuses its power.

Members of the Senate Judiciary Committee’s antitrust panel said on Wednesday that Google had grown into a dominant and potentially anti-competitive force on the Internet.

“Google is in a position to determine who will succeed and who will fail on the Internet,” said Republican Senator Mike Lee. “In the words of the head of the Google’s search ranking team, Google is the biggest kingmaker on Earth.”

Google has been broadly accused of using its clout in the search market to stomp rivals as it moves into related businesses, like travel search.

The Federal Trade Commission is looking into that charge and others, including whether Google manipulates its search result rankings to favor its own products.

Google is trying to convince regulators and lawmakers that it does not need restrictions placed on its growing portfolio of businesses, and that its business practices are legal and good for consumers.

Lee aggressively quizzed Schmidt over whether Google deviates from its search algorithm to boost its own listings.

He brought a chart that showed a study comparing the success rate for shopping-related key word searches. Lee said that search rankings for price comparison sites — Nextag, PriceGrabber and Shopper — varied while Google’s shopping site consistently ranked third.

“I see you magically coming up third every time,” Lee said. “I don’t know whether you call this a separate algorithm or whether you’ve reverse engineered one algorithm, but either way you’ve cooked it, so that you’re always third.”

Schmidt replied: “Senator, may I simply say that I can assure you we’ve not cooked anything.”

Google controls more than two-thirds of the global search market. But Schmidt argued that specialty web sites — like those with restaurant reviews and travel search — give Google stiff competition.

In an oblique reference to Microsoft, which faced nearly two decades of legal scrutiny for antitrust violations, Schmidt told lawmakers: “We get it. By that I mean, we get the lessons of our corporate predecessors.”

Colin Gillis, an analyst at BGC Partners, said some of the senators were “gunning hard” for Google but Schmidt handled himself professionally. “He appeared well-coached to me,” Gillis said.

The senators were at times frustrated by what Democratic Senator Al Franken characterized as “fuzzy” answers from Schmidt about how Google prioritizes its search results and whether it unfairly uses rivals’ content.

Franken questioned Schmidt about complaints from Yelp — which provides user-generated reviews of restaurants, shops and other local businesses — that Google unfairly rips reviews from Yelp to build Google’s competing site, Google Places.

Franken asked if Google still used Yelp’s content to drive business to Google Places.

“As far as I know, not,” Schmidt answered.

Franken skeptically asked, “As far as you know?”

“Again I’ll have to look, but I’m not aware of any,” Schmidt said.

Schmidt was Google’s chief executive officer from 2001, but vacated the post to company co-founder Larry Page in April.

Schmidt now serves as executive chairman and oversees government affairs — a position of critical importance during the FTC probe and lawmakers’ reviews.

Some of Google’s rivals made their case at the hearing for why Google needs to be reined in.

Jeffrey Katz, the CEO of Nextag, an Internet comparison shopping company, said Google was initially a huge help in building innovation.

“But what Google engineering giveth, Google marketing taketh away,” he said in written testimony.

He argued that Google is now the Internet neighborhood bully. “Google doesn’t play fair. Google rigs its results, biasing in favor of Google Shopping and against competitors like us,” Katz said in written testimony. “As a result, Nextag’s access is more and more discriminated against … because we compete with Google where it matters most, for very lucrative shopping users.”

Katz and Yelp CEO Jeremy Stoppelman both said they would not start new businesses in the current environment.

“I personally wouldn’t. I’d find something else to do,” said Stoppelman at the hearing.

(Reporting by Diane Bartz and Malathi Nayak in Washington; Additional reporting by Alexei Oreskovic in San Francisco; Editing by Tim Dobbyn, Phil Berlowitz)

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U.S. calls online poker site a “global Ponzi scheme”

By Grant McCool

NEW YORK | Tue Sep 20, 2011 6:47pm EDT

(Reuters) – U.S. prosecutors made new allegations on Tuesday in a probe of the Full Tilt Poker website, accusing self-styled “Poker Professor” Howard Lederer and professional poker champion Christopher Ferguson and others of paying themselves more than $440 million while defrauding other players.

