TechSpot: August 2015

Monday, August 31, 2015

Yahoo CEO Marissa Mayer says expecting twin girls

Yahoo Chief Executive Marissa Mayer is pregnant with identical twin girls, likely due in December, she said in a blog post."Since this is a unique time in Yahoo's transformation, I plan to approach the pregnancy and delivery as I did with my son three years ago, taking limited time away and working throughout," Mayer wrote in a post early Tuesday. Yahoo said in its corporate blog that the company was "extremely happy" for Mayer and supported her plans and approach. Mayer's pregnancy comes at a critical time for Yahoo. The company is preparing to spin off its stake in Alibaba Group Holding Ltd to investors and is also looking at cashing in its stake in Yahoo Japan Corp. Mayer, 40, was pregnant when she joined Yahoo as CEO in July 2012 and gave birth to a baby boy in September that year. She worked from home after the birth and came back to the office just two weeks later.Her comments at the time that she did not plan to take extended maternity leave stoked a debate about whether her example would help or hurt the cause of women in the workplace. (reut.rs/1PI2jjh) Since taking the helm, Mayer has sought to boost morale at the nearly two-decade-old Internet company, eliminating bureaucracy and introducing perks such as free food. (Reporting by Supriya Kurane in Bengaluru; Editing by Anupama Dwivedi)

Foxconn cancels investment plan in Indonesia - Kontan

Taiwan's Foxconn Technology Group, the world's biggest electronic components maker, has cancelled plans to invest in a factory in Indonesia, Kontan daily reported on Tuesday, citing the head of an Indonesian business chamber.Foxconn, whose flagship listed unit is Hon Hai Precision Industry Co Ltd, said last year it may invest $1 billion in Southeast Asia's biggest economy.Foxconn had decided not to go ahead with its investment plan because of land issues, Kontan quoted Suryo Bambang Sulisto, chairman of the Indonesian chamber of commerce and industry, as saying. Sulisto did not respond to a phone call requesting comment, while Foxconn was not immediately available to respond. (Reporting by Eveline Danubrata; Editing by Stephen Coates)

Apple explores move into original programming business - Variety

Iphone maker Apple Inc is looking to move into the original programming business to compete with video streaming companies such as Netflix Inc, Variety reported on Monday.Apple, which aims to begin offering the service next year, has held preliminary talks with executives from Hollywood in recent weeks to gauge their interest in spearheading efforts to produce entertainment content, Variety reported, citing sources. Apple did not immediately respond to a request for comment outside regular U.S. business hours. Apple's goal is to create development and production divisions that would churn out long-form content for online streaming, Variety said, quoting a "high-level executive" at the company.Cupertino, California-based Apple is looking to start hiring for the planned division in the coming months, Variety said, adding that it was not clear whether the focus would be on TV series, movies or both. Bloomberg reported in August that the company would delay its live TV service to at least next year. It had planned to introduce the service, delivered over the Internet, this year. (Reporting By Lehar Maan in Bengaluru; Editing by Anupama Dwivedi)

Exclusive: U.S. weighs sanctioning Russia as well as China in cyber attacks

The United States is considering sanctions against both Russian and Chinese individuals and companies for cyber attacks against U.S. commercial targets, several U.S. officials said on Monday.The officials, who spoke on condition of anonymity, said no final decision had been made on imposing sanctions, which could strain relations with Russia further and, if they came soon, cast a pall over a state visit by Chinese President Xi Jinping in September.The Washington Post first reported the Obama administration was considering sanctioning Chinese targets, possibly within the next few weeks, and said that individuals and firms from other nations could also be targeted. It did not mention Russia.A move against Chinese entities or individuals before Xi's trip, the officials said, is possible but unlikely because of the strain it could put on the top-level diplomatic visit, which will include a black-tie state dinner at the White House hosted by President Barack Obama.“The Chinese government staunchly upholds cyber security, firmly opposes and combats all forms of cyber attacks in accordance with law,” Chinese Embassy spokesman Zhu Haiquan said in a statement.He said China wants enhanced dialogue and cooperation with the United States and that “groundless speculation, hyping up or accusation is not helpful to solve the problem.”The Russian Embassy did not respond to requests for comment.The U.S. government has suffered a series of embarrassing cyber attacks in recent months, including one on the White House Office of Personnel Management (OPM) that potentially provided a treasure trove of data about government employees to foreign spies.U.S. officials suspect that attack was linked to China, which has denied any involvement in hacking U.S. databases and says it too has been a victim of cyber attacks. The sanctions Washington is currently considering would not target suspected hackers of government data, but rather foreign citizens and firms believed responsible for cyber attacks on commercial enterprises, one official said.If taken, the action would be the administration’s first use of an executive order signed by Obama in April to crack down on foreign hackers accused of penetrating U.S. computer systems.The officials declined to name any potential targets, concerned that advance warning would allow them to hide assets.One U.S. official said that sanctions imposed on individuals or companies would effectively cut them off from using the U.S. financial system, which could be a death-sentence for a serious business venture.The official also said that entities or individuals from countries other than Russia or China could face sanctions. Another U.S. official suggested that a decision on targeting Chinese entities could depend partly on whether diplomatic efforts, such as last week's visit by White House national security adviser Susan Rice to Beijing last week, produce positive results going forward.Assistant Secretary of State Daniel Russel visits China next weekend for further talks ahead of Xi's U.S. trip in the second half of September.STRAINED U.S.- RUSSIAN RELATIONS U.S.-Russian relations have been deeply strained in recent years, notably by Russia's March 2014 annexation of Crimea from Ukraine as well as its continued support for pro-Russian rebels fighting government forces in eastern Ukraine.Cyber security was a major issue between China and the United States during the June Strategic and Economic Dialogue that gathers some of the top financial and foreign policy officials in the two governments."The United States, as we all know, has sharp disagreements with China over its actions in cyber space," State Department spokesman Mark Toner told reporters on Monday."We have remained deeply concerned about Chinese government-sponsored cyber-enabled theft of confidential business information and proprietary technology from U.S. companies," he added at his daily briefing.White House spokesman Josh Earnest declined to confirm the United States was weighing sanctions against Chinese entities, though he said U.S. cyber security concerns were "not a surprise" to Beijing."It would be strategically unwise for us to discuss potential sanctions targets because that would only give the potential targets of sanctions the opportunity to take steps that would allow them to evade those sanctions,” he told reporters aboard Air Force One.He said an executive order signed by Obama in April provided "an additional tool in the toolbox to confront this particular challenge." (Aditional reporting by Julia Edwards and Yeganeh Torbati in Washington.; Writing By Arshad Mohammed; Editing by Sue Horton)

Former Secret Service agent pleads guilty in Bitcoin theft

A former Secret Service agent pleaded guilty on Monday to diverting to his personal account over $800,000 worth of bitcoins during an investigation into online drug marketplace Silk Road.Shaun Bridges, 33, appeared in federal court in San Francisco and admitted to money laundering and obstruction of justice.Silk Road operated for more than two years until it was shut down in October 2013, generating more than $214 million in sales of drugs and other illicit goods using bitcoins, prosecutors said. Ross Ulbricht, Silk Road's creator, who authorities say used the alias "Dread Pirate Roberts," was sentenced to life in prison in May after a federal jury in Manhattan found him guilty of several charges, including distributing drugs through the Internet.Bridges belonged to a Baltimore-based federal task force that investigated Silk Road. Another member of that unit, former U.S. Drug Enforcement Administration agent Carl Force, has admitted to charges of extortion, money laundering and obstruction of justice. An attorney for Ulbricht has said those charges "removes any question about the corruption that pervaded the investigation of Silk Road."In court on Monday, Bridges admitted his theft made Ulbricht believe that another individual was stealing from Silk Road and helped lead Ulbricht to try to hire someone to kill that person. Sentencing for Bridges was scheduled for December. (Reporting by Dan Levine; Editing by Leslie Adler)

Apple partners with Cisco to boost enterprise business

Apple Inc on Monday teamed up with network gear maker Cisco Systems Inc to improve the performance of its iPad and iPhone devices on Cisco's corporate network.Cisco will provide services specially optimized for iOS devices across mobile, cloud, and on premises-based collaboration tools such as Cisco Spark, Cisco Telepresence and Cisco WebEx, the companies said in a statement.Apple is expanding its foothold in the enterprise arena at a time when iPad sales are shrinking. Cisco, on the other hand, has been investing in products and services such as data analytics software, security and cloud-management tools. Last year, Apple partnered with International Business Machines Corp to sell iPhones and iPads loaded with applications geared at enterprise clients. Apple's shares were marginally down at $112.84 in late-afternoon trading, while Cisco was down about 1 percent at $25.75. (Reporting By Lehar Maan in Bengaluru; Editing by Maju Samuel)

