15 Oct 08
Authorities Shut Down Spam Ring, NYT, BRAD
12 Jan 08 Virginia Considers Ban On Driving While Texting, WP, Anita Kumar
5 Jan 08 Intel Quits Effort to Get Computers to Children, NYT, JOHN MARKOFF
20 Nov 07 Pay Me for My Content, NYT, JARON LANIER
10 Oct 07 Generation Q: too quiet, too online, for its own good, NYT, THOMAS L. FRIEDMAN
19 Sep 07 Murdoch's Choice: Paid or Free for WSJ.com?, WSJ, SARAH ELLISON
18 Sep 07 Times to Stop Charging for Parts of Its Web Site, NYT, RICHARD PÉREZ-PEÑA
29 Aug 07 Japan's Warp-Speed Ride to Internet Future, Washington Post, Blaine Harden
26 Aug 07 Minding the Meeting, or Your Computer?, NYT, DEAN HACHAMOVITCH
24 Jun 07 Bit Wars: When Computers Attack, NYT, JOHN SCHWARTZ
9 jui 07 L´industrie du disque amende fortement le piratage, Le Temps, Anouch Seydtaghia
25 May 07 E-Mail Reply to All: 'Leave Me Alone', WP, Mike Musgrove
20 May 07 Telemarketing: Bilking the Elderly, With a Corporate Assist, NYT, CHARLES DUHIGG
25 Mar 07 Slow Down, Brave Multitasker, and Don’t Read This in Traffic, NYT, STEVE LOHR
18 Mar 07 How to Soften the Edges of Technology, NYT, ANNE EISENBERG
15 Mar 07 Basics - Guidelines for Using a Cellphone Abroad, NYT, ERIC A. TAUB
14 Mar 07 Cyber-Criminals and Their Tools Getting Bolder, More Sophisticated, WP, Brian Krebs
14 Feb 07 Google - the Copiepresse fallout, Guardian, Mark Sweney
20 Jan 07 Don’t Call. Don’t Write. Let Me Be., NYT, Damon Darlin
7 Jan 07 Tips for Protecting the Home Computer, NYT, John Markoff
7 Jan 07 Attack of the Zombie Computers Is Growing Threat, NYT, John Markoff
17 Dec 06 Website scammers clone in on Cherie and her learned friends, The Observer, Denis Campbell
6 Dec 06 Spam Doubles, Finding New Ways to Deliver Itself, NYT, BRAD STONE
6 Oct 06 Commerce Department Targeted; Hackers Traced to China, WP, Alan Sipress
29 May 06 Web censorship: Correspondent reports, BBC NEWS
28 May 06 Amnesty to target net repression, BBC NEWS
20 Jan 06 Yahoo, Microsoft, AOL turned over records Feds sought, mercurynews.com, Michael Bazeley et al.
20 Jan 06 Paper Closes Reader Comments on Blog, Citing Vitriol, NYT, Katharine Q. Seelye
20 Jan 06 Google Resists U.S. Subpoena of Search Data, NYT, KATIE HAFNER et al.
Paper Closes Reader Comments on Blog, Citing Vitriol
By KATHARINE Q. SEELYE
The Washington Post stopped accepting reader comments on one of its blogs yesterday, saying it had drawn too many personal attacks, profanity and hate mail directed at the paper's ombudsman.
The closing was the second time in recent months that a major newspaper has stopped accepting feedback from readers in a Web forum. An experiment in allowing the public to edit editorials in The Los Angeles Times lasted just two days in June before it was shut because pornographic material was being posted on the site.
The Post's blog, which had accepted comments from readers on its entries since it was first published on Nov. 21, stopped doing so indefinitely yesterday afternoon with a notice from Jim Brady, executive editor of www.washingtonpost.com.
Mr. Brady wrote that he had expected criticism of The Post on the site, but that the public had violated rules against personal attacks and profanity. "Because a significant number of folks who have posted in this blog have refused to follow any of those relatively simple rules, we've decided not to allow comments for the time being," Mr. Brady wrote. "Transparency and reasoned debate are crucial parts of the Web culture, and it's a disappointment to us that we have not been able to maintain a civil conversation, especially about issues that people feel strongly (and differently) about."
In an interview, Mr. Brady said the site had been overwhelmed with what he described as vicious personal attacks against Deborah Howell, the newspaper's ombudsman. She wrote a column about Jack Abramoff, the lobbyist who pleaded guilty to conspiracy, fraud and tax evasion, and said that several Democrats "have gotten Abramoff campaign money," apparently intending to say that they received campaign money from Mr. Abramoff's clients.
Her column generated complaints, and after saying she thought her views were being misrepresented, she was attacked again, prompting her to say she would not post any more replies.
The complaints escalated into what Mr. Brady said were unprintable comments that started "sucking up the time of two people" to keep them from appearing on the blog. "We were taking them out by the hundreds," he said. "It was just too much to handle." He added that he believed that the problem was "more issue-based than site-based," noting that The Post has more than two dozen other blogs where no such thing occurs. "This particular issue has inflamed the far left, and it seems to be something they've decided they'll fight," he said.
Joan Walsh, editor in chief of Salon.com, an online newsmagazine that allows open comment from the public, said that The Post had probably drawn such attacks to its site in part because it represents the mainstream media. "While we're an established news organization, we're not 'the establishment,' " she wrote in an e-mail message, noting that Salon has had to take down only a handful of comments since its blog went live three months ago. In both the Post and Los Angeles Times cases, she wrote, "there was an element of novelty and rebellion and being able to talk back to 'the man.' "
Still, she said, "I think it's a shame that neither organization saw it through, because I think the more obnoxious comments would have died down, and they'd have ultimately gotten the kind of debate they wanted."
Mr. Brady said he expected to reopen the comments at some point, but he needed to figure out how to patrol the site better and "keep it clean."
Mr. Brady held an online question-and-answer session on Friday to address
reader concerns about the
incident. Many participants complained that The Post was practicing censorship and silencing its critics. Mr. Brady responded that the Post was doing no such thing, pointing to the online discussion and the fact that of 30 blogs maintained by The Post, only one was shut off from outside comment. "We don't have an obligation to keep every one of those avenues open if we run into problems like we did yesterday," Mr. Brady wrote.
Mr. Brady said that Ms. Howell would address the Abramoff matter in her Sunday column, prompting some participants to complain that she should be thinking more about the online audience rather than adhering to a print schedule.
Others asked how Mr. Brady intended to proceed. He said he was considering prescreening of comments, but he did not like that option. "Real-time debate about the issues of the day is exciting, and what the Web can provide," he wrote. "Any prescreening makes that harder, but in certain subject areas, it may be the way we have to go."
He also said that The Post was planning to introduce an online debate next week between bloggers and journalists "to start getting to some of the tough questions this issue has raised, specifically how to make sure the dialogue between the media and its consumers can flourish online."
Correction: Jan. 20, 2006
An earlier version of this story reported incorrectly that The Washington Post had closed a blog. The blog
has not been shut; it has stopped accepting comments from readers.
Google Resists U.S. Subpoena of Search Data
By KATIE HAFNER and MATT RICHTEL
SAN FRANCISCO, Jan. 19 - The Justice Department has asked a federal judge to compel Google, the Internet search giant, to turn over records on millions of its users' search queries as part of the government's effort to uphold an online pornography law.
Google has been refusing the request since a subpoena was first issued last August, even as three of its competitors agreed to provide information, according to court documents made public this week. Google asserts that the request is unnecessary, overly broad, would be onerous to comply with, would jeopardize its trade secrets and could expose identifying information about its users.
The dispute with Google comes as the government is moving aggressively on several fronts to obtain data on Internet activity to achieve its law enforcement goals, from domestic security to the prosecution of online crime. Under the antiterrorism law known as the USA Patriot Act, for example, the Justice Department has demanded records on library patrons' Internet use.
Those efforts have encountered resistance on privacy grounds.
The government's move in the Google case, however, is different in its aims. Rather than seeking data on individuals, it says it is trying to establish a profile of Internet use that will help it defend the Child Online Protection Act, a 1998 law that would impose tough criminal penalties on individuals whose Web sites carried material deemed harmful to minors.
The law has faced repeated legal challenges. Two years ago, the Supreme Court upheld an injunction blocking its enforcement, returning the case to a district court for further examination of Internet-filtering technology that might be an alternative in achieving the law's aims.
The government's motion to compel Google's compliance was filed on Wednesday in Federal District Court in San Jose, Calif., near Google's headquarters in Mountain View. The subpoena and the government's motion were reported on Thursday by The San Jose Mercury News.
In addition to records of a week of search queries, which could amount to billions of search terms, the Google subpoena seeks a random list of a million Web addresses in its index.
Charles Miller, a spokesman for the Justice Department, said on Thursday that three Google competitors in Internet search technology - America Online, Yahoo and MSN, Microsoft's online service - had complied with subpoenas in the case.
Mr. Miller declined to say exactly how the data would be used, but according to the government's filings, it would help estimate the prevalence of material that could be deemed harmful to minors and the effectiveness of filtering software. Opponents of the pornography law contend that filtering software could protect minors effectively enough to make the law unnecessary.
The government's motion calls for Google to surrender the information within 21 days of court approval.
Although the government has modified its demands since last year, Google said Thursday that it would continue to fight. "Google is not a party to this lawsuit, and their demand for information overreaches," said Nicole Wong, Google's associate general counsel, referring to government lawyers. "We intend to resist their motion vigorously."
Philip B. Stark, a statistics professor at the University of California, Berkeley, who was hired by the Justice Department to analyze search engine data in the case, said in legal documents that search engine data provided crucial insight into information on the Internet. "Google is one of the most popular search engines," he wrote in a court document related to the case. Thus, he said, Google's databases of Web addresses and user searches "are directly relevant."
But Danny Sullivan, editor of SearchEngineWatch, an online industry newsletter, questioned the need for a subpoena. "Is this really something the government needs Google to help them with?" he said.
As for Google's rivals, MSN declined to speak directly to the case but released a statement saying it generally "works closely with law enforcement officials."
Mary Osako, a Yahoo spokeswoman, said the company complied with the subpoena "on a limited basis." And Andrew Weinstein, a spokesman for AOL, said that company gave the Justice Department a generic list of anonymous search terms from a one-day period.
Susan P. Crawford, a professor at the Cardozo School of Law in New York, said she could understand why the companies complied. "There's this real perception that if you're not with us you're against us," she said. "So the major companies will cooperate with enormously burdensome requests just to avoid future vengeance being wreaked on them" by the Justice Department.
In its brief history, Google has made "Don't be evil" an operating principle, even as it has come to endure scrutiny and criticism over its increasing inroads into a variety of businesses beyond Web searches, from advertising to mapping.
And Google and its rivals have been criticized for their business practices in China, where Google and MSN have filtered keywords like "human rights" and "democracy" out of their search-engine results. Last fall, it was revealed that Yahoo had cooperated with authorities seeking the identity of a Chinese e-mail subscriber who had distributed a government warning about protests; he is now serving a 10-year prison term.
While its court filings against the Justice Department subpoena have emphasized the burden of compliance and threat to its trade secrets, Google also pointed to a chilling effect on its customers. "Google's acceding to the request would suggest that it is willing to reveal information about those who use its services," it said in an October letter to the Justice Department. "This is not a perception Google can accept. And one can envision scenarios where queries alone could reveal identifying information about a specific Google user, which is another outcome that Google cannot accept."
For its part, the Justice Department said the data received from Google's rivals showed that the search query information did not contain "any additional personal identifying information" and that trade secrets would be protected under procedures at the trial court. "Google thus should have no difficulty in complying in the same way as its competitors have," the government's motion said.
Critics of the effort to subpoena Google say the immediate issue is not pornography or privacy, but whether the government has established its need for the information. "The government's attitude, apparently, is that it's entitled to information without justification," said Aden Fine, an attorney for the American Civil Liberties Union, which has led the fight against the 1998 pornography law. "Like everyone else in litigation, they need to justify their request for information."
Even as the government has yet to put the 1998 law into effect, the pornography industry has faced a legal offensive on other fronts. Congress in recent years has increased the resources and sharpened the laws available to the Justice Department to go after makers of hard-core videos and other content.
At the same time, though, the industry is booming, recording $12.6 billion in revenue in 2005 from distribution of sexually explicit content, and from other forms of entertainment, like strip clubs. A big reason for the growth is technology, with sales from Internet distribution hitting $2.5 billion in 2005, according to testimony given to the Senate on Thursday.
American Web sites that show explicit content get as many as 60 million visitors a day, according to testimony given to the Senate Committee on Commerce, Science and Transportation by Paul Cambria, general counsel for the Adult Freedom Foundation, an organization that represents the interests of the pornography industry.
In fighting the 1998 law, the civil liberties union has argued that whether or not pornography is available on the Internet, the law is unconstitutional because it will limit the distribution of acceptable forms of free speech. Under the law, Web site operators face criminal charges for publishing sexually explicit material unless they have a way of verifying that viewers are over 17.
Whatever the courts ultimately decide on the pornography law at issue, however, Tim Wu, a professor at Columbia Law School, said the Google case pointed to a larger struggle for the identity of the Internet. "Search engines are at the center of that battle, both here and in other countries," said Professor Wu. "By asserting its power over search engines, using threats of force, the government can directly affect what the Internet experience is. For while Google is fighting the subpoena, it's clear that if they lose, they will comply."
Copyright 2006The New York Times Company
San Jose Mercury News
Posted on Thu, Jan. 19, 2006
Feds after Google data
By Howard Mintz Mercury News
The Bush administration on Wednesday asked a
federal judge to order Google to turn over a broad
range of material from its closely guarded databases.
The move is part of a government effort to revive an Internet child protection law struck down two years ago
by the U.S. Supreme Court. The law was meant
to punish online pornography sites that make their content accessible
to minors. The government contends
it needs the Google data to determine how often
pornography shows up in online searches.
In court papers filed in U.S. District Court in San Jose, Justice Department lawyers revealed that Google
has refused to comply with a subpoena issued last
year for the records, which include a request for 1 million random Web
addresses and records of all Google
searches from any one-week period.
The Mountain View-based search and advertising giant opposes releasing the information on a variety of
grounds, saying it would violate the privacy rights of
its users and reveal company trade secrets, according to court documents.
Nicole Wong, an associate general counsel for Google, said the company will fight the government's effort
``Google is not a party to this lawsuit, and the demand for the information is overreaching,'' Wong said.
The case worries privacy advocates, given the vast amount of information Google and other search engines
know about their users.
``This is exactly the kind of case that privacy advocates have long feared,'' said Ray Everett-Church, a
South Bay privacy consultant. ``The idea that these
massive databases are being thrown open to anyone with a court document
is the worst-case scenario. If
they lose this fight, consumers will think twice about
letting Google deep into their lives.''
Everett-Church, who has consulted with Internet companies facing subpoenas, said Google could argue that
releasing the information causes undue harm to
its users' privacy.
``The government can't even claim that it's for national security,'' Everett-Church said. ``They're just using it
to get the search engines to do their research for
them in a way that compromises the civil liberties of other people.''
The government argues that it needs the information as it prepares to once again defend the
constitutionality of the Child Online Protection Act in a federal
court in Pennsylvania. The law was struck down in 2004 because it was
too broad and could prevent adults
from accessing legal porn sites.
However, the Supreme Court invited the government to either come up with a less drastic version of the law
or go to trial to prove that the statute does not
violate the First Amendment and is the only viable way to combat child
As a result, government lawyers said in court papers they are developing a defense of the 1998 law based
on the argument that it is far more effective than
software filters in protecting children from porn. To back that claim,
the government has subpoenaed search
engines to develop a factual record of how often
Web users encounter online porn and how Web searches turn up material
they say is ``harmful to minors.''
The government indicated that other, unspecified search engines have agreed to release the information, but
``The production of those materials would be of significant assistance to the government's preparation of its
defense of the constitutionality of this important
statute,'' government lawyers wrote, noting that Google is the largest
Google has the largest share of U.S. Web searches with 46 percent, according to November 2005 figures
from Nielsen//NetRatings. Yahoo is second with 23
percent, and MSN third with 11 percent.
YAHOO, MICROSOFT, AOL TURNED OVER RECORDS
Google sparks privacy fight
By Michael Bazeley and Howard MintzMercury
NewsYahoo, Microsoft and America Online turned over records to the government
that Google is refusing to
relinquish, raising divisions within the nation's
biggest search engines over what information should be private.
The legal dispute over whether the federal government can force Google to give up information from its
search engine index is a reminder of the vast amount
of personal information Internet companies collect on their users --
and the possibility it could reach third
Some privacy experts said the Department of Justice's request is worrisome , particularly in an era when
the government has stepped up surveillance in
efforts to combat terrorism -- even admitting it has spied on Americans.
The Bush administration apparently never asked for any explicitly personal information. And Google is not
refusing the order on privacy grounds. But it
clearly was concerned about public reaction.
``Google's acceding to the request would suggest it is willing to reveal information about those who use its
services. This is not a perception that Google can
accept,'' Google attorney Ashok Ramani wrote in an Oct. 10 letter to
the Justice Department.
``We think companies should be pushing back,'' said Ari Schwartz, associate director of the Center for
Democracy and Technology. ``They're only going to be
asked for more. These things are gradual. They see if they can get what
they're asking for, and it gets
bigger and bigger.''
AOL, Microsoft and Yahoo agreed to the requests, although one attorney involved in the case said Yahoo
never turned over any personal information.
``We're rigorous defenders of our users' privacy,'' spokeswoman Mary Osako said. ``In our view, this is not a
A Microsoft statement said, in part, ``We did comply with their request for data in regards to helping protect
children in a way that ensured we also
protected the privacy of our customers. We were able to share aggregated
query data (not search results)
that did not include any personally identifiable
The case stems from the Bush administration's attempt to resurrect the Child Online Protection Act, struck
down two years ago by the U.S. Supreme Court.
The law was meant to punish online pornography sites that make content
accessible to minors.
The government contends it needs the data to determine how often pornography shows up in online
In its original subpoena, dated in August, the government asked the four companies for ``all URLs that are
available to be located through a search query on
your company's search engine as of July 31, 2005.'' Also requested were
records of ``all queries'' entered
between June 1 and July 31. The subpoena said
authorities did not want any ``additional information . . . that would
identify the person'' who typed in the
The government later narrowed the scope of its request to a million URLs and search queries over a
Government officials would not detail how they planned to use the information. But a source close to the
case said it is interested in what types of Web pages
appear when people type in various search terms.
``My understanding is, we were seeking what keywords are put in and URLs,'' said Justice Department
spokesman Charles Miller. ``Nothing personal.''
Google called the request ``overbroad, unduly burdensome, vague and intended to harass.''
Its October letter to the Justice Department said the government appeared to want to create ``a sample
world-wide web'' so it could test the effectiveness of
``Google objects to Defendant's view of Google's highly proprietary search database -- the primary reason
for the company's success -- as a free resource that
Defendant can access and use, some levels removed, to formulate its
Google also objected that the request would reveal ``privileged, confidential or trade-secret information.''
It suggested the government seek its information from the Internet Archive, a non-profit archive of Web
pages that Google said more appropriately reflects
the breadth of the Web.
Although he said the case was worrisome, privacy expert Alan Westin said it does not appear to raise
direct privacy issues.
``If there are not responses that reveal personal information, you don't have a privacy issue,'' said Westin,
founder of the Privacy and American Business think
tank. ``If you say, `If you stick in this query and 67 pornographic
responses come back,' that's not a privacy
issue to me.''
Internet companies have been amassing large storehouses of personal information about their users.
Amazon.com is the classic example; it collects credit card
information and keeps track of what books, CDs and other items its customers
buy so it can make
But search engines have been getting increasingly personal, too. Google and other search engines collect
and store records of which search terms their users
type in and what pages they visit. Google now offers to personalize
its search results for people based on
their previous searches. Companies such as Yahoo
and Ask Jeeves encourage users to store bookmarks of Web pages they
find on company servers.
``That's the constant trade-off between greater personalization and this one-stop for managing your life,''
said Ray Everett-Church, a South Bay privacy
consultant. ``You're making it easier to issue subpoenas or warrants
Contact Michael Bazeley at email@example.com or (408) 920-5642,
and read his blog at
Old mogul, new media
Jan 19th 2006
From The Economist print edition
Can Rupert Murdoch adapt News Corporation to the digital age?
IN JUNE 2005 Ross Levinsohn, head of new media at News Corporation,
a media conglomerate, presented
an internet strategy to a gathering of the
company's top managers. It was a daunting prospect: many of them were
deeply sceptical about the
internet, having watched the dotcom bust of 2000-02.
Sure enough, Mr Levinsohn found himself interrupted. “We really can't
do that,” objected a senior executive.
Before Mr Levinsohn could respond he heard
another voice: “What do you mean, we can't do that? Of course we can
do that.” It was Rupert Murdoch, the
firm's chairman and chief executive.
In his 74th year, Mr Murdoch is very much in charge of the global media
group he constructed over the last
four decades. But he and his firm face two
fundamental issues that relate to News Corporation's traditional media
businesses. The first is what to do
about the emergence of the internet, both as a
medium in its own right, and as a way to distribute media content. The
second is how News Corporation's
portfolio should be best configured in response to
rapidly shifting technologies related broadly to digitisation. Its film
and television production units are
vulnerable to digital piracy; its broadcast-television
business is losing advertising revenue to the internet; and the satellite-television
face a stronger cable industry and new entrants. The
company's challenge is typified by, but not limited to, its newspaper
business—it owns dozens of titles.
Last year Mr Murdoch warned in a much-noted speech
that the industry would inevitably decline if it fails to adapt to the internet.
Searching for answers to these problems, Mr Murdoch spent $1.4 billion
on three young internet companies
in 2005, which, together with News
Corporation's existing websites, now form Fox Interactive Media, the
division that Mr Levinsohn runs. On the
internet, News Corporation has now moved
ahead of its big traditional media rivals, with the exception of Time
Warner, which agreed to be taken over in
2000 by AOL, an internet-access provider. But
can News Corporation lead the way for other “old” media and successfully navigate its way forward?
It might seem an unfair question. Compared with its past, News Corporation
is calm and profitable. It is
convinced that it needs scale and a broad range of
businesses embracing both content and distribution—it has no intention
of splitting itself up. In the past
couple of years it has made heavy investments in
satellite television in America and Italy. Those bets seem to be paying
off. Most of its businesses are
thriving and many are throwing off large quantities of cash.
The company's revenues and profits are growing at a double-digit rate, faster than rivals'.
Investors are unimpressed, however. That is partly because they are
so gloomy about traditional media
companies' prospects: they reckon that the internet is
stealing its audiences and that new technologies will combine to wreck
established business models (see
Some of the reason has to do with Mr Murdoch himself. Investors are
fearful about who will lead the
company after him (see article). But the really big issues
are how the company will adapt to the internet and the rise of digital
media. The problem with creating new
business models for the internet and a digital
environment is that these can cannibalise existing, more lucrative businesses.
One of the biggest problems
for News Corporation's film- and
television-production business is digital piracy. At the moment Hollywood
film studios wait for five months
after releasing a film in cinemas before sending it
out on DVD, which leaves their content extremely vulnerable to pirates.
News Corporation is looking at
bridging that gap by offering video-on-demand. But
it is difficult to price such an offering to be as profitable as a DVD,
and without angering powerful retailers,
such as Wal-Mart.
Keeping up with technology in one bit of News Corporation's business
sometimes damages another part. To
maintain the attractiveness of satellite television,
for instance, News Corporation has subsidised digital video recorders
for its customers, which allow them to
record programmes and watch them when they
like. DVRs, as they are known, are disruptive for advertising-funded
television, however, because they allow
people to fast-forward through advertisements.
“In content, we could not be happier,” says Mr Murdoch. News Corporation's
film studio came second for
box-office receipts after Warner Brothers in 2005
and it claims the highest margins in Hollywood. Its TV studio is a leading
producer of prime-time
programmes. Its cable channels are growing fast, and Fox
News, especially, continues to benefit from America's divided politics and the war on terror.
“Distribution systems, on the other hand, are proliferating,” says Mr
Murdoch, and “while that is great for
content, it raises questions about the long-term
economics of distribution.” The internet is emerging as a distribution
system in its own right, and telecoms
firms are already trying to deliver television using
internet technology. News Corporation has spent enormous amounts of
money and energy over the years
on satellite-television platforms in America, Britain,
Italy and Latin America. Now investors are worried that satellite is losing its competitive advantage.
Its most immediate challenge is from the cable industry, which has invested
heavily in its infrastructure and
is now offering a bundle of digital television,
broadband and voice service. At the moment, satellite cannot offer this
“triple-play” option: it has only TV.