In a motion filed in federal court in New York to amend an earlier civil complaint, the prosecutors accused Full Tilt Poker of running a Ponzi scheme that continued even after the original charges were filed.

Prosecutors unsealed the earlier charges on April 15, accusing three Internet poker companies — Full Tilt Poker, Absolute Poker and PokerStars — and 11 people, including Full Tilt director Raymond Bitar, of bank fraud, illegal gambling and money laundering offenses.

Lederer is described on his website (www.howardlederer.com) as “The Poker Professor” and Ferguson has won five World Series of Poker events. The men are directors and owners of Full Tilt Poker.

“In reality, Full Tilt Poker did not maintain funds sufficient to repay all players, and in addition, the company used player funds to pay board members and other owners more than $440 million since April 2007,” the office of Manhattan U.S. Attorney Preet Bharara said in a statement.

“Full Tilt was not a legitimate poker company, but a global Ponzi scheme.”

A Ponzi scheme is usually one in which early investors are paid with the money of new clients and it collapses when funds run out.

The U.S. Attorney’s previous civil complaint did not contain allegations of the company defrauding players or owners taking payments improperly.

Representatives of Full Tilt Poker could not immediately be reached to comment on the amended complaint, which has yet to be approved by a U.S. District Court judge. This type of filing is usually approved as a formality.

The prosecutors said Full Tilt Poker’s board of directors, including Bitar, Lederer, Ferguson and Rafael Furst, defrauded players by misrepresenting that their funds in accounts were safe, secure and available for withdrawal.

In the new complaint, they cited emails and poker message board postings in 2008 and 2009 in which Full Tilt Poker and its representatives assured players their money was safe.

One of those emails read, in part: “To protect both our players and business from financial problems, all player account funds are segregated and held separately from our operating accounts. Unlike some companies in our industry, we completely understand and accept that your account money belongs to you, not Full Tilt Poker.”

The government challenges the assurances, saying the company did not have money to repay the players.

The case is USA v Pokerstars, et al, U.S. District Court for the Southern District of New York, No. 11-02564.

(Reporting by Grant McCool; editing by Gerald E. McCormick and Andre Grenon)

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Most Asian nations realizing Internet cannot be tamed

By Raju Gopalakrishnan

SINGAPORE | Thu Sep 15, 2011 8:30pm EDT

(Reuters) – It’s not just dictators. Governments around the world, many of them popularly elected, have tried for years to control the Internet and social media, dismayed by their potential to incite violence, spread mischief and distribute pornography and dissent.

But in Asia, home to everything from free-wheeling democracies to totalitarian regimes and others in between, many governments are increasingly realizing that controlling online content, including dissent, just will not work.

Even China, which strongly regulates the Internet and is grappling with how to deal with the extremely popular microblogs read by hundreds of millions of its people, is highly unlikely to block them completely.

“Governments are committing quite a bit of resources and time to block websites and I think it’s a panic reaction,” says Phil Robertson, Bangkok-based deputy director of the Asia division of Human Rights Watch.

“They have some temporary, immediate discouraging effect but over the longer term, they won’t be effective because people will still find a way to get the news they want to hear.

“Once people have been exposed to the Internet and see the power of getting information free to your computer, it’s a very addictive feeling of empowerment.”

That snowballing of sentiment has played out this year in Egypt, Libya and Tunisia, where governments have been overthrown by movements bolstered by the Internet. The United States tried to block dissemination of the Wikileaks cables and British Prime Minister David Cameron threatened to temporarily censor social networking sites after riots last month.

Asia is also learning first-hand about the ubiquitous power of the wired world.

In India, authorities were taken aback last month when an anti-corruption campaign multiplied on Facebook, Twitter and other social networking sites and drew tens of thousands of people to protest sites.

But there were no signs the government tried in any way to crack down on the online crusade, even if it could have.

“At the rate in which it gained momentum, I don’t think the government actually had the time to ban the movement,” said Vijay Mukhi, a cyber-security expert.

FUTILE

Mukhi said the government did selectively block some sites, but added Internet users in a nation with millions of tech-savvy engineers and software developers could easily bypass controls.

