Peer-To-Peer News - The Week In Review - October 21st, '06

[JackSpratts]

"The notion that a track I buy in DRM is protected and one without DRM isn't is a fallacy. It's all nonsense. Music is never going to be protected, and anybody who tells you that is not being honest." – David Goldberg


"What remains is future." – Printed on black pins handed out by Patti Smith at closing of CBGB’s Monday morning


"You’re going to see a lot more from online bartering in the future. This is just in its infancy." – Richard Pickering


"When I was a minister, some women resisted me. Once I became president, not even one." – Edgar Faure


"Kids, they'll find some other club. You just got a place, just some crappy place, that nobody wants, and you got one guy who believes in you, and you just do your thing. And anybody can do that, anywhere in the world, any time." – Patti Smith





































October 21st, '06







Russian Site Goes on Media Offensive
Alex Veiga

The operator of a Russian Web site that sells music cheaply went on a media offensive Tuesday to deny accusations that it violates copyrights on songs by major artists.

In an online exchange with reporters, representatives from Moscow-based Mediaservices, which owns the AllofMP3.com Web site, asserted it is running a legitimate business.

"The company has been unfairly characterized as a pirate Web site," Vadim Mamotin, the firm's director general, said through a translator. "Nothing could be further from the truth."

AllofMP3.com typically charges under $1 for an entire album and just cents per track. By contrast, an album at Apple Computer Inc.'s iTunes Music Store and other licensed services typically costs about $10 and a song 99 cents.

Mediaservices maintains that it pays taxes in Russia and that 15 percent of every sale is sent as royalties to the Russian Multimedia and Internet Society, a licensing body it claims is responsible for compensating copyright owners.

The society has "offered to pay the record companies the royalties they collected but (has) been rebuffed," said Mamotin, who asserted the recording industry is trying to gain leverage before entering direct negotiations with Mediaservices or the licensing group.

By paying royalties to the licensing group, Mediaservices claims AllofMP3.com is in compliance with Russian laws.

However, the company has never had a license from major recording companies to sell music in the first place, a requirement under U.S. copyright laws.

The music industry also contends that the Russian licensing group doesn't have the authority to collect and distribute royalties.

"It's a completely spurious claim," said Adrian Strain, a spokesman for the International Federation of the Phonographic Industry. "They haven't respected the rights of the rights holders and have exploited their works without asking permission."

AllofMP3.com does caution computer users outside Russia to make sure they are not violating local laws by downloading music from the site.

The world's largest recording companies - Vivendi's Universal Music Group, EMI Group PLC, Warner Music Group and Sony BMG Music Entertainment - have copyright infringement lawsuits pending in Britain against the operators of AllofMP3.com.

Recording companies have also sued Internet service provider Tele2 in Denmark in an effort to force the company to block its subscribers from having access to AllofMP3.

U.S. officials have cited the site as an example of Russia's lax enforcement of intellectual property rights. U.S. Trade Representative Susan Schwab is pressuring Russia to better protect copyrights and patents in negotiations over Russia's bid to join the World Trade Organization.

"We have made it very clear that AllofMP3.com is a clear violation of intellectual property rights and it would be hard to imagine (Russia) getting into the WTO with a site like that up and running," said Sean Spicer, a spokesman for the U.S. Trade Representative.

But Mamotin insisted that his site "is not a barrier to Russia's entry into the WTO."

During the online news conference organized by Washington D.C.-based public relations firm Qorvis Communications, Mediaservices declined to respond to questions about how much money it has made from music sales or how much it has paid out to Russian rights societies.
http://hosted.ap.org/dynamic/stories...10-17-21-47-37





Free-For-All Over Russian Music Site
Thomas Crampton

A Moscow-based Web site that the U.S. Commerce Department has branded as the world's highest-volume online seller of pirated music announced plans Tuesday to release hundreds of thousands of albums free.

Low prices and ease of use have made AllofMP3 a consumer favorite among music download sites, but the site - which claims to operate legally under Russian copyright law - faces continuing legal battles with the music industry and harsh criticism from the U.S. government.

On Tuesday, the credit card company Visa International said it had suspended card service to the site, citing concerns over copyright issues.

The U.S. trade representative, Susan Schwab, has warned that continued operation of the site signals a lack of respect for intellectual property law that could jeopardize Russia's long-sought entry into the World Trade Organization.

The company, which lists no telephone number on its Web site and normally declines all comment, undertook a rare public relations offensive Tuesday. Vadim Mamotin, director general of the site's parent company, Mediaservices, spoke through a translator during an interview by telephone with the International Herald Tribune and then participated in an online chat with 59 journalists. Defiant, Mamotin maintained that the company operated legally under Russian law.

"In six years of operation we have never been convicted by a Russian court or declared illegal," Mamotin said, speaking through the translator. "Under Russian law we are 100 percent legal."

The site, which claims five million subscribers and a growth rate of 5,000 a day, remunerates artists by paying 15 percent of its revenue to a collecting agency, the Russian Multimedia and Internet Society, or ROMS by its initials in Russian, Mamotin said.

Organizations representing global authors, composers, music publishers and record companies issued a statement, however, calling for closure of the site and reaffirming their stance that both ROMS and AllofMP3 operate illegally.

"Under the copyright laws of virtually every country in the world, including Russia, it is illegal to distribute recordings without the permission of the rights owners," said the statement signed by groups, including the International Federation of the Phonographic Industry, the International Confederation of Societies of Authors and Composers and the Recording Industry Association of America. "ROMS has no mandate from international rights holders to license the site in or outside of Russia."

The battle with AllofMP3 comes as the Internet continues to bring upheaval to the music industry by radically changing distribution models. Some players, like Pirate Bay in Sweden, continue to operate illegally, while others, like Napster and Kazaa, have come into the legal fold in order to offer services in cooperation with the music industry.

Also Tuesday, the International Federation of the Phonographic Industry said it had initiated legal action against 8,000 people in 17 countries, aiming at computer users who illegally share their music collections over the Internet. The IFPI, which represents record companies around the world, said many of the people who were the subject of the suits were the parents of children who had been illegally sharing music files, The Associated Press reported.

AllofMP3 said Tuesday that as of Wednesday, its business model would move toward an ad-supported distribution of free content. The company, which previously charged about $1 an album, plans to offer consumers a new software program that allows them to download any song from the site for free. AllofMP3 claims to have a catalogue of hundreds of thousands of albums, increasing at a rate of 1,000 per month.

Users of the new service will only be able to listen to songs by using the AllofMP3 software, and the songs will be usable on just one computer at a time. The interface, called Music for the Masses, will initially be available for Microsoft Windows, with an Apple version arriving in several weeks, Mamotin said.

Consumers who wish to transfer their songs between computers or to a music device like an iPod or another MP3 player, will have to pay for the music.

The idea, Mamotin said, is to make the offering attractive enough to win new customers and build a big enough community to attract advertising.

"We eventually plan to run advertisements on the music player," Mamotin said. "We will lose revenue from music sales, but we hope that the advertising will more than make up for it."

Mamotin said he and a handful of other programmers started AllofMP3 as a collective project in 1998. Most members of the group were students writing code for accounting programs, he said.

Mamotin said he loved music himself, particularly the Beatles, a group whose music is available on AllofMP3.com, but whose publishing company, Apple Corps, has always refused to license any works for online distribution.

For all the success and controversy over his selling digital music over the Internet, Mamotin said he preferred hearing his Beatles on old-fashioned vinyl.

"With digital music you lose that organic sound from vinyl," Mamotin said. "There are some things you cannot transfer to digital."
http://www.iht.com/bin/print_ipub.ph...oney/music.php





AllofMP3 Threatens Legal Action Against Visa and MasterCard
Thomas Mennecke

AllofMP3.com has become the new media focal point for online music distribution. The key question is whether AllofMP3.com’s methods for online music distribution are legal. Thus far, AllofMP3.com appears to have achieved de facto legality, considering the Russian government's inability to comply with the RIAA and IFPI's request to shut the gray market music site down.

Realizing that little was being accomplished via the Russian government, the IFPI took the clever step of striking AllofMP3 at its financial revenue source - credit card payments. According to Ars Technica, the IFPI lobbied Visa reject payments from AllofMP3.com. The plan worked, and according to an IFPI spokesperson, the plug was pulled in early September.

"IFPI drew to Visa's attention the fact that allofmp3.com was not licensed by its members," the spokesman told Ars Technica. "Visa has a policy position of not supporting such sites and had its facilities removed accordingly. In fact, the facility was removed in early September."

If this is the case, AllofMP3.com has remained quiet on the issue. Only since Wednesday has news of Visa's cutoff surfaced. And today, AllofMP3.com has resumed its public relations blitz, claiming Visa and MasterCard's decision to discontinue its relationship has no legal justification.

