Facebook crashes advertising industry party

By Kate Holton and Leila Abboud

LONDON/PARIS | Fri Jul 1, 2011 5:29am EDT

LONDON/PARIS (Reuters)- While traditional advertising groups jostled for awards at a recent annual industry gathering in Cannes, the year’s biggest star was a newcomer to the beaches: the social network Facebook.

The company has gone from nowhere a few years ago to become the biggest single seller of online display advertising in the United States with more than $2 billion in revenues this year, according to research firm eMarketer.

Online ad sales have boomed in recent years largely because they finely target consumers in a way that print media and TV cannot match. Google and Amazon initially pioneered the trend by analyzing Web surfing and internet searches to target customers’ tastes.

Now Facebook has brought a new level of sophistication to the game: mining data from its social network about users’ likes and dislikes as well as those of friends to better target ads.

The ‘social ad’ approach can be seen in a current Facebook campaign run by tennis racket maker Head. Users who link to Andy Murray’s page get updates from the player himself mixed in with ads for his sponsor and jokey YouTube videos.

However there are risks involved for Facebook and other online ad players as they develop ever more sophisticated ways to track people’s behavior online.

Some regulators see such tracking as a violation of privacy even when it is done anonymously. The Europe Union recently required that web surfers be notified if the sites they visit are collecting information about them, prompting howls from industry.

The stakes are high: industry insiders and analysts say brands are willing to pay more for such ‘social ads’ than they would for traditional online ads since they see them as more effective.

“Brands are willing to invest to learn how consumers interact with their brand,” said Mykim Chikli from Performics, a division of Publicis, which helps big companies with online advertising placement and strategy.

“You can target people who like golf, cars, and watches and you can start to push ads to that profile of person.”

In a demonstration of Facebook’s current advertising power, Google recently launched a social network dubbed Google+ in its boldest attempt yet to crack the medium and tap the advertising dollars it brings.

TARGETING TRANSFORMATION

The move toward social ads shows how the Internet is transforming the whole industry.

Major companies from Nestle to Ford are increasing the proportion of their ad spend on the Internet to the detriment of traditional press ads and big ad agencies are scrambling to evolve.

The changes have given birth to a slew of tech start-ups trying to come up with more sophisticated ways to match ads to consumers, often with sophisticated data mining techniques and algorithms.

Among them is RadiumOne, a venture-backed start-up that tracks people’s social behavior on-line by partnering with niche social networks, blogs, and media-sharing sites and then uses that data to target ads.

“When you share an article or email a Web link to a friend, that’s a very influential connection and we can track that through cookies and then segment users into groups,” Chief Executive Gurbaksh Chahal told Reuters.

“Social data is immense,” he said. “We’ve built some great technology that can understand data and find an audience in the real time and serve an ad that’s relevant to them.”

Martin Sorrell, the CEO of the world’s biggest ad group WPP, says there is room to improve the effectiveness of web ads: “Online advertising is more sophisticated than offline, but it’s not got to where we think it can go yet.”

TENTACLES

Facebook’s influence is also spreading beyond its own site as more webpages allow people to use their login details from Facebook to enter instead of a separate password.

Users can then share content and post messages within those sites as they would do on their social network, which in turn allows the website to access their profile and determine the user’s likes and dislikes. Twitter has a similar system.

California-based start-up Gigya powers the buttons that allow such sharing for about 5,000 sites, such as US broadcaster ABC and sports apparel maker Nike.

“Someone like Nike is getting access to that extremely rich data that it wouldn’t have been able to access otherwise,” Gigya Chief Executive Patrick Salyer said in an interview.

Beyond more sophisticated targeting, Facebook also serves to amplify traditional word of mouth on everything from new movies to the latest smartphone.

“If I have a good experience with a brand I’ll tell a person offline — I might tell my friend — but if I do it on Facebook the average person is telling 130 people,” said Facebook Chief Operating Officer Sheryl Sandberg.

“We think that explains the very healthy growth of our advertising business.”

(Editing by Chris Wickham and Sophie Walker)

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UPDATE 1-Samsung asks U.S. to ban iPad, iPhone imports

Wed Jun 29, 2011 9:59pm EDT

* Samsung asks U.S. ITC to ban imports of Apple gadgets

* Latest in growing battle between companies (Adds detail throughout, previous SEOUL)

(Reuters) – Samsung (005930.KS) asked the U.S. International Trade Commission to ban the importation of Apple’s iPhones, iPads and iPods, ratcheting up its dispute against Apple (AAPL.O).