“The Indian government doesn’t realize that blocking websites is a futile task because nowadays it has become so easy to find other means to get access to banned sites,” he said.

“They are just helping to popularize those particular sites and inviting more traffic.”

South Korea, the world’s most wired nation with 80 percent of households having access to the Internet, is one of two electoral democracies in the world to substantially block access to some sites, said a study on 37 countries this year by U.N.-funded watchdog Freedom House. The other is Turkey.

South Korea heavily filters online content involving North Korea, with which it is still technically at war. But its citizens continue to lobby the government for more access.

“No healthy democracy is possible where free speech is not tolerated,” said a letter earlier this month from the Electronic Frontier Foundation organization to the president.

“The expansive controls on online speech established in South Korea lack oversight and prevent citizens from accessing valuable expressive, historical, political and artistic online content,” the letter said.

Singapore blocks a symbolic list of 100 mostly pornographic sites but does not to bar any site for political content. And despite strict controls on open political discussion, it allowed freewheeling criticism of government policies in the run-up to general elections this year.

The ruling People’s Action Party easily won the election, but it scored its lowest ever percentage of the vote, and the opposition made historic gains.

Neighboring Malaysia pledged in 1996 not to impose controls on the Internet and was rewarded with investments from foreign technology companies such as Microsoft Corp and Cisco Systems.

The decision led to vibrant online political commentary. Analysts say the government had since quietly considered some form of filters on the debate, but decided against it.

“The government feels largely helpless in trying to manage online dissent because methods such as threatening to close down newspapers and targeting bloggers makes netizens angrier and more likely to lash out against the government,” said Ong Kian Ming, who teaches at UCSI University in Kuala Lumpur.

“Netizens have clearly been emboldened and it is hard to see how the government can try to turn this tide without reaping a lot of negative reaction,” said Ong.

Across much of Asia, the feeling is growing that imposing any sort of controls on online political debate backfires.

“Usually all it does is draw attention to the person and the message, who tend to be small players anyway,” said Cherian George, an associate professor at Singapore’s Nanyang Technological University.

“The general pattern is that the blogger who gets censored becomes far more famous than he otherwise might be.

“The only situation where it might work in the short-term would be highly volatile, fast-moving situations. Governments can shut down all communications during violence or a riot, but this can’t be a long-term solution.”

(Reporting by Charmian Kok and Kevin Lim in Singapore Jeremy Laurence in Seoul; Annie Banerji in New Delhi and Razak Ahmad in Kuala Lumpur Editing by Brian Rhoads)

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Most Asian nations realizing Internet cannot be tamed

By Raju Gopalakrishnan

SINGAPORE | Thu Sep 15, 2011 8:30pm EDT

(Reuters) – It’s not just dictators. Governments around the world, many of them popularly elected, have tried for years to control the Internet and social media, dismayed by their potential to incite violence, spread mischief and distribute pornography and dissent.

But in Asia, home to everything from free-wheeling democracies to totalitarian regimes and others in between, many governments are increasingly realizing that controlling online content, including dissent, just will not work.

Even China, which strongly regulates the Internet and is grappling with how to deal with the extremely popular microblogs read by hundreds of millions of its people, is highly unlikely to block them completely.

“Governments are committing quite a bit of resources and time to block websites and I think it’s a panic reaction,” says Phil Robertson, Bangkok-based deputy director of the Asia division of Human Rights Watch.

“They have some temporary, immediate discouraging effect but over the longer term, they won’t be effective because people will still find a way to get the news they want to hear.

“Once people have been exposed to the Internet and see the power of getting information free to your computer, it’s a very addictive feeling of empowerment.”

That snowballing of sentiment has played out this year in Egypt, Libya and Tunisia, where governments have been overthrown by movements bolstered by the Internet. The United States tried to block dissemination of the Wikileaks cables and British Prime Minister David Cameron threatened to temporarily censor social networking sites after riots last month.

Asia is also learning first-hand about the ubiquitous power of the wired world.

In India, authorities were taken aback last month when an anti-corruption campaign multiplied on Facebook, Twitter and other social networking sites and drew tens of thousands of people to protest sites.