Internet entrepreneurs back Chinese Tesla rival NextEV

A group of deep-pocketed China-based internet entrepreneurs and financial investors, including Tencent (0700.HK) and Hillhouse Capital, is backing an effort to create NextEV, a new rival to U.S. electric car maker Tesla Motors Inc (TSLA.O). Hillhouse is also an investor in Uber, the U.S. ride sharing service.The backers have hired ex-Ford Motor Co (F.N) executive Martin Leach to build a global automaker, a NextEV spokeswoman said on Monday. The backers have also recruited experts with previous experience at Tesla, BMW AG (BMWG.DE), Volkswagen AG (VOWG_p.DE) and other major car companies.The NextEV investors are among several Chinese technology entrepreneurs with little or no automotive background who are hoping to create new electric car companies. The effort is supported by the Chinese government, which recently changed rules to encourage investment by non-automotive companies.Among the Chinese tech companies that have announced or are considering investments in electric car ventures are Alibaba (BABA.N), Xiaomi Technology [XTC.UL] and Leshi (300104.SZ).Tesla spokesman Ricardo Reyes said on Monday: "We're happy to see other people use the Model S sedan and our business model as benchmarks, whether they are large companies or well-funded startups." The creation of Shanghai-based NextEV, which has established offices in Europe and the United States, is a sign that a gradual shift toward electric vehicles, which are simpler to design than conventional cars, has lowered the barriers to entry into the auto industry. The Chinese government has also provided generous incentives to encourage production and sale of EVs."The first model launched by NextEV will be an electric supercar," NextEV spokeswoman Jili Liu told . "This EV supercar is expected to outperform all combustion (engine) supercars in the world."The sportscar is expected to debut in 2016. It will be designed to produce more than 1,000 horsepower and accelerate from 0 to 100 kilometers an hour (62 miles per hour) within 3 seconds, Liu said. A range of high-performance family cars will follow. NextEV Co is being backed by Chinese internet company Tencent; William Li, the founder of internet content provider Bitauto.com; Xiang Li, the founder of automotive website autohome.com.cn, and Richard Liu, the founder of e-commerce site JD.com. Hillhouse Capital, which was started with seed money from Yale University, is also a backer, NextEV said.Leach, the former chief operating officer at Ford of Europe, is currently spearheading efforts to recruit hundreds of staff to work in San Jose, California, Shanghai, Munich, Beijing, Hong Kong and London, Liu said.Leach's role is co-president, Liu said, declining to elaborate further on the leadership structure of the new car maker. Among NextEV's hires are Danilo Teobaldi, the former chief of vehicle concepts at Italdesign Giugiaro; Juho Suh, a former senior designer at BMW, and John Thomas, a former senior program director at Tesla, according to their Linkedin profiles.Thomas, who also worked as an engineer at Ford and General Motors Co (GM.N), helped lead the development in 2006-2008 of the Tesla Model S. NextEV did not want to disclose the extent of its financial backing, saying it preferred to keep such details confidential. The company will initially target China as a market and move beyond that at a later stage, Liu said. (Reporting by Edward Taylor in Frankfurt and Paul Lienert in Detroit; Editing by Andrew Hay)

Altice names Combes group COO, Numericable-SFR chairman

Billionaire Patrick Drahi's Altice holding company said on Monday it had named former Alcatel-Lucent Chief Executive Michel Combes as its chief operating officer and chairman of the board of Numericable-SFR.Combes, 53, has more than 25 years of experience in the telecoms industry. He was CEO of Alcatel-Lucent, CEO of Vodafone Europe, Chairman and CEO of TDF, as well as chief financial officer and senior executive vice president of France Telecom. (Reporting by Dominique Vidalon; Editing by James Regan)

Hedge fund Pleasant Lake offers to buy MagnaChip Semiconductor

Hedge fund Pleasant Lake Partners said it offered to buy analog chipmaker MagnaChip Semiconductor Corp in a deal valuing the South Korea-based company at $345.7 million.Pleasant Lake's offer of $10 per share is at premium of 29.2 percent to MagnaChip's Friday closing price. Pleasant Lake already owns 9.9 percent of MagnaChip. (Reporting by Kshitiz Goliya in Bengaluru; Editing by Don Sebastian)

Ashley Madison owner says site still adding users after data hack

Hundreds of thousands of people signed up for infidelity website Ashley Madison in the last week, parent company Avid Life Media said on Monday, even after hackers leaked data about millions of its clients.The company also struck back at reports that the site had few genuine female users, saying internal data released by hackers had been incorrectly analyzed."Recent media reports predicting the imminent demise of Ashley Madison are greatly exaggerated," the company said in a statement. "Despite having our business and customers attacked, we are growing."On Aug. 18, hackers who claimed to be unhappy with Avid Life's business practices released Ashley Madison customer data. A second data dump contained thousands of emails and other company documents. has not independently verified the authenticity of the data, emails or documents. Last week, tech blog Gizmodo published a widely cited analysis of the customer data. It said thousands of users had listed email addresses that ended with ashleymadison.com and that very few, about 1,500, female members had ever checked the site for messages.Avid Life said on Monday that an unnamed reporter had wrongly concluded that the number of active female members on Ashley Madison could be calculated based on assumptions about the meaning of fields contained in the leaked data. "Last week alone, women sent more than 2.8 million messages within our platform," Avid Life said, adding that 87,596 women had also signed up for Ashley Madison last week.On Friday, Avid Life said Chief Executive Officer Noel Biderman had left the company by mutual agreement. For at least three years before the publication of details about its members, Avid Life had been struggling to sell itself or raise funds, according to internal documents and emails that hackers also released. (Reporting by Allison Martell; Editing by Jeffrey Hodgson and Lisa Von Ahn)

Dating site eHarmony aims to mix work with pleasure

As a marriage counselor years ago, Neil Clark Warren saw first-hand how incompatibility led to unhappy matches.So the compatibility factor was key - even in the name - when he co-founded online match-making service eHarmony in 2000.Now, with surveys showing 70 percent of Americans are unhappy with their jobs, he thinks the same focus on matching personalities can work in the recruitment industry."Nobody has really matched personalities in terms of the applicant and the supervisor. That's not something that LinkedIn or Monster do," Warren said, explaining eHarmony's plans to get into the employment industry."(The career market) is such a big market that we do expect it to grow faster than our core product," the octogenarian clinical psychologist and eHarmony CEO said in an interview.Finding love is not easy, and neither is the increasingly crowded online match-making industry.The market is dominated by Barry Diller's IAC/InterActiveCorp, owner of Match.com as well as other sites for the lovelorn. IAC has also been gaining market share through acquisitions, including dating app Tinder.Los Angeles-based EHarmony plans to launch its recruitment service - Elevated Careers - in 2016, and expects the business to contribute about 60 percent of the company's revenue within three years.In the meantime, visitors to elevatedcareers.com can sign up either as a job-seeker or recruiter.Work on the project has been under way for more than a year. "It's so important that Elevated Careers is developed to eHarmony standards via client feedback," a spokeswoman said.The new service speaks to eHarmony's need to diversify as IAC/InterActiveCorp bulks up ahead of the planned public listing of Match Group, which will hold the company's dating businesses. IAC pushed deeper into the mobile-based dating business last month when it agreed to buy PlentyOfFish.Match Group did not respond to requests for comment on whether it plans to launch a recruitment service.NO IPO FOR NOWEHarmony has no plans to go public, Warren said."We love the position of being able to manage our own situation and not feel pushed by any public groups," he said. "We're very much on the side of remaining private as of this time."Daniel Kurnos, an analyst at brokerage Benchmark Co, estimates that eHarmony, whose biggest shareholder is Madrone Capital Partners, has a market value of about $1 billion.The U.S. online dating market is worth more than $2 billion annually, he said. In comparison, the online career market - which includes LinkedIn Corp and Monster Worldwide Inc - is worth about $6 billion a year, said Lisa Rowan of market research firm IDC.The entire talent acquisition and staffing market worldwide is worth about $94 billion, she said. EHarmony expects "high and double-digit" revenue growth in percentage terms this year, to between $275 million and $350 million.Earnings before interest, tax, depreciation and amortization (EBITDA) are expected to increase by 50-70 percent both this year and next, said Warren, who turns 81 next month.But he said the contribution from Elevated Careers would be "minuscule" as eHarmony spends heavily to develop the business.Both employers and job-seekers will likely pay to use the service, although some features could be free.More than 100 variables will be used to match clients.Apart from skills and experience, the algorithm will attempt to match job-seekers and employers based on such variables as personality - as on the eHarmony site - as well as work and social and cultural values.Warren retired from eHarmony in 2007 but came back as CEO after five years to turn around the business, whose growth was slowing in the face of increasing competition.He cut jobs, bought back shares from Sequoia Capital and slashed the nine-member board to two (now three) - himself and "very close friend" Greg Penner, founder of Madrone Capital and now chairman of Wal-Mart Stores Inc.A compatible match, it seems. (Editing by Sayantani Ghosh and Ted Kerr)