Neither can it sell as full a video-on-demand
service, because it beams the same television signal across whole regions.
That will become a serious
drawback as video-on-demand quickly becomes a
standard product, says Craig Moffett, an analyst at Sanford C. Bernstein
in New York. In Britain and Italy
satellite also has to vie with attractive free
digital-terrestrial television services.
In response, News Corporation is rushing to add broadband and voice
to its satellite-television products
around the world. In Britain BSkyB bought Easynet,
a broadband internet-access company, for $385m in 2005. News Corporation
is also working on a way to
add broadband to DirecTV's portfolio, and expects
to announce a solution in the near future.
As for video-on-demand, News Corporation plans to store as many popular
television shows and movies as
it can on digital video recorders for instant
playback. For more obscure material it will provide a broadband option.
In Britain it took a first step in this
direction on January 10th by allowing its
subscribers to download films and sports highlights from the internet on their home PC free of charge.
The most challenged of all of News Corporation's divisions is its newspaper
business, which contributes
one-fifth of its operating income. Newspapers are
suffering from the internet more than the rest of “old” media, as classified
advertising moves online and
young people are using the net to get their news. No
other media conglomerate owns newspapers in any significant number.
Mr Murdoch recently sold the
educational supplements of the British Times because
he thought they were too dependent on classified advertising. But he
does not appear to have any bolder
solution. “Despite his speech, only a tiny fraction of
News Corporation's energy appears to be going into securing its newspapers'
future online,” says Simon
Waldman, director of digital publishing at the
Guardian. In Britain the Murdoch-owned Sun, Times and News of the World
together attracted 6.7m unique
visitors in November 2005, only the same as the
Guardian alone, and far fewer than the 21.4m who visited the news site
of the BBC, a publicly funded
Many investors would like Mr Murdoch to reduce News Corporation's exposure
to newspapers. The main
reason that he does not, says a shareholder, is that
he's “an empire builder who refuses to sell things”. This investor would
also like the company to sell its
television stations, which are struggling to grow
because America's advertising market is mature and because advertisers
are moving money away from TV
to the internet. One executive at the company
agrees that “we've never been very good at selling things, except under duress.”
Mr Murdoch says that he will not get rid of newspapers. “That may be
emotional”, he says, “but we're a
communications company, not just a content company,
and we want to improve the world.” Owning newspapers, of course, has
given the group clout with politicians
and regulators. He argues that a sale would
lose a large slice of value on capital-gains tax.
If he is a stickler on that front, there is no denying that Mr Murdoch
appears to have become an internet
evangelist for his group as a whole. The first time he
invested enthusiastically on the internet, everything ended disastrously.
During the boom of the 1990s, he
refused to join the frenzy until 1999, then spent
hundreds of millions of dollars on ePartners, a dotcom investment division,
only to wind it down a year or so
This time around, his interest in the internet started last year after
he noted that America's economic growth
was not showing up in advertising on TV, radio
or print, but that the internet was starting to grab a meaningful share.
At the same time, he saw that
broadband internet access was becoming widespread.
Once most people have broadband, he reckons, they will want video as
well as music, still pictures and
text. News Corporation owns a huge amount of the
entertainment and sports programming that young people are likely to want to access via broadband.
A flurry of deals followed that insight. None of them is transformative—the
amounts involved remain small by
comparison with News Corporation's huge
turnover or its $54 billion market value. But the message is clear:
News Corporation “gets” the internet and
is determined to embrace it.
This came across loudest in July 2005 when News Corporation surprised
everyone by buying Intermix
Media, owner of MySpace.com, a social-networking site,
for $580m. The following month it acquired Scout.com, a college sports
site. And in September it bought
IGN Entertainment, a video-gaming and
entertainment site, for $650m. More such acquisitions are likely to
follow. Richard Bilotti, media analyst at
Morgan Stanley, says the firm may spend $500m to
$1 billion a year in the next three to five years.
Do you have a MySpace?
The sites' combined traffic, added to News Corporation's own web properties, FoxSports.com,
FoxNews.com and Fox.com, has pushed News Corporation up
among the giants of the internet (see chart 2). Google, an internet
search firm, is taking note of News
Corporation's purchases. Mr Murdoch has passed on to
colleagues that Eric Schmidt, chairman of Google, told him that buying
MySpace.com will prove to be the
best deal of his life. That News Corporation has
chosen to buy an unusual site where users create the content shows that
the company is not merely
reproducing itself online, but thinking differently about
the future of the internet.
Since May 2005 the number of people who visit MySpace.com each month
has grown from 16m to 27m,
and 150,000 people are registering each day. Like
Google before it, MySpace.com has entered the English language. Its
appeal is that its members create an
anarchic mix of their own content. The site is a
collection of individuals' homepages with photographs, music, links to friends and blogs.
As an internet business, MySpace.com considers itself to be an entirely
new breed. Chris DeWolfe, its
co-founder, says he wanted the company to take
inspiration from sociology as well as from technology, and for that
reason he based it in Los Angeles rather
than Silicon Valley. The community has grown
virally, with no advertising. Some of the photographs verge on the pornographic,
and MySpace.com has
about ten people in a room at its headquarters in
Santa Monica, Los Angeles, weeding out explicit photographs. With its
young members, its 24-hour
discussion groups on everything from graffiti to
independent film-making, and its thousands of undiscovered bands, MySpace.com
has the ambition not
just to be useful, like Google, MSN or Yahoo!, but cool.
While no one doubts that News Corporation has tapped into a powerful
social phenomenon, some people
question if there is much money to be made from
it. The company expects to make $300m of revenue on the internet this
year, and Mr Murdoch said he
wants the company to make $1 billion from it in five
years' time. “MySpace has been run by creative types who have not thought
much about earnings and are
frightened of being corporatised,” says Mr Murdoch,
“but now their job is not just to grow but to monetise traffic.” MySpace.com
is profitable, but it has not
translated its popularity into big advertising revenues.
IGN, on the other hand, the most popular site on the internet for young
men, has a more developed
business model based on advertising. Together the sites
make modest tens of millions of dollars in profits.
Now News Corporation will try to convert their traffic into more advertising
revenue. If it does so too
obtrusively, there is a risk that their free-spirited
members will move somewhere else. To avoid that happening, Mr Levinsohn
plans to create scarcity of
space and to charge a high price. The premium will be
justified, he says, by the attractively young demographic—predominantly
13 to 34—of the audiences, and
the amount of information News Corporation has
about each user, which will allow advertisers to target precisely. Despite
its huge audience, MySpace.com
still has a lot to prove to advertisers, says Rob
Norman, director of interaction at Group M, the media-buying arm of
WPP. “It's not yet clear what the value
of user-generated content is to brand owners,”
Owning internet properties is also a way for News Corporation to establish
its content online. Before the
company started talking to MySpace.com, the
biggest four discussion groups on the site were about three programmes
made by Fox, its
subsidiary—“Family Guy”, “The OC” and “The Simpsons”—and a
film from Fox Searchlight Pictures, “Napoleon Dynamite”. IGN has developed
technology to allow the
downloading of large video files from the internet. In
2006, as a start, News Corporation will use this to distribute “Family
Guy” episodes made exclusively for
the internet across Fox's websites. The company is
already feeling a marketing benefit from its web communities. One of
Twentieth Century Fox's films,
“Transporter 2” did far better than expected after being
promoted on MySpace.com and IGN.
Nevertheless, it is News Corporation's big legacy businesses that will
mostly determine whether the
company can adapt to a new era for the media industry.
That is why Mr Murdoch will need to keep focusing on making money from
television, films and newspapers
as well as his trendy new web communities.
Copyright © 2006 The Economist Newspaper and The Economist Group. All rights reserved.
Jan 19th 2006
From The Economist print edition
Investors are fretting about who will succeed Mr Murdoch
ON TOP of its strategic challenges, News Corporation faces the tricky
question of who will take over from
Mr Murdoch. One view is that his eventual
departure will be followed by a break-up of the company, because it
consists of his particular choice of
assets and may prove too unwieldy for anyone else to
So far, Mr Murdoch's plan to pass control of News Corporation to one
of his children is going badly. Last
year his eldest son, Lachlan, left the business after
losing a power struggle with other (non-Murdoch) senior executives,
and his daughter Elisabeth abruptly left
BSkyB in 2000. Now only James, at 33 the
youngest of his adult children, remains in the business—he is currently chief executive of BSkyB.
Does James want the burden of running the whole company? Executives
at News Corporation reckon that
he has the necessary ambition, and he has won the
respect of shareholders. But with no experience of running any of News
Corporation's big American
divisions, it is hard to imagine James taking over soon.
Investors expect that if anything happened to Mr Murdoch, or if he stepped
down, Peter Chernin, the group's
chief operating officer, would take over.
Meanwhile, Mr Murdoch has failed to see off John Malone, boss of Liberty
Media, whose 18% voting stake
is not far off the 29.5% that the Murdochs collectively
own. In 2004, to the dismay of shareholders, News Corporation's board
agreed to a poison-pill defence to
prevent Mr Malone buying more voting shares.
Eventually, Mr Murdoch hopes to overcome the impasse by buying back
Mr Malone's shares in return for
one or more of the group's assets. “We're waiting
on him to come up with a scheme that will satisfy his tax issues,” Mr
Murdoch says. He rejects the
possibility that Mr Malone intends to grab control of News
Corporation. “He's a great financial engineer, but he doesn't have the management,” Mr Murdoch says.
For the moment, News Corporation intends to keep its poison pill, even
though investors dislike it. News
Corporation argues that senior people at big
fund-management firms do not have a big problem with the poison pill,
and that it is only
corporate-governance specialists who are making a fuss. Perhaps,
but the company would doubtless like more fund managers to buy its shares.
Many will not do so until the
poison pill is gone and there is clarity about who
will end up in charge.
Copyright © 2006 The Economist Newspaper and The Economist Group.
All rights reserved.
Jan 19th 2006
From The Economist print edition
Desperate times bring desperate measures
The DVD wars
IN A letter about pay-rises to staff at the Sun last year, Britain's
biggest-selling newspaper, Rebekah Wade,
its editor, remarked that in future the paper's
success would probably depend more on free CDs and DVDs than on its
journalists. British newspapers are
frenziedly giving things away, and in Germany,
France, Italy, Poland and throughout Latin America papers are also increasingly
relying on freebies to try to
attract new readers. In Britain the circulation of
national newspapers fell by 3% in 2005, following a 2% decline in 2004.
The same pattern of falling
circulation is being repeated across Europe and the United
States. So are all the free gifts a sign of desperation from newspapers,
or an entirely sensible new
Ideally, a giveaway attracts brand-new readers who keep on buying the
paper. Newspapers particularly hope
that CDs and DVDs will appeal to the
young—who are increasingly getting their news online. For a paper selling
copies in the hundreds of
thousands each day, it costs about $1m-1.5m to give a
DVD away at the weekend, and less for a CD. A good film can push a day's
circulation up by 20% or more.
But the strategy covers its costs only if new
readers stay during the rest of the week, and the paper gains a larger
base for its advertising sales.
Plenty of newspapers still regard giveaways as beneath their dignity.
Quality papers in America, for
instance, do not go in for them (so far). It looks much
more respectable, says Michael Smith, of the media department of Northwestern
University, if freebies
dovetail neatly with a newspaper's brand. In Latin
America, he says, several papers, such as La Nueva Provincia in Argentina,
have given CD collections of
regional folk music. In Britain this week the Financial
Times (which owns a 50% stake in The Economist) gave away the first
of a weekly series of condensed
editions of business books.
Elsewhere, newspapers have managed to charge more for editions that
come with an extra something.
Italy's La Repubblica is charging a few euros more on
the days when it encloses one of a series of books, and Le Figaro and
Le Monde in France also lift their
price when they carry DVDs or other giveaways.
Some newspaper bosses take an entirely cynical view of the practice.
Rupert Murdoch, owner of the Sun
and the Times, said last November that he dislikes it
because “people grab the paper, tear the DVD off and throw away the
paper”. Despite his views, points out
a rival newspaper executive, his titles in Britain
have given away far more freebies than their competitors have, and are
still handing them out. In fact, many
newspapers have little choice but to give away
things, because everyone else is at it. “It all started with some integrity,”
says Marc Sands, director of
marketing at the Guardian, “but now people are doing
anything to get a spike in circulation.” Yes indeed: on January 14th,
the largest headline on the front page
of the Guardian screamed “Free DVD”.
Copyright © 2006 The Economist Newspaper and The Economist Group. All rights reserved.
» Postmortaler Persönlichkeitsschutz «
von Ludwig Greven
Ein Berliner Hacker legt acht Jahre nach seinem mysteriösen Tod die deutsche Seite des Web-Lexikons
Wikipedia lahm. Damit wird ein Rechtsstreit von
grundsätzlicher Bedeutung ausgelöst.
Als Hacker ist er bis heute eine Legende. Unter dem Pseudonym "Tron" knackte ein Berliner
Informatikstudent in den 90er Jahren die Verschlüsselung des
Pay-TV-Senders Premiere und von Telefonkarten. Im Oktober 1998 wurde
er erhängt in einem Berliner Park
gefunden. Selbstmord, ermittelte die Polizei.
Mord, glauben bis heute einige Freunde und Fans. Bücher und ein
Film beschäftigten sich mit seinem
Leben und seinem Ende.
Gut sieben Jahre später legte "Tron" jetzt indirekt die deutsche
Ausgabe des Internetlexikons Wikipedia
lahm - in einem Rechtsstreit von grundsätzlicher
Bedeutung. Seit Donnerstag darf der deutsche Wikipedia-Trägerverein
nicht mehr von seiner Seite auf die
deutschsprachige Ausgabe der Web-Enzyklopädie
weiterleiten. Erwirkt haben das die Eltern von "Tron" durch eine einstweilige
Verfügung des Amtsgerichts
Berlin-Charlottenburg. Denn in einem
Wikipedia-Beitrag wird seit Mai 2005 der volle Name des Hackers genannt.
Dagegen wenden sich die
Eltern, die darin eine Verletzung des "postmortalen
Das Gegenteil erreicht
Über de.wikipedia.org und die englische Mutter-Site ist der Artikel und damit auch der Name allerdings
weiter zu lesen. Denn eine erste einstweilige
Verfügung, die sich gegen die Wikipedia Foundation in Florida richtete,
der die beiden Domains gehören,
wurde bis heute offenbar nicht zugestellt.
Der deutsche Verein hat nun Widerspruch eingelegt. Voraussichtlich schon
nächste Woche will das
Gericht darüber entscheiden. Es muss klären, ob hier
tatsächlich Persönlichkeitsrechte verletzt wurden und wer
für Einträge in einem solchen Web-Lexikon
verantwortlich ist - der Anbieter oder der Autor.
Wikipedia jedenfalls sieht sich nur als "Plattform des Wissens", so
der Anwalt des Vereins, Thorsten
Feldmann. Und als Lexikon will man nicht darauf
verzichten, alle Fakten und Namen zu nennen.
Der Hamburger Medien- und Internetrechtler Till Kreutzer wundert sich,
dass die Weiterleitung generell
untersagt wurde, "obwohl es doch nur um einen
Artikel geht". Fürs Erste haben die Eltern jedoch das Gegenteil
erreicht: Nun sprechen und schreiben
wieder ganz viele über ihren Sohn.
Aus der FTD vom 20.01.2006
© 2006 Financial Times Deutschland
Amnesty to target net repression
Internet users are being urged to stand up for online freedoms by backing a new campaign launched by human rights group Amnesty International.Amnesty is celebrating 45 years of activism by highlighting governments using the net to suppress dissent.
The campaign will highlight abuses of rights the net is used for, and push for the release of those jailed for speaking out online.
It will also name hi-tech firms aiding governments that limit online protests.
Called Irrepressible.info, the campaign will revolve around a website with the same name. While the human rights group has run separate campaigns about web repression and the jailing of net dissidents before now, Irrepressible.info will bring them all together.
It aims to throw light on the many different ways that the freedom to use the net is limited by governments.
For instance, said a spokesman for Amnesty, around the globe net cafes are being closed down, home PCs are being confiscated, chat in discussion forums is being watched and blogs are being censored or removed.
AMNESTY INTERNET PLEDGE"The internet has become a new frontier in the struggle for human rights," said Kate Allen, UK director of Amnesty International.
I believe the internet should be a force for political freedom, not repression. People have the right to seek and receive information and to express their peaceful beliefs online without fear or interference. I call on governments to stop the unwarranted restriction of freedom of expression on the internet and on companies to stop helping them do it
Ms Allen added that there were growing numbers of cases in which those who have turned to the net to discuss change or protest about government policies have been jailed for what they said.
For instance, she said, Chinese journalist Shi Tao is serving a 10-year jail sentence for sending an e-mail overseas which detailed the restrictions the Chinese government wanted to impose on papers writing about the 15th anniversary of the Tiananmen Square massacre.
HAVE YOUR SAYHi-tech firm Yahoo helped identify the journalist via his e-mail account. Amnesty is calling for the jailed journalist to be released immediately.
The internet is an international tool for free thought
Elliot, Exmouth, Devon
"We condemn punishment of any activity internationally recognised as free expression, whether that punishment takes place in China or anywhere else in the world," she said.
She added the company had received "a valid and legal demand" for information and responded to it as required by the law.
She went on: "The choice in China or other countries is not whether to comply with law enforcement demands for information. Rather, the choice is whether or not to remain in a country.
"We balance the requirement to comply with laws that are not necessarily consistent with our own values against our strong belief that active involvement in China contributes to the continued modernization of the country - as well as a benefit to Chinese citizens - through the advancement of communications, commerce and access to information."
Profit and principles
The Amnesty campaign will seek to get net users to sign a pledge that opposes repressive use of the net. The pledges will be collated and presented to a meeting of the UN's Internet Governance Forum that is due to meet in Athens in November 2006.
Amnesty wants to get people using an icon in e-mail signatures or on websites that contains text from censored sites.
The group also wants to run an e-mail campaign to target companies to stop putting "profit before principles" and respect human rights everywhere they operate.
Reports will be prepared on those countries that place restrictions on what can be said online or use it to keep an eye on those expressing discontent.
"Irrepressible.info will harness the power of the internet and of individuals to oppose repression and stand up for free speech," said Ms Allen.
Story from BBC NEWS:
Published: 2006/05/28 09:32:35 GMT
Web censorship: Correspondent reports
As human rights group Amnesty International launches a global campaign to try to halt censorship of the internet by governments, BBC correspondents report from some countries where web users face difficulties.
In its quest to control the internet China has sought overseas help
CHINA: RUPERT WINGFIELD-HAYES in BEIJING
Officially China does not censor the internet. According to the Chinese government, its internet regulation is no different from that in America, Britain, or anywhere else in the world.
China says it only blocks internet sites that are damaging, such as pornographic sites, or ones promoting things like terrorism.
The reality of China's internet is very different.
Just try logging on to the BBC News website from an internet cafe in China. You can't. The same goes for websites for The New York Times, Amnesty International, Human Rights Watch, and a host of others which could hardly be described as pornographic or "dangerous".
China probably has the most sophisticated internet monitoring and censorship system in the world. In the last few years it has spent tens of millions of dollars building what has come to be known as the "Great Firewall of China". In the past, whole websites were blocked. Today the system can block out individual parts of websites.
In its quest to control the internet China has sought help from overseas. Some large, US-based computer software companies are believed to have sold Beijing the sophisticated software needed to run its filtering system. Companies like Google and Yahoo! have also been accused of co-operating in China's internet censorship.
Google, for example, has modified its Chinese language search engine so that it does not show results for sites the Chinese government deems "harmful".
Inside China there is an even larger effort to control the country's own internet.
Internet service providers (ISPs) are required by law to monitor their own websites and chat-rooms for "dangerous content". Every ISP in China has its own staff of "web police". On top of that government employs thousands more who constantly scan the Chinese web, closing down any site or blog that is considered subversive.
For those Chinese who persist in using the internet to criticize Communist
party rule, the end result can be a prison cell. Three young men were recently
sentenced to prison terms of eight to ten years for using the internet
to send "sensitive" information to foreign based websites.
CUBA: STEPHEN GIBBS in HAVANAThousands of Cubans are being trained in a new school for computer technology on the outskirts of Havana. Free computer clubs have been set up across the country. Even the smallest rural schools are being provided with their own terminals.
Cuba has vowed to be a force to be reckoned with in the digital era.
Cuba's licensed internet terminals are meant only for tourists
But at the same time the government is working hard to prevent its citizens from surfing the net without restraint. Shops in Havana might appear to sell high-quality computers, but actually making a purchase is impossible for Cubans without special approval, which is rarely granted.
Similar restrictions are in place for anyone who might want to open up an account with the state internet service provider. Exceptions include senior government officials, academic researchers, and foreigners.
The authorities say these regulations are in place in order to ensure the internet in Cuba is used for "social and collective use."
Although all Cuban media is rigorously state controlled, the government rejects accusations that it is censoring the net.
It concedes that some sites are blocked, but say these are "terrorist, xenophobic, or pornographic". Websites based in the US which publish articles by dissidents from within Cuba are generally inaccessible.
The government says that what it is doing is "prioritising" the internet, for use by sectors such as education and health. Essential, it says, given Cuba's limited resources, and limited bandwidth.
The bandwidth problem is blamed on the United States. As a result of the US trade embargo, Cuba cannot link up to the web via a direct fibre optic line. Instead it has to use more expensive satellite links.
Thousands of Cubans get around their governments restrictions and access the internet via the black market. User IDs and passwords are sold by state employees whose jobs give them legal access. Some log on via home made computers built from smuggled parts.
A legal alternative is to go to one of the cyber cafes that are being
set up across the country. But these have another barrier - cost. Half
an hour surfing the web costs around $3. That might be comparable to the
price in other parts of the world, but in Cuba, where the average salary
is $15 a month, it is substantial.
UNITED ARAB EMIRATES: JULIA WHEELER in DUBAIThe UAE is one of the fastest developing countries in the world
In the United Arab Emirates, internet censorship centres on two distinct areas; pornography and the criticism of Gulf governments. While the majority of the multi-national population welcomes the blocking of pornography sites, the same cannot be said for the more politically motivated cases.
From the UAE, attempting to access sites like www.uaeprison.com or www.arabtimes.com (published in the United States) brings up an apology for the site being blocked and an explanation; it is "due to its content being inconsistent with the religious, cultural, political and moral values of the United Arab Emirates."
It is not clear how the monopoly internet provider, Etisilat, determines what contravenes the country's values. There is a right of reply on any blocked site message though, allowing surfers to suggest it be made accessible.
For many, the censorship of sites which question, discuss or oppose the ruling families of the Gulf states and their absolute power, is anachronistic. The UAE is one of the fastest developing countries in the world, but this development is far more economic than political.
Satirical blogs, parodying the city and its residents, such as secretdubai.blogspot.com, www.dubaienquirer.com and onebigconstructionsite.blogspot.com can be found.
Internet users in Dubai's commercial free zones - like Dubai Internet City, Dubai Media City and Knowledge Village - are able to sidestep the strict state censorship by using a different proxy. The more technically savvy users in other parts of the country are also finding ways to access the banned sites they want to view.
In March, there were reports internet cafe users could have their personal details recorded and kept on file. The explanation from the authorities was that this was to curb "cyber crime" including hacking and sending spam emails, but it has brought into focus questions of personal privacy.
The opening-up of the telecoms sector which is due to allow another state-run company, Du, to operate from later this year is unlikely to change the position on blocked sites.
Perhaps one of the biggest annoyances for the mostly expatriate population in the Emirates is the inaccessibility of internet telephony sites like www.skype.com. This is widely seen as economic censorship; the state wanting to ensure continuing large profits through migrant workers making international telephone calls.
Computer System Under Attack
Commerce Department Targeted; Hackers Traced to China
By Alan Sipress
Hackers operating through Chinese Internet servers have launched a debilitating attack on the computer system of a sensitive Commerce Department bureau, forcing it to replace hundreds of workstations and block employees from regular use of the Internet for more than a month, Commerce officials said yesterday.
The attack targeted the computers of the Bureau of Industry and Security, which is responsible for controlling U.S. exports of commodities, software and technology having both commercial and military uses. The bureau has stepped up its activity in regulating trade with China in recent years as the United States increased its exports of such dual-use items to the growing Chinese market.
This marked the second time in recent months that U.S. officials confirmed that a major attack traced to China had succeeded in penetrating government computers.
"Through established security procedures, BIS discovered a targeted effort to gain access to BIS user accounts," said Commerce Department spokesman Richard Mills. "We have no evidence that BIS data has been lost or compromised."