The filing, dated Tuesday, says Apple’s iPhone, iPod digital music player and iPad tablet infringe on five of Samsung’s patents involving telecommunications standards and user interface inventions.

Samsung also filed a new patent lawsuit against Apple in a Delaware federal court on Wednesday,

The complaints are the latest salvo in a growing legal battle between the two consumer electronics giants.

In April, Apple sued Samsung in a California federal court, claiming the South Korean firm’s Galaxy line of mobile phones and tablets “slavishly” copies the iPhone and iPad.

Samsung then countersued in California, and Apple last week filed another lawsuit in South Korea. An Apple spokesman could not be immediately reached on Wednesday.

As well as its own phones and tablets, Samsung manufactures microchips for Apple’s gadgets, a business that brought in about $5.7 billion in revenue for the South Korean company last year.

Before banning the importation of Apple’s popular devices, the ITC would first have to agree to look into Samsung’s allegations, a process that could be quite lengthy.

Apple is one participant in a web of litigation among phone makers and software firms over who owns the patents used in smartphones, as rivals aggressively rush into the smartphone and tablet market which the U.S. company jump-started with iPhone and iPad.

Samsung is one of the fastest growing smartphone makers and has emerged as Apple’s strongest competitor in the booming tablet market but it remains a distant second in the space. (Reporting by Noel Randewichand Miyoung Kim; Additional reporting by Dan Levine in San Francisco; editing by Carol Bishopric)

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Not only .coms as Internet body throws open domain names

By Raju Gopalakrishnan

SINGAPORE | Mon Jun 20, 2011 6:31am EDT

(Reuters) – good.food, learnto.salsa, glossy.lipstick — people and companies will be able to set up a website with almost any address by the end of next year if they have a legitimate claim to the domain name and can pay a hefty fee.

The Internet body that oversees domain names voted on Monday to end restricting them to suffixes like .com or .gov and will receive applications for new names from January 12 next year with the first approvals likely by the end of 2012.

And they can be in any characters — Cyrillic, Kanji or Devanagari for instance, for users of Russian, Japanese and Hindi.

“It’s the biggest change I think we have seen on the Internet,” Peter Dengate Thrush, chairman of the Internet Corporation for Assigned Names and Numbers (ICANN), told reporters.

“We have provided a platform for the next generation of creativity and inspiration.”

The new gTLD, or generic top-level domain, program was approved by 13 votes to one with two abstentions by the board of ICANN at a meeting in Singapore.

The sole opposition came from a member who felt that more time was needed to hold discussions with government and others parties, ICANN officials said.

The new names could infringe on social and religious sensitivities, for instance if someone wanted to set up a .nazi domain, said Dengate Thrush.

And people who have invested in securing lucrative .com domains will find the value of the holdings diluted by the new rules, he added.

Thrashing out the rules and overcoming objections has taken years, ICANN officials said.

For instance, while the new steep charges of $185,000 to apply for a domain name could deter cyber-squatters, companies with well known trademarks worry that they may have to contend with series of copycat names like coke.paris or google.zambia.

ICANN hopes to weed these out in an intensive approval process that will take months, at the least, and also involve governments and other agencies.

“I think we’ve crossed the Rubicon,” said Antony van Couvering, CEO of Top Level Domain Holdings Ltd.

“We were expecting it to happen some time in 2009,” he said, adding that the change was also delayed by governments wanting to handle trademark issues in their own countries. “The process has been so lengthy that some people who wanted to do it are now either broke or disgusted.”

COMPANIES

Experts say corporations should be among the first to register, resulting in domain names ending in brands like .toyota, .apple or .coke.

The move is seen as a big opportunity for brands to gain more control over their online presence and send visitors more directly to parts of their sites — and a danger for those who fail to take advantage.

Japanese electronics giant Canon, for instance, has already said it plans to apply for rights to use domain names ending with .canon.

Besides the $185,000 to apply, individuals or organisations will have to show a legitimate claim to the name they are buying. ICANN is taking on hundreds of consultants to whom it will outsource the job of adjudicating claims.

Today, just 22 gTLDs exist — .com, .org and .info are a few examples — plus about 250 country-level domains like .uk or .cn. After the change, several hundred new gTLDs are expected to come into existence.

As well as big brands, organisations such as cities or other communities are expected to apply.