Toshiba CEO says newfound accounting errors not huge

The head of scandal-tarred Toshiba Corp said on Monday the company has found a half-decade's worth of new accounting problems forcing it to further delay closing its books but that it does not expect a big impact on its projected results.The laptops-to-nuclear conglomerate has found some 10 new cases of accounting errors stretching back to around 2010, although these will not drastically affect Toshiba's forecast for an operating profit of 170 billion yen ($1.40 billion) for the year ended March 31, Chief Executive Masashi Muromachi told a news conference after the company again delayed its book-closing.Toshiba, struggling to emerge from a $1.2 billion bookkeeping scandal, was unable to release its annual results on Monday as planned after finding additional errors including incorrect impairment charges on fixed assets at several subsidiaries and improperly timed booking of loss provisions at a U.S. subsidiary. Muromachi said the U.S. unit was not its Westinghouse nuclear business. All told, the errors will not be "huge," Muromachi said but he declined to say what the scale of the new problems might be. (Reporting by Ritsuko Ando; Writing by William Mallard; Editing by Louise Heavens)

Venture capital cash surfers may see waves recede in market turmoil

The waves of cash surfed relentlessly by some of Silicon Valley's largest venture-backed businesses are showing signs of receding amid concern the companies may already be worth more than they're likely to be valued once they finally go public.Investors have created 132 privately held companies valued at $1 billion or more each, according to tracker firm CB Insights, including ride-hailing service Uber [UBER.UL], accommodation service Airbnb and messaging app Snapchat. After a turbulent week for equities, prompted by worries about the faltering Chinese economy, it may take longer for companies aiming to join their ranks to raise multi million-dollar funding rounds, and they may not get the investment terms they want."Many companies in the market for funding right now are struggling to meet their valuation expectations and are going to have to reassess," said Jon Sakoda of venture firm NEA. In the last couple of years, the biggest VC-backed firms, dubbed "unicorns" in 2013 by venture capitalist Aileen Lee of Cowboy Ventures, raised increasing amounts of money at a rapid pace. Airbnb, for instance, raised three nine-figure funding rounds starting in 2011.In June it sealed a $1.5 billion deal that propelled its valuation to $25.5 billion, the third-largest among venture capital-backed companies worldwide.Venture capitalists started seeing indications a few months ago that late-stage investors, the ones who back unicorns, would be less willing to write nine-figure checks for all but the most impressive startups."Investors are now being much more selective identifying which companies can succeed under the scrutiny of the public markets," said Roger Lee, an investing partner with Battery Ventures.An end to the six-year stock market bull run seemed inevitable, they said, and they are less confident that all of these companies will live up to their hefty valuations when they go public, which is how these investors make money.The number of IPOs trading at less than their offering prices has bolstered their doubts. As of late last week, 58 percent of the 38 tech and biotechnology IPOs so far this year were underwater, according to data provided by market-intelligence firm Ipreo and analyzed by . To gauge investor faith in late-stage companies, Barry Kramer, a lawyer at Fenwick & West specializing in venture capital, keeps an eye on whether more deals come with strict protections for investors.MONEY BACKOne of several he's watching is known as a "senior liquidation preference," where new investors are guaranteed their money back before any other investor in the event the company is acquired at a price below what the investor paid.At the end of last year, about 26 percent of late-stage Silicon Valley venture deals came with that protection, but today, it's about 40 percent, Kramer said. "That's an important signal to me," he said, adding it's too early to draw conclusions after just two quarters. It can also indicate less negotiating leverage for the start-up, another sign of weakness.Still, the biggest and fastest-growing of the group will likely be insulated from the market unease.Take Uber, which just closed a $1 billion funding round in China ahead of schedule and with more investors than it could accept.It is difficult to know how much effect the recent market rout has had on the valuation of the biggest VC-backed companies, because start-ups are typically valued when they seek funding, perhaps once a year. One indicator could be GSV Capital, a Nasdaq-traded fund that buys shares of private companies from early employees and others. The fund, which as of June 30 held 12.5 percent of its assets in data-analysis company Palantir and 7.7 percent in storage company Dropbox, has dropped 6 percent since Aug. 20.Some companies said they have noticed worry among investors. San Mateo, California-based Apttus, which provides cloud software for businesses, closed a $108 million funding round about three weeks ago."There is very much concern about frothiness and an impending correction," said Apttus CEO Kirk Krappe.Apttus raised the cash it wanted, but other companies got the brush-off. One late-stage venture investor said that five to six startups he declined to fund last quarter because of what he considered pricey terms came back willing to re-enter negotiations after being turned down elsewhere.A year ago, he would have heard back from only one or two in that situation, he said. The investor didn't want to be identified for fear of offending his portfolio companies.(This story has been refiled to add word 'be' in the first paragraph) (Editing by Stephen R. Trousdale aand John Pickering)

Acer founder says open to takeover amid stock price slide

Acer Inc (2353.TW) founder Stan Shih said he would welcome a takeover of the struggling Taiwanese computer maker after a steep fall in its share price, while warning any potential buyer would pay a heavy price. "Welcome," Shih told reporters in response to a question about whether Acer would be open to a takeover. He added however that any buyer would get an "empty shell" and would pay dearly."U.S. and European management teams usually are concerned about money, their CEOs only work for money. But Taiwanese are more concerned about a sense of mission and emotional factors," he said.His remarks were first reported by Taiwanese media on Thursday and were confirmed by a company spokesman. Acer has reported steep on-year sales falls in recent months, including a 33 percent drop in July. It posted a T$176 million ($5.40 million) net profit in the first six months of 2015, versus a T$486 million net profit in the same period a year ago. Its stock price has fallen by nearly half since early April. (Reporting by Michael Gold; Editing by Stephen Coates)

Sunday, August 30, 2015

BNY Mellon expects to fix pricing glitch before markets open

BNY Mellon Corp (BK.N) expects to fix the computer glitch that disrupted pricing of U.S. mutual funds and exchange-traded funds before markets open on Monday, its chief executive said.The resolution of the issue, which affected the calculation of billions of dollars of assets last week, has taken far longer than expected, CEO Gerald Hassell said on a conference call, a transcript of which was made available to ."We expect to complete Friday's NAVs for all but one of the affected fund clients by tomorrow morning ... Our goal is to provide fund clients with system-generated NAVs for Monday by tomorrow night," Hassell said on Sunday night.The bank has completed calculating net asset values (NAVs) for all funds through last Thursday with the exception of those of one mutual fund client, Hassell said, without identifying the client. An accounting system BNY Mellon relies on to calculate the prices of clients' mutual funds and ETFs broke down last weekend, disrupting pricing on nearly 5 percent of U.S. mutual funds and ETFs with about $404 billion in assets, according to data from Morningstar and Lipper. [ID:nL1N1130W8] [ID:nL1N1111QY] Hassell said the bank still didn't know the root cause of the failure and would seek assistance from independent third-party to work on the issue.Last Thursday, financial services software provider SunGard, which hosts an accounting platform that helps the world's largest custody bank calculate NAVs for its funds clients, apologized for the glitch that happened during a systems upgrade. [ID:nL1N11213M] (Reporting by Shivam Srivastava in Bengaluru; Editing by Gopakumar Warrier)