The significance of the attacks was underscored in a series of e-mails sent to BIS employees by acting Undersecretary of Commerce Mark Foulon since July, informing them of "a number of serious threats to the integrity of our systems and data." In an August e-mail, Foulon reported that the bureau had "identified several successful attempts to attack unattended BIS workstations during the overnight hours." Then, early last month, he wrote: "It has become clear that Internet access in itself is a vulnerability that we cannot mitigate. We have tried incremental steps and they have proven insufficient."
A source familiar with the security breach said the hackers had penetrated the computers with a "rootkit" program, a stealthy form of software that allows attackers to mask their presence and then gain privileged access to the computer system. The attacks were traced to Web sites registered on Chinese Internet service providers, Commerce officials said. "We determined they were owned by the Chinese," a senior Commerce official said. He did not say who in China was responsible or whether officials had even been able to identify the culprits. Although bureau employees were informed of the problem in July, commerce officials declined to say when the attacks were discovered and how long they had been going on. Only over time did bureau officials realize the extent of the damage from the breach.
"The more we learned, the more we did," the senior official said.
Since Sept. 1, the bureau has blocked employees from accessing the Internet from their own computers. Instead, several separate computers unconnected to the BIS computer network have been set up so employees can try to continue carrying out their duties.
Commerce officials have also decided they cannot salvage the workstations that employees had been using and instead will build an entirely new system for the bureau in the coming months with "clean hardware and clean software," the senior official said. Foulon told employees in late August that they hoped to replace all the bureau's workstations within three months.
The official acknowledged that some of the emergency measures have made it more difficult for the bureau to communicate with other government agencies and the public, including companies that turn to BIS for export licenses.
In July, the State Department confirmed that hackers in China had broken into its computers in Washington and overseas. Last year, U.S. officials reported that the Defense Department and other U.S. agencies were under relentless attack from unidentified computers in China.
China has long been a focus of high-level attention at BIS and was the destination for the largest number of licenses approved by the bureau in 2004, according to the bureau's most recent annual report. In weighing applications for licenses, bureau officials seek to protect U.S. national security interests without hamstringing legitimate commercial trade.
Commerce officials recently reported that they had taken significant steps to enhance computer security at the department, both by deploying new software and improving the management of the system.
These steps came after the General Accounting Office (since renamed the Government Accountability Office) issued a scathing report five years ago, which concluded that "significant and pervasive computer security weaknesses place Department of Commerce systems at risk." The report found that outsiders could gain unauthorized access to the computer system and access confidential data. "Intruders could disrupt the operations of systems that are critical to the mission of the department," the report found.
© 2006 The Washington Post Company
Spam Doubles, Finding New Ways to Deliver Itself
By BRAD STONE
Hearing from a lot of new friends lately? You know, the ones that write “It’s me, Esmeralda,” and tip you off to an obscure stock that is “poised to explode” or a great deal on prescription drugs.
You’re not the only one. Spam is back — in e-mail in-boxes and on everyone’s minds. In the last six months, the problem has gotten measurably worse. Worldwide spam volumes have doubled from last year, according to Ironport, a spam filtering firm, and unsolicited junk mail now accounts for more than 9 of every 10 e-mail messages sent over the Internet.
Much of that flood is made up of a nettlesome new breed of junk e-mail called image spam, in which the words of the advertisement are part of a picture, often fooling traditional spam detectors that look for telltale phrases. Image spam increased fourfold from last year and now represents 25 to 45 percent of all junk e-mail, depending on the day, Ironport says.
The antispam industry is struggling to keep up with the surge. It is adding computer power and developing new techniques in an effort to avoid losing the battle with the most sophisticated spammers.
It wasn’t supposed to turn out this way. Three years ago, Bill Gates, Microsoft’s chairman, made an audacious prediction: the problem of junk e-mail, he said, “will be solved by 2006.” And for a time, there were signs that he was going to be proved right.
Antispam software for companies and individuals became increasingly effective, and many computer users were given hope by the federal Can-Spam Act of 2003, which required spam senders to allow recipients to opt out of receiving future messages and prescribed prison terms for violators.
According to the Federal Trade Commission, the volume of spam declined in the first eight months of last year.
But as many technology administrators will testify, the respite was short-lived.
“At the beginning of the year spam was off our radar,” said Franklin Warlick, senior messaging systems administrator at Cox Communications in Atlanta.
“Now employees are stopping us in the halls to ask us if we turned off our spam filter,” Mr. Warlick said.
Mehran Sabbaghian, a network engineer at the Sacramento Web hosting company Lanset America, said that last month a sudden Internet-wide increase in spam clogged his firm’s servers so badly that the delivery of regular e-mail to customers was delayed by hours.
To relieve the pressure, the company took the drastic step of blocking all messages from several countries in Europe, Latin America and Africa, where much of the spam was originating.
This week, Lanset America plans to start accepting incoming mail from those countries again, but Mr. Sabbaghian said the problem of junk e-mail was “now out of control.”
Antispam companies fought the scourge successfully, for a time, with a blend of three filtering strategies. Their software scanned each e-mail and looked at whom the message was coming from, what words it contained and which Web sites it linked to. The new breed of spam — call it Spam 2.0 — poses a serious challenge to each of those three approaches.
Spammers have effectively foiled the first strategy — analyzing the reputation of the sender — by conscripting vast networks of computers belonging to users who unknowingly downloaded viruses and other rogue programs. The infected computers begin sending out spam without the knowledge of their owners. Secure Computing, an antispam company in San Jose, Calif., reports that 250,000 new computers are captured and added to these spam “botnets” each day.
The sudden appearance of new sources of spam makes it more difficult for companies to rely on blacklists of known junk e-mail distributors. Also, by using other people’s computers to scatter their e-mail across the Internet, spammers vastly increase the number of messages they can send out, without having to pay for the data traffic they generate.
“Because they are stealing other people’s computers to send out the bad stuff, their marginal costs are zero,” said Daniel Drucker, a vice president at the antispam company Postini. “The scary part is that the economics are now tilted in their favor.”
The use of botnets to send spam would not matter as much if e-mail filters could still make effective use of the second spam-fighting strategy: analyzing the content of an incoming message. Traditional antispam software examines the words in a text message and, using statistical techniques, determines if the words are more likely to make up a legitimate message or a piece of spam.
The explosion of image spam this year has largely thwarted that approach. Spammers have used images in their messages for years, in most cases to offer a peek at a pornographic Web site, or to illustrate the effectiveness of their miracle drugs. But as more of their text-based messages started being blocked, spammers searched for new methods and realized that putting their words inside the image could frustrate text filtering. The use of other people’s computers to send their bandwidth-hogging e-mail made the tactic practical.
“They moved their message into our blind spot,” said Paul Judge, chief technology officer of Secure Computing.
Antispam firms spotted the skyrocketing amount of image spam this summer. A technology arms race ensued. The filtering companies adopted an approach called optical character recognition, which scans the images in an e-mail and tries to recognize any letters or words. Spammers responded in turn by littering their images with speckles, polka dots and background bouquets of color, which mean nothing to human eyes but trip up the computer scanners.
Spammers have also figured out ways to elude another common antispam technique: identifying and blocking multiple copies of the same message. Pioneering antispam companies like the San Francisco-based Brightmail, which was bought two years ago year by the software giant Symantec, achieved early victories against spam by recognizing unwanted e-mail as soon as it hit the Internet, noting its “fingerprint” and stopping every subsequent copy. Spammers have defied that technique by writing software that automatically changes a few pixels in each image.
“Imagine an archvillain who has a new thumbprint every time he puts his thumb down,” said Patrick Peterson, vice president for technology at Ironport. “They have taken away so many of the hooks we can use to look for spam.”
But don’t spammers still have to link to the incriminating Web sites where they sell their disreputable wares? Well, not anymore. Many of the messages in the latest spam wave promote penny stocks — part of a scheme that antispam researchers call the “pump and dump.” Spammers buy the inexpensive stock of an obscure company and send out messages hyping it. They sell their shares when the gullible masses respond and snap up the stock. No links to Web sites are needed in the messages.
Though the scam sounds obvious, a joint study by researchers at Purdue University and Oxford University this summer found that spam stock cons work. Enough recipients buy the stock that spammers can make a 5 percent to 6 percent return in two days, the study concluded.
The Securities and Exchange Commission has brought dozens of cases against such fraudsters over the years. But as a result of the Can-Spam Act, which forced domestic e-mail marketers to either give up the practice or risk jail, most active spammers now operate beyond the reach of American law enforcement. Antispam researchers say the current spam hot spots are in Russia, Eastern Europe and Asia.
While spammers are making money, companies are clearly spending more of it to fight the surge. Postini says that the costs for companies trying to fight spam on their own have tripled, mostly because of increased bandwidth costs to handle bulky image spam and lost employee productivity.
The estimates should be taken with a grain of salt, since antispam companies are eager to hawk their expensive filtering systems, which can cost around $20,000 a year for a company of 1,000 employees. But the onslaught of junk e-mail does affect business operations, even if the impact is difficult to quantify.
At the headquarters of the Seattle Mariners this summer, the topic of the worsening spam problem came up regularly in executive meetings, and the team’s top brass began pressuring the technology staff to fix the problem. Ben Nakamura, the Mariners’ network manager, said he tried to tighten spam controls and inadvertently began blocking the regular incoming press notes from opposing teams.
Two weeks ago, the situation grew so dire that the team switched from software provided by Computer Associates, whose suite of security programs sat on the team’s internal server, to a dedicated antispam server from Barracuda Networks, which gets regular updates from Barracuda’s offices in Silicon Valley.
Mr. Nakamura said the new system had greatly improved the situation. On a single day last week, the team received 5,000 e-mail messages and the Barracuda spam appliance blocked all but 300. Still, some employees continue to see two or three pieces of spam in their in-boxes each day.
Some antispam veterans are not optimistic about the future of the spam battle. “As an industry I think we are losing,” Mr. Peterson of Ironport said. “The bad guys are simply outrunning most of the technology out there today.”
Website scammers clone in on Cherie and her learned friends
Cherie Booth and her fellow barristers at Matrix Chambers are usually
involved in fighting discrimination, protecting human rights and exposing
injustice. But Britain's best-known team of lawyers have had to resort
to legal action to defend themselves against internet pirates who are using
Matrix's personnel, host of awards and high reputation in an apparent money-making
Matrix called in the police after they became the latest victims of the growing phenomenon of cyber-cloning, in which a firm finds that its website has been copied by rivals. A previously-unknown outfit called Lando Attorneys, which purports to be run by two experienced barristers based in London, has copied the entire layout of Matrix's site and much of the material used to promote the chambers's services - including their description in the prestigious Legal 500 guide as 'arguably the finest concentration of talent at the Bar'.
'Matrix is very annoyed,' said Lindsay Scott, Matrix's chief executive. 'They have cloned part of our website. Matrix is taking all appropriate action to ensure that the cloned site is taken down as soon as possible.' Matrix has also sought help from the Serious Organised Crime Agency, the Bar Council and the Office of Fair Trading in its attempts to shut the Lando website. It has put one of its barristers in charge of tackling the problem and has written to the firm which hosts the site, warning them to close it. Matrix was expecting it to be removed early last week, but it was still operating yesterday. The site claims the entire back-up staff and a host of Matrix barristers - such as Philippe Sands, QC, though not Booth - as their own personnel.
It uses modified versions of the CVs of two Matrix barristers, lifted from the Matrix website, as the fake details of the two men who claim to run Lando Attorneys: Grey Patrick and David Monlay. It is unclear if either man, whose photographs are on the Lando website, really exists or is a qualified solicitor or barrister.
Patrick and Monlay give a contact number with their profiles, which turns out to be Matrix's switchboard. Neither responded to attempts by The Observer to talk to them. Matrix is concerned that the Lando site may be part of a scam to get unsuspecting clients to part with money for advice on immigration and asylum cases, an area where Matrix specialises, which then may not materialise. They also fear that Matrix's reputation - Chambers of the Year in 2005, according to the Lawyer magazine, another gong which Lando claims it won - may be sullied.
However, Dr Simon Moores, an internet security expert, said Matrix may not succeed in banishing the Lando website from cyberspace: 'In my opinion as a non-lawyer, Lando Attorneys are exploring the gap between "passing off" [pretending that someone else's property is your own], which is illegal, and cloning, which isn't. This isn't in my opinion a visible attempt at passing off, though it comes close, because Lando have not used Matrix's name on their site. I think this is cloning. This is a grey area of the law, which is ambivalent, in regards to websites.'
Attack of the Zombie Computers Is Growing Threat
By JOHN MARKOFF
In their persistent quest to breach the Internet’s defenses, the bad guys are honing their weapons and increasing their firepower.
With growing sophistication, they are taking advantage of programs that secretly install themselves on thousands or even millions of personal computers, band these computers together into an unwitting army of zombies, and use the collective power of the dragooned network to commit Internet crimes.
These systems, called botnets, are being blamed for the huge spike in spam that bedeviled the Internet in recent months, as well as fraud and data theft.
Security researchers have been concerned about botnets for some time because they automate and amplify the effects of viruses and other malicious programs.
What is new is the vastly escalating scale of the problem — and the precision with which some of the programs can scan computers for specific information, like corporate and personal data, to drain money from online bank accounts and stock brokerages.
“It’s the perfect crime, both low-risk and high-profit,” said Gadi Evron, a computer security researcher for an Israeli-based firm, Beyond Security, who coordinates an international volunteer effort to fight botnets. “The war to make the Internet safe was lost long ago, and we need to figure out what to do now.”
Last spring, a program was discovered at a foreign coast guard agency that systematically searched for documents that had shipping schedules, then forwarded them to an e-mail address in China, according to David Rand, chief technology officer of Trend Micro, a Tokyo-based computer security firm. He declined to identify the agency because it is a customer.
Although there is a wide range of estimates of the overall infection rate, the scale and the power of the botnet programs have clearly become immense. David Dagon, a Georgia Institute of Technology researcher who is a co-founder of Damballa, a start-up company focusing on controlling botnets, said the consensus among scientists is that botnet programs are present on about 11 percent of the more than 650 million computers attached to the Internet.
Plagues of viruses and other malicious programs have periodically swept through the Internet since 1988, when there were only 60,000 computers online. Each time, computer security managers and users have cleaned up the damage and patched holes in systems.
In recent years, however, such attacks have increasingly become endemic, forcing increasingly stringent security responses. And the emergence of botnets has alarmed not just computer security experts, but also specialists who created the early Internet infrastructure.
“It represents a threat but it’s one that is hard to explain,” said David J. Farber, a Carnegie Mellon computer scientist who was an Internet pioneer. “It’s an insidious threat, and what worries me is that the scope of the problem is still not clear to most people.” Referring to Windows computers, he added, “The popular machines are so easy to penetrate, and that’s scary.”
So far botnets have predominantly infected Windows-based computers, although there have been scattered reports of botnet-related attacks on computers running the Linux and Macintosh operating systems. The programs are often created by small groups of code writers in Eastern Europe and elsewhere and distributed in a variety of ways, including e-mail attachments and downloads by users who do not know they are getting something malicious. They can even be present in pirated software sold on online auction sites. Once installed on Internet-connected PCs, they can be controlled using a widely available communications system called Internet Relay Chat, or I.R.C.
ShadowServer, a voluntary organization of computer security experts that monitors botnet activity, is now tracking more than 400,000 infected machines and about 1,450 separate I.R.C. control systems, which are called Command & Control servers.
The financial danger can be seen in a technical report presented last summer by a security researcher who analyzed the information contained in a 200-megabyte file that he had intercepted. The file had been generated by a botnet that was systematically harvesting stolen information and then hiding it in a secret location where the data could be retrieved by the botnet master.
The data in the file had been collected during a 30-day period, according to Rick Wesson, chief executive of Support Intelligence, a San Francisco-based company that sells information on computer security threats to corporations and federal agencies. The data came from 793 infected computers and it generated 54,926 log-in credentials and 281 credit-card numbers. The stolen information affected 1,239 companies, he said, including 35 stock brokerages, 86 bank accounts, 174 e-commerce accounts and 245 e-mail accounts.
Sensor information collected by his company is now able to identify more than 250,000 new botnet infections daily, Mr. Wesson said.
“We are losing this war badly,” he said. “Even the vendors understand that we are losing the war.”
According to the annual intelligence report of MessageLabs, a New York-based computer security firm, more than 80 percent of all spam now originates from botnets. Last month, for the first time ever, a single Internet service provider generated more than one billion spam e-mail messages in a 24-hour period, according to a ranking system maintained by Trend Micro, the computer security firm. That indicated that machines of the service providers’ customers had been woven into a giant network, with a single control point using them to pump out spam.
The extent of the botnet threat was underscored in recent months by the emergence of a version of the stealthy program that adds computers to the botnet. The recent version of the program, which security researchers are calling “rustock,” infected several hundred thousand Internet-connected computers and then began generating vast quantities of spam e-mail messages as part of a “pump and dump” stock scheme.
The author of the program, who is active on Internet technical discussion groups and claims to live in Zimbabwe, has found a way to hide the infecting agent in such a way that it leaves none of the traditional digital fingerprints that have been used to detect such programs.
Moreover, although rustock is currently being used for distributing spam, it is a more general tool that can be used with many other forms of illegal Internet activity.
“It could be used for other types of malware as well,” said Joe Stewart, a researcher at SecureWorks, an Atlanta-based computer security firm. “It’s just a payload delivery system with extra stealth.”
Last month Mr. Stewart tracked trading around a penny stock being touted in a spam campaign. The Diamant Art Corporation was trading for 8 cents on Dec. 15 when a series of small transactions involving 11,532,726 shares raised the price of the stock to 11 cents. After the close of business that day, a Friday, a botnet began spewing out millions of spam messages, he said.
On the following Monday, the stock went first to 19 cents per share and then ultimately to 25 cents a share. He estimated that if the spammer then sold the shares purchased at the peak on Monday he would realize a $20,000 profit. (By Dec. 20, it was down to 12 cents.)
Computer security experts warn that botnet programs are evolving faster than security firms can respond and have now come to represent a fundamental threat to the viability of the commercial Internet. The problem is being compounded, they say, because many Internet service providers are either ignoring or minimizing the problem.
“It’s a huge scientific, policy, and ultimately social crisis, and no one is taking any responsibility for addressing it,” said K. C. Claffy , a veteran Internet researcher at the San Diego Supercomputer Center.
The $6 billion computer security industry offers a growing array of products and services that are targeted at network operators, corporations and individual computer users. Yet the industry has a poor track record so far in combating the plague, according to computer security researchers.
“This is a little bit like airlines advertising how infrequently they crash into mountains,” said Mr. Dagon, the Georgia Tech researcher.
The malicious software is continually being refined by “black hat” programmers to defeat software that detects the malicious programs by tracking digital fingerprints.
Some botnet-installed programs have been identified that exploit features of the Windows operating system, like the ability to recognize recently viewed documents. Botnet authors assume that any personal document that a computer owner has used recently will also be of interest to a data thief, Mr. Dagon said.
Serry Winkler, a sales representative in Denver, said that she had turned off the network-security software provided by her Internet service provider because it slowed performance to a crawl on her PC, which was running Windows 98. A few months ago four sheriff’s deputies pounded on her apartment door to confiscate the PC, which they said was being used to order goods from Sears with a stolen credit card. The computer, it turned out, had been commandeered by an intruder who was using it remotely.
“I’m a middle-aged single woman living here for six years,” she said. “Do I sound like a terrorist?”
She is now planning to buy a more up-to-date PC, she said.
Tips for Protecting the Home Computer
By JOHN MARKOFF
Botnet programs and other malicious software largely take aim at PCs running the Microsoft Windows operating system, because Windows’ ubiquity makes it fertile ground for network-based attacks.
Using a non-Windows-based PC may be one defense against these programs, known as malware; in addition, anti-malware programs and antivirus utilities for the PC are available from several vendors. Windows users should use the Windows Update feature.
Microsoft itself entered the computer-security business last year and now offers a free malware-removal tool for download from its Web site. The company says the program removes about two million pieces of malware each month, of which 200,000, or about 10 percent, are botnet infections.
Like Windows, Microsoft’s Internet Explorer browser is also a large, convenient target for code-writing vandals. Alternative browsers, like Firefox and Opera, may insulate users. Microsoft’s most recent browser release, Internet Explorer 7, is said to offer significantly improved defenses.
Adding software to your browser like Noscript, a plug-in utility, can limit the ability of remote programs to run potentially damaging programs on your PC.
Security experts also offer these tips:
¶Don’t share your computer (on which you pay your bills) with your children (who download games).
¶Use a firewall program that warns you about outgoing connections that botnets make to communicate with control software.
¶Don’t use the same password on more than one financial site.
¶Don’t let your browser store your password for such sites.
¶Don’t buy anything offered by a spammer.
¶Don’t click if someone offers you something too good to be true. It is.
Don’t Call. Don’t Write. Let Me Be.
By DAMON DARLIN
The fears of the direct marketing industry came true. Once a do-not-call list was created, people did register, in droves.
The list was created in 2003, not as a way to protect privacy, but to remove a powerful irritant from the lives of Americans. The Federal Trade Commission, which administers the list, says that more than 137 million phone numbers have been placed on the list by people tired of interruptions during dinner or their favorite TV show.
The popularity of the do-not-call list unleashed a demand for other opt-out lists. A consumer can now opt out of the standard practice of their banks or loan companies selling their information to others. Other opt-outs stop credit card companies from soliciting consumers or end the flow of junk mail and catalogs.
While most of the opt-outs are intended to make life less annoying, they can also have the side effect of protecting personal information that can be misused by identity thieves or unscrupulous merchants.
“Over the years, it has gotten so much easier to opt out,” said Ari Schwartz, deputy director of the Center for Democracy and Technology, a public interest group that lobbies Congress on privacy issues. “There are still gray areas.”
While financial companies have to provide an opportunity to opt out of sharing personal information, other kinds of companies do not. Some that tell you they will share the information do not offer the option to protect personal information (other than not doing business with the company).
For those who just can’t take it anymore, here is a master list of where you can take control:
PHONE SOLICITATIONS To stop them, go to donotcall.gov. Or call toll free, (888)382-1222, from the number you are going to restrict.
Remember to register if you get a new phone number. You can register cellphone numbers as well. A listing is good for five years, after which you’ll have to repeat the process. But you need not worry about forgetting. You will know when you start receiving sales calls again.
JUNK MAIL You can try to opt out of direct mail solicitations, but it will probably not work very well. A private organization, the Direct Marketing Association, handles that list and not every merchant with pages of hot leads is a rule-abiding member.
If you want to give it a shot anyway, write the association, in care of the Mail Preference Service at P.O. Box 643, Carmel, N.Y. 10512. There is an online form at www.the-dma.org/consumers/offmailinglist.html. If you want to get more mail, there is also a place to sign up to get on the lists.
E-MAIL Whatever you do, do not respond to an unsolicited e-mail message when it gives you the option to opt out of receiving more e-mail. That is a trick used by spammers to confirm they hit a live address. Once that happens, your address goes to a prime list and is sold to other spammers. You may even find legitimate businesses eventually using addresses on that list.
So how do you prevent spam? Unfortunately, other than spam filters, there really is no good way.
You can try to make it harder for spammers to get your address in the first place by never posting your address in public forums. Spammers employ software to scrape the sites of anything with that @ symbol. Instead spell it out in a unique way like “the nameofthiscolumn at nytimes.com.”
CREDIT CARD OFFERS Almost as annoying as the direct marketing call is the mailbox stuffed with credit card solicitations. The more you ignore their offers, the more you will receive.
One way to stop the offers is to sign up for so many cards and run up such high levels of debt that you become a credit untouchable. That is not a good plan. Instead, call (888) 567-8688, but be ready to give out some personal information like your Social Security number.
The major credit bureaus, like Experian, Equifax and TransUnion, that collect information on your borrowing habits let you opt out of what they call prescreened offers of credit at https://www.optoutprescreen.com. You can do it for a period of five years or permanently.
Opting out of prescreened offers of credit might also be useful when you apply for a mortgage. When you seek a loan, the credit bureaus notice and they put you on a “trigger list.” The information that you are a ripe prospect is then sold to other lenders in as little time as 24 hours. Suddenly, other lenders are calling.
“It hurts the image of our members,” said Harry Dinham, president of the National Association of Mortgage Brokers. His group also objects because it could be “an avenue to identity theft.” He said, “We actually don’t know who they sell it to.”