"The company believes the action taken by the world’s largest payment processors is arbitrary, capricious and discriminatory because Visa and MasterCard lack the authority to adjudicate the legality of AllofMP3’s activities and its determination that the company’s activities were illegal is patently erroneous and without legal merit. AllofMP3 has not been found by any court in the world to be in violation of any law."

Hinting at the IFPI's lobbying of Visa and MasterCard, AllofMP3.com continued by stating that Visa and MasterCard have no right to reject the Russian music store based on the interpretation of a non-legal entity.

"It is evident that Visa and MasterCard made the decision on factors other than legal grounds since the decision was not based on an adjudicated verdict by any court in the Russian Federation or, for that matter, anywhere in the world. To disqualify AllofMP3 based on a payment processing company’s whim is irresponsible and sets a bad precedence."

What's next? AllofMP3.com is not taking this situation lightly. It threatens the existence of their business model, as the reported DRM/adware option would surely spell the end of AllofMP3.com. Its likely AllofMP3.com will first attempt to settle its banishment from Visa and MasterCard through appeal. If they fail, then a legal battle is certain to erupt.

"AllofMP3 will pursue every course of action, including legal options, to reverse Visa’s and MasterCard’s decision."
http://www.slyck.com/story1313.html





Compulsory Licenses Cover Ringtones
Susan Butler

The Copyright Office has decided that compositions used for ringtones may be subject to a compulsory license. The decision is a victory for record labels that want to offer ringtone operators the master rights and publishing rights as one package.

“This decision injects clarity into the marketplace -- clarity that will help satisfy fans’ hunger for the latest hits from today’s best artists by affording record companies and ringtone providers the ability to move new offerings quickly and easily to consumers," says Steven Marks, executive VP/general counsel for the RIAA. "Ultimately, we’re all seeking a vibrant mobile market. This decision helps us further that goal.”

Last month, the Copyright Royalty Board (CRB) referred the question about ringtones and compositions to the Copyright Office for a decision. The CRB wanted to know whether compositions used for ringtones -- monophonic (single melody line) or polyphonic (melody and harmony) -- or for master ringtones (taken from a master recording) fall under the compulsory license provisions of section 115 of the Copyright Act. If so, the CRB would determine rates through its rate-setting proceeding. If not, then publishers would be free to withhold permission to use the compositions unless labels or ringtone providers negotiate a license and a royalty rate for each use.

Under section 115, anyone, like a record label, may obtain a mechanical license or a digital phonorecord delivery (DPD) license to record and distribute "phonorecords" of compositions that were previously recorded and released in the United States. The rate is set by statute, which is periodically adjusted through a copyright tribunal proceeding.

In its 35-page opinion, the Copyright Office concluded that ringtones and master ringtones are "phonorecords" under copyright law. As a result, delivery of ringtones by wire or wireless technology makes them a digital phonorecord delivery.

As long as the ringtones are merely excerpts of a larger musical work or from a preexisting sound recording, then the composition used for the ringtone is subject to the compulsory license, the decision says. For the composition to fall under the compulsory license, the ringtone may not recast, transform or adapt it -- or include additional material -- in such a way that it becomes an original work of authorship (i.e., a derivative work). If it does, then a license must be negotiated with the copyright owner.

"We are disappointed in the Register's decision, which could hurt songwriters significantly and represents an unprecedented broadening of the compulsory license for musical works," says a National Music Publishers' Assn. spokeswoman. "Of particular concern is that copyright owners who have negotiated ringtones licenses in the free market for years will now be subject to government regulation. We see no justification for this, and are currently reviewing our legal options."

The decision also makes the portion of a composition that has been recorded only as a ringtone subject to a compulsory license as well. "If a newly created ringtones is considered a derivate work, and that work has been first distributed with the authorization of the copyright owner, then any person may use the statutory license to make and distribute the musical work in the ringtone," the opinion states.

Briefs from interested parties arguing what statutory rates should be for ringtones and other formats are due to be filed with the CRB in mid-November.
http://www.billboard.biz/bb/biz/news..._id=1003255346





Universal Music Group Sues two Web Sites
Alex Veiga

Universal Music Group is suing the operators of two video-sharing Web sites, claiming they illegally let users share music videos and other copyright material without permission.

Universal Music, the world's largest recording company, filed separate lawsuits against Grouper Networks Inc., operator of Grouper.com, and Bolt Inc., which runs Bolt.com. Sony Corp.'s Sony Pictures Entertainment acquired Grouper for $65 million in August, and Universal Music said it may add the film studio as a defendant.

Video sites have become wildly popular over the past year, drawing millions of visitors who often find clips from movies and music videos along with homemade footage from users. Just this week, Google Inc. agreed to buy one of the top such sites, YouTube, for $1.65 billion.

Universal Music recently signed a content licensing agreement with YouTube. The recording company said it sought licensing deals with both Grouper and Bolt, but reached agreements with neither.

In lawsuits filed Monday in U.S. District Court in Los Angeles, Universal Music claimed Grouper and Bolt actively play a role in violating copyright laws by "copying, reformatting, distributing and creating" works derived from music videos and songs owned by the label.

In one example cited in the Grouper lawsuit, a search turned up several Mariah Carey videos that could be viewed and downloaded. A video for her song "Shake It Off," had been viewed more than 50,000 times, the lawsuit said.

A similar search on Bolt.com generated a list of clips featuring Mary J. Blige, including the video for "Enough Cryin," which had been viewed more than 1,000 times, the lawsuit said.

Universal Music, a unit of French telecommunications and media company Vivendi, is seeking unspecified damages derived from any profits by the defendants, or $150,000 per copyright work that was allegedly distributed on the sites without permission.

In a statement Tuesday, New York-based Bolt said it had yet to receive a copy of the lawsuit, but added that it has always complied with music companies' requests to remove any copyright video after the fact.

A call seeking comment by Sausalito-based Grouper was not immediately returned.
http://hosted.ap.org/dynamic/stories...10-17-21-35-09





Music Industry in 8,000 New File-Share Lawsuits
Kate Holton

The music industry has launched a fresh wave of 8,000 lawsuits against alleged file-sharers around the world, escalating its drive to stamp out online piracy and encourage the use of legal download services.

The International Federation of the Phonographic Industry (IFPI), which represents the world's music companies, said on Tuesday the new cases were brought in 17 countries, including the first ones ever in Brazil, Mexico and Poland.

The trade group said more than 1 billion music tracks were illegally downloaded last year in Brazil, the largest market in Latin America. Record company revenue has nearly halved in Brazil since 2000, IFPI said.

IFPI has said some 20 billion songs were illegally downloaded worldwide last year.

The industry has now filed about 18,000 lawsuits in the United States, the largest market for music sales, and 13,000 in the rest of the world.

The legal proceedings involve both criminal and civil suits and are aimed at "uploaders" -- people who put copyrighted songs onto Internet file-sharing networks to offer to music fans without permission.

The IFPI said many of those targeted for legal action were parents whose children had been illegally file-sharing. Others facing law suits included a laboratory assistant in Finland and a German parson.

The group added that more than 2,300 people had already settled their case for illegally file-sharing copyrighted material with an average payout of 2,420 euros ($3,034).

John Kennedy, chairman and chief executive of IFPI, told Reuters in an interview he was encouraged by the group's progress, although he said the fight against online piracy would be an ongoing battle.

"It's not getting easier but we are encouraged enough by the results to keep on going," he said via the telephone from a trip to Brazil. "It will never go away completely."

He said the success of high-speed broadband was combining with the threat of legal action and fears of computer viruses to encourage more and more users to opt for legal online services.

While the cost of pursuing individual legal cases has been very expensive, he said the music industry had benefited from its settlement of more than $100 million in July this year with long-time antagonist Kazaa, one of the world's best known file-sharing networks.

"It put some money back into the war chest to try to clean up the online world," he said. "Legal offerings will only thrive and open in different countries if there is a chance of them succeeding."

Legal downloads represent about 11 percent of total music sales, but still do not make up for declining CD sales. Total music sales declined 4 percent in the first half of 2006.

Kennedy said the drive to see digital sales make up for the loss in the physical format was the "holy grail" for the music industry and said he hoped to see it happen by 2007.
http://news.yahoo.com/s/nm/20061017/...kxBHNlYwN0bQ--





Swedish File Sharers Fined
Jan Libbenga

Two men who made music and films available for download over the internet have been fined by courts in two separate cases in Sweden on Wednesday, according to Swedish site The Local.

A 44-year-old man from Borås who was prosecuted for making four recordings available of Roxette, Eurythmics, Mauro Scocco and Jakob Hellman, is the first person to be fined in Sweden for sharing music online. A second 32-year-old man from Norrköping has been convicted of making Swedish film Rånarna available online.

The Swedish pro file sharing movement (http://www.theregister.co.uk/2006/09...toral_assault/) had hoped the judges would look at a similar case in Västerås a few months ago, where the Swedish Court of Appeal decided there was insufficient evidence in a case of a 29-year-old Swedish man suspected of uploading a movie. The only evidence was that his ISP confirmed the IP address belonged to the Västerås man. The Västerås court argued that house searches were needed to prove that file sharing had been carried out from a particular PC.