But there were no signs the government tried in any way to crack down on the online crusade, even if it could have.

“At the rate in which it gained momentum, I don’t think the government actually had the time to ban the movement,” said Vijay Mukhi, a cyber-security expert.

FUTILE

Mukhi said the government did selectively block some sites, but added Internet users in a nation with millions of tech-savvy engineers and software developers could easily bypass controls.

“The Indian government doesn’t realize that blocking websites is a futile task because nowadays it has become so easy to find other means to get access to banned sites,” he said.

“They are just helping to popularize those particular sites and inviting more traffic.”

South Korea, the world’s most wired nation with 80 percent of households having access to the Internet, is one of two electoral democracies in the world to substantially block access to some sites, said a study on 37 countries this year by U.N.-funded watchdog Freedom House. The other is Turkey.

South Korea heavily filters online content involving North Korea, with which it is still technically at war. But its citizens continue to lobby the government for more access.

“No healthy democracy is possible where free speech is not tolerated,” said a letter earlier this month from the Electronic Frontier Foundation organization to the president.

“The expansive controls on online speech established in South Korea lack oversight and prevent citizens from accessing valuable expressive, historical, political and artistic online content,” the letter said.

Singapore blocks a symbolic list of 100 mostly pornographic sites but does not to bar any site for political content. And despite strict controls on open political discussion, it allowed freewheeling criticism of government policies in the run-up to general elections this year.

The ruling People’s Action Party easily won the election, but it scored its lowest ever percentage of the vote, and the opposition made historic gains.

Neighboring Malaysia pledged in 1996 not to impose controls on the Internet and was rewarded with investments from foreign technology companies such as Microsoft Corp and Cisco Systems.

The decision led to vibrant online political commentary. Analysts say the government had since quietly considered some form of filters on the debate, but decided against it.

“The government feels largely helpless in trying to manage online dissent because methods such as threatening to close down newspapers and targeting bloggers makes netizens angrier and more likely to lash out against the government,” said Ong Kian Ming, who teaches at UCSI University in Kuala Lumpur.

“Netizens have clearly been emboldened and it is hard to see how the government can try to turn this tide without reaping a lot of negative reaction,” said Ong.

Across much of Asia, the feeling is growing that imposing any sort of controls on online political debate backfires.

“Usually all it does is draw attention to the person and the message, who tend to be small players anyway,” said Cherian George, an associate professor at Singapore’s Nanyang Technological University.

“The general pattern is that the blogger who gets censored becomes far more famous than he otherwise might be.

“The only situation where it might work in the short-term would be highly volatile, fast-moving situations. Governments can shut down all communications during violence or a riot, but this can’t be a long-term solution.”

(Reporting by Charmian Kok and Kevin Lim in Singapore Jeremy Laurence in Seoul; Annie Banerji in New Delhi and Razak Ahmad in Kuala Lumpur Editing by Brian Rhoads)

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Court battle looms between U.S. and AT&T, T-Mobile

NEW YORK/WASHINGTON | Thu Sep 1, 2011 8:37am EDT

(Reuters) – The Justice Department made a bold move when it sued to block AT&T Inc’s $39 billion acquisition of T-Mobile. Now comes the hard part: going to court.

The government is asking a federal judge in Washington, D.C., to stop thedeal, and will have to prove that it would mean higher prices and less competition.

“This will be the Obama administration’s line in the sand. This will be their signature antitrust event,” said University of Baltimore law school professor Robert Lande.

AT&T has said it will fight the case, and its general counsel said it plans to seek an expedited hearing from the judge. Even so, experts say, the company could decide that it is not worth the expense and uncertainty to go to trial.

An AT&T spokeswoman declined to comment.

Two big communications deals, MCI’s proposed takeover of Sprint in 1999 and EchoStar Communications Corp’s deal to buy Hughes Electronic Corp’s DirecTV in 2001 fell apart after the Justice Department challenged the deals.

“A preliminary question is whether AT&T will go to court. It’s certainly not uncommon for companies to look at this and decide that the game isn’t worth the gamble,” said David Smutny, an antitrust lawyer with Orrick, Herrington & Sutcliffe.