Still, some callers may actually have better deals than the one your mortgage broker or bank is offering. “Do you want to opt out and never learn how to save money,” asked Stuart Pratt, president of the Consumer Data Industry Association, a trade group.
Will opting out protect your identity from thieves? Mr. Pratt said that “lender data tells us that prescreened offers of credit result in lower levels of fraud.” Nonetheless, he did recommend using a paper shredder on the offers you do reject.
CREDIT FREEZE The ultimate opt-out for your credit is a credit freeze. You’ll sometimes hear it recommended as a way to protect yourself from fraud because once you sign up to have your credit report frozen, no company can get access to your credit report without your expressed permission. That means no one can open up a credit card or take out a loan in your name.
Think long and hard before you do this. It sounds great at first, but doing so can backfire. You might be buying an expensive flat-screen TV at a warehouse store and want to get the instant credit card to score another 5 percent discount. You will not be able to. But about half the states have passed laws making credit reporting companies quickly unfreeze a report, some in as little as five minutes.
Not that preventing the opening of one more store account is a bad thing. Remember that everyone of those cards can hurt your credit score, which determines what your interest rate is when you borrow money.
Use the credit freeze only if you are a true victim of identity theft, which means that some criminal has your personal information and is opening up credit card accounts, borrowing money or buying property with your credit history.
If you suspect you may be a target, but have not been harmed yet, a better form of protection is asking the credit bureaus to flag your report with a fraud alert, which is supposed to make lenders take extra precautions.
OTHER OPT-OUTS Your personal information is accessible in less obvious ways. For instance, your computer tracks where you have visited online. DoubleClick, a company that collects data for online advertisers, offers a way to prevent your computer from giving it information at http://www.doubleclick.com/us/about-doubleclick/privacy/dart-adserving.asp.
But again, it is only a piecemeal solution. Other online advertising companies will still put “cookies” on your computer to collect the same data. So the next-best solution is to frequently run software that cleans out cookies. You can get Spyware Blaster, Spybot, or Ad-Aware at www.download.com free.
Your personal information, including parts of your Social security number, are available in publicly available data bases that you may never see. The most common ones offer a way to opt out of a listing. Nexis, one of the biggest, says you can opt out of its people-finding lists by going to www.lexisnexis.com/terms/privacy/data/remove.asp. Nexis does not make it easy because it requires that you prove you are a victim of identity theft before it will consider your application.
The Center for Democracy and Technology provides addresses and forms for other companies, like ChoicePoint, that do not let you opt out online (http://opt-out.cdt.org).
REAL ESTATE FILINGS You have to file deeds with the local government office and once you do, companies swoop in to compile lists of new homeowners from the public records. That’s why you get the discount coupons from Home Depot and other merchants right after you buy. Birth certificates and marriage licenses are also scraped for data.
There is little you can do about it because the records are intended to be public. Any good lawyer can show you how to make it a little harder for personal information to be listed on a deed. But it will cost money, which is probably not worth it if all you are trying to do is stop solicitations from Swifty’s Mortgage Lending and Used Car Sales.
E-mail: yourmoney at nytimes.com
Google - the Copiepresse fallout
Google News needs to act now to stop other publishers
following Copiepresse's lead on content copyright
The Belgian court copyright infringement ruling against Google News
will not ultimately damage the search engine service, but it will bring
the company to the negotiating table with publishers who are concerned
about how their content is being used online.
Losing Copiepresse's content will not in itself cause Google News too many problems.
Many publishers see the Google News service as a fantastic traffic driver that ultimately results in a potential increase in revenue.
However, if other content providers start winning similar copyright infringement court rulings around the world, Google and leading other online content aggregators - including Microsoft and Yahoo! - would be in trouble.
The most likely outcome of the stand-off between content providers and aggregators is a compromise offering publishers greater control of what material is picked up by Google News and its peers, and how it is used.
But Google and other aggregators will stop short of agreeing to pay for content, according to industry experts. Following the Belgian court ruling, Google said it will appeal the decision, that its service is "entirely legal", and that if Copiepresse wanted out of Google News it could have done so easily. "Hundreds of news publishers in Belgium and around the world are delighted to be included in Google News because it helps more people find their websites and read their articles," said a defiant Rachel Whetstone, the Google European director of communications and public affairs, on the company's official blog. "That's why Google receives far more requests for inclusion than requests for removal," Ms Whetstone added.
"If a newspaper does not want to be part of Google News, we remove their content from our index - all the newspaper has to do is ask. There is no need for legal action and all the associated costs."
While Ms Whetstone is absolutely right - a small piece of common technology called robots.txt can opt out content from Google News - for publishers the issue is about Google's negotiating tactics, or rather, lack of them. Larry Kilman, the director of communications at the World Association of Newspapers, said: "Overall, the underlying issue is that publishers and content providers have to be part of the discussion. "This lawsuit has come around because of the unilateral decision by Google - and others - on how content will be used."
The answer, say content providers, could be a system called automated content access protocol - or Acap. Developed and funded by the European Publishers Council, the International Publishers Association and the World Association of Newspapers, Acap will be a "permissions information" technology that can be attached to content on a media organisation's website.
Acap will tell the web crawlers - used by Google to aggregate content - what they can do with each piece of information, such as how long the piece can stay on Google News, image rights, and how long an article can be. Content publishers on board to test the product include AFP, Reed Elsevier and the Independent. Google is involved on the technical board.
Mr Kilman said that the idea is that, just as a news agency such as Reuters has a commercial relationship with those that want to use its content, so Acap might be an option for any content provider who wants to charge for use via Google. "The status quo [Google News aggregating content for free] is fine with some publishers. It definitely has value," added Mr Kilman. "But it is not for all, there have to be commercial agreements if some content owners demand this route. We don't think law suits are the answer. We do think that co-operation is the way forward."
Pressure from unhappy publishers like Copiepresse is likely to have played a part in Google - along with Yahoo! and Microsoft - joining the discussion about content aggregation.
However, the continued defiant stance adopted by Google is a probable indicator that it will ultimately balk at any development of Acap that proposes payment. "Losing Copiepresse listings will do no damage to Google News, but if things escalated and it lost very member of WAN, then that would hurt," said Struan Robertson, a senior associate at law firm Pinsent Masons.
"Google will discuss the Acap proposal and will decide if it is workable for them. Technically it is straightforward change, it comes down to a commercial decision for Google to decide and if it wants to go down that route," he added. "Google is likely to agree on Acap specifications, it wants to keep publishers happy, but it is likely to draw the line at paying."
Mr Robertson said that wealthy Google is readily seen as a target - evidenced by companies such as Viacom threatening legal action over copyrighted video clips to improve its negotiating position with Google-owned YouTube. "Most newspapers - including those represented by Copiepresse - want to be found by Google's search engine," he added.
"They know exactly how to keep Google out, using a technical change that requires maybe five minutes' effort. But they choose not to do that. "Instead, Copiepresse's members want a slice of Google's wealth and they're hoping copyright law will cut it. The newspapers involved have been dropped from Google News and newspapers across Europe could follow suit if they were so inclined. But I don't see that happening."
Cyber-Criminals and Their Tools
Getting Bolder, More Sophisticated
By Brian Krebs
Robert Hoyler thought hackers who broke into his computer stole only his bank account information. But it turned out that the thieves also left something behind: a hidden software virus that recorded his every keystroke.
So when Hoyler's bank issued him new account numbers and passwords, the hackers got all that information, too. His health insurance, online shopping and Social Security data went into a file in a master database at a Web site controlled by the attackers, stashed among personal information on more than 3,220 U.S. residents.
"These guys got everything, but all I knew was that my financial accounts were compromised," said the 66-year-old Fairfax engineer, who learned of the virus from a reporter who used forensic tools from computer-security firm Sunbelt Software in February to locate the Web server hosting Hoyler's private information.
Such attacks are evidence of the sophistication and depth of technical manipulation by hackers, and the challenges facing consumers and law enforcement agencies in fighting them.
Online crime is easier, in part because tools for carrying out attacks are readily available and harder to purge from computers. Moreover, for consumers like Hoyler, there is often no surefire way to know how or what information has been stolen. Notifying individual victims is time-intensive and expensive, and law enforcement agencies and credit bureaus say it's not their job.
Many viruses that send junk e-mail also include password-stealing components, and some combine such technology with fake Web sites mimicking trusted online brands, which can be particularly deceptive. More than 1,000 fraudulent sites known as "phishing" sites are erected each day, according to the Anti-Phishing Working Group, an industry organization. Scammers can net 20 to 100 victims per case, according to CastleCops, a volunteer group of security experts that analyzes malicious software and phishing sites and provides information to police, Internet service providers and affected companies.
Contributing to the proliferation of Web-based crime is the broad availability of online tools.
"Basically we're at the point where the scammer can go into the virtual tackle store and buy all the equipment he needs to get a phishing scam working," said Lance James, founder of security-software developer Secure Science. "There's the guy who writes the [virus] who says, 'Here's your phishing rod, here's some of our best bait, here are the best sites to attack, and if you pay me an extra $200, I'll tell you some of the best sites you can hack into.' "
The virus that stole Hoyler's information came from Web sites based in Eastern Europe, according to the information tracked by Sunbelt Software. It infiltrated the new-accounts department of a major U.S. bank, a medical patient database in Georgia and an Alabama district attorney's office containing a database used by police departments to trace people, according to information obtained with the Sunbelt software.
Hoyler's bank told him in January that someone had tried to wire money out of his account. Days later, Fidelity Investments notified him that someone tried to use his log-in information to purchase thousands of shares of an adult-entertainment company.
The government has acknowledged a need to do more for identity-theft victims. Last year, the Bush administration created an identity-theft task force that has proposed creating a center that would help victims.
Federal law enforcement officials said they routinely provide data they uncover on compromised credit and debit accounts to MasterCard, Visa and other credit-card issuers. The FBI also said it recently began sharing caches of stolen consumer data with the fraud departments of the three major credit-reporting bureaus.
But because credit-card companies often do not get any more information about the extent of the breaches, victims of viruses or scams may think that their problems have been resolved after being issued new credit or debit cards. And such agencies as the FBI handle too many incidents to notify online crime victims individually.
"We're just getting overwhelmed with this [compromised] consumer data, but it's not exactly law enforcement's job to call each victim and explain the situation," said Dan Larkin, an FBI agent who heads the National Cyber-Forensics & Training Alliance in Pittsburgh.
Credit bureaus are not required to notify consumers.
"The credit bureaus work on behalf of banks and companies that grant credit," said Ari Schwartz of the Center for Democracy and Technology, a consumer advocacy group in Washington. "They're not set up to be consumer-oriented businesses."
And the credit bureaus say they are not in the habit of reaching out to consumers whose private information may have been compromised.
"Normally we would not put a fraud alert on a file without a consumer being involved" or initiating it, said Maxine Sweet, a vice president with Experian, one of the three major credit-reporting bureaus. "That's just not something we generally do."
Basics - Guidelines for Using a Cellphone Abroad
By ERIC A. TAUB
As a T-Mobile subscriber, Ken Grunski, a businessman in San Diego, knew that his cellphone would work during a trip to Tanzania. What he did not expect was the bill: $800 for 10 days’ use. “I didn’t think I was going to use my phone that much,” Mr. Grunski said. “But two to three 10-minute calls a day, and it adds up.” What a shame that Mr. Grunski did not heed his own company’s advice. If he had, he would have saved himself a bundle.
Mr. Grunski owns Telestial, a company that sells SIM cards, small chips that replace those in cellphones sold by T-Mobile and Cingular and lower the costs of calls when overseas. While his American phone worked abroad without one, Mr. Grunski was paying sky-high rates because he was roaming in a foreign country. T-Mobile charged him $5 a minute to roam in Tanzania. If Mr. Grunski had used one of the SIM cards he sells, he would have paid $1.15 a minute to call the United States and his calls — averaging 16 minutes a day — would have cost him $184, rather than $800.
While Americans have embraced the convenience of using cellphones, trying to dial from overseas often brings surprises. Even if the phone works, voice mail may not. Depending on the handset, coverage can be spotty. Make the wrong choices, and you may find a huge bill. The right tactics to avoid those headaches depend on which carrier you use, the length of your trip and your destination.
GSM vs. CDMA
A majority of the world’s cellphone subscribers — 82 percent — use the GSM technology standard, according to the GSM Association. In the United States, the major carriers use two systems. Cingular (now AT&T) and T-Mobile use GSM, while Sprint and Verizon use CDMA, an incompatible technology.
CDMA technology is found in North America, as well as some Asian countries, but it is basically nonexistent in Europe. As a result, Sprint and Verizon customers can use their phones in just 26 countries. (AT&T and T-Mobile customers can potentially use theirs in over a hundred.)
When traveling in non-CDMA countries, Sprint and Verizon customers can rent or purchase GSM phones from those providers. Sprint rents a Motorola Razr for $58 for the first week, and $70 for two weeks, plus $1.29 to $4.99 a minute of airtime. Verizon charges $3.99 a day to rent, plus $1.49 to $4.99 a minute. Verizon also sells three combo CDMA-GSM models, priced from $150 to $600 with a two-year contract.
Cingular and T-Mobile customers have more options — if their existing phones can pick up multiple frequencies. To complicate matters, the American GSM standard operates on 850 and 1,900 megahertz, while the rest of the GSM world uses 900 and 1,800 megahertz.
To use an American GSM cellphone in a foreign country, the handset you own must be tri-band or quad-band and able to operate on one or both of the frequencies used outside the United States. The Cingular and T-Mobile Web sites, as well as Telestial’s and others, list the predominant frequencies used in each country, and show if your phone can operate on one or both overseas bands.
To protect against fraud, American cellphones are typically blocked from making calls when used abroad. Before traveling, call your provider and ask to have that restriction removed.
A Temporary SIM Card
GSM phones use SIM cards (subscriber identity modules), tiny electronic chips that hold a cellphone’s “brains,” including the subscriber’s contact numbers and phone number. (CDMA phones store such information directly in the hardware.)
GSM customers can avoid sky-high roaming charges by replacing their American SIM cards with ones from other countries. For example, travelers to Britain can pick up a SIM card from the British carrier Vodafone; once inserted, it gives the phone a temporary British phone number. Calls within Britain and to the United States would be much cheaper.
For example, T-Mobile charges its customers 99 cents a minute for using their phones in Britain, whether calling a pub in London or your home in New Jersey.
Insert a prepaid British SIM card from a company like Telestial instead, and local calls drop to 26 cents a minute, while calls back to the United States cost 9 to 14 cents a minute.
Another benefit when using overseas SIM cards is that incoming calls are typically free in most countries.
Overseas SIM cards can be purchased before you travel from companies like Cellular Abroad (www.cellularabroad.com) and Telestial (www.telestial.com) or at local shops in foreign countries.
Unlocking the Phone
Even if you have a GSM phone that operates on both overseas frequencies, domestic cellphone providers do not want you to use your phone with another company’s SIM card, because they do not make any money when you do. To prevent your doing so, cellphones bought through Cingular and T-Mobile are electronically locked — they accept only their own company’s SIM cards.
Before you throw your phone off the Eiffel Tower in frustration, know that there are several ways to unlock your phone and avoid those high overseas roaming rates.
Cingular and T-Mobile will unlock their customers’ phones under certain conditions. Cingular will provide unlock codes to customers whose contracts have expired, who have canceled their service and paid an early termination fee, or who have paid a full rather than subsidized price for their phones, according to Rich Blasi, a Cingular Wireless spokesman.
T-Mobile has more lenient policies. It will provide the unlock code to any customer after 90 days of service, but no more than one unlock code will be provided every 90 days, said Graham Crow, a T-Mobile spokesman.
If you do not meet these requirements, you can still get your phone unlocked from a private company. For a few dollars, the Travel Insider (www.thetravelinsider.com) and UnlockTelecom (www.unlocktelecom.co.uk) will provide your phone’s specific unlocking code.
Other GSM Phones
Cellphone customers with dual-band GSM phones that cannot be used overseas can always purchase unlocked quad-band phones from third-party providers. These phones can be used solely when traveling outside the United States. Since they are unlocked, they can also be used instead of your current phone on your American network.
Because the phone is not subsidized by a carrier, the price is higher. For example, an unlocked quad-band Motorola Razr V3 can be bought for $140 from Cellular Blowout (www.cellular-blowout.com). Cellular Abroad and Telestial also sell unlocked phones.
A Few More Tips
When entering numbers in your phone, always add the plus (+) sign and the country code; that way, the number can be dialed automatically no matter from what country you are calling.
Store your GSM phone’s numbers in the phone itself, rather than the SIM card. Then the numbers will still be available to you when you use an overseas SIM card. To transfer them to a new phone easily, store them on a device like Backup-Pal (www.backup-pal.com), an external U.S.B. memory unit.
While you will not pay any charges for incoming calls when you use a foreign SIM card, tell your American callers to get an overseas calling plan from their phone company before you ask them to ring you. If they do not, they could be paying the same sky-high rates that you just avoided.
And if you take your American phone overseas, make sure that its battery charger is dual voltage; without one, all the effort to get your phone to work in other countries may go up in smoke the first time you plug it in.
Correction: March 17, 2007
An article in the Circuits pages of Business Day on Thursday about using cellphones overseas misstated the charge to T-Mobile USA customers for placing a call in Britain. It is 99 cents a minute, not $1.99. The article also referred incorrectly to the status of CDMA cellphone technology in Australia. While CDMA phones from American carriers do not operate there, other CDMA phones are in use; they are not “basically nonexistent.” And the article also referred incompletely to a source of low rates for calls from Britain. The rates — 26 cents a minute for local calls and 9 to 14 cents a minute for calls to the United States — are available with use of a SIM card sold by Telestial.
How to Soften the Edges of Technology
By ANNE EISENBERG
IT’S a given these days that computers come sheathed in plastic or metal, as do the keyboards, mice and monitors that accompany them. But if the industrial look leaves you cold, some companies will now encase both a computer and its peripherals in a back-to-the-future covering of a different sort: warm, glowing wood.
A keyboard built from solid walnut, or a computer tower in polished mahogany, doesn’t come cheap. But for some buyers, the comforting feel of wood, or the way it complements the décor of a home or office, makes the expense worthwhile.
Suissa Computers, based outside Toronto (www.suissacomputers.com), offers high-performance desktop computers in cases of oak, walnut, zebrawood, purpleheart, mahogany, maple and leopardwood, among others. “Everything is hidden behind solid wood but the power button,” said Howard Suissa, the company’s president referring to one of the models, the Moeka.
The company, which opened last September, offers five models. The prices for the computers, which include a monitor, keyboard, mouse and some service, start at about $5,740.
Mr. Suissa, who designed the computers, plans to produce only a small number of each model. “These are limited-edition computers, all numbered and signed,” he said. “Once we’ve sold 100, we will retire the model and replace it with something new.”
The company also offers customized or “bespoke” models with specialized electronics and cabinetry, so long as the work meets environmental goals. “When customers specify a wood that we don’t have, we will do the computer in that wood,” Mr. Suissa said, “provided it is being harvested in a renewable way.”
Suissa makes its own metal brackets to support the computer components inside their wooden enclosures. “We have virtually eliminated plastic except when we use it as a detail material,” Mr. Suissa said.
There’s plenty of room left inside the Suissa cases for computer upgrades, Mr. Suissa said. Depending on how complicated the job is, the company may have the owner mail the computer in so that Suissa can install the upgrade and repolish the cabinet.
Computer keyboards made by Holzkontor of Neustadt, Germany, are each cut from an individual piece of hardwood, said Mira Liebhart-Kolb, marketing and sales manager. “The keyboards are not different pieces of wood put together,” he said.
Holzkontor products are sold in the United States by Wood Contour (www.woodcontour.com) of Thousand Oaks, Calif. The base price — for a matched set of a keyboard, a wireless mouse with a wooden cover and a 19- inch LCD monitor with a wooden frame — is $2,950. The innards of the wooden mice are made by Logitech and the LCD monitors by ViewSonic; the wooden keyboards have electronics from the Cherry Corporation.
Individual, wooden-covered computer mice are sometimes for sale at Wood Contour’s Web site. Wade Hergert, of Woodbridge, Va., bought a black-cherry version there for about $150. “I love natural things,” he said. “To me the mouse is functional art, and I was willing to pay for it.”
Anne Janis of Fayetteville, Ga., decided to buy a complete set of keyboard, mouse and monitor from Wood Contour for use in her home office. Ms. Janis, who coordinates studies in veterinary genetic research, spends many hours a day at the computer, and last year the skin on her fingertips started to peel.
“I wondered if it was the texture of the plastic irritating my fingers,” she said. In case plastic was the source of her troubles, she ordered the wooden keyboard set in November.
She is not sure whether the wood surfaces helped, but for whatever reason, her fingers have since improved. In any case, she is satisfied because of the way the set looks. “It’s easy on the eyes,” she said, “and it kind of goes with the rug.” Her set is made of purpleheart wood. “The more I use the mouse and keyboard, the darker and more vibrant the wood becomes,” she said. “And I love the way it feels.”
Wooden-covered keyboards, mice and LCD monitors are also available from Swedx, which is based in Sollentuna, north of Stockholm, directly from its online store at www.swedx.com. The company does not currently have distributors in the United States.
Of course, people can always make their own wooden computer cases, or modify standard ones — a practice known as “case modding,” or modification. Nicholas Falzone, 20, a third-year architectural student at California Polytechnic State University in San Luis Obispo, Calif., is just putting the finishing touches on the second computer case he’s made. “It’s taken me at least a thousand hours,” he said.
The case has an aluminum interior frame to support the computer workings. The outer frame is made of koa and maple. Mr. Falzone did the rough cuts with a table saw; after that, almost all the work was done with hand tools. “Each joint has multiple mortises and tenons,” he said. “I didn’t use any screws or glue.”
Mr. Falzone’s first case has an acrylic interior frame and an outer frame of mahogany, spruce and ebony. His work on both cases is documented at his journal at forums.bit-tech.net.
WOODEN coverings for computers and peripherals have become popular recently, but companies like Holzkontor weren’t the first to devise them. The first computer mouse, for example, had a wooden cover, said Douglas C. Engelbart, who invented a prototype of the mouse but did not name it.
In 1963 and 1964, Dr. Engelbart said, he was testing different gadgets at the Stanford Research Institute to see how well they could select objects on a computer screen. He had an idea for a two-wheeled device that he sketched out for his colleague, Bill English, to build. The draftsman who helped them, who was also a woodcarver, volunteered to make a case for the new device.
“The wires came out of the tail and toward the user,” Dr. Engelbart recalled. “No one can remember who started calling it a mouse. We think it’s because of how it looked sitting there on the desk with the wires coming toward you.”
Wooden computer cases, too, have a long history. Many hobbyists built cases for their computers in the early and mid 1970s, recalled Andy Baird, a retired computer software designer and a full-time traveler in his RV. “Many of the early computers were sold as bare boards, or as a kit with a board and a bunch of parts, and you did you own soldering — and built your own case,” he said.
Mr. Baird bought an early computer, a Poly 88, that came in an orange-red steel case. Later, he built a replacement case from oak. He did so for the same reason that some people are buying or making wooden enclosures today. “I wanted something that looked better than an ordinary steel case,” he said.
Slow Down, Brave Multitasker, and Don’t Read This in
By STEVE LOHR
Confident multitaskers of the world, could I have your attention? Think you can juggle phone calls, e-mail, instant messages and computer work to get more done in a time-starved world? Read on, preferably shutting out the cacophony of digital devices for a while.
Several research reports, both recently published and not yet published, provide evidence of the limits of multitasking. The findings, according to neuroscientists, psychologists and management professors, suggest that many people would be wise to curb their multitasking behavior when working in an office, studying or driving a car.
These experts have some basic advice. Check e-mail messages once an hour, at most. Listening to soothing background music while studying may improve concentration. But other distractions — most songs with lyrics, instant messaging, television shows — hamper performance. Driving while talking on a cellphone, even with a hands-free headset, is a bad idea.
In short, the answer appears to lie in managing the technology, instead of merely yielding to its incessant tug.
“Multitasking is going to slow you down, increasing the chances of mistakes,” said David E. Mayer, a cognitive scientist and director of the Brain, Cognition and Action Laboratory at the University of Michigan. “Disruptions and interruptions are a bad deal from the standpoint of our ability to process information.”
The human brain, with its hundred billion neurons and hundreds of trillions of synaptic connections, is a cognitive powerhouse in many ways. “But a core limitation is an inability to concentrate on two things at once,” said René Marois, a neuroscientist and director of the Human Information Processing Laboratory at Vanderbilt University.