The Norrköping court now says there should not be a higher burden of proof in file sharing cases.
http://www.theregister.co.uk/2006/10...sharers_fined/





Yoko Ono Sues Record Companies

Yoko Ono has sued two music companies in the US for $10m (£5.35m), claiming she is owed royalties from sales of her late husband John Lennon's records.

The claim, filed in Manhattan's Supreme Court, accuses EMI and its subsidiary Capitol Records of "willfully and knowingly under-reporting royalties". EMI/Capitol spokeswoman Jeanne Myer said there are "sometimes differences of opinion" on royalties. But Ms Myer refused to comment specifically on the Ono case. Ono's file claims that EMI and Capitol hid the "true use and disposition of Lennon's recordings".

'Dishonest'

The papers also accuse the record companies of "intentionally and systematically rendering dishonest and grossly deficient accounting statements". Ono's lawyer, John LiCalsi, refused to comment on the case.

Ms Myer added: "Artists from time to time request audits of their royalty accounts". She said contracts are sometimes subject to interpretation, "but 99 times out of 100 these things are resolved in an amicable way".
http://news.bbc.co.uk/1/hi/entertainment/6065150.stm





Record Labels Turn Piracy Into a Marketing Opportunity
Julia Angwin, Sarah McBride and Ethan Smith

A video clip from Jay-Z's live concert in June at Radio City Music Hall is popping up on all sorts of illicit music-sharing hotspots. But Jay-Z isn't upset.

That's because the rapper, at the request of Coca-Cola Co., agreed to allow distribution of the eight-minute clip -- which included promotions for Coke -- on the peer-to-peer sites, using technology usually used to thwart music pirates.

The unusual alliance demonstrates a new tack being taken by the music industry to deal with the challenge posed by widespread music piracy. For years, the industry has been suing individual downloaders and file-sharing services, hoping to discourage the practice. In a tactic little known outside the music industry, record labels have also started to hire outside companies to plant "decoy," or fake, files on the sites. (One such company, ArtistDirect Inc.'s MediaDefender, says it has deployed decoys for as many as 30 of the top 100 Billboard songs at any given time.) The decoy files frustrate users because they fail to download even though, thanks to the companies' technical expertise, they often claim the top spot in search results for a tune.

But now there's a growing recognition among some record executives and performers that the people who are downloading illegally are frequently huge music fans and that marketing to them may be more desirable in the long run than suing or otherwise harassing them.

Hence the alliance between Jay-Z and Coke. By inserting promotional material into the decoy files, and then planting those files prominently on file-sharing sites, record labels and other marketers can turn what is now an antipiracy tool into an advertising medium. "The concept here is making the peer-to-peer networks work for us," says Jay-Z's attorney, Michael Guido. "While peer-to-peer users are stealing the intellectual property, they are also the active music audience," and "this technology allows us to market back to them."

Concert outtakes aren't the only content. Audioslave, Ice Cube, Yellowcard and other music groups have used decoy files for their own version of viral marketing. With help from niche companies like Sparkart LLC and NFA Group's BuyDRM, they put snippets of a song into the files with the promise that a stream of the entire song will be "unlocked" for everyone once the promotion is forwarded to enough people. The hope is that this will motivate people to send the file to lots of friends.

Alternative rock band Dashboard Confessional tried that approach with its single "Don't Wait" to promote its latest album, "Dusk and Summer," released jointly on the independent Vagrant label and Universal's Interscope label. "It just emanated out of one more thing we could do on the Internet, because that's where our customers are," says Dashboard's manager, Rich Egan, who credits filesharing rather than radio airplay with the performer's success.

Right now, only about 1% of the decoy files on peer-to-peer sites include promotions or ads, but the potential audience is huge. While many well-known peer-to-peer services such as eDonkey and Grokster have been shut down by legal action, new ones pop up all the time. In September, an average of nine million people were logged on to the services at any given time, up from 6.8 million two years ago, according to BigChampagne, which tracks the industry. By comparison, last month YouTube attracted about two million visitors a day and MySpace.com attracted 16.8 million visitors a day, according to comScore Media Metrix.

The typical downloader is a tech-savvy male between 14 and 25 years old. "It's a wonderful audience that is very difficult to reach through any other means," says Mitchell Reichgut, a principal at Jun Group, the ad agency in Norwalk, Conn., that crafted the Coke promotion.

The record industry's approach toward downloaders began to change after last year's landmark Supreme Court ruling on Grokster. The Justices found that file-sharing companies like Grokster could be held liable for copyright infringement if their products encouraged consumers to swap music or movies illegally. Before the ruling, record labels worried that they might undercut their legal arguments if they used peer-to-peer sites for their own purposes. Now, "we're basically free to exploit these billions of fake files we're putting out," says Randy Saaf, chief executive of MediaDefender.

Still, marketing on peer-to-peer sites is "a bit of a tricky dynamic for entertainment companies," says Mr. Reichgut. He says many of his clients in the entertainment industry don't want to be identified.

Not so reticent is EMI Group PLC's Virgin Records, which says it's in talks with MediaDefender about marketing options. "It's an opportunity that will hopefully lead to a better experience for the artists, the labels and the consumers," says Virgin Chairman Jason Flom.

Labels typically must approve file-sharing marketing projects, says Peter Katsis, an executive at The Firm, an entertainment-management company. Coke, which devised the Jay-Z promotion as part of a bigger marketing push, says it wouldn't have gone ahead without the agreement of Universal Music Group, Jay-Z's record company. Helping facilitate the deal was Jay-Z's unusual role at Universal: He heads Def Jam Records, the Universal label that releases his albums. Coke did a similar decoy-file promotion using another Def Jam artist, the R&B act Ne-Yo, earlier this year.

Coke says that 3.5 million people downloaded the Ne-Yo video during the six weeks it was on the peer-to-peer networks, and the Jay-Z concert clip has already been downloaded more than 2.5 million times. "It has so far exceeded our goals that you should look for us to do more," says Katie Bayne, senior vice president of Coca-Cola North America.

Some music acts are using peer-to-peer sites to gather marketing data. Over the summer, MediaDefender ran a promotion for the alternative music group Gin Blossoms. File sharers looking for songs got files with links that asked if they wanted to win a free iPod preloaded with Gin Blossoms tunes. If they clicked on the link, they landed on a page that asked them to fill in demographic data, including name, age and email address, and 25% of them did. MediaDefender executives say they were surprised so many responded, but they believe that placing the questionnaire on ArtistDirect, a well-known music site, gave the promotion legitimacy.

Meanwhile, some file-sharing sites are fighting back against the marketing-infused decoy files, which they consider spam. When they release new versions of their filesharing programs, they are including tweaks that can make planting the covert ads more difficult. The latest version of LimeWire, for example, won't allow people responding to other users' searches to easily include a link to a Web page.

At the same time, MediaDefender and other decoy-file distributors are constantly trying to beef up their own technology. "It's a constant cat and mouse game," says MediaDefender's Mr. Saaf.
http://online.wsj.com/public/article...html?mod=blogs





Music Companies Grab a Share of the YouTube Sale
Andrew Ross Sorkin and Jeff Leeds

YouTube’s young founders may have been the biggest beneficiaries of last week’s $1.65 billion deal with Google, but they have some unexpected bedfellows — old-line media companies that had been considered YouTube’s biggest legal threat.

Three of the four major music companies — Vivendi’s Universal Music Group, Sony and Bertelsmann’s jointly owned Sony BMG Music Entertainment, and the Warner Music Group — each quietly negotiated to take small stakes in YouTube as part of video- and music-licensing deals they struck shortly before the sale, people involved in the talks said yesterday. The music companies collectively stand to receive as much as $50 million from these arrangements, these people said.

Because a significant portion of the videos posted to YouTube contain copyrighted songs or video material, the Web site had been considered a litigation land mine. Last month, Doug Morris, the chief executive of the Universal Music, called YouTube and MySpace “copyright infringers” and said the sites “owe us tens of millions of dollars.”

Just this week, Universal filed suits against Bolt and Grouper, two smaller video-sharing sites, for allowing users to post hundreds of pirated music videos of its artists, including Mariah Carey, 50 Cent and the Black Eyed Peas.

The deals that the music companies struck for stakes in YouTube should help to shield Google from copyright-infringement lawsuits, an issue that concerned some Google investors when the YouTube deal was first announced. Still, other copyright holders, including the Hollywood and television studios, could pursue legal action if their content appears on YouTube.

The decision to take a stake in YouTube is a sharp departure from the tack that record companies took regarding Napster, the pioneering file-swapping service that transformed the industry in 1999. Back then, after the major companies filed suits against Napster, the two sides discussed various settlements that involved the music companies receiving a big equity stake.

The Napster talks, which were led on the industry side by Edgar Bronfman Jr., then the chief of Universal’s then-parent Seagram — eventually broke down.