U.S. considering sanctions over Chinese cyber theft: Washington Post

The White House is considering applying sanctions against companies and individuals in China it believes have benefited from Chinese hacking of U.S. trade secrets, the Washington Post reported on Sunday.The newspaper, citing several unidentified Obama administration officials, said a final determination on whether to issue the sanctions was expected soon, possibly as early as the next two weeks.Suspicions that Chinese hackers were behind a series of data breaches in the United States have been an irritant in relations between the world's two largest economies as President Xi Jinping prepares to make his first visit to the United States next month.Obama administration officials have said China is the top suspect in the massive hacking of a U.S. government agency that compromised the personnel records of at least 4.2 million current and former government workers. China has denied involvement.U.S. government officials and cyber analysts say Chinese hackers are using high-tech tactics to build massive databases that could be used for traditional espionage, such as recruiting spies or gaining access to secure data on other networks. A White House official had no immediate comment on the report. The State Department did not immediately respond to a request for comment.A senior administration official said in reply to a query that President Barack Obama noted when he signed an executive order earlier this year enabling the use of economic sanctions against cyber hackers that the administration "is pursuing a comprehensive strategy to confront such actors.""That strategy includes diplomatic engagement, trade policy tools, law enforcement mechanisms, and imposing sanctions on individuals or entities that engage in certain significant, malicious cyber-enabled activities," the official said. "We are assessing all of our options to respond to these threats in a manner and time frame of our choosing," the official added.The Post quoted an administration official as saying the possible sanctions move “sends a signal to Beijing that the administration is going to start fighting back on economic espionage, and it sends a signal to the private sector that we’re on your team. It tells China, enough is enough.” The newspaper said the sanctions would not be imposed as retaliation for the suspected hacking of the U.S. government personnel records, as they were deemed to have been carried out for intelligence reasons rather than to benefit Chinese industry. (Reporting by Peter Cooney; Additional reporting by Roberta Rampton; Editing by Leslie Adler)

Paypal seen rising 40 percent from post spinoff lows: Barron's

PayPal Holdings Inc (PYPL.O), the e-commerce group trading sharply off its recent offering price, could rise 40 percent to $46 a share if it succeeds with investments tied to payments systems innovation, the Aug. 31 edition of Barron's said.Spun off in July by auctioneer eBay Inc (EBAY.O), PayPal is now clear to do deals with big vendors like Staples and move into back office operations and other services, according to Barron's. PayPal shares last week traded at $34.60, or over $4 less than its offering price in July, Barron's said. (Reporting By Michael Connor in New York; Editing by Marguerita Choy)

Saturday, August 29, 2015

Europe fails on electronics recycling goals

Only a third of Europe's electronic waste is properly recycled, with vast numbers of cellphones, computers and televisions illegally traded or dumped, a study led by the United Nations and INTERPOL said on Sunday.Sweden and Norway were close to European targets of collecting and recycling 85 percent of all electrical and electronic waste, at the top of a ranking in which Romania, Spain and Cyprus were bottom with less than 20 percent, it said.European rules demand recycling of "e-waste", products with a plug or a battery, to recover metals such as gold or silver and avoid release of toxins such as lead or mercury.Overall, 35 percent of the continent's e-waste was properly recycled in 2012, it said. The report dismissed past suggestions that most gets illegally shipped to African nations, such as Nigeria and Ghana, and repaired to get a new lease of life."Most of the illegal e-waste trade is taking place next door rather than far away in Africa," said Jaco Huisman of the United Nations University, scientific coordinator of the project that included police agency INTERPOL and other partners. "Mismanagement is occurring everywhere," he told . In Europe "there is a lot of theft, scavenging ... and quite a significant amount going into the waste bin."A broken fridge, for instance, is valuable scrap mainly because of copper in its compressor. Often the compressor get ripped out and the rest dumped.Such theft of valuable components means compliant processors in Europe lose up to 1.7 billion euros ($1.90 billion) a year, the report estimated. Overall, it said 3.3 million tonnes of 9.5 million tonnes of e-waste generated in Europe in 2012 was properly discarded and recycled. Only about 1.3 million were exported, with the rest recycled in Europe outside regular programs or dumped.Ioana Botezatu, an environmental expert at the international police agency INTERPOL, said prosecutions were rare although some nations have strict penalties for environmental crimes.The report's recommendations include better police cooperation, more education of consumers about recycling, and a ban on cash transactions in the scrap metal trade. One problem is making people aware of recycling centers."Consumers don’t know where to find them," said Pascal Leroy, secretary-general of the Waste of Electrical and Electronic Equipment Forum which also contributed to the report. (Reporting by Alister Doyle; editing by Andrew Roche)

Ashley Madison courted several buyers, landed none before attack

The owner of adultery website Ashley Madison had already been struggling to sell itself or raise funds for at least three years before the publication of details about its members, according to internal documents and emails also released by hackers as part of their assault on the company in recent weeks. Some unnamed investors wanted out, multiple attempts to close a deal or raise funds failed, and a public market debut looked increasingly unlikely, the documents show.Avid Life Media announced on Friday that CEO Noel Biderman, who founded the website in 2001, had left the company with immediate effect, the latest sign of the wrenching impact on the company of the attack that led to the disclosure of sensitive data about millions of clients. In an April 2015 letter addressed to all its investors, closely-held Avid Life acknowledged that some investors had pressed it to improve liquidity so they could sell shares. The company said it would buy back up to $10 million worth of shares."Over the last couple of years, we have not been successful in exploring various alternatives including a sale of the business and seeking debt from third parties," said the letter signed by the board of directors. could not independently verify the authenticity of the email messages and internal documents. Avid Life did not respond to repeated requests for comment. Members of the company's board also could not be reached for comment. Biderman was not reachable by phone.DILLER HOPES DASHEDThe attack has likely sharply lowered the price Avid Life could muster in any sale of assets, assuming it could find a buyer willing to take on a company facing several multi-million dollars lawsuits and the challenge of rebuilding a computer network that has been so badly infiltrated. Bankers told last month - before the massive disclosure of its customers' information - that a full data dump would create a 'doomsday scenario' for the company, and kill any IPO plan.Several messages show that Biderman was trying to secure a meeting with executives at media mogul Barry Diller's IAC/InterActive Corp, whose biggest online dating assets, including Match.com and Tinder, are being prepared for a public market spinoff. Biderman's goal was to start acquisition talks with the much larger rival. "They would be CRAZY not to speak with us," wrote Biderman in February this year. And in May: "If there was ever a moment to have a 'private' meeting with Diller, it is now." But in an email message later forwarded to Biderman by an intermediary, one IAC director, Bryan Lourd, was blunt about the chances IAC might buy Ashley Madison: "They don't want it."IAC declined to comment "on rumors and speculation about transactions." Avid Life in April said it was considering an initial public offering in London, at a $1 billion valuation, with company executives expressing hope in media interviews that European investors would prove more understanding of the controversial business than those in North America.The emails show that Biderman received an informal approach in May from Cliff Lerner, the CEO of Snap Interactive Inc (STVI.PK), which owns the online dating site AYI.com. Lerner suggested a reverse takeover and a Nasdaq listing. A spokesman for Snap said Lerner had a short back and forth email conversation with Avid Life representatives, but ultimately decided a deal wouldn't work.By June, Biderman called the IPO a "long shot" in one email. He told an acquaintance, who helped put other companies’ financing deals together, that he was looking to raise between $50 million and $75 million in debt. Similar efforts had fallen through before. Avid Life had a letter of intent from Fortress Credit Corp, part of Fortress Investment Group LLC (FIG.N), to borrow $43 million in September 2013, the documents the hackers released show, but the deal never went through. "I can confirm that the proposed loan you referenced did not close," Gordon Runté, head of investor and media relations at Fortress, said in response to queries, declining to comment further on the reasons. Avid Life had intended to use some of that cash to pay a dividend to its shareholders, the proposal, dated September 6, 2013, showed.It also received a term sheet for a $40 million three-year loan from GMP Securities, a Canadian investment bank, in 2012.GMP said the deal was not completed and it has never loaned Avid Life any money. It declined to specify why. The emails also show that Avid Life came close to selling itself at least three times in 2012.In one instance, a deal with Canadian billionaire Alex Shnaider and frozen yogurt mogul Michael Serruya fell apart because of CEO Biderman's "difficult and very demanding" personality, according to an email from the potential buyers. Two other attempted deals, with a boutique investment bank and a private equity firm, also fell apart.Shnaider confirmed that he and Serruya wanted to strike a deal to acquire Avid Life and had agreement in principle to buy it. “We didn’t feel comfortable, at the end of the day, going through with the deal,” he said.A spokesperson for Serruya did not immediately return calls. (Editing by Amran Abocar and Martin Howell)