Mr. Marois and three other Vanderbilt researchers reported in an article last December in the journal Neuron that they used magnetic resonance imaging to pinpoint the bottleneck in the brain and to measure how much efficiency is lost when trying to handle two tasks at once.
Study participants were given two tasks and were asked to respond to sounds and images. The first was to press the correct key on a computer keyboard after hearing one of eight sounds. The other task was to speak the correct vowel after seeing one of eight images.
The researchers said that they did not see a delay if the participants were given the tasks one at a time. But the researchers found that response to the second task was delayed by up to a second when the study participants were given the two tasks at about the same time.
In many daily tasks, of course, a lost second is unimportant. But one implication of the Vanderbilt research, Mr. Marois said, is that talking on a cellphone while driving a car is dangerous. A one-second delay in response time at 60 miles an hour could be fatal, he noted.
“We are under the impression that we have this brain that can do more than it often can,” observed Mr. Marois, who said he turns off his cellphone when driving.
The young, according to conventional wisdom, are the most adept multitaskers. Just look at teenagers and young workers in their 20s, e-mailing, instant messaging and listening to iPods at once.
Recently completed research at the Institute for the Future of the Mind at Oxford University suggests the popular perception is open to question. A group of 18- to 21-year-olds and a group of 35- to 39-year-olds were given 90 seconds to translate images into numbers, using a simple code.
The younger group did 10 percent better when not interrupted. But when both groups were interrupted by a phone call, a cellphone short-text message or an instant message, the older group matched the younger group in speed and accuracy.
“The older people think more slowly, but they have a faster fluid intelligence, so they are better able to block out interruptions and choose what to focus on,” said Martin Westwell, deputy director of the institute.
Mr. Westwell is 36, and thus, should be better able to cope with interruptions. But he has modified his work habits since completing the research project last month.
“I check my e-mail much less often,” he said. “The interruptions really can throw you off-track.”
In a recent study, a group of Microsoft workers took, on average, 15 minutes to return to serious mental tasks, like writing reports or computer code, after responding to incoming e-mail or instant messages. They strayed off to reply to other messages or browse news, sports or entertainment Web sites.
“I was surprised by how easily people were distracted and how long it took them to get back to the task,” said Eric Horvitz, a Microsoft research scientist and co-author, with Shamsi Iqbal of the University of Illinois, of a paper on the study that will be presented next month.
“If it’s this bad at Microsoft,” Mr. Horvitz added, “it has to be bad at other companies, too.”
In the computer age, technology has been seen not only as a factor contributing to information overload but also as a tool for coping with it. Computers can help people juggle workloads, according a paper presented this month at a conference at the National Bureau of Economic Research. The researchers scrutinized the work at an unnamed executive recruiting firm, including projects and 125,000 e-mail messages. They also examined the firm revenues, people’s compensation and the use of information technology by the recruiters.
The recruiters who were the heaviest users of e-mail and the firm’s specialized database were the most productive in completing projects. “You can use the technology to supplement your brain and keep track of more things,” said Erik Brynjolfsson of the Sloan School of Management at the Massachusetts Institute of Technology and a co-author of the paper, along with Sinan Aral of the Stern School of Business at New York University, and Marshall Van Alstyne of Boston University.
But the paper also found that “beyond an optimum, more multitasking is associated with declining project completion rates and revenue generation.”
For the executive recruiters, the optimum workload was four to six projects, taking two to five months each.
The productivity lost by overtaxed multitaskers cannot be measured precisely, but it is probably a lot. Jonathan B. Spira, chief analyst at Basex, a business-research firm, estimates the cost of interruptions to the American economy at nearly $650 billion a year.
That total is an update of research published 18 months ago, based on surveys and interviews with professionals and office workers, which concluded that 28 percent of their time was spent on what they deemed interruptions and recovery time before they returned to their main tasks.
Mr. Spira concedes that the $650 billion figure is a rough estimate — an attempt to attach a number to a big problem. Work interruptions will never — and should not — be eliminated, he said, since they are often how work is done and ideas are shared. After all, one person’s interruption is another’s collaboration.
The information age is really only a decade or two old in the sense of most people working and communicating on digital devices all day, Mr. Spira said. In the industrial era, it took roughly a century until Frederick Winslow Taylor in 1911 published his principles of “scientific management” for increasing worker productivity.
“We don’t have any equivalent yet for the knowledge economy,” Mr. Spira said.
But university and corporate researchers say they can help. Brain scans, social networking algorithms and other new tools should help provide a deeper understanding of the limits and the potential of the human brain, they said. That will teach workers in groups how to manage the overload of digital communications efficiently.
A new organization, the Institute for Innovation and Information Productivity, whose sponsors include Hewlett-Packard, Microsoft and Johnson & Johnson, has been created to sponsor such research. It provided money for the recent research project at Oxford’s Institute for the Future of the Mind, for example.
Further research could help create clever technology, like sensors or smart software that workers could instruct with their preferences and priorities to serve as a high-tech “time nanny” to ease the modern multitasker’s plight.
That is what Mr. Horvitz of Microsoft is working on. “We live in this Wild West of digital communications now,” he said. “But I think there’s a lot of hope for the future.”
Wednesday April 11 2007
Four papers reveal their online strategies
11.30am UPDATE: How are Britain's national newspapers facing up to the digit=
al challenge? The World Editors' Forum has=20
conducted interviews with online executives at four papers - the Daily Teleg=
raph, The Times, The Sun and the Daily Mirror - and=20
compiled a four-part report on the results. The first part, on logistics, is=
posted here on the Editors' Weblog site, and the second,=20
entitled "Let readers lead your content", is here.=20
The first analysis compares the levels of integration at the four titles and=
concludes that it's "all a matter of opinion." A weak and=20
simplistic comment. The comparisons reveal a familiar groping-in-the-dark ap=
proach, but the commitment to a new form of=20
journalism is clear.
As we know, the Telegraph has a fully integrated newsroom with online formin=
g part of all the editorial floor conversations and=20
online journalists sitting at each of the three main desks - news, business=20=
and sport. But The Times takes the view, according to its=20
online supremo, Anne Spackman, that the net is "a specific medium". Though T=
imes online journalists also sit on the three desks,=20
the rest of the 50-strong team are on a separate floor with "ongoing flows o=
f information between the floors" (whatever that=20
The Times's model of semi-integration has been adopted by The Sun and the Mi=
rror. Though The Sun has integrated its Bizarre=20
gossip column, the rest of the online team sits in a separate corner of the=20=
building. At the Mirror, where the online and newspaper=20
teams sit on the same floor, the online editor attends morning conference.=20
Of course, integration isn't just a matter of sitting journalists next to ea=
ch other and asking them to post to print and web. It's=20
about integrating the media themselves. Both Spackman and the Telegraph's di=
gital editor, Ed Roussell, argue that the print product=20
can boost on-line readership and vice versa. This approach is evident in the=
way in which the newspapers carry puffs for their=20
On the web-first or print-first question, the Telegraph says it generally ha=
s a web-first policy while The Times and The Sun go=20
online after the stories have appeared in print.=20
Now for the key points from the second report about the importance of knowin=
g one's audience. This, says the report, is=20
exemplified by The Times having opted for a dual home page which gives reade=
rs the choice of UK or world. By contrast, the=20
Telegraph has "touchpoints" throughout the day, mini-deadlines to ensure new=
s is fresh at each of its peaks - before work,=20
lunchtime and and leaving work. Specific products are tailored to serve thos=
Turning to user generated content (UGC), The Sun's online editor, Pete Picto=
n, enthused over the launch, in October last year, of=20
the paper's MySun online community which, he says, has proved an enormous su=
ccess. It enables readers to create blogs and have=20
discussions. They are drawn to participate by their common love of a particu=
lar newspaper and, say the report's authors, The Sun=20
therefore "appears to be the only site to have replicated [a] feeling of com=
But the Mirror may catch up with its soon-to-be-launched blogging site, "Voi=
ce of Britain". So the two papers have different goals:=20
The Sun is looking to build a community around its own content while the Mir=
ror is looking at using its readers to provide content=20
for the entire audience.=20
All four websites encourage readers to participate. And there are signs too=20=
of social content, showing that the papers are starting=20
to look outside their own space where they don't have, or can't naturally bu=
ild, a community.=20
Presumably, parts three and four follow over the course of the next two days=
. Meanwhile, though it doesn't tell us anything we=20
don't really know, the exercise does have some merits. Newspapers have previ=
ously paid lip service to reader participation,=20
treating audiences as passive consumers. Now they have cottoned on to the ne=
ed to forge a closer relationship with readers in=20
which they listen as well as preach.=20
Tuesday, April 10, 2007
UK Newspaper websites: Learnings from a study tour part 1 - Logistics matter
The aggressive UK newspaper market has embraced online news, making developm=
ents quick to stay ahead of the game. Editors=20
Weblog has spoken to top executives at two quality and two tabloid newspaper=
s to try and garner the key themes and learnings=20
from potentially the most competitive newspaper market in the world.=20
Over the course of four pieces of analysis, we compare the approach of all f=
our newspapers towards logistics, content, staff and=20
Part 1: Logistics Matter
Part 2: Let readers lead your content
Part 3: The web provides opportunities to show content on more than one plat=
form. Use it wisely.
Part 4: Don=E2=80=99t forget your staff, or the bank balance
UK Newspapers part 1: Logistics matter
One of the most prominent trends of 2006 was integration between print and o=
nline. Where exactly should online sit? Is it a=20
separate department on a separate platform or is it the same product but sho=
wn to readers in a different format? The strategic=20
questions need to be answered before logistics are defined. This is what is=20=
happening in the UK:
Integrating your newsroom is a matter of opinion
The Telegraph has spent a great deal of time and energy to have the first fu=
lly integrated newsroom model (more on Telegraph and=20
integrated newsrooms here). The spokes system ensures online is part of all=20=
conversations on the editorial floor. An online=20
journalist also sits on each of the three main desks =E2=80=93 news, busines=
s and sport.=20
Having only recently completed the office move to the new structure and stil=
l being in the process of training journalists, the=20
results of the full integration are difficult to say. Hitwise has (controver=
sially) put them as the number one news website in the UK=20
(they attract approx 8 million readers to the site per month).=20
Anne Spackman, Editor of Times Online tells Editors Weblog that whilst a lev=
el of integration is necessary, it does not have to=20
happen in its totality. She believes that the Internet is a specific medium=20=
and needs to have a team who sit together and spar off=20
each other, even if they are writing on different topics. Some online journa=
lists at The Times sit on the newspaper desks =E2=80=93 again=20
just the three most popular, which happen to be the same as the Telegraph. T=
he rest of the team sit on a different floor. There are=20
ongoing flows of information between the floors. The Times online team is 50=
strong. Working with editorial depts. Makes the=20
total resource much bigger.
The web team produces the popular box of five of the =E2=80=98most read=E2=
=80=99, =E2=80=98most commented=E2=80=99, =E2=80=98most curious=E2=80=99. Th=
e fact that they sit=20
together means that they can create this with a range a content from around=20=
the site and it=E2=80=99s proved a huge traffic driver. Times=20
attracted 10.9million to the site in January 2007 after the redesign.=20
Both the Sun and The Mirror follow the Times model of semi integration. The=20=
Sun has integrated their showbiz desk, Bizarre, but=20
the rest of the online team sits in a separate corner of the building. The M=
irror is yet to integrate any of their online and=20
newspaper teams =E2=80=93 the editorial teams sit on the same floor and the=20=
online editor attends the morning meeting but content,=20
marketing and other online departments are several floors below. Whilst the=20=
Times and the Sun give their reasons for integrating=20
only their most popular desks, it may well be that they, and the Mirror, are=
simply not as advanced as the Telegraph.
Integrating your products is essential
Integration isn=E2=80=99t just a matter of sitting journalists next to each=20=
other and asking them to post to print and web. Integrating the=20
media themselves is key.
Both Spackman at the Times and Edward Roussell, Digital Editor at the Telegr=
aph, made a point of telling Editors Weblog that they=20
believe that the print product can boost on-line readership and vice versa.=20=
The Telegraph believes that the growth of the=20
newspaper readership base is precisely because they have a strong web produc=
t =E2=80=93 it serves to introduce new readers to the paper.
This attitude is evident in both print products:
- The Times puffs online at the bottom right of the front page every day=
, plus on the contents page and strategically placed=20
throughout the paper. Big stories carry the tag =E2=80=98For breaking news o=
n this story timesonline.co.uk. Plus there are references to=20
specific blogs and calls to action, often in terms on contentious questions,=
to generate comments =E2=80=93 have your say=20
- The Telegraph puts it=E2=80=99s =E2=80=98most read=E2=80=99 and =E2=80=98m=
ost commented on=E2=80=99 in paper the next day. Page 2 has a good space at=20=
the top of the=20
page for what is happening online including the =E2=80=98most read=E2=80=99=20=
and =E2=80=98most commented on=E2=80=99 stories. It also has puffs at the to=
p of most=20
pages as well as calls to action at the end of articles.
There is still some question as to whether to go web first or save copy for=20=
print. The Telegraph generally has a web first policy=20
whereas the Times (and the Sun) go online after the stories have appeared in=
print (when the stories originate from the paper).=20
Newspapers must consider that print copy and web copy for the same article m=
ust be differentiated.
When using a print article on the web, it must, particularly the headline, b=
e rewritten in order to be picked up effectively by search=20
engine =E2=80=98spiders=E2=80=99. Manual intervention to rewrite headlines i=
n an ABC (who, what, why) approach is necessary to reach the search=20
engine audience. It is something that needs to be considered when deciding h=
ow to integrate the teams and link the print and web=20
Approx 50% of the Telegraph's print readers go to the website. The Telegraph=
was one of the few newspapers that increased their=20
year on year sales in December last year. The Daily Telegraph circulation wa=
s 899,493, up 0.23% whilst the Sunday Telegraph=20
circulation was 643,592, up 0.21%. They must be doing something right.
The staple elements of integration are established across the board but the=20=
ad hoc projects that need extra space aren=E2=80=99t always=20
given the attention they need. After the successful launch of online bingo a=
t The Mirror, the digital team struggled to get ads in the=20
paper to continue to promote the joint venture.=20
Other media are now starting to come into play making the strategy and found=
ation for integration even more important. The Sun=20
has launched its mobile product successfully and although take up is still l=
ow, it is ahead of the game in terms of its competitors.=20
The Sun simply tells readers there are =E2=80=98different ways to read The S=
un=E2=80=99. Internally, there is a combine metric term called a Sun=20
session =E2=80=93 whether it=E2=80=99s by print, online or mobile, a reader=20=
is still interacting with the brand.=20
Wednesday, April 11, 2007
UK Newspaper websites: Learnings from a study tour part 2 - Let readers lead=
It sounds obvious to make sure you know who your audience is and many newspa=
pers research it well. Something must be done=20
with this valuable information. It really is the key to success.=20
The aggressive UK newspaper market has embraced online news, making developm=
ents quick to stay ahead of the game. Editors=20
Weblog has spoken to top executives at two quality and two tabloid newspaper=
s to try and garner the key themes and learnings=20
from potentially the most competitive newspaper market in the world. Over th=
e course of four pieces of analysis, we compare the=20
approach of all four newspapers towards logistics, content, staff and financ=
Part 1: Logistics Matter
Part 2: Let readers lead your content
Part 3: The web provides opportunities to show content on more than one plat=
form. Use it wisely.
Part 4: Don=E2=80=99t forget your staff, or the bank balance
Know your audience
These factors perhaps explain why The Times has opted for a dual home page g=
iving the readers the choice of UK or World -=20
around 60% of the audience goes to =E2=80=98World=E2=80=99. By knowing the a=
udience, tweaks can be made to a site to make it more attractive=20
and therefore more sticky.=20
The Telegraph in contrast has =E2=80=98touchpoints=E2=80=99 throughout
ay which are in essence mini deadlines to ensure news is fresh at each=20
of its peaks =E2=80=93 before work (9am), lunchtime (1pm) and leaving work (=
6pm). They have also tailored specific products to those times=20
of day such as =E2=80=98Telegraph pm' the afternoon pdf downloadable versio=
n which goes online at 4pm ready for their last peak of the=20
day at 6pm. Thus, traffic can be boosted during certain times by releasing p=
roducts that are appealing to the current/target=20
The Telegraph=E2=80=99s products have perhaps not been as sophisticated as t=
he Times=E2=80=99 (and the idea of the pdf product has been criticized=20
by others) but they have recognized it=E2=80=99s not just about launching ne=
w, exciting services. By launching services at the time of day=20
more suitable for their readers, they promote longer term stickiness through=
encouraging habit at those times.=20
Use your readers effectively =E2=80=93 User Generated Content
Asking readers to contribute to the site has proved popular around the world=
Pete Picton, Online Editor, The Sun, tells Editors Weblog that during the an=
nual =E2=80=98meet the readers=E2=80=99 weekend, he got the sense that=20
the readers saw the newspaper as their own - the staff just look after for t=
hem. He saw in this a great opportunity to create an=20
online community and in October 2006 launched the highy successful MySun.=20
MySun builds on the loyalty of readers, requiring a completed profile before=
being able to contribute. It has proved an enormous=20
success enabling readers to create blogs, have discussions and appear as the=
profile of the day. An online community has been=20
created around one thing - readers common love of a particular newspaper.
It is often said that you can tell a lot about a person from the newspaper t=
hey read. There is a collective set of beliefs and values=20
attached to a newspaper, which determines why the analysis and opinion is wo=
rth that particular cover price to the individual. This=20
collective set of beliefs and values creates a community. The Sun appears to=
be the only site to have replicated this feeling of=20
community online to the same extent.=20
The Mirror will soon be launching its =E2=80=98Voice of Britain=E2=80=99 whe=
re it will ask =E2=80=98real=E2=80=99 people in =E2=80=98real=E2=80=99 jobs=20=
(i.e. representative of the=20
readership) to blog their views of what=E2=80=99s going on in the country. T=
he basic idea is to give a voice to a widely seen platform.=20
The two tabloids have different end goals though have a fairly similar
ach. The Sun is looking to build a community around it=E2=80=99s=20
own content whereas the Mirror is looking at using its readers to provide co=
ntent for the entire audience. It=E2=80=99s important to decide=20
what the aim is before starting out.
The pattern of usage is different from print to web and many people
ough search engines looking for specific=20
content/stories rather than browsing what=E2=80=99s on offer as you would no=
rmally do in a newspaper. Creating a community ensures that=20
these readers come back to the site as a central point, it=E2=80=99s a good=20=
way of guaranteeing a base readership (assuming that the site=20
continues to provide the same level of quality).
As well as building a community where readers can talk to each other, it=E2=
=80=99s important to encourage dialogue with this newspaper=20
itself. At thesun.co.uk, users are obliged to register before being able to=20=
post a comment. The comments are moderated to a small=20
degree (no swear words or racism allowed) but remain largely unchanged. Pict=
on gives his reasoning as to why this is popular with=20
readers: =E2=80=9CThe Sun readers have always been good at sending in storie=
s, this is just another medium to do so=E2=80=9D.
All four of the newspaper websites actively encourage their readers to take=20=
part in the site. They acknowledge that incoming=20
feedback is an important tool to enable them to grow and adapt their content=
to the readers.
The Times and Telegraph both appeal to wide audiences. Their core readers ar=
e older (40=E2=80=99s plus) but they target stories that=20
appeal to or affect their children/grandchildren to get a response and attra=
ct younger audiences.
Social networking has been mentioned by some of the newspapers but not as pr=
ominently as one might expect. One News=20
International title says that they have consciously chosen not to act as com=
petitor to MySpace, owned by the same organization.=20
Social content though, does look popular. The Times and The Mirror have chos=
en to limit links to two sites =E2=80=93 both have del.icio.us,=20
The Times also uses newsvine and The Mirror uses the popular digg. The Teleg=
raph adds NowPublic and Reddit, bringing their=20
total to five. The Sun currently doesn=E2=80=99t use these tools.
The advance of social content shows that newspapers are starting to look out=
side their own space and content where they don=E2=80=99t=20
have or can=E2=80=99t naturally build a community.=20
Anne Spackman, Editor, Times Online sums up this up nicely =E2=80=9CUse what=
readers send you, add another dimension, make them=20
Browne fights to keep his job as storm over sailors rages on
By Toby Helm and Thomas Harding
Last Updated: 1:30am BST 12/04/2007
Des Browne's ability to survive as Defence Secretary was in serious doubt la=
st night after Tony Blair and a fellow minister cut him=20
adrift by criticising the way the Iran hostages were allowed to sell their s=
tories to the press.
Des Browne is unlikely to be sacked so close to a Cabinet reshuffle
In his first public comments on the controversy, the Prime Minister admitted=
that the sailors should never have been encouraged=20
to profit from their ordeal on returning after 13 days of captivity.
A senior minister also told The Daily Telegraph that it was clear that Mr Br=
owne should have used his authority to prevent the=20
Navy allowing sailors to strike big money deals.
The minister said Mr Brown "should have rescinded the Navy's recommendation=20=
when he received it, there and then".
While Opposition parties stopped short of calling for Mr Browne to be sacked=
, his credibility was further damaged as it emerged=20
Several Navy officers have considered resigning because of their "total disi=
llusion" at the Ministry of Defence's handling of the affair.
One commander said it was the MoD that applied the pressure for stories to b=
e sold and accused an MoD press officer of "actively=20
soliciting" money from newspapers last Saturday.
A group of Navy personnel sent a petition to the Downing Street website dema=
nding that Mr Blair "name and sack the person=20
responsible for declaring that members of the Armed Services can sell their=20=
stories to the media". The decision was a "major=20
government failure and a disaster for the Navy", the petition said. Under it=
s rules Downing Street has three days to decide whether=20
the petition is appropriate to post on its site.
Labour Party sources said that while Mr Browne's credibility had been damage=
d, he was unlikely to be sacked so close to the=20
transition to a new Labour leader and an inevitable Cabinet reshuffle in Jul=
His chances of clinging on are helped by his being a close ally of Gordon Br=
own, the favourite to succeed Mr Blair.
Michael Portillo, the former Tory defence secretary, called the affair "the=20=
biggest calamity to befall the Royal Navy since the=20
Falklands were taken in April 1982 - which led to three ministerial resignat=
David Cameron demanded further explanation from Mr Browne of what led to a "=
The episode had "caused great damage to our Armed Forces", he said, and was=20=
typical of a "cheap and tatty" Government that put=20
spin before the interests of the Forces.
Nick Harvey, the Liberal Democrat defence spokesman, said Mr Browne's explan=
ation was "not good enough''.
They were speaking after Mr Browne broke his silence on the affair, saying h=
e accepted "full responsibility''.
But rather than end the row, his remarks inflamed it. After apparently takin=
g the blame, Mr Browne sought to distance himself=20
from the decision and then to imply that he never agreed with the deal to se=
ll the sailors' stories.
He said: "I knew about the decision. A note indicating the decision and the=20=
analysis of the regulations that supported that decision=20
came into my office on Thursday and early on Friday afternoon one of my offi=
cials took me through that.
"I was asked to note the decision.
"Clearly over the weekend I thought about the decision and over that weekend=
I accepted the analysis that was put forward to me=20
by the Navy but I wasn't content with it."
He said he did not think the Navy was content either.
Mr Blair said he had not known about the decision until after it had been ta=
ken. Downing Street had suggested that he knew in=20
Despite the mistakes, Mr Blair insisted everyone involved had behaved "compl=
etely in good faith and honourably".
The Navy had been trying to deal with a "wholly exceptional situation" in wh=
ich the families had been pursued by the media to tell=20
"The Navy took the view that it was better to manage the situation. With hin=
dsight was that a good idea? No."
A senior Navy source said: "The perception of the Navy as a fighting force h=
as taken a huge body blow in the last two weeks. If you=20
wanted to destroy the Navy from inside the MoD then this would be no better=20=
way of doing it."
Mr Browne is due to make a statement to Parliament on Monday about the circu=
mstances surrounding the seizure of the 15 sailors=20
in the Gulf. Opposition MPs are planning to bombard the Government with a se=
ries of detailed questions.
The youngest hostage, Operator Mechanic Arthur Batchelor, 20, defended selli=
ng his story to the Daily Mirror but said that if the=20
Navy had guided him earlier, he would not have accepted payment for his acco=
Bilking the Elderly, With a Corporate Assist
By CHARLES DUHIGG
The thieves operated from small offices in Toronto and hangar-size rooms in India. Every night, working from lists of names and phone numbers, they called World War II veterans, retired schoolteachers and thousands of other elderly Americans and posed as government and insurance workers updating their files.
Then, the criminals emptied their victims’ bank accounts.