The case was assigned to U.S. District Judge Ellen Segal Huvelle, who also oversaw the EchoStar-Hughes antitrust court challenge. Huvelle was appointed to the bench in 1999 by then President Bill Clinton.

In pre-trial proceedings in that case, Huvelle had harsh words for the way both companies responded to regulators’ information requests, calling them “sluggish.”

LENGTHY AND COMPLICATED

Any trial in the AT&T case would be lengthy and complicated, with experts predicting that both sides would put on a parade of witnesses including consumers, economists, and possibly competitors or state regulators.

In its complaint, the Justice Department argued that AT&T has overwhelming power in the national market — it is one of four major carriers — and that the market for mobile telecommunications would be highly concentrated in 96 of 100 U.S. cell phone market areas.

AT&T is likely to argue that the deal would create efficiencies in terms of price, quality and innovation — and maybe even jobs, said Lande, the Baltimore professor.

“Very few efficiency defenses work,” said Lande, who praised the Justice Department for bringing the action. “They make promises that these efficiencies could happen, but showing that in court is very difficult.”

While most antitrust attorneys declined to say how they thought the case would be decided, Howard University law professor Andy Gavil said he thought the judge would block the deal. “Having read the complaint, I don’t see a basis for a negotiated settlement,” said Gavil, who testified to Congress on the deal.

Two other veteran Washington antitrust attorneys, who declined to be identified because of potential conflicts involving their law firms and companies in the case, told Reuters they think the deal will be stopped, either because the court blocks it or because AT&T drops its bid.

If the case goes to trial, there may be no quick end. The losing side is likely to appeal.

“You could have a situation here where the combined litigation and regulatory process could extend for several months or years,” said Maury Mechanick, a telecommunications attorney at law firm White & Case.

“From a business practicality perspective, is that a delay that AT&T and T-Mobile can tolerate?” said Mechanick. “That’s ultimately a judgment that they will have to make.”

The case is USA v. AT&T Inc et al, U.S. District Court for the District of Columbia, No. 11-cv-1560.

For the DOJ: Sharis Pozen, Joseph Wayland, Gene Kimmelman, Patricia Brink, Laury Bobbish, Claude Scott and Lawrence Frankel.

For Defendants: Not immediately available.

(Reporting by Carlyn Kolker and Diane Bartz)

Follow us on Twitter: @ReutersLegal

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Apple fans pay tribute to “industry icon” Jobs

By Sarah McBride and Melanie Lee

SAN FRANCISCO/SHANGHAI | Thu Aug 25, 2011 9:02am EDT

SAN FRANCISCO/SHANGHAI (Reuters)- From San Francisco to Seoul to Sydney, fans of Apple Inc paid tribute to Steve Jobs after he resigned as CEO, calling him an icon for the entire technology industry, not just the company he co-founded.

The extraordinary outpouring on blogs and Twitter began minutes after Jobs, who has been on medical leave since January, announced he would leave the chief executive’s post but carry on as chairman of Apple.

“Steve Jobs was the Leonardo da Vinci of our age,” said popular British novelist and journalist Tony Parsons on his Twitter page. “So thank you — without you, it would have all been ugly, difficult and dull.”

In Asia, home to legions of Jobs fans as well as scores of rip-offs of the products he helped design, customers at Apple stores said the resignation had taken them by surprise.

“I’m surprised he resigned right before the iPhone 5 launch,” said Belinda Liu, a 26-year-old at an Apple store in Shanghai. “I was shocked when I heard the news.”

Apple is likely to launch the iPhone 5, the latest model of its iconic smartphone, in October.

“I make phone calls every day with my iPhone3, send Weibo messages by iPhone4, jog to podcasts downloaded from iTunes, listen to music on my iPod, use applications from the App Store and surf the net with my Mac — never before has a company been entwined so deeply into my life,” said Wang Lifen in a tribute to Jobs on Chinese microblogging site Weibo.

Wang is a founder of Umiwi.com, a website that profiles corporate leaders and focuses on news for young people.