Friday, August 28, 2015

Exclusive: Russia's Kaspersky threatened to 'rub out' rival, email shows

In 2009, Eugene Kaspersky, co-founder of one of the world's top security companies, told some of his lieutenants that they should attack rival antivirus software maker AVG Technologies N.V. (AVG.N) by "rubbing them out in the outhouse," one of several previously undisclosed emails shows.He was quoting from Vladimir Putin's famous threat a decade earlier to pursue Chechen rebels wherever they were: "If we catch them in the toilet, then we will rub them out in the outhouse." Former employees say that the reprisal Kaspersky was pushing for was to trick AVG's antivirus software into producing false positives - that is, misclassifying clean computer files as infected.As previously reported by , the plan involved creating fake virus samples and malware identifications to fool competitors into disabling or deleting important files, thereby creating problems for their customers."More and more I get the desire to smack them with their falses," Kaspersky wrote in Russian in one email seen by , dated July 23, 2009. He accused AVG of poaching staff from his company. "AVG is carrying out an HR attack on the company, mostly the managers."The emails shed fresh light on the allegations of two former Kaspersky Lab employees that the Moscow-based company had sought to sabotage rivals to gain market share and retaliate against competitors it believed were mimicking its malware detections instead of relying on their own research.Kaspersky Lab has strongly denied the allegations. On Friday, it said the emails "may not be legitimate and were obtained from anonymous sources that have a hidden agenda.""Kaspersky Lab has never conducted any secret campaign to trick competitors into generating false positives to damage their market standing. Such actions are unethical, dishonest and illegal," the company said in a statement.The ex-employees told that AVG, Microsoft Corp (MSFT.O) and Avast Software were among the companies targeted by Kaspersky Lab in campaigns between 2009 and 2013 to spread false positives through threat information-sharing programs."To be honest, I'll feel pretty bad when AVG goes public and earns a billion. They won't say thanks to you or me – don't even hope," Kaspersky wrote in another email seen by , dated Oct. 8, 2009. "'Rubbing out' – is one of the methods, which we will DEFINITELY use in combination with other methods."A day earlier, Kaspersky had urged his team in another email to consider "rubbing them out in the outhouse," noting that his European chief was "very positive about falses." The emails do not confirm that an attack was launched against AVG or say how effective it might have been. AVG's former chief technology officer, Yuval Ben-Itzhak, previously told the company was hit with waves of doctored virus samples from 2009 to 2013.AVG, Microsoft and Avast have all declined comment on who might have been behind the sophisticated assaults. AVG did not immediately respond to a request for comment on the emails. CHINA CAMPAIGNIn the emails, Eugene Kaspersky did not give specifics on the "rubbing out" method that he envisioned using against AVG. But he said it was a trick that the company had used against a competitor in China years ago. He did not identify the company in the email."We've already had an experience 'rubbing out' – in China. In year 2002-2003. And we did end up moving one of then-market leaders," Kaspersky wrote.A former Kaspersky Lab employee said the Chinese target was Beijing Jiangmin New Science & Technology Co, one of the biggest antivirus companies in the country at the time. Jiangmin General Manager Guo Changsheng declined to comment.In 2002, Kaspersky Lab had been struggling to gain traction in the massive Chinese market, where piracy was rampant in the software industry, according to former employees. Jiangmin did well in part because it copied Kaspersky Lab's identifications of malicious software files, said two former software engineers at Jiangmin, and a Chinese expert who had worked with both companies. The three sources spoke on condition of anonymity.After repeated threats and attempts to reach a licensing deal with Jiangmin failed, the Chinese expert said, Kaspersky Lab began to fake some of its malware detections in China in order to cause problems on Jiangmin's customer machines when the Chinese company copied them.Kaspersky Lab did this to protect itself from more piracy, the Chinese expert said, adding that the campaign worked. "All of a sudden, customers came to Kaspersky."Jiangmin's general manager declined to comment on the allegations that the company copied Kaspersky Lab's detections. He also declined to comment on whether Jiangmin had suffered from false detections during the period in question.Kaspersky Lab has previously said that it too had been hit with fake virus samples. It declined to provide copies of the samples or give other details.It is not known how much business Kaspersky Lab may have gained in China or elsewhere as a result of these alleged attacks.In one of the emails, Eugene Kaspersky said the China attack, which he called a "rubber bomb," was a success. The term "rubber bomb" comes from a Russian joke about an explosive that keeps bouncing and inflicting more damage."Something tells me that without that 'rubber bomb,' things wouldn't be so rosy for us in China," Kaspersky wrote in the Oct. 8, 2009 email. (Additional reporting by Gerry Shih in Beijing and Alina Selyukh in Washington; Editing by Tiffany Wu)

U.S. International Trade Commission clears Microsoft of patent infringement

Microsoft Corp avoided a potentially costly setback to its mobile phone business on Friday as the U.S. International Trade Commission declined to block the import of its devices in a longstanding patent dispute. The decision rejected a ruling in April by a U.S. trade judge who found that Microsoft had infringed two InterDigital Inc wireless patents, and recommended an import ban.The commission's action is good news for Microsoft, which has been struggling to compete with Apple Inc and Samsung Electronics Co Ltd devices. The Redmond, Washington-based company has captured just 3 percent of the smartphone market in the United States and globally, according to recent estimates.Microsoft last month posted a record quarterly loss as it took a $7.5 billion charge on its handset business, which it bought from Nokia last year.InterDigital's Chief Executive Officer William Merritt said in a statement that the decision was disappointing but would have limited impact "given the decline of the Nokia mobile device business under Microsoft’s control and its limited market position." A Microsoft spokesperson said the company was "grateful the Commission stopped InterDigital from trying to block our products."InterDigital stock was down 3 percent after hours on Friday. The two companies are at odds over how much InterDigital should be able to charge to license its patents, which are considered essential to cellphone technology. Wilmington, Delaware-based InterDigital first accused Nokia in 2007 of infringing its technology for optimizing a cellphone's power to connect to a network. In April, the U.S. trade judge ruled that Microsoft used InterDigital's patents, considered standard in the industry, but refused to pay for a license to them. An import ban would have affected any Microsoft phone using 3G cellular technology, including its Lumia smartphones.After reviewing that ruling, the commission said on Friday that Microsoft did not violate the patents, but it did not address the issue of fair licensing for essential patents. Earlier this month, Microsoft sued InterDigital in Delaware federal court, claiming InterDigital violated U.S. antitrust law by breaking promises to offer licenses on reasonable terms.Companies frequently sue both at the ITC, which has the authority to block the import of products that infringe a U.S. patent, and in district court to win monetary damages.The case at the ITC is No. 337-613. (Reporting by Andrew Chung; Editing by Matthew Lewis)

Ashley Madison courted several buyers, landed none before attack

The owner of adultery website Ashley Madison had already been struggling to sell itself or raise funds for at least three years before the publication of details about its members, according to internal documents and emails also released by hackers as part of their assault on the company in recent weeks. Some unnamed investors wanted out, multiple attempts to close a deal or raise funds failed, and a public market debut looked increasingly unlikely, the documents show.Avid Life Media announced on Friday that CEO Noel Biderman, who founded the website in 2001, had left the company with immediate effect, the latest sign of the wrenching impact on the company of the attack that led to the disclosure of sensitive data about millions of clients. In an April 2015 letter addressed to all its investors, closely-held Avid Life acknowledged that some investors had pressed it to improve liquidity so they could sell shares. The company said it would buy back up to $10 million worth of shares."Over the last couple of years, we have not been successful in exploring various alternatives including a sale of the business and seeking debt from third parties," said the letter signed by the board of directors. could not independently verify the authenticity of the email messages and internal documents. Avid Life did not respond to repeated requests for comment. Members of the company's board also could not be reached for comment. Biderman was not reachable by phone.DILLER HOPES DASHEDThe attack has likely sharply lowered the price Avid Life could muster in any sale of assets, assuming it could find a buyer willing to take on a company facing several multi-million dollars lawsuits and the challenge of rebuilding a computer network that has been so badly infiltrated. Bankers told last month - before the massive disclosure of its customers' information - that a full data dump would create a 'doomsday scenario' for the company, and kill any IPO plan.Several messages show that Biderman was trying to secure a meeting with executives at media mogul Barry Diller's IAC/InterActive Corp, whose biggest online dating assets, including Match.com and Tinder, are being prepared for a public market spinoff. Biderman's goal was to start acquisition talks with the much larger rival. "They would be CRAZY not to speak with us," wrote Biderman in February this year. And in May: "If there was ever a moment to have a 'private' meeting with Diller, it is now." But in an email message later forwarded to Biderman by an intermediary, one IAC director, Bryan Lourd, was blunt about the chances IAC might buy Ashley Madison: "They don't want it."IAC declined to comment "on rumors and speculation about transactions." Avid Life in April said it was considering an initial public offering in London, at a $1 billion valuation, with company executives expressing hope in media interviews that European investors would prove more understanding of the controversial business than those in North America.The emails show that Biderman received an informal approach in May from Cliff Lerner, the CEO of Snap Interactive Inc, which owns the online dating site AYI.com. Lerner suggested a reverse takeover and a Nasdaq listing. A spokesman for Snap said Lerner had a short back and forth email conversation with Avid Life representatives, but ultimately decided a deal wouldn't work.By June, Biderman called the IPO a "long shot" in one email. He told an acquaintance, who helped put other companies’ financing deals together, that he was looking to raise between $50 million and $75 million in debt. Similar efforts had fallen through before. Avid Life had a letter of intent from Fortress Credit Corp, part of Fortress Investment Group LLC, to borrow $43 million in September 2013, the documents the hackers released show, but the deal never went through. "I can confirm that the proposed loan you referenced did not close," Gordon Runté, head of investor and media relations at Fortress, said in response to queries, declining to comment further on the reasons. Avid Life had intended to use some of that cash to pay a dividend to its shareholders, the proposal, dated September 6, 2013, showed.It also received a term sheet for a $40 million three-year loan from GMP Securities, a Canadian investment bank, in 2012.GMP said the deal was not completed and it has never loaned Avid Life any money. It declined to specify why. The emails also show that Avid Life came close to selling itself at least three times in 2012.In one instance, a deal with Canadian billionaire Alex Shnaider and frozen yogurt mogul Michael Serruya fell apart because of CEO Biderman's "difficult and very demanding" personality, according to an email from the potential buyers. Two other attempted deals, with a boutique investment bank and a private equity firm, also fell apart.Shnaider confirmed that he and Serruya wanted to strike a deal to acquire Avid Life and had agreement in principle to buy it. “We didn’t feel comfortable, at the end of the day, going through with the deal,” he said.A spokesperson for Serruya did not immediately return calls. (Editing by Amran Abocar and Martin Howell)