Richard Guthrie, a 92-year-old Army veteran, was one of those victims. He ended up on scam artists’ lists because his name, like millions of others, was sold by large companies to telemarketing criminals, who then turned to major banks to steal his life’s savings.
Mr. Guthrie, who lives in Iowa, had entered a few sweepstakes that caused his name to appear in a database advertised by infoUSA, one of the largest compilers of consumer information. InfoUSA sold his name, and data on scores of other elderly Americans, to known lawbreakers, regulators say.
InfoUSA advertised lists of “Elderly Opportunity Seekers,” 3.3 million older people “looking for ways to make money,” and “Suffering Seniors,” 4.7 million people with cancer or Alzheimer’s disease. “Oldies but Goodies” contained 500,000 gamblers over 55 years old, for 8.5 cents apiece. One list said: “These people are gullible. They want to believe that their luck can change.”
As Mr. Guthrie sat home alone — surrounded by his Purple Heart medal, photos of eight children and mementos of a wife who was buried nine years earlier — the telephone rang day and night. After criminals tricked him into revealing his banking information, they went to Wachovia, the nation’s fourth-largest bank, and raided his account, according to banking records.
“I loved getting those calls,” Mr. Guthrie said in an interview. “Since my wife passed away, I don’t have many people to talk with. I didn’t even know they were stealing from me until everything was gone.”
Telemarketing fraud, once limited to small-time thieves, has become a global criminal enterprise preying upon millions of elderly and other Americans every year, authorities say. Vast databases of names and personal information, sold to thieves by large publicly traded companies, have put almost anyone within reach of fraudulent telemarketers. And major banks have made it possible for criminals to dip into victims’ accounts without their authorization, according to court records.
The banks and companies that sell such services often confront evidence that they are used for fraud, according to thousands of banking documents, court filings and e-mail messages reviewed by The New York Times.
Although some companies, including Wachovia, have made refunds to victims who have complained, neither that bank nor infoUSA stopped working with criminals even after executives were warned that they were aiding continuing crimes, according to government investigators. Instead, those companies collected millions of dollars in fees from scam artists. (Neither company has been formally accused of wrongdoing by the authorities.)
“Only one kind of customer wants to buy lists of seniors interested in lotteries and sweepstakes: criminals,” said Sgt. Yves Leblanc of the Royal Canadian Mounted Police. “If someone advertises a list by saying it contains gullible or elderly people, it’s like putting out a sign saying ‘Thieves welcome here.’ ”
In recent years, despite the creation of a national “do not call” registry, the legitimate telemarketing industry has grown, according to the Direct Marketing Association. Callers pitching insurance plans, subscriptions and precooked meals collected more than $177 billion in 2006, an increase of $4.5 billion since the federal do-not-call restrictions were put in place three years ago.
That growth can be partly attributed to the industry’s renewed focus on the elderly. Older Americans are perfect telemarketing customers, analysts say, because they are often at home, rely on delivery services, and are lonely for the companionship that telephone callers provide. Some researchers estimate that the elderly account for 30 percent of telemarketing sales — another example of how companies and investors are profiting from the growing numbers of Americans in their final years.
While many telemarketing pitches are for legitimate products, the number of scams aimed at older Americans is on the rise, the authorities say. In 2003, the Federal Trade Commission estimated that 11 percent of Americans over age 55 had been victims of consumer fraud. The following year, the Federal Bureau of Investigation shut down one telemarketing ring that stole more than $1 billion, spanned seven countries and resulted in 565 arrests. Since the start of last year, federal agencies have filed lawsuits or injunctions against at least 68 telemarketing companies and individuals accused of stealing more than $622 million.
“Most people have no idea how widespread and sophisticated telemarketing fraud has become,” said James Davis, a Federal Trade Commission lawyer. “It shocks even us.”
Many of the victims are people like Mr. Guthrie, whose name was among the millions that infoUSA sold to companies under investigation for fraud, according to regulators. Scam artists stole more than $100,000 from Mr. Guthrie, his family says. How they took much of it is unclear, because Mr. Guthrie’s memory is faulty and many financial records are incomplete.
What is certain is that a large sum was withdrawn from his account by thieves relying on Wachovia and other banks, according to banking and court records. Though 20 percent of the total amount stolen was recovered, investigators say the rest has gone to schemes too complicated to untangle.
Senior executives at infoUSA were contacted by telephone and e-mail messages at least 30 times. They did not respond.
Wachovia, in a statement, said that it had honored all requests for refunds and that it was cooperating with authorities.
Mr. Guthrie, however, says that thieves should have been prevented from getting access to his funds in the first place.
“I can’t understand why they were allowed inside my account,” said Mr. Guthrie, who lives near Des Moines. “I just chatted with this woman for a few minutes, and the next thing I knew, they took everything I had.”
Sweepstakes a Common Tactic
Investigators suspect that Mr. Guthrie’s name first appeared on a list used by scam artists around 2002, after he filled out a few contest entries that asked about his buying habits and other personal information.
He had lived alone since his wife died. Five of his eight children had moved away from the farm. Mr. Guthrie survived on roughly $800 that he received from Social Security each month. Because painful arthritis kept him home, he spent many mornings organizing the mail, filling out sweepstakes entries and listening to big-band albums as he chatted with telemarketers.
“I really enjoyed those calls,” Mr. Guthrie said. “One gal in particular loved to hear stories about when I was younger.”
Some of those entries and calls, however, were intended solely to create databases of information on millions of elderly Americans. Many sweepstakes were fakes, investigators say, and existed only to ask entrants about shopping habits, religion or other personal details. Databases of such responses can be profitably sold, often via electronic download, through list brokers like Walter Karl Inc., a division of infoUSA.
The list brokering industry has existed for decades, primarily serving legitimate customers like magazine and catalog companies. InfoUSA, one of the nation’s largest list brokers and a publicly held company, matches buyers and sellers of data. The company maintains records on 210 million Americans, according to its Web site. In 2006, it collected more than $430 million from clients like Reader’s Digest, Publishers Clearinghouse and Condé Nast.
But infoUSA has also helped sell lists to companies that were under investigation or had been prosecuted for fraud, according to records collected by the Iowa attorney general. Those records stemmed from a now completed investigation of a suspected telemarketing criminal.
By 2004, Mr. Guthrie’s name was part of a list titled “Astroluck,” which included 19,000 other sweepstakes players, Iowa’s records show. InfoUSA sold the Astroluck list dozens of times, to companies including HMS Direct, which Canadian authorities had sued the previous year for deceptive mailings; Westport Enterprises, the subject of consumer complaints in Kansas, Connecticut and Missouri; and Arlimbow, a European company that Swiss authorities were prosecuting at the time for a lottery scam.
(In 2005, HMS’s director was found not guilty on a technicality. Arlimbow was shut down in 2004. Those companies did not return phone calls. Westport Enterprises said it has resolved all complaints, complies with all laws and engages only in direct-mail solicitations.)
Records also indicate that infoUSA sold thousands of other elderly Americans’ names to Windfall Investments after the F.B.I. had accused the company in 2002 of stealing $600,000 from a California woman.
Between 2001 and 2004, infoUSA also sold lists to World Marketing Service, a company that a judge shut down in 2003 for running a lottery scam; to Atlas Marketing, which a court closed in 2006 for selling $86 million of bogus business opportunities; and to Emerald Marketing Enterprises, a Canadian firm that was investigated multiple times but never charged with wrongdoing.
The investigation of Windfall Investments was closed after its owners could not be located. Representatives of Windfall Investments, World Marketing Services, Atlas Marketing and Emerald Marketing Enterprises could not be located or did not return calls.
The Federal Trade Commission’s rules prohibit list brokers from selling to companies engaged in obvious frauds. In 2004, the agency fined three brokers accused of knowingly, or purposely ignoring, that clients were breaking the law. The Direct Marketing Association, which infoUSA belongs to, requires brokers to screen buyers for suspicious activity.
But internal infoUSA e-mail messages indicate that employees did not abide by those standards. In 2003, two infoUSA employees traded e-mail messages discussing the fact that Nevada authorities were seeking Richard Panas, a frequent infoUSA client, in connection with a lottery scam.
“This kind of behavior does not surprise me, but it adds to my concerns about doing business with these people,” an infoUSA executive wrote to colleagues. Yet, over the next 10 months, infoUSA sold Mr. Panas an additional 155,000 names, even after he pleaded guilty to criminal charges in Nevada and was barred from operating in Iowa.
Mr. Panas did not return calls.
“Red flags should have been waving,” said Steve St. Clair, an Iowa assistant attorney general who oversaw the infoUSA investigation. “But the attitude of these list brokers is that it’s not their responsibility if someone else breaks the law.”
Millions of Americans Are Called
Within months of the sale of the Astroluck list, groups of scam artists in Canada, the Caribbean and elsewhere had the names of Mr. Guthrie and millions of other Americans, authorities say. Such countries are popular among con artists because they are outside the jurisdiction of the United States.
The thieves would call and pose as government workers or pharmacy employees. They would contend that the Social Security Administration’s computers had crashed, or prescription records were incomplete. Payments and pills would be delayed, they warned, unless the older Americans provided their banking information.
Many people hung up. But Mr. Guthrie and hundreds of others gave the callers whatever they asked.
“I was afraid if I didn’t give her my bank information, I wouldn’t have money for my heart medicine,” Mr. Guthrie said.
Criminals can use such banking data to create unsigned checks that withdraw funds from victims’ accounts. Such checks, once widely used by gyms and other businesses that collect monthly fees, are allowed under a provision of the banking code. The difficult part is finding a bank willing to accept them.
In the case of Mr. Guthrie, criminals turned to Wachovia.
Between 2003 and 2005, scam artists submitted at least seven unsigned checks to Wachovia that withdrew funds from Mr. Guthrie’s account, according to banking records. Wachovia accepted those checks and forwarded them to Mr. Guthrie’s bank in Iowa, which in turn sent back $1,603 for distribution to the checks’ creators that submitted them.
Within days, however, Mr. Guthrie’s bank, a branch of Wells Fargo, became concerned and told Wachovia that the checks had not been authorized. At Wells Fargo’s request, Wachovia returned the funds. But it failed to investigate whether Wachovia’s accounts were being used by criminals, according to prosecutors who studied the transactions.
In all, Wachovia accepted $142 million of unsigned checks from companies that made unauthorized withdrawals from thousands of accounts, federal prosecutors say. Wachovia collected millions of dollars in fees from those companies, even as it failed to act on warnings, according to records.
In 2006, after account holders at Citizens Bank were victimized by the same thieves that singled out Mr. Guthrie, an executive wrote to Wachovia that “the purpose of this message is to put your bank on notice of this situation and to ask for your assistance in trying to shut down this scam.”
But Wachovia, which declined to comment on that communication, did not shut down the accounts.
Banking rules required Wachovia to periodically screen companies submitting unsigned checks. Yet there is little evidence Wachovia screened most of the firms that profited from the withdrawals.
In a lawsuit filed last year, the United States attorney in Philadelphia said Wachovia received thousands of warnings that it was processing fraudulent checks, but ignored them. That suit, against the company that printed those unsigned checks, Payment Processing Center, or P.P.C., did not name Wachovia as a defendant, though at least one victim has filed a pending lawsuit against the bank.
During 2005, according to the United States attorney’s lawsuit, 59 percent of the unsigned checks that Wachovia accepted from P.P.C. and forwarded to other banks were ultimately refused by other financial institutions. Wachovia was informed each time a check was returned.
“When between 50 and 60 percent of transactions are returned, that tells you at gut level that something’s not right,” said the United States attorney in Philadelphia, Patrick L. Meehan.
Other banks, when confronted with similar evidence, have closed questionable accounts. But Wachovia continued accepting unsigned checks printed by P.P.C. until the government filed suit in 2006.
Wachovia declined to respond to the accusations in the lawsuit, citing the continuing civil litigation.
Although Wachovia is the largest bank that processed transactions that stole from Mr. Guthrie, at least five other banks accepted 31 unsigned checks that withdrew $9,228 from his account. Nearly every time, Mr. Guthrie’s bank told those financial institutions the checks were fraudulent, and his money was refunded. But few investigated further.
The suit against P.P.C. ended in February. A court-appointed receiver will liquidate the firm and make refunds to consumers. P.P.C.’s owners admitted no wrongdoing.
Wachovia was asked in detail about its relationship with P.P.C., the withdrawals from Mr. Guthrie’s account and the accusations in the United States attorney’s lawsuit. The company declined to comment, except to say: “Wachovia works diligently to detect and end fraudulent use of its accounts. During the time P.P.C. was a customer, Wachovia honored all requests for returns related to the P.P.C. accounts, which in turn protected consumers from loss.”
Prosecutors argue that many elderly accountholders never realized Wachovia had processed checks that withdrew from their accounts, and so never requested refunds. Wachovia declined to respond.
The bank’s statement continued: “Wachovia is cooperating fully with authorities on this matter.”
Some Afraid to Seek Help
By 2005, Mr. Guthrie was in dire straits. When tellers at his bank noticed suspicious transactions, they helped him request refunds. But dozens of unauthorized withdrawals slipped through. Sometimes, he went to the grocery store and discovered that he could not buy food because his account was empty. He didn’t know why. And he was afraid to seek help.
“I didn’t want to say anything that would cause my kids to take over my accounts,” he said. Such concerns play into thieves’ plans, investigators say.
“Criminals focus on the elderly because they know authorities will blame the victims or seniors will worry about their kids throwing them into nursing homes,” said C. Steven Baker, a lawyer with the Federal Trade Commission. “Frequently, the victims are too distracted from dementia or Alzheimer’s to figure out something’s wrong.”
Within a few months, Mr. Guthrie’s children noticed that he was skipping meals and was behind on bills. By then, all of his savings — including the proceeds of selling his farm and money set aside to send great-grandchildren to college — was gone.
State regulators have tried to protect victims like Mr. Guthrie. In 2005, attorneys general of 35 states urged the Federal Reserve to end the unsigned check system.
“Such drafts should be eliminated in favor of electronic funds transfers that can serve the same payment function” but are less susceptible to manipulation, they wrote.
But the Federal Reserve disagreed. It changed its rules to place greater responsibility on banks that first accept unsigned checks, but has permitted their continued use.
Today, just as he feared, Mr. Guthrie’s financial freedom is gone. He gets a weekly $50 allowance to buy food and gasoline. His children now own his home, and his grandson controls his bank account. He must ask permission for large or unusual purchases.
And because he can’t buy anything, many telemarketers have stopped calling.
“It’s lonelier now,” he said at his kitchen table, which is crowded with mail. “I really enjoy when those salespeople call. But when I tell them I can’t buy anything now, they hang up. I miss the good chats we used to have.”
E-Mail Reply to All: 'Leave Me Alone'
By Mike Musgrove
Last month, venture capitalist Fred Wilson drew a lot of attention on the Internet when he declared a 21st century kind of bankruptcy. In a posting on his blog about technology, Wilson announced he was giving up on responding to all the e-mail piled up in his inbox. "I am so far behind on e-mail that I am declaring bankruptcy," he wrote. "If you've sent me an e-mail (and you aren't my wife, partner, or colleague), you might want to send it again. I am starting over."
College professors have done the same thing, and a Silicon Valley chief executive followed Wilson's example the next day. Last September, the recording artist Moby sent an e-mail to all the contacts in his inbox announcing that he was taking a break from e-mail for the rest of the year.
The supposed convenience of electronic mail, like so many other innovations of technology, has become too much for some people. Swamped by an unmanageable number of messages -- the volume of e-mail traffic has nearly doubled in the past two years, according to research firm DYS Analytics -- and plagued by annoying spam and viruses, some users are saying "Enough!"
Those declaring bankruptcy are swearing off e-mail entirely or, more commonly, deleting all old messages and starting fresh. E-mail overload gives many workers the sense that their work is never done, said senior analyst David Ferris, whose firm, Ferris Research, said there were 6 trillion business e-mails sent in 2006. "A lot of people like the feeling that they have everything done at the end of the day," he said. "They can't have it anymore."
So some say they're moving back to the telephone as their preferred means of communication. "From here on out I am going back to voice communication as my primary mechanism for interacting with people," wrote Jeff Nolan, chief executive of the business software company Teqlo, in his blog announcing his e-mail boycott.
The term "e-mail bankruptcy" may have been coined as early as 1999 by a Massachusetts Institute of Technology professor who studies the relationship between people and technology.
Professor Sherry Turkle said she came up with the concept after researching e-mail and discovering that some people harbor fantasies about escaping their e-mail burden. Turkle, who estimated that she has 2,500 pieces of unread e-mail in her inbox, is one of those people. A book she has been working on for a decade is coming out soon. Turkle joked that it would have taken her half the time to write it "if I didn't have e-mail."
Some people who don't want to go through the drastic-seeming measure of declaring total bankruptcy say they are trying to gently discourage the use of e-mail in their communications in favor of more personal calls or instant messages. "I am reachable, just e-mail is not a good way to do it," said Sean Bonner, chief executive of a news blog network who has automatic responses set up on his work and personal accounts warning he doesn't check e-mail as often as he used to.
Even those who've chosen partial e-mail engagement say they continue to struggle with the question of whether or not to reply. Stanford University technology professor Lawrence Lessig publicly declared e-mail bankruptcy a few years ago after being deluged by thousands of e-mails. "I eventually got to be so far behind that I was either going to spend all my time answering e-mails or I was going to do my job," he said.
Thereafter, Lessig's correspondents received e-mail equivalents of Dear John letters: "Dear person who sent me a yet-unanswered e-mail, he wrote, "I apologize, but I am declaring e-mail bankruptcy," he said, adding an apology for his lack of "cyber decency." He eliminated about 90 percent of his e-mail traffic, but said he can't quite abandon it entirely. "The easiest strategy is just to ignore e-mail, but I just can't psychologically do that," Lessig said in an interview.
If there is a downside to completely turning a back on e-mail, it's not one many former users notice. Stanford computer science professor Donald E. Knuth started using e-mail in 1975 and stopped using it 15 years later. Knuth said he prefers to concentrate on writing books rather than be distracted by the steady stream of communication. "I'd get to work and start answering e-mail -- three hours later, I'd say, "Oh, what was I supposed to do today?" Knuth said that he has no regrets. "I have been a happy man since Jan. 1 , 1990."
The critics of e-mail themselves have critics, who say copping out is a reactionary and isolationist way of dealing with modern communications. Carnegie Mellon University computer science professor David J. Farber receives piles of e-mail as the administrator of the "Interesting People" technology news mailing list. He has no patience for e-mail bankruptcy. "For a venture capitalist to say something like this -- he should get out of the technology field," Farber said.
Wilson, the venture capitalist, did not respond to a phone call placed to his firm -- or to an e-mailed request for comment.
Staff writer Sabrina Valle and staff researcher Richard Drezen contributed to this report.
Musique: tous les internautes traqués
L´industrie du disque amende fortement le piratage
• Les amendes pleuvent sur des internautes romands qui mettent à disposition des chansons«J'ai failli m'évanouir lorsque j'ai reçu cette facture de 10??000 francs. Je ne m'y attendais absolument pas, cela a été un terrible choc.» Catherine* est marquée par ce 16 mars 2007. Ce jour-là, elle reçoit à son domicile de La Conversion, près de Lausanne, une lettre de l'IFPI (Fédération internationale des producteurs de phonogrammes et vidéogrammes), la fédération qui représente une grande partie de l'industrie du disque. Les termes sont d'une précision implacable: «Le 27.09.2006 à 06:13:45 ont été offerts pour téléchargement à une «bourse d'échange» et donc au public mondial 2582 fichiers musicaux MP3 (...) par l'adresse IP 84.74.192.XXX.» Le bulletin de versement annexé est lourd: 7746 francs de dommages-intérêts, 1450 francs de frais légaux et 630 francs de frais d'enquête, le tout plus TVA. Total: 10?572 francs à régler dans les trois semaines. «Je suis seule avec deux enfants à charge, jamais je ne pourrai payer une telle somme», soupire Catherine.
• L'industrie du disque exige souvent des milliers de francs. Mais a-t-elle le droit d'agir ainsi?
La charge menée par l'IFPI n'épargne personne. «Nous attaquons des internautes qui mettent à disposition parfois 200 fichiers en téléchargement, parfois 3000, cela dépend des jours», affirme Peter Vosseler, directeur de l'IFPI en Suisse. Deux cents fichiers, donc trois fois rien: tous les internautes qui utilisent des systèmes d'échange peer-to-peer, tel eMule ou LimeWire, risquent désormais de recevoir une facture très salée. 2007 marque un changement radical pour les amateurs de musique gratuite: l'impunité est terminée. Les plaintes pleuvent: 137 en Suisse depuis mars 2006
. «Nous poursuivrons nos actions en justice, aucun terme n'est prévu», avertit Peter Vosseler.
Avocate à Lausanne, Lise-Marie Gonzalez a défendu une habitante de La Côte dont la fille mineure était poursuivie en été 2006 par l'IFPI. «Il était exclu pour ma cliente d'aller en procès, nous avons donc fait le maximum pour réduire la facture initiale de 10?000 francs, explique-t-elle. Avec succès, puisque la somme à payer a été réduite de moitié. Mais l'empressement – du jamais-vu dans une affaire – de l'IFPI à réclamer plusieurs fois l'argent, le sentiment qu'ils rechignaient à fournir des informations, des réponses floues, me font penser que l'IFPI ne serait pas totalement dans son droit.»
Plusieurs zones d'ombre existent. Pour traquer les adresses IP des internautes, l'IFPI utilise les services d'une société étrangère, dont elle garde le nom secret. «Certains estiment que l'adresse IP fait partie du domaine public. Cependant, en vertu de l'article 273 du Code pénal, on peut considérer que sa traque depuis l'étranger est une mesure d'investigation, une compétence qui n'appartiendrait qu'aux autorités suisses», relève Laurent Moreillon, avocat à Lausanne et coauteur d'un livre à paraître sur la criminalité informatique avec Miriam Mazou (avocate), Sandra Blank (juriste) et le juge d'instruction Jean Treccani. Celui-ci relève un autre problème majeur: «Lors de deux plaintes d'une association de défense du droit d'auteur dans le canton de Vaud, deux juges différents les ont rejetées. Ils ont estimé que ce sont les membres de l'association, et non celle-ci, qui sont titulaires des droits. Et l'association n'a pas recouru», conclut le juge. Pour Peter Vosseler, le problème n'existe pas: «La loi sur le droit d'auteur nous permet de mener ces actions. Les juges vaudois en effectuent une interprétation spéciale – s'il le faut, Warner ou EMI porteront directement plainte.»
Selon l'IFPI, sur les 137 plaintes déposées, 80 cas ont déjà été réglés par le versement de dédommagements via une convention, et les quatre internautes qui sont allés en procès ont tous perdu. Peter Vosseler affirme parfois faire preuve de clémence: «Lorsque nous avons affaire à des mineurs ou à des personnes en situation financière délicate, nous abaissons nos prétentions. Sinon, nous ne transigeons pas.» En plus des frais de justice, l'IFPI exige trois francs par titre mis à disposition – sans savoir combien de fois il a été téléchargé.
Avocat de Catherine, Yannis Sakkas estime que l'IFPI néglige des points très importants. «La loi punit le comportement intentionnel. Or ma cliente ne pouvait savoir qu'elle mettait des fichiers à disposition, n'ayant pas personnellement installé le programme. De plus, plusieurs personnes utilisaient son ordinateur. L'IFPI devra prouver que c'est elle qui a commis l'infraction.» Du coup, Yannis Sakkas espère obtenir l'acquittement de sa cliente ou pour le moins réduire fortement la somme exigée par l'IFPI: «En tout état de cause, ce montant est disproportionné, car l'IFPI ne peut prouver combien de copies ont été effectuées depuis les fichiers mis à disposition.» A priori, l'avocat de Martigny n'exclut pas une approche pragmatique et une conciliation. «Une procédure pénale peut coûter entre 2500 et 6000 francs de frais d'avocat, plus 2000 à 4000 francs de frais de justice en cas de condamnation. Tout compris, le risque pour ma cliente approche 20?000 francs – et cela pour la mise à disposition de musique à son insu.»
Selon Peter Vosseler, il est trop tôt pour mesurer l'impact des plaintes déposées sur les Suisses qui utilisent des systèmes peer-to-peer.
Pour être à l'abri des poursuites de l'IFPI, il faut désactiver le partage de fichiers sur son logiciel peer-to-peer. Certains programmes l'autorisent. Mais d'autres, tel eMule, ne permettent pas de rendre inaccessibles les chansons que l'on est en train de télécharger. «Tous les internautes ne savent pas forcément comment paramétrer leur logiciel, et vont ainsi arrêter de l'utiliser. Donc les sources de fichiers mis à disposition vont se tarir», espère Peter Vosseler.