At the company’s flagship San Francisco store, the only sign something was amiss was a few groups of employees, huddled together discussing the news. They heard by word of mouth, they said, with no formal announcement by late afternoon on Wednesday to retail workers.

Some customers, however had already heard.

Robert Cory, waiting for help with a broken laptop, learned of Jobs’ resignation from a news alert on his phone. “I feel bad,” said the New York resident. “But Apple will be okay.”

Other customers echoed that sentiment. San Francisco resident Erich Blazeski proclaimed that “Apple is not Steve Jobs.”

MIGHTY JOB

In Australia, customers outside Apple’s flagship two-storey glass-fronted store in downtown Sydney discussed Jobs’ resignation as a musician played inside, using an Apple device that connected an electric guitar to a Mac computer.

“I think it’s rather sad because it reflects his illness but in terms of its influence on the company, I’m sure they’ve been planning for this for quite some time,” said Clive Allcock, a psychiatrist.

“He has done a mighty job getting Apple up and running, it’s a great tribute to him personally and he’ll be well remembered in the world of computing. But I’m sure that it won’t materially affect the company.”

In tech-savvy Singapore, Apple users said the news was unlikely to change anything for the firm, in the short-term.

“Jobs’ departure is unlikely to affect my decisions as to whether I will purchase Apple products or not,” said 25-year-old Sean Xie, who works in the science and technology sector.

“Jobs has built a company and culture over a long time, and that doesn’t change overnight.”

The chief financial officer of a major Apple supplier in Taiwan also said there should be no material effect on the company.

“He’s the king,” said the officer, of Jobs. “Apple has already laid out the road map for future generations of products, it will not affect us as a supplier.”

Some of the most effusive tributes to Jobs came from rivals in the tech industry.

“I think his brilliance has been well-documented, but what gets forgotten is the bravery with which he’s confronted his illness,” Howard Stringer, the CEO of Sony, said in a statement.

“For him to achieve this much success under these circumstances doubles his legacy.”

An employee at Samsung, which could benefit the most if Apple relaxes its grip on the smartphone and tablet markets, dismissed the idea that its rival would be hit by Jobs’ departure.

“Apple has already gained a strong foothold as an icon and for its products, so I don’t think something major is going to happen to Apple because of the absence of Jobs,” said the employee, who gave her name as Kim.

“Steve Jobs is not our enemy. He is a veteran and senior figure in this business.”

Google Inc Chairman Eric Schmidt, a friend of Jobs for years before the Internet search giant’s move into mobile software and devices strained their relationship, wrote a moving testament to the legacy of his erstwhile business partner.

“Steve Jobs is the most successful CEO in the U.S. of the last 25 years,” he said. “He uniquely combined an artist’s touch and an engineers vision to build an extraordinary company… One of the greatest American leaders in history.”

(Additional reporting by Ju-min Park in SEOUL, Amy Pyett in SYDNEY, Clare Jim in TAIPEI, Charmian Kok in SINGAPORE and Jason Subler in SHANGHAI; Editing by Raju Gopalakrishnanand Miral Fahmy)

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Analysis: HP – Dial “M” for mayhem

By Poornima Gupta

SAN FRANCISCO | Sun Aug 21, 2011 4:23pm EDT

(Reuters) – Leo Apotheker’s credibility as a CEO is falling along with Hewlett-Packard’s stock price.

Apotheker, who gained a reputation for sharp business acumen when he headed up SAP, thoroughly flummoxed HP shareholders last week with what some analysts have called a “value destroying” $11.7 billion deal to buy British software maker Autonomy and for sticking a for-sale sign on HP’s PC division — thus scaring off clients for the year or so it will take to decide on the division’s future.

In a resounding rejection of Apotheker’s grand vision, shareholders sent HP shares down almost 20 percent on Friday, wiping out $16 billion of value in the worst single-day fall since the Black Monday stock market crash of October 1987.

Since Apotheker joined HP early last November, the company has lost almost 44 percent of its value, and he has lost a significant amount of investor support.