Uber hiring two security researchers to improve technology: source

Private ride service Uber Technologies Inc [UBER.UL] is hiring two top vehicle security researchers as it ramps up its work on technology for self-driving cars, a person familiar with the matter said on Friday.Charlie Miller, who has been working at Twitter Inc, and Chris Valasek, who quit Friday at security firm IOActive, will be announced Monday as new hires at the fast-growing company looks to expand its technology effort, the person said.Miller and Valasek won wide attention this month after demonstrating that they could hack into a moving Jeep. The men said they could not comment until after the weekend.If Uber plunges more deeply into developing or adapting self-driving cars, Miller and Valasek could help the company make that technology more secure. Uber had no immediate comment. Uber on Tuesday announced a partnership with the University of Arizona, offering the university grant money to fund research into the optics and mapping technology needed for autonomous vehicles, and the San Francisco company will test self-driving cars on the streets of Tucson, Arizona.This partnership follows a more tumultuous effort with Carnegie Mellon University in Pittsburgh, one of the world's top robotics research institutions, that resulted in Uber hiring away more than 40 of its experts in autonomous vehicles. Miller and Valasek's Jeep efforts, which were coordinated with manufacturer Fiat Chrysler Automobiles NV, prompted the first vehicle recall to protect drivers from possible malicious hacking.FCA USA LLC recalled 1.4 million vehicles to install software intended to prevent hackers from emulating the experiment, which used the cellular network to enter the entertainment system and then win control of the engine, brakes and steering. (Reporting by Joseph Menn; Additional reporting by Heather Somerville and Jim Finkle; Editing by Lisa Shumaker)

Angry Birds maker's float seen less likely despite mobile games growth

The often touted but regularly delayed stock-market listing of Rovio, creator of the hugely popular "Angry Birds" mobile game, could be even more distant after this week's warning of lower earnings and a planned cull of more than a third of its staff.While the mobile games market as a whole is thriving and looks set to grow to more than $35 billion in 2017, according to research firm Newzoo, Rovio's woes typify the difficulty established players have in changing with the times."They lost their moment ... You need to list when your games are working well," said Thomas Alzuyeta, analyst at Gilbert Dupont, noting a drop in interest in the game franchise that debuted in 2009.Alzuyeta said newer contenders such as free-to-download "Clash of Clans", from Rovio's fellow Finnish company Supercell, had better managed to retain player interest, with regular updates and features paid for in bite-size "microtransactions".Rovio, which is pinning its hopes on an Angry Birds 3D movie due for release in May 2016, said on Wednesday sales had been lower than expected and forecast falling profits for the full year. It said it was cutting up to 260 jobs. In an e-mailed statement on Friday, the company said the cuts did not affect the outlook for a potential market listing, though a flotation was not on the agenda for now."We're focusing on our principal areas of business, which will only improve our competitiveness," a spokeswoman said.A cross-sector move towards free-to-play products has been one of the biggest challenges for Rovio, which has failed to create follow-up hits to Angry Birds, instead pushing for earnings from product licensing deals. That may have allowed other games to steal the limelight: runaway hit "Candy Crush Saga" led to the listing of King Digital Entertainment, one of the few European mobile gaming companies to trade on an exchange. Japan's Gumi also recently listed.Yet Rovio is not the only games company to run into trouble. Gumi said in March it planned to cut jobs and sell assets, while King earlier this month reported a revenue drop. Zynga, known for "FarmVille" and "Mafia Wars", last week forecast current-quarter bookings well below estimates. Its shares are a fraction of their early 2012 peak.King's experience on the stock market, where its shares are down nearly 30 percent since their float in March 2014, has also shown how investors can lose faith."The sector changes so fast that the companies that don't change with it run into trouble," said Newzoo head Peter Warman. "And that's what's happened with Rovio." (Additional reporting by Jussi Rosendahl in Helsinki; Editing by Lionel Laurent and David Holmes)

Facebook must obey German law even if free speech curtailed: minister

Facebook will have to abide by German laws banning racist sentiment even if it might be allowed in the United States under freedom of speech, Justice Minister Heiko Maas said in an interview with .Maas, who has accused Facebook (FB.O) of doing too little to thwart racist and hate posts on its social media platform, said that Germany has zero tolerance for such expression and expects the U.S.-based company to be more vigilant."One thing is clear: if Facebook wants to do business in Germany, then it must abide by German laws," Maas told . "It doesn't matter that we, because of historical reasons, have a stricter interpretation of freedom of speech than the United States does. "Holocaust denial and inciting racial hatred are crimes in Germany and it doesn't matter if they're posted on Facebook or uttered out in the public on the market square," he added. Maas sent a letter to Facebook public policy director Richard Allan in Dublin saying he received many complaints from users that their protests on racist posts have been ignored. He suggested meeting in Berlin on Sept. 14.Maas is a leader of the center-left Social Democrats (SPD). The party faced a flood of racist emails, phone calls and bomb threat after its chairman Sigmar Gabriel denounced an anti-refugee "mob" behind anti-refugee violence in the eastern town of Heidenau.The town near Dresden was the scene of violent clashes last weekend as far-right militants, protesting against the arrival of around 250 refugees at a local shelter, pelted police with bottles and rocks, some shouting "Heil Hitler". "The internet isn't a place where laws are ignored, where indictable comments can be spread with impunity," Maas said, adding he found it appalling that some were using Facebook to spread hatred against refugees and the Germans helping them."There's no scope for misplaced tolerance towards internet users who spread racist propaganda. That's especially the case in light of our German history." A spokeswoman for Facebook said the company took his concerns seriously and it was interested in meeting the justice minister. Maas said he was looking forward to the meeting."It's in Facebook's own inherent interest that it is not used as a platform for racist content," he said. (Reporting by Erik Kirschbaum; Editing by Toby Chopra)

To regulate or not to regulate? EU to launch study on Uber

Brussels will launch a study in September of the taxi-hailing app Uber, in an effort to settle the legal disputes that have pitched the U.S. start-up against conventional taxis across Europe, three people familiar with the matter said.Since opening in Paris in 2011, San Francisco-based Uber has run into vehement opposition from taxi drivers, who complain it competes unfairly by bypassing local laws on licensing and safety.Uber has responded by submitting complaints to the European Commission against German and Spanish court bans as well as a new French law on taxis, the so-called Thevenoud law.The study will attempt to determine the legal instruments that Brussels might use to decide whether Uber is a transport service or just a digital service, an EU official said.Uber argues it is a digital platform that connects willing drivers with customers. Being considered a transport service might make it subject to stricter rules on licensing, insurance and safety. The study will review the regulatory regimes for taxi services in all member states and assess if an EU-wide framework is needed. Currently, taxis and vehicle-with-chauffeur services are regulated at a national level.The study will run in parallel with a case at the European Union's top court that could set a precedent for legal battles across the continent. However, it is likely the European Court of Justice will rule before the completion of the study, expected around June next year.In the meantime, the Commission will also continue assessing the complaints against France, Germany and Spain. In May, the Commission asked France for more information on its new taxi law, which Uber says favors regular taxis at its expense.The Commission has previously said it welcomes innovative services such as Uber as part of the so-called sharing economy - where individuals are put in touch with others offering services, such as travel or accommodation. However, businesses such as Uber should not circumvent national laws on taxation, safety and social aspects, the EU Transport Commissioner Violeta Bulc said in a letter to a member of the European Parliament in February.The sharing economy has flummoxed policy-makers, torn between promoting innovative services and ensuring that incumbent industries can still compete on fair grounds."There needs to be a middle way", said an EU official. (Reporting by Julia Fioretti, editing by Larry King)