Même si cela semble paradoxal, les internautes qui ne font que télécharger sont intouchables selon la loi sur le droit d'auteur, tant que ce n'est que pour un usage privé. Mais la situation suscite une controverse. «La loi sur le droit d'auteur permet l'usage privé d'une œuvre divulguée, explique Miriam Mazou. Certains juristes estiment toutefois que la copie privée ne devrait être permise que lorsque l'œuvre a été rendue accessible de manière licite, par exemple par la société détentrice du droit d'auteur. Mais, à mon sens, la loi actuelle ne permet pas de condamner le fait de télécharger, quelle que soit la source.»
Selon Jean Treccani, la question s'annonce difficile à trancher . «Comment saurais-je si le système que j'utilise est légal, s'il me propose par exemple des chansons à 10 centimes l'unité, en étant légal dans un pays tiers, mais pas en Suisse?» s'interroge le juge.
Adresse IP: Numéro qui permet d'identifier chaque ordinateur connecté à Internet. Il est en général composé de quatre nombres (par exemple 220.127.116.11). Il permet facilement de connaître le fournisseur d'accès et le pays de l'internaute. Mais seul le fournisseur d'accès connaît l'identité du détenteur de l'adresse IP. Il ne la communique que sur demande de la justice.
Logiciel peer-to-peer (P2P): Programme généralement gratuit permettant l'échange de fichiers (musicaux, vidéo, etc.) via Internet. Le téléchargement se fait via une multitude de sources, les fichiers étant échangés en petits morceaux. Les logiciels les plus populaires sont Kazaa, Bittorrent et LimeWire.
DRM: Le Digital Rights Management (soit la gestion numérique des droits) est souvent lié à des fichiers musicaux, et permet d'interdire leur copie multiple, de ne permettre de les lire qu'un nombre limité de fois, ou encore d'interdire le transfert vers un autre appareil tel un baladeur numérique. Les DRM accompagnent souvent les fichiers vendus sur les sites de téléchargement payants.
Bit Wars: When Computers Attack
By JOHN SCHWARTZ
ANYONE who follows technology or military affairs has heard the predictions for more than a decade. Cyberwar is coming. Although the long-announced, long-awaited computer-based conflict has yet to occur, the forecast grows more ominous with every telling: an onslaught is brought by a warring nation, backed by its brains and computing resources; banks and other businesses in the enemy states are destroyed; governments grind to a halt; telephones disconnect; the microchip-controlled Tickle Me Elmos will be transformed into unstoppable killing machines.
No, that last item is not part of the scenario, mostly because those microprocessor-controlled toys aren’t connected to the Internet through the industrial remote-control technologies known as Scada systems, for Supervisory Control and Data Acquisition. The technology allows remote monitoring and control of operations like manufacturing production lines and civil works projects like dams. So security experts envision terrorists at a keyboard remotely shutting down factory floors or opening a dam’s floodgates to devastate cities downstream.
But how bad would a cyberwar really be — especially when compared with the blood-and-guts genuine article? And is there really a chance it would happen at all?
Whatever the answer, governments are readying themselves for the Big One.
China, security experts believe, has long probed United States networks. According to a 2007 Defense Department annual report to Congress, China’s military has invested heavily in electronic countermeasures and defenses against attack, and concepts like “computer network attack, computer network defense and computer network exploitation.”
According to the report, the Chinese Army sees computer network operations “as critical to achieving ‘electromagnetic dominance’ ” — whatever that is — early in a conflict.
The United States is arming up, as well. Robert Elder, commander of the Air Force Cyberspace Command, told reporters in Washington at a recent breakfast that his newly formed command, which defends military data, communications and control networks, is learning how to disable an opponent’s computer networks and crash its databases.
“We want to go in and knock them out in the first round,” he said, as reported on Military.com.
An all-out cyberconflict could “could have huge impacts,” said Danny McPherson, an expert with Arbor Networks. Hacking into industrial control systems, he said, could be “a very real threat.”
Attacks on the Internet itself, say, through what are known as root-name servers, which play a role in connecting Internet users with Web sites, could cause widespread problems, said Paul Kurtz, the chief operating officer of Safe Harbor, a security consultancy. And having so many nations with a finger on the digital button, of course, raises the prospect of a cyberconflict caused by a misidentified attacker or a simple glitch.
Still, instead of thinking in terms of the industry’s repeated warnings of a “digital Pearl Harbor,” Mr. McPherson said, “I think cyberwarfare will be far more subtle,” in that “certain parts of the system won’t work, or it will be that we can’t trust information we’re looking at.”
Whatever form cyberwar might take, most experts have concluded that what happened in Estonia earlier this month was not an example.
The cyberattacks in Estonia were apparently sparked by tensions over the country’s plan to remove Soviet-era war memorials. Estonian officials initially blamed Russia for the attacks, suggesting that its state-run computer networks blocked online access to banks and government offices.
The Kremlin denied the accusations. And Estonian officials ultimately accepted the idea that perhaps this attack was the work of tech-savvy activists, or “hactivists,” who have been mounting similar attacks against just about everyone for several years.
Still, many in the security community and the news media initially treated the digital attacks against Estonia’s computer networks as the coming of a long-anticipated new chapter in the history of conflict — when, in fact, the technologies and techniques used in the attacks were hardly new, nor were they the kind of thing that only a powerful government would have in its digital armamentarium.
The force of the attack appears to have come from armies of “zombie” computers infected with software that makes them available for manipulation and remote command. These “bot-nets” are more commonly used for illicit activities like committing online fraud and sending spam, said James Andrew Lewis, director of the Technology and Public Policy Program at the Center for Strategic and International Studies.
The main method of attack in Estonia — through what is known as a digital denial of service — doesn’t disable computers from within, but simply stacks up so much digital debris at the entryway that legitimate visitors, like bank customers, can’t get in.
That is not the same as disabling a computer from the inside, Mr. Lewis stressed. “The idea that Estonia was brought to its knees — that’s when we have to stop sniffing glue,” he said.
In fact, an attack would have borne real risks for Russia, or any aggressor nation, said Ross Stapleton-Gray, a security consultant in Berkeley, Calif. “The downside consequence of getting caught doing something more could well be a military escalation,” he said.
That’s too great a risk for a government to want to engage in what amounts to high-tech harassment, Mr. Lewis said. “The Russians are not dumb,” he said.
Even if an Internet-based conflict does eventually break out, and the dueling microchips do their worst, it would have a fundamentally different effect from flesh-and-blood fighting, said Andrew MacPherson, research assistant professor of justice studies at the University of New Hampshire. “If you have a porcelain vase and drop it — it’s very difficult to put it back together,” he said. “A cyberattack, maybe it’s more like a sheet that can be torn and it can be sewed back together.”
That is why Kevin Poulsen, a writer on security issues at Wired News, said that he had difficulty envisioning the threat that others see from an overseas attack by electrons and photons alone. “They unleash their deadly viruses and then they land on the beaches and sweep across our country without resistance because we’re rebooting our P.C.’s?” he asked.
In fact, the United States has prepared for cyberattacks incidentally, through our day-to-day exposure to crashes, glitches, viruses and meltdowns. There are very few places where a computer is so central that everything crashes to a halt if the machine goes on the blink.
Russian space engineers struggled to fix crashing computers aboard the International Space Station that help keep the orbiting laboratory oriented properly in space — if they hadn’t been fixed, the station might have had to be abandoned, at least temporarily.
Down on earth, by comparison, this correspondent found himself near the Kennedy Space Center in a convenience store without cash and with the credit card network unavailable. “The satellite’s down,” the clerk said. “It’s the rain.” And so the purchase of jerky and soda had to wait. At the center’s visitor complex, a sales clerk dealt with the same problem by pulling out paper sales slips.
People, after all, are not computers. When something goes wrong, we do not crash. Instead, we find another way: we improvise; we fix. We pull out the slips.
Minding the Meeting, or Your Computer?
By DEAN HACHAMOVITCH
BACK in 1994, when portable PCs started their descent from 15-pound luggables to today’s 5-pound laptops, I started taking mine to meetings at Microsoft, and so did my colleagues. So novel. So useful.
We could type notes. We could get information immediately from our computers instead of carrying a stack of paper or scurrying back to our offices to fetch a file. We could present our slides or show off new products. Geek thrills!
As we became more connected and casual with the technology, though, we embarked on some decidedly less meeting-oriented activities. We read our e-mail if the conversation took a dull turn. We checked news headlines. We surreptitiously logged on to the ESPN Web site.
In the last few years, we even started instant messaging one another during meetings, like eighth graders whispering in class: “Did he just say —— ” or “Does she realize that —— .” Sometimes, people would even wisecrack over I.M., to see if they could make other people in the room laugh.
But now a whole etiquette has formed. The Microsoft.com Web site even lists seven rules for using laptops in meetings, including “Make Sure There’s a Point” and “Turn Down Bells and Whistles.” In some meetings, especially if the topic is sensitive, it just seems more respectful to leave the laptops closed. On the other hand, if the meeting is covering a variety of areas and the conversation is moving into something I’m not involved in, I don’t feel too bad about catching up on my e-mail. It beats doing so at 11 p.m.
Of course, there are mistakes and boundaries that you figure out over time. Recently, one of my colleagues was standing at the front of a meeting room, projecting some data from his laptop onto the screen. A toast popped up — the little square window in the corner that tells you someone on your buddy list has logged on — with a message from someone in the audience that his fly was open. This was a joke meant to remind the guy to set his laptop on “presentation” mode for meetings, which mutes instant messaging, among other things.
Everyone has their own way of handling the laptop question when running a meeting. When it’s me, I may sometimes glance over people’s shoulders to see if their screens look topic-related. Or if I see people buried in their laptops, I may ask for their opinions to see if they’re engaged.
Some speakers start a meeting with “Laptops off, please.” Others might chirp, “Excuse me, we’re having a meeting here,” if people are making more eye contact with their screens than with the speaker. Once, one of my bosses slammed the lid of my PC down in a fury because he thought I wasn’t paying attention.
Tablet PCs — the kind that sit flat on your lap and are used with a stylus instead of a keyboard — seem to be more socially acceptable. Maybe it’s because there isn’t a big dark rectangular barrier that you’re putting up between yourself and the speaker. Maybe it’s because we all grew up taking notes with paper and pen, so it’s more familiar. In any case, you can still do your e-mail, get an I.M. about dinner plans, pay your bills or surf.
But it’s not all etiquette, passing electronic notes and Web surfing. The technology is really useful. I can get data from the corporate Web. I can let my wife know I’ll be late without leaving the meeting room to make a call (and making myself that much later), or answer a colleague’s quick question immediately. Instant messaging lets me see who’s available outside the meeting room to send me information if I need it. Checking who’s online from your PC is like poking your head into the hallway to see who’s around to help you.
Laptops in meetings can be discouraging if the most senior people in the room are frequently looking down at their laptops or, worse yet, typing for an extended time. The presenter has to wonder how much he or she is getting across. I have to say that our senior management sets a good example in this regard. In meetings, I don’t see Bill Gates or Steve Ballmer doing e-mail — they’re actively engaged, and listening and asking questions.
Laptops in meetings are also becoming fashion accessories, especially among employees in their 20s and early 30s. Their PCs have stickers like those of a high school binder: snowboard products, or geeky sayings like “My other PC is your laptop — I’m a hacker.” There are political bumper stickers and all kinds of things that show off their interests, their image, their sense of humor.
I guess the computer coming to meetings is like bringing your office’s decorations along with you. You get a better idea of the people you’re meeting with.
SOMETIMES when I’m in meetings all day, I carry around my laptop to keep up on e-mail and phone messages, and to take notes. Many of my colleagues are doing the same, so by the 5 p.m. meeting we’re all looking for electrical outlets.
The more discreet way to check e-mail, I.M., and the Web at a meeting these days is the latest-generation cellphone. While they can’t connect to all the data on your PC (yet), smartphones — connected to the Internet, with mobile versions of the same Office software on your PC — make it easy for insatiable information seekers to sneak a peek at headlines or send off a quick e-mail without drawing attention. Just make sure to turn off that “Girl From Ipanema” ring tone.
Dean Hachamovitch is general manager of Internet Explorer for Microsoft.
As told to Julie Bick, a former co-worker of Mr. Hachamovitch when she worked at Microsoft.
Japan's Warp-Speed Ride to Internet Future
By Blaine Harden
TOKYO -- Americans invented the Internet, but the Japanese are running away with it. Broadband service here is eight to 30 times as fast as in the United States -- and considerably cheaper. Japan has the world's fastest Internet connections, delivering more data at a lower cost than anywhere else, recent studies show.
Accelerating broadband speed in this country -- as well as in South Korea and much of Europe -- is pushing open doors to Internet innovation that are likely to remain closed for years to come in much of the United States.
The speed advantage allows the Japanese to watch broadcast-quality, full-screen television over the Internet, an experience that mocks the grainy, wallet-size images Americans endure.
Ultra-high-speed applications are being rolled out for low-cost, high-definition teleconferencing, for telemedicine -- which allows urban doctors to diagnose diseases from a distance -- and for advanced telecommuting to help Japan meet its goal of doubling the number of people who work from home by 2010.
"For now and for at least the short term, these applications will be cheaper and probably better in Japan," said Robert Pepper, senior managing director of global technology policy at Cisco Systems, the networking giant.
Japan has surged ahead of the United States on the wings of better wire and more aggressive government regulation, industry analysts say.
The copper wire used to hook up Japanese homes is newer and runs in shorter loops to telephone exchanges than in the United States. This is partly a matter of geography and demographics: Japan is relatively small, highly urbanized and densely populated. But better wire is also a legacy of American bombs, which razed much of urban Japan during World War II and led to a wholesale rewiring of the country.
In 2000, the Japanese government seized its advantage in wire. In sharp contrast to the Bush administration over the same time period, regulators here compelled big phone companies to open up wires to upstart Internet providers.
In short order, broadband exploded. At first, it used the same DSL technology that exists in the United States. But because of the better, shorter wire in Japan, DSL service here is much faster. Ten to 20 times as fast, according to Pepper, one of the world's leading experts on broadband infrastructure.
Indeed, DSL in Japan is often five to 10 times as fast as what is widely offered by U.S. cable providers, generally viewed as the fastest American carriers. (Cable has not been much of a player in Japan.)
Perhaps more important, competition in Japan gave a kick in the pants to Nippon Telegraph and Telephone Corp. (NTT), once a government-controlled enterprise and still Japan's largest phone company. With the help of government subsidies and tax breaks, NTT launched a nationwide build-out of fiber-optic lines to homes, making the lower-capacity copper wires obsolete.
"Obviously, without the competition, we would not have done all this at this pace," said Hideki Ohmichi, NTT's senior manager for public relations.
His company now offers speeds on fiber of up to 100 megabits per second -- 17 times as fast as the top speed generally available from U.S. cable. About 8.8 million Japanese homes have fiber lines -- roughly nine times the number in the United States.
The burgeoning optical fiber system is hurtling Japan into an Internet future that experts say Americans are unlikely to experience for at least several years.
Shoji Matsuya, director of diagnostic pathology at Kanto Medical Center in Tokyo, has tested an NTT telepathology system scheduled for nationwide use next spring.
It allows pathologists -- using high-definition video and remote-controlled microscopes -- to examine tissue samples from patients living in areas without access to major hospitals. Those patients need only find a clinic with the right microscope and an NTT fiber connection.
"Before, we did not have the richness of image detail," Matsuya said, noting that Japan has a severe shortage of pathologists. "With this equipment, I think it is possible to make a definitive remote diagnosis of cancer."
Japan's leap forward, as the United States has lost ground among major industrialized countries in providing high-speed broadband connections, has frustrated many American high-tech innovators.
"The experience of the last seven years shows that sometimes you need a strong federal regulatory framework to ensure that competition happens in a way that is constructive," said Vinton G. Cerf, a vice president at Google.
Japan's lead in speed is worrisome because it will shift Internet innovation away from the United States, warns Cerf, who is widely credited with helping to invent some of the Internet's basic architecture. "Once you have very high speeds, I guarantee that people will figure out things to do with it that they haven't done before," he said.
As a champion of Japanese-style competition through regulation, Cerf supports "net neutrality" legislation now pending in Congress. It would mandate that phone and cable companies treat all online traffic equally, without imposing higher tolls for certain content.
The proposed laws would probably save billions for companies such as Google and Yahoo, but consumer advocates say they would also save money for most home Internet users.
U.S. phone and cable companies, which control about 98 percent of the country's broadband market, strongly oppose the proposed laws, saying they would discourage the huge investments needed to upgrade broadband speed.
Yet the story of how Japan outclassed the United States in the provision of better, cheaper Internet service suggests that forceful government regulation can pay substantial dividends.
The opening of Japan's copper phone lines to DSL competition launched a "virtuous cycle" of ever-increasing speed, said Cisco's Pepper. The cycle began shortly after Japanese politicians -- fretting about an Internet system that in 2000 was slower and more expensive than what existed in the United States -- decided to "unbundle" copper lines.
For just $2 a month, upstart broadband companies were allowed to rent bandwidth on an NTT copper wire connected to a Japanese home. Low rent allowed them to charge low prices to consumers -- as little as $22 a month for a DSL connection faster than almost all U.S. broadband services.
In the United States, a similar kind of competitive access to phone company lines was strongly endorsed by Congress in a 1996 telecommunications law. But the federal push fizzled in 2003 and 2004, when the Federal Communications Commission and a federal court ruled that major companies do not have to share phone or fiber lines with competitors. The Bush administration did not appeal the court ruling.
"The Bush administration largely turned its back on the Internet, so we have just drifted downwards," said Thomas Bleha, a former U.S. diplomat who served in Japan and is writing a history of how that country trumped the United States in broadband.
As the United States drifted, a prominent venture capitalist in Japan pounced on his government's decision to open up the country's copper wire.
Masayoshi Son, head of a company called Softbank, offered broadband that was much cheaper and more than six times as fast as NTT's. He added marketing razzmatazz to the mix, dispatching young people to street corners to give away modems that would connect users to a service called Yahoo BB. (The U.S.-based Yahoo owns about a third of it.) The company's share of DSL business in Japan has exploded in the past five years, from zero to 37 percent. As competition grew, the monthly cost of broadband across Japan fell by about half, as broadband speed jumped 33-fold, according to a recent study.
"Once a customer enjoyed the high speed of DSL, then he or she preferred more speed," said Harumasa Sato, a professor of telecommunication economics at Konan University in Kobe.
The growing addiction to speed, ironically, is returning near-monopoly power in fiber to NTT, which owns and controls most new fiber lines to homes. Growth of new fiber connections exceeded DSL growth two years ago. Fiber is how all of Japan will soon be connected -- for phones, television and nearly all other services. "NTT is becoming dominant again in the fiber broadband kingdom," Sato said.
That infuriates its competitors. Yahoo BB and others are demanding that the government once again compel NTT to unlock the lines. In Japan, the regulatory wars over broadband are far from over.
Special correspondent Akiko Yamamoto contributed to this report.
The New York Times will stop charging for
access to parts of its Web site,
effective at midnight Tuesday night. A Letter to Readers About TimesSelect
Times to Stop Charging for Parts of Its Web Site
By RICHARD PÉREZ-PEÑA
The New York Times will stop charging for access to parts of its Web site, effective at midnight Tuesday night. The move comes two years to the day after The Times began the subscription program, TimesSelect, which has charged $49.95 a year, or $7.95 a month, for online access to the work of its columnists and to the newspaper’s archives. TimesSelect has been free to print subscribers to The Times and to some students and educators.
In addition to opening the entire site to all readers, The Times will also make available its archives from 1987 to the present without charge, as well as those from 1851 to 1922, which are in the public domain. There will be charges for some material from the period 1923 to 1986, and some will be free.
The Times said the project had met expectations, drawing 227,000 paying subscribers — out of 787,000 over all — and generating about $10 million a year in revenue.
“But our projections for growth on that paid subscriber base were low, compared to the growth of online advertising,” said Vivian L. Schiller, senior vice president and general manager of the site, NYTimes.com.
What changed, The Times said, was that many more readers started coming to the site from search engines and links on other sites instead of coming directly to NYTimes.com. These indirect readers, unable to get access to articles behind the pay wall and less likely to pay subscription fees than the more loyal direct users, were seen as opportunities for more page views and increased advertising revenue.
“What wasn’t anticipated was the explosion in how much of our traffic would be generated by Google, by Yahoo and some others,” Ms. Schiller said.
The Times’s site has about 13 million unique visitors each month, according to Nielsen/NetRatings, far more than any other newspaper site. Ms. Schiller would not say how much increased Web traffic the paper expects by eliminating the charges, or how much additional ad revenue the move was expected to generate.
Those who have paid in advance for access to TimesSelect will be reimbursed on a prorated basis.
Colby Atwood, president of Borrell Associates, a media research firm, said that there have always been reasons to question the pay model for news sites, and that doubts have grown along with Web traffic and online ad revenue.
“The business model for advertising revenue, versus subscriber revenue, is so much more attractive,” he said. “The hybrid model has some potential, but in the long run, the advertising side will dominate.”
In addition, he said, The Times has been especially effective at using information it collects about its online readers to aim ads specifically to them, increasing their value to advertisers.
Many readers lamented their loss of access to the work of the 23 news and opinion columnists of The Times — as did some of the columnists themselves. Some of those writers have such ardent followings that even with access restricted, their work often appeared on the lists of the most e-mailed articles.
Experts say that opinion columns are unlikely to generate much ad revenue, but that they can drive a lot of reader traffic to other, more lucrative parts of The Times site, like topic pages devoted to health and technology.
The Wall Street Journal, published by Dow Jones & Company, is the only major newspaper in the country to charge for access to most of its Web site, which it began doing in 1996. The Journal has nearly one million paying online readers, generating about $65 million in revenue.
Dow Jones and the company that is about to take it over, the News Corporation, are discussing whether to continue that practice, according to people briefed on those talks. Rupert Murdoch, the News Corporation chairman, has talked of the possibility of making access to The Journal free online.
The Financial Times charges for access to selected material online, much as The New York Times has.
The Los Angeles Times tried that model in 2005, charging for access
to its arts section, but quickly dropped it after experiencing a sharp
decline in Web traffic.
Dear NYTimes.com Readers:
Effective Sept. 19, we are ending TimesSelect. All of our online readers will now be able to read Times columnists, access our archives back to 1987 and enjoy many other TimesSelect features that have been added over the last two years – free.
If you are a paying TimesSelect subscriber, you will receive a prorated refund. We will send you an e-mail on Wednesday, Sept. 19 with full details.
Why the change?
Since we launched TimesSelect in 2005, the online landscape has altered significantly. Readers increasingly find news through search, as well as through social networks, blogs and other online sources. In light of this shift, we believe offering unfettered access to New York Times reporting and analysis best serves the interest of our readers, our brand and the long-term vitality of our journalism. We encourage everyone to read our news and opinion – as well as share it, link to it and comment on it.
We welcome all online readers to enjoy the popular and powerful voices that have defined Times commentary – Maureen Dowd, Thomas L. Friedman, Frank Rich, Gail Collins, Paul Krugman, David Brooks, Bob Herbert and Nicholas D. Kristof. And we invite them to become acquainted with our exclusive online journalism – columns by Stanley Fish, Maira Kalman, Dick Cavett and Judith Warner; the Opinionator blog; and guest forums by scientists, musicians and soldiers on the frontlines in Iraq. All this will now reach a broader audience in the United States and around the world.
This month we mark the 156th anniversary of the first issue of The New York Times. Our long, distinguished history is rooted in a commitment to innovation, experimentation and constant change. All three themes were plainly evident in the skillful execution of TimesSelect; they will be on full display as NYTimes.com becomes entirely open.
Senior Vice President & General Manager
Murdoch's Choice: Paid or
Free for WSJ.com?
By SARAH ELLISON
News Corp. Chairman Rupert Murdoch hasn't completed his purchase of Dow Jones & Co., publisher of The Wall Street Journal, but already Mr. Murdoch and Dow Jones executives are debating a key strategic question: Should the Journal fall in line with the rest of the industry and make its 11-year-old paid-subscription Web site free?
Mr. Murdoch has been dropping hints that he is contemplating doing just that when he takes over, raising the idea in interviews before he clinched the deal and more openly in recent meetings with top Journal editors and Dow Jones Chief Executive Richard F. Zannino.
Yesterday, the News Corp. chairman went even further, telling an investment conference that the issue was "right on the front burner" and, although no decision has been made, a free site "looks like the way we are going."