“We wonder whether activist investors will — and should — begin to exert pressure on the board,” said Toni Sacconaghi, an analyst with Sanford Bernstein. “If HP’s results don’t improve, the company will ultimately restructure its portfolio and/or replace its leadership.”

Pat Becker Jr., fund manager at Portland, Oregon-based Becker Capital Management Inc, which owns HP shares, noted that Apotheker has continually failed to instill confidence in his conference calls with investors.

“Every time he has gotten on the call, the stock has gone down substantially,” Becker said.

On a conference call last Thursday following the announcements on Autonomy and the PC division, Apotheker failed to fully address key questions from analysts, including why HP was paying a large premium for Autonomy. When asked about the vision for HP’s PC unit, he said the decision could range from an outright sale to a spinoff to a “potential “nontransaction.”

“That call — was that an ‘A’ performance by a CEO on that acquisition?” asked Becker, whose firm holds HP shares.

An HP spokeswoman said the “strategic transformation” is intended to position the company for a new future and drive long-term shareholder value.

While investors applaud Apotheker’s long-term plan to get out of HP’s commoditized PC business, and the Palm WebOS tablet and smartphone business — considered a capital sinkhole — that goes with it, the $11.7 billion bill for Autonomy and haphazard articulation of the spin-off strategy left many shaking their heads.

HP’s purchase price is a stunningly rich 10 times sales of Autonomy, a cloud search specialist whose revenues are equal to only about 1 percent of HP’s.

HP’s Personal Systems Group, which includes the PC business and the now-defunct TouchPad tablet — faces an uncertain future, which may undermine the business and benefit Dell, whose shares ended up nearly 2 percent on Friday in a broadly weak market.

Even more worrying, HP’s new strategic road map marked an about-face on several crucial fronts, signaling a lack of direction. Executives as recently as May had touted how WebOS would be on every HP product from printers to PCs. In March, they had played up the advantages of serving both consumers and enterprise.

In addition, Apotheker has been forced to slash HP’s sales estimates three times since he took over last November.

IN BIG BLUE’S FOOTSTEPS

It is not the first time HP seems behind the curve. it agreed to buy Compaq in 2001 in what turned out to be a rocky merger. IBM, on the other hand, transformed itself by selling its PC arm to China’s Lenovo in late 2004 and establishing its dominance in enterprise IT. HP appears to be trying to replicate Big Blue’s success.

Some analysts and fund managers hold out hope that the company is at least now on the right track and can still catch up by making smart acquisitions.

“Just because they didn’t make the move earlier doesn’t mean they still can’t skate to the where the puck is going,” said Tony Ursillo, an analyst with Loomis Sayles Value Fund.

But he added, “HP has overpaid for every acquisition it has made” in the past year.

One thing that could take the sting out of the steep price tag for Autonomy is the sale of HP’s PC division, which industry experts estimate could fetch as much as $10 billion.

And Apotheker did make at least one correct decision by retiring the TouchPad. Sacconaghi estimates the business lost about $250 million last quarter, or 9 cents a share.

INTERNAL DISARRAY

But the events of last Thursday have done little to build confidence in Apotheker. The afternoon of high drama kicked off with a series of rapid-fire announcements: disclosure of acquisition talks with Autonomy; confirmation a deal had been done; announcement that HP was killing its TouchPad and other WebOS devices.

HP also disclosed its results an hour earlier than scheduled, marking the second straight quarter that the company had to release earnings ahead of schedule. And in another small sign of disarray, TouchPad ads featuring “Glee” star Lea Michele continued to run on CNBC on Friday.

While HP’s dire competitive position was in the making well before Apotheker’s arrival, shareholders do not view the CEO’s track record as impressive.

“I was skeptical coming in about whether he had the right background for the job,” Ursillo said. “So far the results are not encouraging.”

(Reporting by Poornima Gupta; Editing by Peter Lauria, Edwin Chan and Leslie Adler)

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Apple, Qualcomm, others eye InterDigital

By Nadia Damouni and Sinead Carew

NEW YORK | Wed Aug 17, 2011 2:46pm EDT

(Reuters) – Apple Inc, Nokia and Qualcomm Inc are among several technology companies pondering bids for InterDigital Inc, sources familiar with the situation said.