The record companies went on to win a series of legal victories that ultimately forced Napster to shut its site, but the labels have been fighting an uphill battle against free peer-to-peer services ever since. The music industry has also filed thousands of lawsuits against individuals, hoping the threat of civil fines will reduce unauthorized sharing of songs.

But the failure to end digital piracy and the continuing slump in CD sales has slowly pressured record executives to rethink their approach to Internet distribution.

These days, music marketers are eagerly pursuing fans by advertising on independent music blogs and on vast online social networks like MySpace. (Universal’s Interscope unit even struck a deal to distribute a label created by MySpace.)

Lately, the music companies have begun trying to wring more revenue from their music videos. Instead of offering music videos at a nominal fee as a way to promote CD sales, the companies have struck deals with services like Yahoo to share in revenue from advertisements that run in front of the music clips.

Indeed, the companies’ deals with YouTube call for them to share revenue from ads that will run alongside their music videos. As part of the deal, YouTube will use new technology to identify copyrighted material that users have uploaded to the site without permission.

It was Mr. Bronfman, now chief executive of Warner Music, who struck the first deal with YouTube. Universal and Sony BMG followed suit.

Details of the stakes that the music companies received as part of those revenue-sharing and content-licensing deals could not be learned last night. Of the four major record companies, only EMI did not strike a deal with YouTube.

Spokesmen for YouTube, Google, Universal, Sony BMG and Warner all declined to comment. EMI did not return a telephone message left late last night.

Other old-line media companies, including CBS and NBC, which also negotiated content licensing deals with YouTube before its sale to Google, did not receive stakes in YouTube, these people said.

The deal with the music companies could result in other content companies seeing similar arrangements as a requirement before agreeing to similar pacts with YouTube.

YouTube’s deals with Universal and Sony BMG came hours before it announced its deal with Google.

Indeed, people involved in the discussions said that the music companies rushed to complete the deal ahead of the YouTube deal, in part so that it could benefit in the jump in YouTube’s value.

Record companies have benefited from investments in online companies before. In 1999, EMI made $40 million literally overnight by selling part of its stake in Musicmaker.com during its first trading day. That sum dwarfed the company’s earnings from American CD sales for the entire first half of that year.
http://www.nytimes.com/2006/10/19/technology/19net.html





YouTube Purges 30,000 Copyright Files
AP

The popular video-sharing site YouTube deleted nearly 30,000 files after a Japanese entertainment group complained of copyright infringement.

The Japan Society for Rights of Authors, Composers and Publishers, found 29,549 video clips such as television shows, music videos and movies posted on YouTube's site without permission, an official from the group, Fumiyuki Asakura, said Friday.

The San Mateo, Calif.-based company quickly complied with the request to remove the copyright materials, made on behalf of 23 Japanese TV stations and entertainment companies, Asakura said.

Most videos posted on YouTube are homemade, but the site also features scores of copyright material posted by individual users. YouTube's policy is to remove such clips after it receives complaints, though some have suggested the startup eventually could be sued, especially with deep-pocketed Google Inc. about to buy it for $1.65 billion in stock.

Asakura said the entertainment industry group may ask YouTube to introduce a preliminary screening process to prevent copyright clips from being posted.

YouTube has been negotiating with leading copyright holders and reached agreement with several letting the Web site post copyright music videos and other content in exchange for sharing ad revenue.

The company agreed to deploy an audio-signature technology that can spot a low-quality copy of a licensed clip. YouTube would have to substitute an approved version or remove the material automatically.

YouTube has licensing deals with CBS Corp. and three major recording companies - Warner Music Group Corp., Vivendi SA's Universal Music Group and Sony BMG Music Entertainment, which is a joint venture between Sony Corp. and Bertelsmann AG.

Since YouTube started in February 2005, the company has blossomed, now showing more than 100 million video clips per day.

YouTube's worldwide audience was 72.1 million by August, up 2.8 million from a year earlier, according to comScore Media Metrix.
http://hosted.ap.org/dynamic/stories...10-20-10-37-37





RIAA Drops File Sharing Case
John Oates

The Recording Industry Ass. of America has dropped a case against Paul Wilke who was accused of sharing music files over a peer-to-peer network.

Wilkes denied the charges and said he'd never used a file sharing application. He said The Recording Industry Ass. of America did not have sufficient evidence and that he was not the person named in their complaint.

The two sides jointly applied for dismissal of the case. It is not clear whether any money changed hands.

Wilkes said he did not have any of the songs he was accused of stealing and those that were on his hard drive had been taken legally from CDs he owns, not from file sharing networks. In response, the RIAA asked to search his hard drive.

This was an unusual move for the organisation, which usually uses a list of songs and an IP address, which it connects to an individual, as the basis for its cases.

The RIAA has filed dozens of cases against individuals it accuses of file sharing and all have settled out of court.

There's more on the RecordingIndustryvsthepeople blog (http://recordingindustryvspeople.blogspot.com/).
http://www.theregister.co.uk/2006/10...aa_drops_case/





Music Sales Weaken in First Half
Andrew Edgecliffe-Johnson

The decline in music industry revenues accelerated in the first half of 2006, defying record executives’ hopes of returning to growth this year and raising fresh questions about whether they are winning the fight against piracy and illegal downloads.

Global music sales fell by 4 per cent in the first half to $8.4bn in trade values, or $13.7bn at the retail level, according to the IFPI, the recording industry’s international trade association. In 2005, the industry declined by 3 per cent.

Revenues from physical formats, such as compact discs and music videos, were down 10 per cent worldwide, compared with the 6.7 per cent decline seen in the previous full year.

CD sales and prices have been hard hit by the ready availability of pirated physical copies, illegal peer-to-peer services and the fact that the growing market for digital downloads has allowed many consumers to buy single tracks rather than entire albums.

The legal digital music market continued to accelerate, rising 106 per cent to $945m, or 11 per cent of the total recorded music market - double the share it claimed at the end of 2005. In the US, where digital sales increased by 84 per cent, online and mobile music now accounts for 18 per cent of the total market.

Some industry executives had voiced hopes that this rapid growth in downloads, mobile ringtones and subscription revenues would compensate for the decline in physical formats.

John Kennedy, chairman of the IFPI, said in March: “It is encouraging that the markets with the strongest digital sales are also generally the best performing markets overall. In Japan digital has already made up for the decline in physical sales, and other markets should go this way.”

The pressure on traditional sources of revenue has forced the major music companies to look at new ways of refreshing their physical products and new outlets for their content.

Universal Music has introduced new packaging and a three-tier pricing system across Europe, and many groups have begun to offer CDs and DVDs with bonus material to differentiate physical products from digital offerings at download sites such as Apple’s iTunes.

In an effort to extract more value from their music video libraries, Warner Music, Universal and Sony BMG have signed deals with YouTube, the video sharing site, to supply videos in exchange for a fee and a share of associated advertising revenues.

The industry has won several battles against pirate music sites, but an IFPI report in July estimated that 20bn songs were downloaded illegally in 2005 - or 40 for every track that was downloaded legally.

The IFPI figures were released at the start of the intensely-competitive fourth quarter, when sales are typically boosted around Christmas. Last year, the recording industry made almost 60 per cent of its revenues in the second half.
http://www.ft.com/cms/s/a4154dd0-5a3...0779e2340.html





Creative Zen Players Lose FM Recording
Ed Oswald

Creative has apparently bowed to RIAA pressure, issuing a firmware update for two of its players that removes the FM recording feature. In the past, the music industry has argued that recording from radio broadcasts hurt music sales, and has most recently attempted to stop satellite radio services from implementing similar features.

Specifically, the firmware change affects the company's Zen MicroPhoto and Zen Vision:M players. In the release notes, Creative gives no reasoning for the change other than saying "this firmware removes your player's FM recording feature."

The change overshadows other enhancements, including support for Audible Type 4 tracks, the addition of a volume restriction feature, and enhancements to the user interface and usability. But many customers may be less apt to apply the update in order to save the FM recording functionality.

The RIAA has made moves to prevent recording in other devices, most notably in portable players from the satellite radio providers. The group sued XM in May, with RIAA accusing XM of "massive wholesale infringement" of copyrights by allowing users to save songs heard on the service to the device.

Requests for comment from Creative were not answered as of press time.
http://www.betanews.com/article/Crea...ing/1161106079





Digitaly Restricted Media

Invention: Smart-Card DVDs
Barry Fox

Smart-card discs

CDs and DVDs have been around for a while. Nevertheless, American-Israeli company Aladdin think it can breathe new life into these formats by creating a disc that combines optical storage capacity with an embedded electronic smart card chip.

The irregularly-shaped "XCD" is the thickness of a normal optical disc and can still play in any CD or DVD drive. But it also has a smart card, with its own memory and processing components, embedded in the plastic. The embedded chip is connected to a line of electrodes on the surface of one side of the disc. The outer edge of the disc is cut away so that the electrodes protrude and can plug straight into a USB socket.