Ashley Madison parent company CEO quits after infidelity data hack

Noel Biderman, the chief executive of infidelity website Ashley Madison's parent company Avid Life, has left the company, weeks after hackers launched a cyber assault that leaked sensitive data about millions of clients.Avid Life said on Friday the departure was by "mutual agreement" and the company's existing management would take over until a new CEO is appointed.The Canadian company was rocked by the release of Ashley Madison customer data on Aug. 18 by hackers who claimed to be unhappy with its business practices. "This change is in the best interest of the company and allows us to continue to provide support to our members and dedicated employees," the Toronto-based company said. The data dump contained email addresses of U.S. government officials, UK civil servants, and workers at European and North American corporations, taking already deep-seated fears about Internet security and data protection to a new level. Police investigating the cyber attack said it has sparked extortion attempts and at least two unconfirmed suicides.Biderman founded Ashley Madison in 2001 and it was acquired by Avid Life Media in 2007. A second data dump by the hackers released thousands of Biderman's own emails and other company documents. could not independently verify the authenticity of the data, email messages and internal documents.To date only a small number of top executives have lost their jobs in the wake of massive breaches. Sony Pictures America co-chairman Amy Pascal stepped down in February after last year’s devastating breach at Sony Corp’s Hollywood studio and Target Corp replaced its CEO last year in the wake of the 2013 breach at the retailer that exposed records of tens of millions of customers. Chris Wysopal, chief technology officer with cyber security firm Veracode, said he expects such ousters to become increasingly common in the wake of devastating breaches because boards often consider the CEO as ultimately responsible for cyber security."Breaches are huge financial issues, even existential issues for companies. They are getting bigger and more impactful to the companies being breached,” he said. (Additional reporting by Jim Finkle in Boston; Editing by Chizu Nomiyama and James Dalgleish)

U.S. court rules for government over NSA metadata collection program

A U.S. appeals court on Friday threw out a judge's ruling that would have blocked the National Security Agency from collecting phone metadata under a controversial program that has since been amended by Congress.The U.S. Court of Appeals for the District of Columbia Circuit said there were not sufficient grounds for the preliminary injunction imposed by the lower court. The law in question expired in June and has since been amended by Congress.The three-judge panel concluded that the case was not moot despite the change in the law and remanded the case back to U.S. District Court Judge Richard Leon for further proceedings. One member of the panel, Judge David Sentelle, partially dissented, saying he would have dismissed the challenge outright.Under the amended law, the existing metadata collection program is set to continue for 180 days after the June 2 enactment of the USA Freedom Act. Then, the new version of the program goes into effect. Former NSA contractor Edward Snowden disclosed the massive phone record collection to U.S. and British media in June 2013. Documents provided by Snowden showed a U.S. surveillance court had secretly approved the collection of millions of raw daily phone records in America, such as the length of calls and the numbers dialed.The program was challenged by plaintiffs Larry Klayman and Charles Strange. Klayman is a conservative lawyer and Strange is the father of a U.S. cryptologist technician killed in Afghanistan in 2011. They won the case in U.S. District Court in Washington in December 2013. Leon ruled that the program was likely unlawful, and the government appealed. The government said the program was authorized under Section 215 of the Patriot Act, which addresses the FBI's ability to gather business records.In a separate case, a judge in New York ruled in December 2013 that the program was lawful. The case is NSA v. Klayman, U.S. Court of Appeals for the District of Columbia Circuit, No. 14-5004 (Reporting by Lawrence Hurley; Editing by Susan Heavey and Mohammad Zargham)

Investors still in the dark as cyber threat grows

Investors are being poorly served by a haphazard approach from fund managers to the growing threat of cyber crime damaging the companies in which they invest, with a lack of clarity from the businesses themselves compounding the problem.Banks have led the way in developing cyber defenses and some top fund managers have ramped up pressure on companies to do more, but the broader picture is less encouraging."I don't see any visible stand asset managers are taking, like they do on other social responsibility items," said Malcolm Harkins, information security chief at U.S. cyber security start-up Cylance Inc.The soft underbelly of companies outside the banking sector was exposed again this month when hackers leaked details of nearly 37 million clients of Ashley Madison. The infidelity website had to postpone its stock market listing and now faces a $750 million lawsuit.More than half the value of companies worldwide is in intangible assets, such as intellectual property, much of which is stored on computers and could therefore be vulnerable to hackers. That figure could be as high as $37.5 trillion of the $71 trillion in enterprise value of 58,000 companies, according to Brand Finance, a consultancy specializing in valuation of intangible assets. The World Economic Forum said that robust protection against cyber risk could add as much as $22 trillion to the global economy by 2020.The global financial cost of attacks is rising fast -- up more than 10 percent last year, a report by specialist researcher Ponemon Institute said. Though some might argue that investors can sell out of businesses they consider to be performing badly on cyber safety, the reality is less straightforward. Passive funds that track a specific index or sector have no leeway, while pension funds tend to demand a longer-term view from asset managers.But even those keen to evaluate cyber risk face an uphill struggle, hampered by a lack of resources, poor data and weak disclosure from companies.Sacha Sadan, corporate governance head at the fund arm of insurer Legal & General, told that cyber risk is one of his team's top priorities for corporate engagement but described the approach of some rivals as "hit and miss"."We would rather a company, when they come to talk to us, had a slide that said 'this is what we're doing'. At the moment, it's us asking them and they say, 'well, most other shareholders don't ask'." MIXED PRIORITIESA survey of fund firms with a combined $16 trillion in assets showed pressure on company boards is far from uniform. Only four of 12 governance chiefs at British, French, German and U.S. fund houses interviewed by telephone and email said they considered cyber risk a "top priority" across all of their investments. The remainder said they either discussed the issue case by case or that there was too little information for proper risk-assessment.BlackRock, the world's biggest asset manager, is among those that have engaged with companies, though it declined to provide further detail on examples in its quarterly governance report.In its latest report BlackRock said it had spoken to a large insurer and "shared perspectives" gained from speaking to cyber experts and other companies. As for the types of business meriting closer examination, Jessica Ground, global head of stewardship at Schroders, said that less-obvious targets such as travel agents need to do more. Another chief named online gaming as a sector laggard.Most fund managers do have dedicated teams supervising governance. But these often number fewer than 10 people to analyze and speak to thousands of companies on a broad range of topics, with matters such as executive pay regularly given higher priority than cyber security. On the other side of the fence, the companies themselves are far from united in their approach."There is significant divergence across companies as to how prepared they are," said Antony Marsden at Henderson Global Investors.Though attitude to cyber risk is inherently difficult to quantify, analysis of the most recent annual reports of the 10 biggest companies in Europe and the United States showed variable communication on the issue. Only three of the Europeans -- Novo Nordisk, HSBC and Royal Dutch Shell -- had a separate section on cyber risk or information security. Across all 10 reports there were a mere 14 mentions of keywords "cyber", "information security", "hack" or "hacking". That compares with five of the U.S. companies -- Apple, Wells Fargo, Facebook, General Electric and JPMorgan -- and 63 keyword references, partly influenced by more banks featuring in the list. WHEN, NOT IF"You can look at an annual report and see some companies talk a lot about what would happen if the euro were to fail ... But just as important is what happens if you get hacked," L&G's Sadan said. "You will get hacked. So what's your contingency planning?"Several smaller U.S. investment firms with a mandate for socially responsible investment are already pressing companies publicly over data security matters, including the filing of proxy resolutions at shareholder meetings.Arjuna Capital, for example, had American Express shareholders vote on whether it should report annually on how its board oversees privacy and data security. Amex opposed the idea, saying its board receives regular updates, and the proposal won only 22 percent of the vote at the annual meeting.Highlighting the lack of a consistent approach from asset managers, a number of large fund firms opposed the resolution. It is little wonder, then, that some have yet to address a skills gap that leaves them ill-equipped for proper risk-assessment. "The frameworks for dealing with cyber risk, about what it means for our business and what can we do about it, are only now being put in place," said Sandra Carlisle at Newton Asset Management.Rules in the United States requiring companies to report data privacy breaches are likely to be replicated in Europe in the near future, which will aid funds' understanding of the risks.In the meantime, investors are very much in the dark."What you get is assurance that people are looking at these things," said Iain Richards at Anglo-U.S. fund firm Columbia Threadneedle. "There's a scarcity of meaningful disclosure." (Additional reporting by Carolyn Cohn; Editing by David Goodman)