The auction of the wireless telecommunications specialist — expected to be heavily contested as giant tech companies fight to shore up patent portfolios — will be postponed from next week until after Labor Day, the sources said.

Shares in InterDigital, which has a market value of about $3 billion, leaped as much as 12.2 percent on the news. But it quickly backtracked and was up $4.38 or 6.8 percent at $68.41 in afternoon trade.

Key potential bidder Google Inc has not formally withdrawn from the auction but it is unclear whether the Internet leader will bid for the company, the sources told Reuters.

InterDigital is up for sale and is forging ahead with its auction, despite Google agreeing to buy Motorola Mobility Holdings Inc for $12.5 billion. That triggered a 23 percent drop in InterDigital’s shares on Monday.

First-round bids have been postponed because bidders asked for more time to complete due diligence on the company’s patents, the sources said.

To make up for that delay, the King of Prussia, Pennsylvania-based company expects to accelerate the second round, the sources said.

Google’s presence in the auction would be crucial to how much InterDigital could fetch, an analyst said.

“The problem InterDigital has is that Elvis has left the building. He’s got his date,” Deutsche Bank analyst Brian Modoff said.

Modoff also questioned whether any other technology companies need InterDigital enough to pay the high price at which its shares are currently trading.

He noted that Qualcomm already has a good portfolio of patents, and so may not want to pay up for the business.

“The problem is finding somebody else to whom it’s necessary.” Modoff said. “It could get acquired, but not at where the stock is at (now).”

InterDigital’s stock had soared last month on reports that Google was in talks to buy the company. Bidders have been eager to get their hands on the company’s 8,800 patents — including crucial 3G and 4G/LTE patents to strengthen operating software for smartphones.

Some analysts have said that InterDigital has one of the best quality patent portfolios that remains on the market after bankrupt Nortel Network’s sold its patents to a consortium led by Apple and Microsoft Corp last month.

Just over 50 percent of the current 3G market is already under license with InterDigital. Its partners include Samsung Electronics Co Ltd, Apple, Research In Motion Ltd and HTC Corp, among others. The company’s 4G portfolio is relatively unlicensed.

InterDigital hired Evercore Partners and Barclays Capital on July 19 to explore strategic alternatives, including a possible sale of the company.

InterDigital declined to comment. The other potential bidders were not immediately available for comment.

(Reporting by Nadia Damouni; editing by Gerald E. McCormick and Gunna Dickson)

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Hackers protest peacefully in San Francisco subway

By Emmett Berg

SAN FRANCISCO | Mon Aug 15, 2011 9:55pm EDT

(Reuters) – A few dozen protesters turned out on Monday for a San Francisco rally organized by the hacker group Anonymous to protest alleged police brutality and what they called anti-free speech tactics by authorities.

Bay Area Rapid Transit, the commuter train service in the San Francisco area, shut down cell phone networks in some stations on Thursday to stop a demonstration over the fatal shooting of a man by police last month.

The cell phone shut-down drew a new wave of criticism, spurring the Monday rush hour action.

“This was a complete silencing of the people.” said Carlos Wilson, a 41-year-old gay rights activist who came to protest police brutality and the shut-down of the mobile phone network last week.

The Monday protest ended just before 5:30 p.m. local time, when authorities shut down the Civic Center station.

Police said there were no arrests, although officers arrived dressed in riot gear.

Cell phone service was left on in the station during the action, and some protesters took that as a sign of victory.

“I have more cell service now than usual on BART. I think what they did last time was an empty threat. I have full bars,” said Beck Simmons, a 21-year-old student, who was protesting the police shooting.

Anonymous, a loosely knit group that has attacked financial and government websites, had called for protesters to descend on the station at 5 p.m., and media widely publicized the plan.

Would-be protesters were encouraged to download software for short-range mobile-to-mobile messaging, in case the in-station networks are shut down again.

BART said that a website for its users, myBART.org, had been hacked over the weekend, and contact information from at least 2,400 people had been stolen.

(Writing by Peter Henderson; Editing by Dan Whitcomb and Jerry Norton)

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