But why bother inserting a chip into a DVD or CD in the first place? Aladdin thinks it could provide a clever way to digitally lock content sold on optical discs. Music, video or data can be stored optically and read by computer's CD or DVD player, while encryption keys can be stored on the embedded chip and read by USB. The encryption keys could be used to lock information so that it can only be played having plugged the original disc in to the USB.
http://www.newscientisttech.com/arti...card-dvds.html





Digital Rights in Question as Business Model
Antony Bruno

If the music industry truly wants to loosen Apple's iron grip on digital music sales, it should start allowing music to be sold without digital rights management protection.

That's the theory posited by several music services these days in response to the whipping they're taking from the dominant iTunes Music Store.

The issue, of course, is interoperability. The iPod remains the most popular digital music player on the market, and only music purchased from iTunes or copied from the user's CD collection will work on the device. The exceptions are unprotected MP3-encoded files. As such, many Apple competitors would like to sell music in MP3 format so they can compete with iTunes and still be compatible with the popular iPod device.

Perhaps the most successful example of this is eMusic. Despite a music catalog limited to independent label fare, the service facilitates more music downloads than any other save iTunes. The reason? eMusic's entire catalog is available to consumers as unprotected MP3s.

But the major record labels by and large insist their music must have some sort of DRM protection before they'll license it for digital distribution. Increasingly, the wisdom of this stance is coming under scrutiny.

Debate Heats Up

Traditionally, the loudest anti-DRM voice has been the radical "copy-left" movement, a group of advocates who focus primarily on consumer rights. But executives in the broader digital music ecosystem -- such as Yahoo Music general manager David Goldberg and eMusic CEO David Packman -- are taking labels to task with a more business-oriented argument.

DRM, they say, simply forces consumers to buy hardware with proprietary technology that enriches software companies rather than artists or labels.

The conversation has heated up now that Microsoft is preparing to enter the race with another closed system as part of its Zune strategy. Once Zune is launched, there will be two large, deep-pocketed digital services offering music that is not only incompatible with each other, but also with the many other digital music devices and services already in existence.

"That doesn't sound like a very exciting future to me," Packman said during a recent panel appearance at the Digital Music Forum West conference in Los Angeles. "There's no way you can say with a straight face that that's something consumers want. This has to get solved for the industry to grow."

What's more, opponents insist that DRM, in fact, does nothing to protect music. Virtually every form of DRM has been hacked, including Apple's FairPlay and Microsoft's WMA encryption of tethered subscription files. Not all digital music consumers are aware of these workarounds, but tend to discover them the minute they find they can't play their music on their device of choice.

Protection A Fallacy

"The notion that a track I buy in DRM is protected and one without DRM isn't is a fallacy," Goldberg says. "It's all nonsense. Music is never going to be protected, and anybody who tells you that is not being honest. Yes, you can put up speed bumps, but the people who really want to steal music are going to steal it. So you're just making it hard for people who want to do the right thing to get the music they legitimately purchased on the devices and services that they want."

This difficulty, Goldberg continues, only serves to dissuade consumers from buying music legally and instead keeps unauthorized peer-to-peer services in business. He calls the protected a la carte download model a "failure," noting that legal digital download figures have remained flat all year.

"There's been no growth this year at all," he says. "The market has stalled."

On a month-to-month basis for this year, average monthly downloads are flat, just as they were last year, averaging around 10 million a week. Of late, average weekly downloads have slightly slipped, from 11.5 million in January to 10.7 million at the end of September. That's after an all-time high of almost 20 million downloads the week after Christmas.

According to the most recent SoundScan year-to-year figures, digital album sales through October 1 have grown 115 percent over the same period last year, while downloaded individual tracks have grown 72 percent.

Yet these gains have not yet closed the gap with still-declining physical sales, which are down 8.3 percent from last year. DRM opponents say a la carte sales could do more to close that gap if restrictions were removed, but it is impossible to quantify whether this is in fact the case.

Yahoo Music is attempting to prove this theory by making Jesse McCartney's new album available in both protected and unprotected formats at the same price via a deal with Hollywood Records.

Meanwhile, labels hope Microsoft's Zune or another entity will eventually mount a successful enough challenge to Apple that it will force Steve Jobs to open the iPod to competing services.
http://www.sciam.com/article.cfm?cha...F6B7C E480E9E





IFPI Revives DFC DRM
p2pnet.net

Just about everyone in the world has heard about the ongoing Sony BMG debacle where the company tried to secretly plant potentially lethal spyware into the computers of people who'd bought its music CDs.

Not only did Sony BMG try to scam its own customers, the software it used to do so also made it possible for the systems to be hijacked by attackers, as well as opening them to a computer virus.

Now here, once again, is Digital File Check, another entertainment cartel-touted DRM (digital restrictions management) application designed to bring consumers to heel. And this time, the other cartel members are involved.

Warping the minds of our children

Schools used to exist exclusively to educate our children, teaching them how to read and write and add and subtract, and telling them about the importance of truth and honesty and freedom of expression.

But that's no longer the case.

Public and private school systems everywhere are being slowly but emphatically penetrated by the morally bankrupt entertainment and software cartels who are using them to bend the minds of our children to the corporate will, indoctrinating them through phony, blackly cynical 'education' programs.

And what's even more alarming is: well-intentioned staffs and government administrations are actively, and often enthusiastically, helping music, movie and software company employees to walk freely into school classrooms to deliver these self-serving 'lessons'.

Because in the 21st digital century, schools are becoming marketing divisions where sales and propaganda programs dressed up to mimic genuine lessons are just as likely to be 'taught' as the three Rs.

Know IT All For Parents

'IFPI' is short for International Federation of Phonographic Industry. It's owned and operated by Warner Music, EMI, Vivendi Universal and Sony BMG, the Big Four Organized Music family, and it's now leading the way in promoting the Digital File Check, with Hollywood's MPAA (Motion Picture Association of America) in the wings.

The Big Four have numerous similar PR and propaganda units scattered around the world.

"IFPI today hailed the launch in the UK of the new 'Know IT All For Parents" campaign by Childnet International, the leading children's internet safety organisation," says the IFPI in a pseudo press release.

" 'Know IT All For Parents' is aimed at helping adults better support their children's positive and safe use of the internet," it states.

However, far from teaching positive and safe surfing, the 'initiative' is part of a huge, carefully orchestrated world-wide program instituted by the cartels as they try to regain control of what used to be their faithfully compliant consumer bases.

"The campaign will see the distribution of an interactive CD ROM to 100,000 families who, over the next two years, will receive a computer as part of the Government's Computers for Pupils initiative," says the IFPI. "This national programme aims to put computers into the homes of pupils who don't have one, in order to give them the same opportunities as their peers."

In reality, there's not a shred of truth in the statement, and there's absolutely nothing altruistic about the scheme.

DRM means Consumer Control

One of the main purposes of the Know IT All For Parents 'initiative' is to get cartel-controlled systems, loaded with phone-home spyware called the Digital File Check, into the homes of consumers in the UK.

And where first it's the UK, soon it'll be the world.

www.pro-music.org is an industry owned and operated site launched to pimp the Big Four message online and, "The CD ROM provides information and links to the free software 'Digital File Check'," says the IFPI.

It claims the Digital File Check was, "developed by the music sector educational alliance pro-music (www.pro-music.org) to help people ensure that they enjoy music safely and legally on the home computer. and stop illegally file-sharing music and films.

"The internet safety advice which has already been translated into Bengali and Urdu, is presented by themes which relate to family life, such as downloading music, chatting or searching for information. As more and more children are accessing the internet through their mobile phones, there is also a separate section covering safe mobile use."

But it seems Linux and Mac users are safe from from, "the most impressive piece of useless software I've ever seen," as Brian DeMarzo described it on his demarzo.net.

Pledge of Allegiance

The cartels are also attempting another stomach-turning spin on their already well-established course of trying to con parents into watching and then censoring the activities of their own children.

"A key aim of the CD ROM is to encourage parents to have a dialogue with their children about the internet," says the IFPI, which is why, "the CD ROM includes an activity centre with quizzes and games that parents and children can do together".

However, it goes even further, expecting moms and dads to print out a cartel-supplied pledge it calls a "special internet use 'Family Agreement' certificate" which, "the family has agreed in relation to safety and responsible use in the home".
http://p2pnet.net/story/10116?PHPSES...5a920b7b96dc83





MPAA: Piracy is the Outcome of DRM Complications

Last week at the Digital Home Developers Conference Brad Hunt, the MPAA’s executive vice president and chief technology officer said that piracy is the inevitable outcome of the music and movie industries’ inability to provide a simple, inter-compatible and non-intrusive DRM solution.

In a Q & A session he said, “I understand that if we frustrate the consumer, they will simply pirate the content.” He also acknowledged the fact that many consumers are already frustrated because they’re having to buy multiple copies of an album or movie to play on different devices. For example, a song you buy on the iTunes Store won’t play on your Nokia cellphone. And a song you buy on MSN Music or the Zune Marketplace won’t play on your iPod.