Russia's MTS teams up with Google to promote mobile Internet

Russia's biggest mobile phone operator MTS said on Friday it had teamed up with Google Inc to help grow the use of mobile Internet and will get a share of the search site's advertising revenues in Russia.Under a strategic agreement, MTS will feature Google's voice search in its ad campaigns and retail stores, and a relevant application will be pre-installed on the main screen of Google's Android-based smartphones sold in the MTS retail chain. "MTS will share with Google the cost of mobile Internet promotion and get money from Google's search services under a revenue-sharing scheme," an MTS spokesman said. (Reporting by Maria Kiselyova; Editing by Alexander Winning)

British payments glitch at HSBC leaves thousands without wages

HSBC (HSBA.L) reported a computer glitch on Friday which it said prevented some of its British business customers from making payments, leaving thousands of workers without wages ahead of a three-day weekend.The problem affected outgoing payments being made by some businesses that bank with HSBC, making it impossible for them to pay staff. Many Britons are scheduled to receive their monthly wages on Friday with a large number planning getaways to make the most of the final public holiday in Britain before Christmas."All I want to know is when will we get paid!?", an affected worker said on Twitter. The bank said that it was working to fix the problem."We are aware that some customers are experiencing issues with expected payments today. We apologize for any inconvenience caused and are working hard to resolve the issue as quickly as possible," it said in a statement. The systems meltdown is one of a number to have hit British banks, causing inconvenience for hundreds of thousands of customers. Royal Bank of Scotland (RBS.L) has been the worst affected and has promised to invest in its technology to prevent future failures. (Reporting by Matt Scuffham; Editing by Jan Lopatka)

Finland's Nokia agrees on China joint venture with Huaxin

Finnish telecom equipment maker Nokia (NOKIA.HE) on Friday said it has agreed to create a joint venture in China with state-owned Huaxin, following Nokia's proposed takeover of Alcatel-Lucent.Alcatel-Lucent and Huaxin currently share a similar joint venture.According to a memorandum of understanding, Nokia said it expects to hold 50 percent plus one share in the new joint venture, with Huaxin holding the remaining shares. The Nokia-Alcatel deal has not yet won approval from Chinese authorities. The transaction is expected to close next year. (Reporting by Jussi Rosendahl; editing by Jason Neely)

Pentagon teams up with Apple, Boeing to develop wearable tech

The Pentagon is teaming up with Apple, Boeing, Harvard and others to develop high-tech sensory gear flexible enough to be worn by people or molded onto the outside of a jet.The rapid development of new technologies is forcing the Pentagon to seek partnerships with the private sector rather than developing its technology itself, defense officials say."I've been pushing the Pentagon to think outside our five-sided box and invest in innovation here in Silicon Valley and in tech communities across the country," Defense Secretary Ash Carter said in prepared remarks on Friday. "Now we’re taking another step forward." The new technology aims to use high-end printing technologies to create stretchable electronics that could be embedded with sensors and worn by soldiers, a defense official said, and could ultimately be used on ships or warplanes for real-time monitoring of their structural integrity. The U.S. government is contributing $75 million over five years, he said, and companies, managed by the U.S. Air Force Research Laboratory, will add $90 million, with local governments chipping in more to take the total to $171 million.Carter said the FlexTech Alliance comprised 162 companies, universities and other groups, from Boeing (BA.N), Apple (AAPL.O) and Harvard, to Advantest Akron Polymer Systems and Kalamazoo Valley Community College. He was due to announce the award formally in a speech on Friday at Moffett Federal Airfield, which is operated by NASA's Ames Research Center near Mountain View, in Silicon Valley. Carter visited California four months ago to create an outreach office to forge ties with the tech community and will visit that office on Friday.The defense chief also plans to meet the Defense Science Board for a briefing on a study it is doing on the level of autonomy that military drones and robots should have in future. The Flexible Hybrid Electronics Manufacturing Innovation Hub, which will be based in San Jose, is the seventh of nine such institutes planned by the Obama administration in an effort to revitalize several U.S. manufacturing sectors, several of them defense-related. The Pentagon's initial experience with the institutes was in 2012 when it established one to help develop 3-D printing. (Editing by Louise Ireland)

Key Apple suppliers seeking stake in Taiwan chip packaging firm

Iphone assembler Hon Hai Precision Industry Co Ltd will buy a 21 percent stake in Siliconware Precision Industries Co Ltd (SPIL), both firms said on Friday, days after another Taiwan-based Apple Inc supplier also said it wanted to buy into the chip packaging firm.The rivalry over SPIL, the industry's third-largest packager, comes as companies in the chip industry seek to overcome the technological challenges raised by the Internet of Things, where everyday products are monitored and controlled online. Chip packaging firms have also been developing technologies for smart wearables, in which chips that power such gadgets are packed into smaller and smaller spaces. In a joint stock market filing with SPIL, Hon Hai, the world's largest contract electronics maker, said it would buy the 21 percent stake in SPIL via a share swap. It did not disclose a value for the deal or say when it would close.Last week, Advanced Semiconductor Engineering Inc (ASE), the world's largest chip packager and tester, said it would buy up to 25 percent of SPIL stock on the open market. ASE is a key supplier for the Apple Watch. Executives at ASE could not be reached for comment on the Hon Hai deal. (Reporting by Michael Gold; Editing by Miral Fahmy)

Huawei brings online smartphone brand Honor to Europe

((This August 27 has been corrected to mention June 30 in fifth paragraph)) - Huawei Technologies Co Ltd [HWT.UL] brought its youth-focused mobile phone brand Honor to Europe on Thursday with the launch of the Honor 7, a handset that has chalked up sales of more than 1.5 million in China since June.Huawei, the world's number three smartphone maker according to Gartner, has invested heavily in the past couple of years to establish Honor as a standalone brand challenging Beijing-based Xiaomi Inc [XTC.UL] in appealing to digitally savvy consumers.George Zhao, president of Huawei's Honor brand, said the handsets would be mainly promoted and sold online in Europe, as they were in China. The company made its vMall e-commerce platform available across the continent on Thursday.Zhao said the Honor 7, which has high-end features like a solid metallic shell and fingerprint recognition, was achieving high customer satisfaction levels. "It is very successful," he said. "We have shipped more than 1.5 million since June 30, only in China."Huawei, which also sells smartphones to the mass market of consumers and business users, is aiming to become the first Chinese smartphone maker to sell more than 100 million phones this year. Xiaomi has a stated sales target of between 80 million and 100 million phones.The Honor 7 will be priced at 249.99 pounds in Britain. (Reporting by Paul Sandle; Editing by Mark Heinrich)

Uber China closes $1 billion fundraising round: sources

Uber Technologies Inc's China arm has closed its $1 billion fundraising round early, according to two people with knowledge of the matter, with investors still hopeful for the U.S.-based ride service despite strong domestic competition.Investors in Uber's Chinese unit include Internet giant Baidu Inc, China CITIC Bank Corp Ltd and China Life Insurance Co Ltd, among others, said one of the people, requesting anonymity because they were not authorized to discuss the matter publicly.Chinese financial conglomerate Ping An Group's investment arm and Hillhouse Capital, which has a stake in the main U.S.-based Uber business, also took part, the person said. However, a representative of Ping An's investment team said they did not invest in the China unit. Hillhouse was also not an investor, said a third source who declined to be identified because of the sensitivity of the subject.A spokeswoman for Uber declined to comment. With the close of the $1 billion round, Uber is re-lining its war chest for a drawn-out battle with Chinese car-hailing app rival Didi Kuaidi, which last month raised $2 billion. The two are locked in a turf war, spending heavily on subsidies to lower the cost for users and inflate the money earned for drivers of their services. The deal was oversubscribed, said the second source directly familiar with the fundraising. According to a fundraising document seen by last week, this round values Uber China at $7 billion, with the unit planning to list on the mainland by 2020. (Additional reporting by Shu Zhang; Editing by Meredith Mazzilli and Stephen Coates)