GTLDs such as .nyc, .london or .food could provide opportunities for many smaller businesses to grab names no longer available at the .com level — like bicycles.london or indian.food.

“It’s the next expansion of the Internet, it’s the future of the Internet,” said Kieren McCarthy, the CEO of .Nxt,Inc, a San Francisco-based company which covers Internet policy and governance issues.

“I think our kids will think that we were crazy to always talk about .coms.”

(Additional reporting by Georgina Prodhan in LONDON; Editing by Ron Popeski)

 

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Samsung and Apple to end Nokia’s smartphone reign

By Tarmo Virki, European Technology Correspondent

HELSINKI | Mon Jun 13, 2011 8:53am EDT

(Reuters) – Samsung Electronics Co Ltd will become the world’s largest smartphone maker this quarter, overtaking struggling Nokia Oyj which has lead the market since 1996, Nomura said on Monday.

In the next quarter Nomura also sees also Apple Inc overtaking Nokia, pushing the Finnish company to No. 3 in the rankings.

“Nokia looks set to relinquish its smartphone crown to Samsung and Apple,” Nomura analysts said in a research note. “Further emphasizing the shift in power to Asia is our forecast for HTC to almost match Nokia during 2012.”

Research firms Gartner and Canalys both said they saw Nokia — which created the smartphone market with its 1996 launch of the Communicator model — losing smartphone volume leadership later this year.

“If Nokia’s new phones are not well received in the third quarter and (with) the Galaxy S2 ramping up, Samsung might overtake them and become the smartphone leader in Q3,” said Gartner analyst Carolina Milanesi.

Nokia has lost initiative in the smartphone market to Apple’s iPhone and Google Inc’s Android devices, and at the lower end to more nimble Asian rivals.

Overall, Nokia still makes more cellphones than Samsung due to its strong position in basic cellphones and its wider distribution network in emerging countries.

The company is switching to Microsoft Corp’s software from its own Symbian platform as part of an overhaul of its phone business set out in February by new Chief Executive Stephen Elop.

On May 31 Nokia abandoned hope of meeting key targets just weeks after setting them, raising questions over whether its new boss can deliver on the turnaround he promised.

Shares in Nokia were 0.6 percent firmer at 4.33 euros by 5:34 a.m. EDT, in line with a slightly stronger technology sector.

(Editing by David Holmes)

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Shanda Games says online game hacked

Fri Jun 10, 2011 9:39am EDT

(Reuters) – Chinese online game developer Shanda Games Ltd said one of its online games was hacked earlier this month, and it had to close about 5,000 accounts that had taken advantage of a design flaw.

Shanda, which became aware of the flaw in its “Legend of Immortals” online game, said it corrected the flaw within 24 hours.

“Accounts using robot programs were able to exploit the flaw by repeatedly performing the same quest and obtain virtual gold coins for free for use in the game, and caused temporary inflation in the in-game economy in certain servers,” the company said in a statement.

Shanda is the latest in a growing list of companies that have suffered cyber attacks, including Citigroup Inc, Sony, Google Inc and Lockheed Martin.

Shares of the company were trading slightly down at $6.32 on Friday morning on Nasdaq.

(Reporting by A. Ananthalakshmi in Bangalore; Editing by Roshni Menon)

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Facebook facial recognition technology sparks renewed concerns

By Alexei Oreskovic

SAN FRANCISCO | Tue Jun 7, 2011 9:29pm EDT

(Reuters) – Facebook has quietly expanded the availability of technology to automatically identify people in photos, renewing concerns about the privacy practices of the world’s top social networking service.

The feature, which Facebook automatically enabled for Facebook users, has been expanded from the United States to “most countries”, Facebook said on its official blog on Tuesday.

Its “Tag Suggestions” feature uses facial recognition technology to speed up the process of labeling friends and acquaintances that appear in photos posted on Facebook.

The company’s rollout of the technology has raised eyebrows in some circles. Internet security consultant firm Sophos published a post on its company blog on Tuesday saying that many Facebook users are reporting that the site has enabled the facial recognition option in the last few days without giving users any notice.

“Yet again, it feels like Facebook is eroding the online privacy of its users by stealth,” wrote Graham Cluley, a senior technology consultant at Sophos.

Facebook, which announced in December that it planned to introduce the service in the United States, acknowledged on Tuesday that the feature was in fact now more widely available.

When asked about the Sophos blog post, Facebook said in an emailed statement that “we should have been more clear with people during the roll-out process when this became available to them.”