There is clearly a need for inter-compatible DRM and Hunt seems to see it. He went on to say, “content protection is going to be critical to enabling the full potential of the digital home network. If devices don’t support content protection, the limits placed on users will undoubtedly frustrate them.” Notice how he still stands firm behind DRM. However, be agreed that “the consumer, if he or she has already purchased licensed material, should certainly be able to transfer that content to any other new or old device.”

Hunt also mentioned that the MPAA is currently working with 3 content protection standard bodies DLNA, DVB and the Coral Consortium to solve these interoperability problems. They are also trying to develop standardised logos and certificates that will help the consumer identify interoperable products. It is worth noting that all three of the bodies are working independently of each other, so we don’t really know what the outcome’s going to be.

It’s nice to see a slight change in the MPAA’s stance. DRM is a necessary evil. You have to agree that it’s not going anywhere, especially in relation to “mainstream” content. The mere fact that they are trying to build an inter-operable standard is a step forward in the right direction. Apple’s FairPlay is possibly the best example of DRM that doesn’t get in the way. Let’s hope the MPAA follow in Apple’s footsteps and come up with an even better solution, however unlikely it may be.
http://torrentfreak.com/mpaa-piracy-...complications/





L.A. Boy Scouts New Activity Patch: 'Respect Copyrights'
Gary Gentile

A Boy Scout is trustworthy, loyal, helpful, etc., etc.

If he's in the Los Angeles area, he also respects copyrights.

Tens of thousands of Boy Scouts here will be able to earn an activity patch for learning about the evils of downloading pirated movies and music.

The patch shows a film reel, a music CD and the international copyright symbol, a "C" enclosed in a circle.

The movie industry developed the curriculum as a way of emphasizing the ills of piracy to a generation that has grown up finding free music and video clips on the Internet.

"We have a real opportunity to educate a new generation about how movies are made, why they are valuable, and hopefully change attitudes about intellectual property theft," Dan Glickman, chairman of the Motion Picture Association of America, said Friday.

Scouts will be instructed in the basics of copyright law and learn how to identify five types of copyrighted works and three ways copyrighted materials may be stolen.

"Part of being a Scout is being trustworthy and part of being trustworthy is being able to follow the rules in our society," said Victor Zuniga, a spokesman for the Los Angeles Area Council.

Scouts also must choose one activity from a list that includes visiting a movie studio to see how many people can be harmed by film piracy. They also can create public service announcements urging others not to steal movies or music.

Many of the Scouts in the Los Angeles area come from families whose members are somehow connected to the region's sprawling entertainment industry, Zuniga said.

The program is being introduced to the 52,000 Scouts in the Los Angeles area, with plans to offer it to other California councils early next year. The program will reach Scouts aged 6 to 21.

Unlike a merit badge, an activity patch is not required to advance in the Scouts. Instead, they are awarded for various recreational and educational activities, such as conservation or volunteering at a food bank.
http://www.sfgate.com/cgi-bin/articl...n140301D15.DTL





Chatterbox

Three ways copyrighted materials may be stolen:

First there's your basic shoplifting.

Second there's the classic breaking and entering.

The third way is a little tricky. You have to forcibly board a boat and seize their copyrighted materials at swordpoint.

Bonus points for recognizing which one involves piracy.
http://yro.slashdot.org/yro/06/10/20/1932241.shtml





Google CEO: Techies Must Educate Governments
Anne Broache

Those in the know about technology must spend more time reaching out to governments and helping them understand the Internet's role in society, Google Chief Executive Eric Schmidt said Tuesday.

"The average person in government is not of the age of people who are using all this stuff," Schmidt said at a public symposium here hosted by the National Academies' Computer Science and Telecommunications Board. "There is a generational gap, and it's very, very real."

Of particular importance on the policy front are Net neutrality--the idea that network operators should not generally be allowed to prioritize content that travels over their pipes, or the "revenge of the Bell companies," as Schmidt put it--and digital copyright law. Online-service providers like Google that routinely grapple with complaints about copyrighted content on their properties are adequately protected under the Digital Millennium Copyright Act (DMCA), but any future changes in that area "could significantly change the way the Web works," he said.

Schmidt said he also doesn't expect arguments over the proper balance between individual privacy rights and government intrusion to die down anytime soon. "There's not a single and simple answer," he said.

The Google chief's half-hour talk capped a daylong series of lectures focusing on how aspects of computer science and telecommunications will look in 2016. Standing beside the podium, his right elbow propped casually on its edge, Schmidt wore a dark jacket and slacks and no tie, and he appeared to be speaking largely without a script.

His speech meandered from his memories of the mainframe age to the growing importance of targeted advertising as a business model to his personal belief, which he mentioned more than once, that the so-called convergence of media will not ultimately result in consumers using "one box that has everything."

"It's clear the number of devices and things we're going to use are going to be very different," he said. He would, however, like to see a world in which he can access the same content on each device, via a single log-in name and password, and have everything be "completely seamless."

One topic that scarcely came up, however, was Google's announcement last week of a $1.65 billion deal for online video-sharing dominator YouTube. Asked by CNET News.com after his speech whether the planned acquisition presented any copyright concerns, Schmidt said he had nothing more to say about the transaction--which he noted has not yet closed--saying only that the company operates under the DMCA and "went into this with our eyes open."

Earlier in the afternoon, Microsoft Senior Vice President for Research Rick Rashid spoke of a future fueled by the rise of "human-scale storage." Translation: Since nearly anyone should be able to afford terabytes of disk space by 2016--even today, one can purchase that capacity for less than $500--new possibilities arise for documenting the world around you.

Viewed another way, it's enough to make a privacy hawk's skin crawl--and Rashid acknowledged that those tensions will always exist. "But the reality is, we will be able to do it," he said.

And there are good reasons why people may want to activate what amounts to a "black box" for humans, he said. He pointed to a study by British researchers showing that the use of such devices (in particular, Microsoft Research's SenseCam) by people with memory loss problems has helped them retain information about past events.

"They can keep their life," he said. And more broadly, people "can go back and say, I really want to get that conversation with my father who passed away, I want to get that time back when my 25-year-old first crawled."
http://news.zdnet.com/2100-9588_22-6126938.html





Chinese City to Fine Web Satirists
AP

The price of Internet satire in China is going up.

A major Chinese city is threatening to fine Web surfers up to $625 for online defamation amid a surge in short satirical Internet films, an official news report said Monday.

The new rules enacted in Chongqing, an industrial city in China's southwest, against "online defamation" come as Beijing tries to tighten control over the freewheeling Internet.

The rules target Web users "who spread information or remarks defaming others, launch personal attacks or damage others' reputations online," the official Xinhua News Agency said.

Potential violations include posting online video "to satirize others or social phenomena."

Video spoofs have become so popular that Chinese have coined a new slang term, "egao," to describe the act of using real film clips to create mocking send ups.

Star film director Chen Kaige complained this year about a 20-minute short titled "The Bloody Case of the Steamed Bun," made with clips from Chen's "The Promise."

Xinhua didn't say how Chongqing would decide whether Internet users violated the rules or whether it would try to enforce its regulations on Web surfers elsewhere.

China's government encourages Internet use for business and education but tries to block access to material deemed subversive or obscene.

Government film regulators announced new rules in August meant to rein in the "egao" fad by allowing only authorized major Web sites to show short films online.
http://hosted.ap.org/dynamic/stories...10-16-08-16-11





China Jails 9 in Anti-Piracy Crackdown
AP

Nine people convicted of selling illegally copied DVDs and other goods have been jailed for up to 13 years in China's biggest anti-piracy crackdown to date, a news report said Friday.

The sentences were the longest reported since China stepped up penalties for product piracy in mid-2005, imposing jail time in addition to fines that Washington and other governments had complained were inadequate to stop the thriving underground industry.

The latest crackdown was launched July 25 against producers of unlicensed copies of goods ranging from movies and software to designer clothes and sporting goods.

Four people were sentenced to 13 years in prison for producing and selling pirated publications in separate cases in the cities of Ningbo in the east and Xiamen in the southeast, the official Xinhua News Agency reported.

The defendant in Xiamen, Wang Guimei, was fined 40,000 yuan ($5,000), Xinhua said. It didn't give the identities of those convicted in Ningbo.

"The severe punishment demonstrates the government's determination to battle piracy and protect intellectual property," said a statement by the national anti-piracy agency, quoted by Xinhua.

In the eastern city of Qingdao, a defendant was sentenced to two years in prison for selling pirated DVDs and computer software, according to Xinhua.

Elsewhere, two men received one year in prison for selling pirated CDs and DVDs over the Internet, Xinhua said. Two other defendants received 18- and eight-month sentences and fines of 200,000 yuan ($25,000) and 100,000 yuan ($12,500).