Mr. Zannino and other Dow Jones executives, however, have made the case that there is value in keeping the Journal's Web site -- with its 983,000 subscribers -- at least partially a paid site. While none of the executives would comment, a spokeswoman said, "We are continuing to evaluate our online model and look for opportunities to grow our business."
The Journal became the only major U.S. paper charging for online access to most of its content after the New York Times yesterday abandoned its two-year-old online paid-subscription service, which offered paying subscribers online access to the newspaper's columnists and archives. The Times believes it will more than offset the subscription revenue it is losing by generating more advertising revenue, a result of broadening its Web site's audience.
But the debate at Dow Jones and the Times' decision comes as the once-torrid growth in online-newspaper ad revenue is slowing. Newspapers face increasing online competition from Web portals and TV networks. Last month some newspaper groups, including McClatchy Co. and Hearst Corp. newspapers, saw traffic to their Web sites fall while Yahoo News and Time Warner Inc.'s CNN Web sites posted strong growth, according to Nielsen/NetRatings.
The rate of growth of online-newspaper ads dropped to 19.3% during the second quarter of 2007, down from a growth rate of 33.2% during the second quarter of 2006, according to the Newspaper Association of America.
The slowing growth online coincides with accelerating declines in newspapers' print-ad revenue, casting doubt on whether newspapers will ever be able to offset their losses in print with gains on the Internet. Online ads still make up a small portion of total newspaper revenues, just 7% of the $11.3 billion total print- and online-newspaper ad revenues during the second quarter.
Still, given the downward spiral of print revenues, most newspaper executives feel they have no choice but to grab as big a slice of the online-ad pie as they can.
The Times is the latest in a string of papers to abandon attempts to generate subscription revenue online. Slate, the online magazine now owned by Washington Post Co., started out as a free site owned by Microsoft Corp. in 1996, only to charge a $19.95 subscription fee two years later and then drop the fee a year after that, citing the boom in online advertising. Tribune Co.'s Los Angeles Times, after a two-year experiment, stopped charging for online access to its entertainment listings in 2005.
Aside from the Journal, the most prominent newspaper to continue charging for access to part of its Web site is the Financial Times, which charges for certain portions of the site. "There are no plans to make ft.com completely free," said Charles Goldsmith, spokesman for Pearson PLC, publisher of the Financial Times. "We continue to evaluate the mix of paid versus free content on the site," he added. Subscriptions to ft.com rose to 97,000 as of June 2007, up 12% from a year earlier.
Both the Journal and the Financial Times are special cases in the newspaper world -- more specialized than general-interest papers but more general than trade publications. That puts them in an unusual place in the discussion of paid content: Wall Street and corporate executives have shown a willingness to pay for online access to business news.
Mr. Murdoch has suggested that making WSJ.com free would bring in enough advertising revenue to offset the subscription revenues that are lost. WSJ.com generated at least $50 million in subscription revenues last year, according to people familiar with the matter.
"Would you lose $50 million in revenue? I don't think so," Mr. Murdoch said yesterday at a Goldman Sachs conference in New York City. "...But you'd lose some tens of millions to start with. Then, if the site is good, I think you'd get much more than that back just in textual search. And I think you'd get not one million paying customers, but, around the world, you'd get 10 to 15 million regular daily hits on it, and that would be the most affluent, the most influential people in the world...And I think that could grow."
But making that up in advertising revenue would require the Journal to increase traffic to its site to well north of 20 million monthly unique visitors, up from an 8.3 million monthly average in the second quarter of this year, Dow Jones estimates. Nielsen Net/Ratings, one of several firms that measure Web traffic, estimates the Journal's August traffic at 5.1 million unique visitors.
Getting up to 20 million could be tough: the New York Times' Web site, nytimes.com, is the most popular newspaper site on the Web, with 13.1 million unique visitors, Nielsen Net/Ratings estimates. Yahoo Finance, the biggest financial Web site, drew 16.8 million visitors.
News Corp. may see a strategic benefit in having a free WSJ.com even if the site doesn't immediately make up the lost subscription revenue. As part of a larger corporation, expanding reach and gaining share of overall online volume "will outweigh the opportunity, and absolute dollars, associated with the paid subscription model," Douglas Anmuth, a Lehman Brothers analyst, said in a note.
But Mr. Zannino and other executives have said that given the nature of the Journal's content, opening up the Web site to nonsubscribers might not attract enough new readers to make up for lost subscription revenue. Furthermore, according to an internal Dow Jones review of WSJ.com, nonsubscribers only stay on the site for an article or two, unlike subscribers, who stay on the site much longer.
The lofty ad rates the Journal can charge online would be eroded by a less loyal, nonsubcriber base. Lehman Brothers estimates that the average page view on WSJ.com commands four times the ad revenue of a page view the New York Times site.
Looking to cash in on growth in online advertising, the Journal already offers some content free, including stories from its business-of-life sections. The paper is doing a test with Google News in which online readers coming to its site from Google News can read a single article for free but are blocked from entering other parts of the site. The goal, according to a Wall Street Journal spokeswoman, is to capitalize on both the traffic that comes from search engines as well as to encourage people to subscribe to the Journal.
Emily Steel contributed to this article. Write to Sarah Ellison at firstname.lastname@example.org
By THOMAS L. FRIEDMAN
I just spent the past week visiting several colleges — Auburn, the University of Mississippi, Lake Forest and Williams — and I can report that the more I am around this generation of college students, the more I am both baffled and impressed.
I am impressed because they are so much more optimistic and idealistic than they should be. I am baffled because they are so much less radical and politically engaged than they need to be.
One of the things I feared most after 9/11 — that my daughters would not be able to travel the world with the same carefree attitude my wife and I did at their age — has not come to pass.
Whether it was at Ole Miss or Williams or my alma mater, Brandeis, college students today are not only going abroad to study in record numbers, but they are also going abroad to build homes for the poor in El Salvador in record numbers or volunteering at AIDS clinics in record numbers. Not only has terrorism not deterred them from traveling, they are rolling up their sleeves and diving in deeper than ever.
The Iraq war may be a mess, but I noticed at Auburn and Old Miss more than a few young men and women proudly wearing their R.O.T.C. uniforms. Many of those not going abroad have channeled their national service impulses into increasingly popular programs at home like “Teach for America,” which has become to this generation what the Peace Corps was to mine.
It’s for all these reasons that I’ve been calling them “Generation Q” — the Quiet Americans, in the best sense of that term, quietly pursuing their idealism, at home and abroad.
But Generation Q may be too quiet, too online, for its own good, and for the country’s own good. When I think of the huge budget deficit, Social Security deficit and ecological deficit that our generation is leaving this generation, if they are not spitting mad, well, then they’re just not paying attention. And we’ll just keep piling it on them.
There is a good chance that members of Generation Q will spend their entire adult lives digging out from the deficits that we — the “Greediest Generation,” epitomized by George W. Bush — are leaving them.
When I was visiting my daughter at her college, she asked me about a terrifying story that ran in this newspaper on Oct. 2, reporting that the Arctic ice cap was melting “to an extent unparalleled in a century or more” — and that the entire Arctic system appears to be “heading toward a new, more watery state” likely triggered by “human-caused global warming.”
“What happened to that Arctic story, Dad?” my daughter asked me. How could the news media just report one day that the Arctic ice was melting far faster than any models predicted “and then the story just disappeared?” Why weren’t any of the candidates talking about it? Didn’t they understand: this has become the big issue on campuses?
No, they don’t seem to understand. They seem to be too busy raising money or buying votes with subsidies for ethanol farmers in Iowa. The candidates could actually use a good kick in the pants on this point. But where is it going to come from?
Generation Q would be doing itself a favor, and America a favor, if it demanded from every candidate who comes on campus answers to three questions: What is your plan for mitigating climate change? What is your plan for reforming Social Security? What is your plan for dealing with the deficit — so we all won’t be working for China in 20 years?
America needs a jolt of the idealism, activism and outrage (it must be in there) of Generation Q. That’s what twentysomethings are for — to light a fire under the country. But they can’t e-mail it in, and an online petition or a mouse click for carbon neutrality won’t cut it. They have to get organized in a way that will force politicians to pay attention rather than just patronize them.
Martin Luther King and Bobby Kennedy didn’t change the world by asking people to join their Facebook crusades or to download their platforms. Activism can only be uploaded, the old-fashioned way — by young voters speaking truth to power, face to face, in big numbers, on campuses or the Washington Mall. Virtual politics is just that — virtual.
Maybe that’s why what impressed me most on my brief college swing was actually a statue — the life-size statue of James Meredith at the University of Mississippi. Meredith was the first African-American to be admitted to Ole Miss in 1962. The Meredith bronze is posed as if he is striding toward a tall limestone archway, re-enacting his fateful step onto the then-segregated campus — defying a violent, angry mob and protected by the National Guard.
Above the archway, carved into the stone, is the word “Courage.” That is what real activism looks like. There is no substitute.
Pay Me for My Content
By JARON LANIER
INTERNET idealists like me have long had an easy answer for creative types — like the striking screenwriters in Hollywood — who feel threatened by the unremunerative nature of our new Eden: stop whining and figure out how to join the party!
That’s the line I spouted when I was part of the birthing celebrations for the Web. I even wrote a manifesto titled “Piracy Is Your Friend.” But I was wrong. We were all wrong.
Like so many in Silicon Valley in the 1990s, I thought the Web would increase business opportunities for writers and artists. Instead they have decreased. Most of the big names in the industry — Google, Facebook, MySpace and increasingly even Apple and Microsoft — are now in the business of assembling content from unpaid Internet users to sell advertising to other Internet users. (Disclosure: I’m the scholar at large for Microsoft Live Labs, and I once was part of a company that Google bought.)
There’s an almost religious belief in the Valley that charging for content is bad. The only business plan in sight is ever more advertising. One might ask what will be left to advertise once everyone is aggregated.
How long must creative people wait for the Web’s new wealth to find a path to their doors? A decade is a long enough time that idealism and hope are no longer enough. If there’s one practice technologists ought to embrace, it is the evaluation of empirical results.
To help writers and artists earn a living online, software engineers and Internet evangelists need to exercise the power they hold as designers. Information is free on the Internet because we created the system to be that way.
We could design information systems so that people can pay for content — so that anyone has the chance of becoming a widely read author and yet can also be paid. Information could be universally accessible but on an affordable instead of an absolutely free basis.
People happily pay for content in certain Internet ecosystems, provided the ecosystems are delightful. People love paying for virtual art, clothing and other items in virtual worlds like Second Life, for instance. Something similar is going on for music within the ecosystem of the iPod. (I am an adviser to Linden Lab, the creator of Second Life.)
Affordable turns out to be much harder than free when it comes to information technology, but we are smart enough to figure it out. We owe it to ourselves and to our creative friends to acknowledge the negative results of our old idealism. We need to grow up.
Jaron Lanier is a computer scientist and a columnist for Discover.
Intel Quits Effort to Get Computers to Children
By JOHN MARKOFF
SAN FRANCISCO — A frail partnership between Intel and the One Laptop Per Child educational computing group was undone last month in part by an Intel saleswoman: She tried to persuade a Peruvian official to drop the country’s commitment to buy a quarter-million of the organization’s laptops in favor of Intel PCs.
Intel and the group had a rocky relationship from the start in their short-lived effort to get inexpensive laptops into the hands of the world’s poorest children.
But the saleswoman’s tactic was the final straw for Nicholas Negroponte, the former Massachusetts Institute of Technology computer researcher and founder of the nonprofit effort. He demanded that Intel stop what he saw as efforts to undermine the group’s sales, which meant ceasing to sell the rival computer. Intel chose instead to withdraw its support from One Laptop this week.
The project has been a lightning rod for controversy largely because the world’s most powerful software and chip making companies — Microsoft and Intel — had long resisted the project, for fear, according to many industry executives, that it would compete in markets they hoped to develop.
As a result, One Laptop’s XO computer comes with a processor built by Intel’s rival Advanced Micro Devices and open-source software, rather than Microsoft’s Windows and Office software.
After several years of publicly attacking the XO, Intel reversed itself over the summer and joined the organization’s board, agreeing to make an $18 million contribution and begin developing an Intel-based version of the computer.
Although Intel made an initial $6 million payment to One Laptop, the partnership was troubled from the outset as Intel sales representatives in the field competed actively against the $200 One Laptop machine by trying to sell a rival computer, a more costly Classmate PC.
The Classmate sells for about $350 with an installed version of Microsoft Office, and Intel is selling the machine through an array of sales organizations outside the United States.
Even after Intel joined the One Laptop board, in country after country, the two organizations competed to make government sales, Mr. Negroponte said yesterday in a telephone interview. The relationship first frayed seriously in October, he said, when an Intel salesman gave a Mongolian government official a side-by-side comparison of the Classmate PC and the XO.
Mr. Negroponte said he was infuriated and threatened to throw Intel off the One Laptop board. In response, Intel’s chief executive, Paul S. Otellini, agreed to change Intel practices and he accelerated the development of the Intel prototype.
Sean Maloney, the company’s top sales and marketing executive, sent e-mail instructions to the sales team that were intended to end the practice of product comparisons.
Mr. Negroponte said eliminating the comparisons was required as part of a nondisparagement clause in the partnership agreement the two companies had signed. In the field, according to Mr. Negroponte, nothing changed. He complained, in particular, that Intel sales representatives were claiming that as a result of the company’s board position at One Laptop, Intel had information suggesting that the organization was in trouble.
Intel refused to respond to Mr. Negroponte’s specific account of the events that led to the end of the partnership. Instead, Chuck Mulloy, an Intel spokesman, reiterated the company’s statement that Intel had decided to leave the organization after it reached a stalemate over whether the chip maker could continue to promote the Classmate. “Our position continues to be that at the core of this is a philosophical impasse about how the market gets served,” he said.
Mr. Negroponte said that an Intel representative did not attend a board meeting of the group in Miami last month, citing a potential conflict of interest. At the meeting, the board agreed that Mr. Negroponte should make a final effort to end Intel’s efforts to disrupt One Laptop’s sales.
A rapprochement never happened, however. “They played another dirty trick in Peru,” he said. “It’s a little bit like McDonald’s competing with the World Food Program.”
In Peru, where One Laptop has begun shipping the first 40,000 PCs of a 270,000 system order, Isabelle Lama, an Intel saleswoman, tried to persuade Peru’s vice minister of education, Oscar Becerra Tresierra, that the Intel Classmate PC was a better choice for his primary school students.
Unfortunately for Intel, the vice minister is a longtime acquaintance of Mr. Negroponte and Seymour Papert, a member of the One Laptop team and an M.I.T. professor who developed the Logo computer programming language. The education minister took notes on his contacts with the Intel saleswoman and sent them to One Laptop officials.
In a telephone interview Friday, Mr. Tresierra said that his government had asked Intel for a proposal for secondary-school machines, and it had responded with a proposal offering the Classmate PC for primary grades. “We told them this is a final decision, we are running the primary-grade project with the XO,” he said. “She wasn’t very happy.”
He said the decision to purchase the XO had come after the government had run a pilot project with the computers. “We were very happy with the results,” he said.
Until Intel surprised him by quitting on Thursday, Mr. Negroponte said he had still held out some hope that the relationship could be saved. The Intel XO was supposed to be introduced next week at the Consumer Electronics Show in keynote speeches to be made by Mr. Negroponte and Mr. Otellini, but the prototype will now be set aside.
Intel’s decision to leave was announced first in a series of phone calls made by a company spokesman to a small group of reporters. Some time later, D. Bruce Sewell, Intel’s senior vice president and general counsel, sent an e-mail message to Mr. Negroponte.
The note said that the statement, which had already been reported by wire services, was an inadvertent leak. He apologized for the way the announcement was handled.
For his part, Mr. Negroponte said he still hoped to sell two million to three million computers this year. He said that on Monday, if all goes well, he will announce a major order. Mr. Negroponte had originally hoped to sell up to five million computers. The group did not get major orders; instead One Laptop has continued with a variety of smaller deals in countries including Uruguay, Peru and Mexico.
The group, based in Cambridge, Mass., announced Friday that its two-month “Give One, Get One” charitable promotion had generated $35 million and sold a total of 167,000 computers, half of them to be distributed in the developing world.
He said he still believed that the XO could have a big impact. “If I can sell 1.5 million computers in Iraq, Afghanistan and Ethiopia, I will feel a lot better than other sales we might make.”
Virginia Considers Ban On Driving While Texting
By Anita Kumar
RICHMOND, Jan. 11 -- Some Virginia lawmakers want drivers to take their thumbs off the keyboards and put them back on the steering wheel while cruising down Virginia's roads.
They are tackling the problem of drivers who send, read and write messages on cellphones, PDAs and BlackBerrys. It's a thoroughly modern distraction dubbed Driving While Texting or DWT.
The General Assembly, which began its 60-day session Wednesday, is considering a pair of bills that would ban texting while driving a car, bicycle, motorcycle, moped or even an electric wheelchair. Lawmakers in four other states, including Maryland, are considering similar proposals.
Virginia legislators have tried in recent years to ban handheld cellphone use by adult drivers but have not been successful. A year ago, they made it illegal for teenagers under 18 to talk, send text messages or snap photos with a cellphone while driving, but they can be cited only if they are stopped for another offense.
This year, supporters say they hope to push a bill that forbids at least some cellphone use, now that drivers are doing more than just talking behind the wheel.
"I frankly did not even realize that one could do that and drive,'' said Del. James M. Scott (D-Fairfax), who sponsored one of the bills. "But I learned quickly from my younger daughter, who assured me that it's very easy to do."
Lawmakers in several states are trying to keep up with the latest driver-distraction phenomenon by banning texting, or prohibiting all cellphone use, while driving.
In Maryland, where lawmakers also convened this week, Sen. Michael G. Lenett (D-Montgomery) has introduced a bill that would prohibit the use of hand-held phones by all drivers. Another proposal may be on the way that would cover only texting.
Texting is safety advocates' latest worry about driver distractions, which include eating, grooming and reading newspapers. Safety experts say the practice is even more prevalent in affluent, urban places such Northern Virginia, with its extensive cellphone service.
"It's sort of the issue du jour right now,'' said Matt Sundeen, a transportation analyst at the National Conference of State Legislatures, which tracks bills across the nation. "I'm sure we'll see more this year."
Six states considered anti-texting laws in 2007; Washington state and New Jersey passed laws, as did the city of Phoenix. Five other states and the District prohibit drivers from using hand-held phones while driving.
Virginia and Maryland have considered an outright cellphone ban for adult drivers almost every year since at least 2001. Maryland banned cellphone use for teens with learner's permits in 2005, and Virginia made it illegal for drivers younger than 18 in 2007.
Under the Virginia proposal, texting while driving would be a misdemeanor punishable by a fine of up to $250 and court costs.
Dana Schrad, executive director of the Virginia Association of Chiefs of Police, said it would be difficult to enforce the law because it's hard to peer into moving cars. But she said officers would be looking for the problems that often come from driver distractions, such as weaving or slowing down.
Joe Farren, spokesman for CTIA-The Wireless Association, said his organization does not oppose the ban. "We don't think anyone should text message while driving,'' he said. "We don't have a problem with that."
Lon Anderson, director of public and government affairs at AAA Mid-Atlantic, whose membership area includes Maryland and Virginia, said texting is different from talking on a cellphone and deserves special consideration.
"Texting belongs in its own category. It is extremely dangerous,'' he said. "There is no place for driving and texting."
The first reported accident caused by texting may have been in Tennessee in 2005, when a man died after he lost control of his pickup truck and plunged down an embankment. In Colorado that same year, a teenager who was texting while driving killed a bicyclist.
In June 2007, five members of a high school cheerleading squad were killed in New York, and police said they think the driver lost control while sending a text message.
Del. Joe T. May (R-Loudoun), chairman of the House Transportation Committee, where the bill is likely to be debated, said he agrees that texting while driving involves multiple physical and mental tasks but that he wants to look at accident data before he decides whether to support the bill.
Texting while driving has become popular only in recent years, and few studies specifically measure that distraction.
A 2007 study by Nationwide Mutual Insurance estimated that 73 percent of drivers use phones while driving and 20 percent text while behind the wheel. The texting number goes up to 37 percent for drivers ages 18 to 27.
A national survey conducted by AAA and Seventeen magazine in July found that 61 percent of teens admit to risky driving habits. Of that number, 46 percent said they text while driving.
"Obviously, text messaging is a huge distraction. No one could dispute that,'' said Janet Brooking, executive director of Drive Smart Virginia, a statewide nonprofit advocacy group. "We could save a lot of lives with these bills."
Shut Down Spam Ring
By BRAD STONE
The Federal Trade Commission won a preliminary legal victory against what it called one of the largest spam gangs on the Internet, persuading a federal court in Chicago on Tuesday to freeze the group’s assets and order the spam network to shut down.
The group, which used several names but was known among spam-fighting organizations as HerbalKing, sent billions of unsolicited messages to Internet users over the last 20 months, promoting replica watches and a variety of pharmaceuticals, including weight-loss drugs and herbal pills that supposedly enhanced the male anatomy, according to the commission.
“This is pretty major. At one point these guys delivered up to one-third of all spam,” said Richard Cox, chief information officer at SpamHaus, a nonprofit antispam research group.
The investigation provides a clear window into the business of modern spam, which by some estimates accounts for 90 percent of all e-mail sent over the Internet.
To pepper Internet users with its solicitations, the HerbalKing group used a botnet, a global network of computers infected with malicious software, often without the knowledge of their owners.
The security firm Marshal Software, which assisted the F.T.C. with the investigation, estimated in court documents that the group’s Mega-D botnet — named after one of its pill products — was made up of 35,000 computers and could send 10 billion e-mail messages a day. In January, the botnet was the leading source of spam on the Internet, the firm estimated.
F.T.C. investigators also said they monitored the group’s finances closely and that it cleared $400,000 in Visa charges in one month alone.
The commission has brought more than 100 cases against spammers and spyware vendors over the past decade. But officials and investigators said this spam operation was perhaps the most extensive they had ever encountered, with ties to Australia, New Zealand, India, China and the United States.
“They were sending extraordinary amounts of spam,” said Jon Leibowitz, an F.T.C. commissioner. “We are hoping at some level that this will help make a small dent in the amount of spam coming into consumers’ in-boxes.”
The commission asked the federal district court in Chicago to freeze the gang’s finances, arguing that its members were using unfair and deceptive advertising practices and violating the Can-Spam Act of 2003. That federal law provides civil and criminal penalties for spammers who falsify information in e-mail messages and fail to offer ways for consumers to refuse further messages.
The government is also pursuing criminal charges against the group. F.B.I. investigators in Chicago and St. Louis have executed search warrants against members of the spam gang, the commission said.
Jody Michael Smith, 29, of McKinney, Tex., was involved in the group’s finances, according to the F.T.C. Reached at his home, Mr. Smith said: “I don’t even know who these people are who I have been tied to,” and referred all inquiries to his Dallas lawyer, John R. Teakell. Mr. Teakell did not immediately respond to a request for comment.
United States officials are also working with New Zealand authorities in the case against Lance Thomas Atkinson, 26, a native of New Zealand who now resides in Australia. Mr. Atkinson has a history in the spam business. In 2005, the F.T.C. obtained a $2.2 million judgment against him and a business partner for running a similar operation selling herbal pills online.
In conjunction with the investigation in the United States, the Department of Internal Affairs in New Zealand asked a court on Tuesday to impose a fine of 200,000 New Zealand dollars, or $121,000, on Mr. Atkinson, his brother Shane Atkinson and a business partner for violating the country’s own spam laws.
The activities of the HerbalKing group, like those of other criminal groups online, were remarkably international in scope. The group was shipping drugs like Propecia, Lipitor, Celebrex and Zoloft out of India. The F.T.C. also said the group based its Web sites in China, processed credit cards from the former Soviet republic of Georgia and Cyprus, and transferred funds among members using ePassporte, an electronic money network.
As part of its investigation, the commission purchased the “herbal” pills from the group and asked the Food and Drug Administration to test them. That agency found that the pills contained sildenafil, the active ingredient in Viagra, which can be risky for some people with heart conditions.
Antispam researchers lauded the crackdown and said it would send a strong message to other spammers. But they were not confident that spam volumes would decrease.
“This will send some real shock waves through the spamming industry,
but even if these guys were running a substantial botnet of compromised
computers, there are always spammers looking to take their place,” said
Graham Cluley, a senior technology consultant at Sophos, a spam-fighting
security firm. “It wouldn’t be a surprise if people don’t notice any difference
in their in-box tomorrow morning.”