The statement noted that the photo-tagging suggestions are only made when new photos are added to Facebook, that only friends are suggested and that users can disable the feature in their privacy settings.

The company did not respond to requests for further comment.

While other photo software and online services such as Google Inc’s Picasa and Apple Inc’s iPhoto use facial recognition technology, the use of the technology on an Internet social network like Facebook, which counts more than 500 million users, could raise thorny privacy issues.

Marc Rotenberg, President of the non-profit privacy advocacy group Electronic Privacy Information Center, noted that Apple’s iPhoto software gave users control over facial recognition technology by letting them elect whether or not to use the technology with their personal photo collections.

Facebook’s technology, by contrast, operates independently, analyzing faces across a broad swathe of newly uploaded photos.

Rotenberg said such a system raised questions about which personally identifiable information, such as email addresses, would become associated with the photos in Facebook’s database. And he criticized Facebook’s decision to automatically enable the facial-recognition technology for Facebook users.

“I’m not sure that’s the setting that people would want to choose. A better option would be to let people opt-in,” he said.

Last year the Electronic Privacy Information Center filed a complaint about Facebook’s privacy practices with the U.S. Federal Trade Commission, which Rotenberg said was still pending. He noted that he planned to take a close look at Facebook’s new announcement involving facial recognition technology.

(Reporting by Alexei Oreskovic; editing by Carol Bishopric)

 

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Hackers claim to have hit Sony again

By Diane Bartz

WASHINGTON | Mon Jun 6, 2011 8:19pm EDT

(Reuters) – Hackers calling themselves Lulz Security said on Monday that they had broken into Sony Corp computer systems again, and posted the results on the Internet.

The group, which has claimed credit for a prior attack on Sony’s systems, posted what appeared to be Sony BMG network maps from a New York city office and what they said was 54 megabytes of Sony developer source code.

“We’re not commenting on this issue,” said Sony Music spokeswoman Liz Young.

Last week, the group said it had broken into Sony’s computer network and accessed information on more than 1 million customers to show the vulnerability of the company’s systems. In that attack, the group of hackers, who have managed to keep themselves anonymous, published names, birth dates, street addresses, email addresses, phone numbers and passwords of people who had entered contests promoted by Sony.

On April 26, Sony warned that hackers had stolen personal information from 77 million user accounts of its video game online network. On April 19, Sony pulled the plug on its PlayStation Network after discovering the breach.

On May 2, Sony revealed that hackers had stolen data another 25 million users of its PC games system.

Last week, Lulz Security claimed credit for an attack on an Atlanta office of InfraGard, an outreach center used by the Federal Bureau of Investigation to liaise with private business.

InfraGard and the FBI did not respond to requests for comment.

Lulz Security has claimed responsibility for defacing the U.S. Public Broadcasting Service network websites, and for posting on Monday data from PBS servers to protest a “Front Line” documentary about WikiLeaks.

It has also claimed credit for breaking into a Fox.com website and publishing data about contestants for the upcoming Fox TV talent show, “X Factor.”

Defense contractor Lockheed Martin and Google Inc have also been hacked recently.

Nobody has claimed responsibility for the attacks that Sony disclosed in April and May.

(This article has been modified to correct the third paragraph to show that Sony declined to comment)

 

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WHO says cell phone use “possibly carcinogenic”

By Kate Kelland, Health and Science Correspondent

LONDON | Tue May 31, 2011 2:52pm EDT

(Reuters) – Using a mobile phone may increase the risk of developing certain types of brain tumor and consumers should consider ways of reducing their exposure, World Health Organization (WHO) cancer experts said on Tuesday.

A working group of 31 scientists from 14 countries meeting at the WHO’s International Agency for Research on Cancer (IARC) said a review of all the available scientific evidence suggested cell phone use should be classified as “possibly carcinogenic.”

The classification, which puts mobile phone use in the same broad IARC cancer risk category as lead, chloroform and coffee, could spur the United Nations health body to look again at its guidelines on mobile phones, the scientists said.

But more lengthy and detailed research is needed before a more definitive answer on any link can be given.

The WHO had previously said there was no established evidence for a link between cell phone use and cancer.

“After reviewing essentially all the evidence that is relevant… the working group classified radiofrequency electromagnetic fields as possibly carcinogenic to humans,” Jonathan Samet, chair of the IARC group, said in a telebriefing.