Last month, authorities destroyed nearly 13 million pirated CDs, DVDs and computer software in their campaign, Xinhua said.
http://hosted.ap.org/dynamic/stories...10-20-05-45-16





EU to Regulate Video Bloggers (?)
Nate Anderson

There's a row brewing in Britain over a new EU television directive which some believe could open the door to increased regulation of the Internet. Because of the proposal's less-than-specific language, it could be interpreted to cover any video clip posted on the Internet, even at a personal site.

Shaun Woodward, the UK's Broadcasting Minister, told The Times, "Supposing you set up a website for your amateur rugby club, uploaded some images and added a link advertising your local sports shop. You would then be a supplier of moving images and need to be licensed and comply with the regulations."

Well, maybe. European television is shaped by the "Television Without Frontiers" (TVWF) directive first passed in 1989, then updated in 1997, and now due for a 2006 overhaul. The process is well underway and a draft of the new proposal (PDF) is available. While much remains unchanged, the new version does regulate both "linear" (the broadcaster controls when something is shown) and "non-linear" (the user controls when something is shown) broadcasts. It covers all "moving images with or without sound... [shown] to the general public by electronic communications networks."

The new definition is designed so that the TVWF can be applied to new types of broadcasting, such as video on mobile phones and IPTV. But it can also be read as applying to any audio or video clip hosted on the Internet, which is why Woodward is so concerned about amateur rugby clubs.

The EU's own interpretation of the new provisions looks far narrower, though. In a chart outlining the various broadcasts to be regulated, there is indeed a section for IP services, but it does not include anything that appears to target individual web sites. It mentions non-linear "films, serials, TV programmes, sport events, music (concerts, clips, tracks), [and] videogames," but none of these seems to threaten video bloggers, personal sites, or the next YouTube.

The worry is that if regulation is in fact extended to cover Internet sites of all kinds, it could have a chilling effect on free speech. That's because the TVWF prohibits video that incites hate or inflames racial tensions or "impair[s] the physical, mental or moral development of minors"—categories broad enough to worry those concerned about censorship from Brussels.

For its part, the EU points out that most member nations already have laws on the books that criminalize such broadcasts, and says that it is simply trying to harmonize them into a consistent framework, not launch an Internet censorship department.
http://arstechnica.com/news.ars/post/20061018-8020.html





Veils and caps

Iran Bans Fast Internet to Cut West's Influence

• Service providers told to restrict online speeds
• Opponents say move will hamper country's progress

Robert Tait

Iran's Islamic government has opened a new front in its drive to stifle domestic political dissent and combat the influence of western culture - by banning high-speed internet links.

In a blow to the country's estimated 5 million internet users, service providers have been told to restrict online speeds to 128 kilobytes a second and been forbidden from offering fast broadband packages. The move by Iran's telecommunications regulator will make it more difficult to download foreign music, films and television programmes, which the authorities blame for undermining Islamic culture among the younger generation. It will also impede efforts by political opposition groups to organise by uploading information on to the net.

The order follows a purge on illegal satellite dishes, which millions of Iranians use to clandestinely watch western television. Police have seized thousands of dishes in recent months.

The latest step has drawn condemnation from MPs, internet service companies and academics, who say it will hamper Iran's progress. "Every country in the world is moving towards modernisation and a major element of this is high-speed internet access," said Ramazan-ali Sedeghzadeh, chairman of the parliamentary telecommunications committee. "The country needs it for development and access to contemporary science."

Iran has not responded to a western incentive package that includes the offer of state-of-the-art internet technology in return for the suspension of a key part of the country's nuclear programme.

A petition branding the high-speed ban as "backward and unprincipled" bearing more than 1,000 signatures is to be sent to President Mahmoud Ahmadinejad.

Scores of websites and blogs are censored using hi-tech US-made filtering equipment. Iran filters more websites than any other country apart from China. High-speed links can be used with anti-filtering devices to access filtered sites.

The telecoms regulator declined to explain the decision but said it was taken by "a collection of policy-makers". However, Etemad, a pro-reformist newspaper, suggested it was part of an official campaign to stem a western "cultural invasion".

"Unpleasant whispers are saying that the motivations behind the scenes are the same as those involved in the purging of satellite dishes," the paper wrote.

Parastoo Dokoohaki, a prominent Iranian blogger, said the move was designed to foil the government's opponents. "If you want to announce a gathering in advance, you won't see it mentioned on official websites and newspapers would announce it too late. Therefore, you upload it anonymously and put the information out. Banning high-speed links would limit that facility. Despite having the telecoms facilities, fibre-optic technology and internet infrastructure, the authorities want us to be undeveloped."

The crackdown comes in an atmosphere of increasing restrictions on the media. Last week, Mr Ahmadinejad launched a fierce attack on the head of the state broadcasting organisation, IRIB, which he blamed for stoking public fears about inflation. Iran's leading reformist newspaper, Shargh, was also closed last month.
http://technology.guardian.co.uk/new...924637,00.html





High Court in Britain Loosens Strict Libel Law
Sarah Lyall

Britain’s highest court ruled Wednesday for the first time that journalists have the right to publish allegations about public figures, as long as their reporting is responsible and in the public interest.

The ruling, a unanimous judgment by the Law Lords, is a huge shift in British law and significantly improves journalists’ chances of winning libel cases in a court system that until now has been stacked against them.

English judges have traditionally been so sympathetic to libel plaintiffs that many people from abroad have sued in English courts — even if the publications in question have tiny circulations here — because they have had a much better chance of winning here than at home.

Newspaper editors said the decision, in the case of Jameel v. Wall Street Journal Europe, would free them to pursue stories vigorously without constant fear of lawsuits.

“This will lead to a greater robustness and willingness to tackle serious stories, which is what the judges said they wanted,” said Alan Rusbridger, editor of The Guardian. Until now, he said in an interview, newspapers have had to police themselves to the point where “stories weren’t getting in the paper or were being neutered by clever lawyers who knew how to play the game.”

The case concerned an article published on Feb. 6, 2002, in The Wall Street Journal and in its European edition, The Wall Street Journal Europe, which has a daily circulation of 18,000 in Britain.

The article said that at the request of the United States, Saudi Arabia was monitoring bank accounts of prominent Saudi businesses and individuals to trace whether they were being used, possibly unwittingly, to siphon money to terrorist groups.

One of the businesses mentioned, Abdul Latif Jameel Company Ltd., sued the newspaper, as did Muhammed Abdul Latif Jameel, its general manager and president. Under British libel law, newspapers being sued are required to prove the truth of the allegations they print — the opposite of the situation in the United States, where the burden of proof falls heavily on plaintiffs.

But that was a practical impossibility in this case, a member of the panel that ruled on Wednesday, Lord Hoffmann, wrote in his decision.

“In the nature of things, the existence of surveillance by the highly secretive Saudi authorities would have been impossible to prove by evidence in open court,” he said. The paper argued that the article was in the public interest — that is, important to the debate about terrorism and the authorities’ efforts to combat it.

A court ruling in a case several years ago involving The Times of London first seemed to open the door to such an argument. But that decision set out what some lawyers say was a prohibitively high set of standards for newspapers and other news media to meet, forcing them to defend their reporting practices to satisfy the subjective opinions of individual English judges.

In the Jameel case, a lower court jury rejected The Journal’s public-interest argument, finding that the article was defamatory. The Journal was ordered to pay £40,000 — or about $74,000 — in damages. An appeals court affirmed the ruling.

The Law Lords overturned the decision. In a ringing rebuke to the lower court judge’s conclusion that the article was not in the public interest, in part because it flouted an agreement between the United States and Saudi Arabia to keep the monitoring program secret, Lord Hoffmann declared it to be “a serious contribution in measured tone to a subject of very considerable importance.”

Another member of the panel, Lord Scott of Foscote, defended the right of news organizations to publish material deemed private by the government.

“It is no part of the duty of the press to cooperate with any government, let alone foreign governments, whether friendly or not, in order to keep from the public information of public interest the disclosure of which cannot be said to be damaging to national interests,” he wrote.

A third member, Baroness Hale of Richmond, wrote, “We need more such serious journalism in this country, and our defamation law should encourage rather than discourage it.”

Keith Mathieson, a partner specializing in media law at the firm of Reynolds Porter Chamberlain, said the ruling would make it easier for newspapers to rely on confidential sources, as long as the articles were responsibly reported and in the public interest.

“It should make it easier for newspapers in the U.K. to publish serious stories where they cannot prove that allegations are true,” he said in an interview.

Stuart Karle, The Wall Street Journal’s general counsel, said that the newspaper had spent millions of dollars on the case and that the decision represented an important turning point. “The history of English libel law was that essentially no decision was final in a newsroom until a judge, several years later, agreed with you,” he said in an interview.