He said some evidence suggested a link between an increased risk for glioma, a type of brain cancer, and mobile phone use.

The WHO’s position has been keenly awaited by mobile phone companies and by campaign groups who have raised concerns about whether cell phones might be harmful to health.

Industry groups immediately sought to play down the decision, stressing that the “possibly carcinogenic” category also includes substances such as pickled vegetables and coffee.

“This IARC classification does not mean that cell phones cause cancer,” said John Walls, vice president of public affairs for the United States-based wireless association CTIA.

He noted that the IARC working group did not conduct any new research, but reviewed published studies, and said other regulatory bodies such as the U.S. Food and Drug Administration have stated that “the weight of scientific evidence has not linked cell phones with any health problems.”

John Cooke, executive director of the British-based Mobile Operators Association, said IARC had only found the possibility of a hazard. “Whether or not this represents a risk requires further scientific investigation,” he said in a statement.

PREVIOUS STUDIES INCONCLUSIVE

The IARC remarks follow a study published last year which looked at almost 13,000 cell phone users over 10 years and found no clear answer on whether the mobile devices cause brain tumors.

Many previous studies have also failed to establish any clear cancer link, but a U.S. study in February found that using a mobile phone can change brain cell activity.

Use of mobile phones has increased hugely since their introduction in the early- to mid-1980s. About 5 billion mobile phones are currently in use worldwide.

Christopher Wild, IARC’s director, said it was important that more research should be conducted, particularly into long-term and heavy use of mobile phones.

“Pending the availability of such information, it is important to take pragmatic measures to reduce exposure such as hands-free devices or texting,” he said.

Malcolm Sperrin, director of medical physics and clinical engineering at Britain’s Royal Berkshire Hospital, said he thought the IARC move was appropriate because it reflected the “anecdotal evidence that cancers may be associated with phone usage.” But he added: “It is vitally important to fully understand that there is no definitive correlation.”

(Additional reporting by Sinead Carew in New York, editing by Mark Heinrich)

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Sony: Japan must await PlayStation network restoration

TOKYO | Mon May 30, 2011 11:25pm EDT

(Reuters) – Sony Corp said on Tuesday it would restore all PlayStation Network videogame services by the end of the week except in Japan, Hong Kong and South Korea, weeks after a massive security breach leaked details on 77 million user accounts.

The company had said earlier it was aiming to restore all services by the end of May.

A spokesman for Sony Computer Entertainment, the company’s games unit, said the delay in Japan was due to the need to comply with government instructions on information security, but he declined to specify reasons for the delay in other parts of Asia.

About 90 percent of the network’s users are in North America and Europe.

PlayStation Network users in Japan have already had online play services restored but do not yet have access to other services, such as the PlayStation Store, where they can buy games.

Sony said in a statement it would announce details for Japan, Hong Kong and South Korea as they became available.

The Japanese electronics and entertainment company also said last week its officials will testify before U.S. lawmakers at a hearing on data security in Washington on June 2 about what is thought to be the biggest ever Internet security breach.

(Reporting by Isabel Reynolds; Editing by Michael Watson)

 

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Honda Canada warns customers of major data breach

TORONTO | Fri May 27, 2011 4:13pm EDT

(Reuters) – The personal information of more than 283,000 customers at Honda Canada has been breached, the company confirmed on Friday.

Honda Canada said the stolen data included names, addresses, vehicle identification numbers and in some cases financing account numbers.

It said the data was not the type that would typically be used for identity theft or fraud, such as birth dates, telephone numbers, email addresses, credit card numbers, bank account numbers, driver’s license numbers, social insurance numbers, or dollar amounts of financing or payments.

The company said the information was collected in 2009 as part of a series of customer mail programs encouraging Honda and Acura owners to register at the myHonda and myAcura websites. It added that the unauthorized access was recent.

The Toronto Star reported Honda first noticed suspicious activity on the e-commerce websites in late February and that it said in a letter to affected customers dated May 13 that it was tipped off by unusual volume on the sites, including “some unauthorized attempts to access account information.”

Honda would not confirm the additional details the newspaper gave in its report.

The company said it is notifying all the affected customers by mail. It said it does not recommend taking any specific action at this time, other than being alert for marketing campaigns from third parties that reference Honda vehicle ownership.

Honda said it has had a toll-free line — 1-800-839-2826 — open since May 16 for customers who would like further information.

(Reporting by John McCrank)

 

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