“Going forward,” he said, “this decision means that if you’re a quality news organization you can fully and fairly cover the important issues of the day without this nagging problem of having a libel judge in London basically engage in an autopsy of every single thing you did and decide whether he agrees with your editorial judgment.”
http://www.nytimes.com/2006/10/12/wo...12britain.html





Can an American Judge Take a British Company Offline?

The fallout from a legal battle in the US has sparked talk of a constitutional crisis for the net
Charles Arthur

Had a court in Illinois done what the winner of a case there desired, billions of spam emails could have begun landing in the inboxes of 650 million people all over the world - including the European Parliament, US Army, the White House and Microsoft - every day this month.

The reason: Judge Charles Kocoras, of the district court of the northern district of Illinois, was asked to rule that a British company called Spamhaus, which runs a commercial spam-blocking service for 700 million users, should have its website taken away for failing to comply with an earlier court order - which was to stop blocking emails from e360Insight, a Chicago-based bulk emailing company.

Spamhaus has for some time maintained that e360Insight belongs on its list of "known spammers"; in June, David Linhardt - the owner and operator of e360Insight - sued, asking for monetary damages and removal from Spamhaus's list. But the suit was brought in Illinois - even though, as Steve Linford, chief executive and founder of Spamhaus points out: "Spamhaus in fact operates no business in the United States, and has no US office, agents or employees in Illinois or any other US state."

A lawyer representing Spamhaus in the US at first began defending the case, but the company then effectively thumbed its nose at Judge Kocoras, saying that an Illinois court had no jurisdiction over a British company. Because Spamhaus had initially shown up as a defendant, but then did not defend its case, the judge of course ruled in Linhardt's favour, awarding $11.7m (£6.25m) in damages for lost business, and $1.97m in legal costs. Spamhaus has not paid it.

Thus last month a new order - written by e360Insight - was submitted to the court, demanding that Icann, the California-based Internet Corporation for Assigned Names and Numbers, and Tucows, the Canadian domain company through which Spamhaus is registered, should remove www.spamhaus.org from the internet. The ruling did not have the force of law; but it could, should the judge choose to accept it.

That sent a shiver through people who follow the application of the law to the internet. There were murmurs of a "constitutional crisis". Could a judge in America really force a company in another country off the net? If it could, would that be because Icann is based in the US? The idea that Spamhaus might be pitched into a sort of internet limbo by a judge in one country raised important issues. Would it mean that a British judge could rule an American company off the net? And if not, why not? What would make America's courts special in that regard?

Those questions won't arise - at least not for now. Icann put out a statement (tinyurl.com/fwrmv) saying: "Icann cannot comply with any order requiring it to suspend Spamhaus.org or any specific domain name because Icann does not have either the ability or the authority to do so." Even if brought before the judge (which it has not been), Icann's chiefs don't have the power to suspend organisations from the net; its purpose, essentially, is to decide which domain names to hand out, and how.

Tucows, too, disclaimed responsibility. "Nobody's asked us to do anything," said Ken Schafer, its vice president of marketing. "Right now it's just statements flying around." But the implications of the ruling, were Judge Kocoras to implement it, are huge.

If Spamhaus vanished from the net, the volume of spam people received would increase dramatically. But Richard Cox, the company's chief information officer, says that removing www.spamhaus.org would not actually affect its ability to stop spam. The organisation works by maintaining a huge set of "blacklists" of internet addresses known to be used to send spam: client companies query the blacklist to decide whether to accept an email, based on its originating address. Being on Spamhaus's blacklist can mean your email will never reach its destination.

They key point, though, is that none of those blacklists is actually kept on www.spamhaus.org - the address that e360Insight demanded should be taken off the net. So, Cox points out, if Linhardt's complaint is that emails from him are being blocked, removing the Spamhaus website from the net would bring no relief.

Yet the case could have wider implications. Edward Felten, a law professor at Harvard, noted on his Freedom to Tinker blog that "the really sticky case would be a dispute over a valuable .com name. Suppose a US court ordered Icann to yank a prominent .com name belonging to a non-US company. Icann could fight, but being based in the US it would probably have to comply in the end. Such a decision, if seen as unfair outside the US, could trigger a sort of constitutional crisis for the net."

Spamhaus is fighting back. A Chicago-based law firm, Jenner & Block, has taken on its appeal on a pro bono basis, and last week lodged a notice to appeal: "Basically, protecting our right to appeal if we wish," says Cox. That might be important. Matthew Prince, a lawyer based in Illinois but uninvolved in the case, noted that "this judgment will likely follow Spamhaus in perpetuity. Even if it shuts down and later some of the same people reconstitute 'SpecialHamHouse' to publish similar data, the judgment will almost certainly stick to the new entity. In the long run, cute arguments and legal sleight of hand don't work."

Jonathan Ezor, assistant professor of law and technology at the Touro Law Center in Huntington, New York, comments: "Might Spamhaus eventually get acquired by a US company? Possibly - what would a default judgment do to the proposed deal in that case? What if Spamhaus's executives were travelling in the US?" The question carries echoes of the problems that executives of UK-based online gambling companies have faced during US stopovers.

But Cox is not fazed. "The last group of people to sue us in the US was a front for some spammers. They tried to withdraw from the case but that didn't stop them getting investigated by the FBI."

Asked whether he realised that the draft ruling would have no effect on Spamhaus's operation, e360's Linhardt told the Guardian he preferred not to comment on any pending rulings from the court.
http://technology.guardian.co.uk/wee...925075,00.html





Judge Won't Suspend Anti-Spam Group Name
AP

A federal judge presiding over a spam dispute rejected a marketing company's request to suspend the domain name of an anti-spam group that ignored an $11.7 million judgment against it.

U.S. District Court Judge Charles P. Kocoras denied a proposed motion from e360 Insight, which sued the Spamhaus Project over its "black list" of spammers. Wheeling, Ill.-based e360 Insight contends it is improperly on the list because it is a direct marketer that does not send unsolicited e-mail.

The Spamhaus Project did not bother defending itself and refused to recognize Kocoras' $11.7 million judgment against it, saying the court had no jurisdiction over the U.K.-based group. So e360 Insight asked that the judge order the spamhaus.org domain suspended.

But Kocoras said Thursday that the requested action was too broad and would cut off all lawful online activities of Spamhaus, not just those targeted by any court order.

Service providers and others use Spamhaus' list to help identify which messages to block, send to a "junk" folder or accept. Spamhaus claims that more than 650 million Internet users benefit from its list of spammers.
http://hosted.ap.org/dynamic/stories...10-20-15-28-29





A Student’s Video Résumé Gets Attention (Some of It Unwanted)
Michael J. de la Merced

With his name and image on Web sites and his appearance on the “Today” show, Aleksey Vayner may be the most famous investment-banking job applicant in recent memory.

Mr. Vayner’s curious celebrity came after an 11-page cover letter and résumé as well as an elaborate video that he had submitted to the Swiss bank giant UBS showed up on two blogs, and then quickly spread on the Internet. The clip, staged to look like a job interview, is spliced with shots of Mr. Vayner lifting weights and ballroom dancing and has him spouting Zen-like inspirational messages.

The video clip flooded e-mail inboxes across Wall Street and eventually appeared on the video-sharing site YouTube.

Blogs brimmed with commentary, much of it mocking, about Mr. Vayner and his feats. Television programs and newspapers then picked up the Web’s latest viral sensation.

Now Mr. Vayner, a student at Yale University, is starting to speak out about his 15 minutes of fame, portraying himself as being victimized by the flash flood of Web interest.

“This has been an extremely stressful time,” Mr. Vayner said in an interview.

The job materials that were leaked and posted for public view included detailed information about him that allowed strangers to scrutinize and harass him, he said. His e-mail inbox quickly filled up, with most of the messages deriding him and, in some cases, threatening him.

Mr. Vayner’s experience shows the not-so-friendly side of the social-networking phenomenon. While sites such as YouTube allow aspiring comedians or filmmakers to share their creations with millions of others, they also provide the ideal forum for embarrassing someone on a global scale. Materials can quickly make the rounds on blogs, via e-mail and through online hangouts like MySpace, becoming all but impossible to contain.

Wall Street workers may be especially quick to hit the send button. Last month, a compromising video of a Merrill Lynch banker and his female companion on a Brazilian beach had much of Brazil’s financial-services industry glued to their computer screens. Over the summer, a persnickety birthday party invitation from a Citigroup intern was e-mailed all over London’s financial district.

Mr. Vayner’s seven-minute clip, entitled “Impossible is nothing,” presents images of him bench-pressing what a caption suggests is 495 pounds and firing off what is purported to be a 140-mile-an-hour tennis serve.

The tone of the video seems too serious to be parody, yet too over-the-top to be credible. After sharing the clip, fellow students at Yale, he said, began telling their own tales about Mr. Vayner on the Web, fabricating stories of bare-handed killings and handling nuclear waste. The Internet scrutiny also raised questions about some of Mr. Vayner’s claims in his résumé, including assertions that he ran his own charity and investment firm.

There have also been questions over whether he copied sections of a self-published book, “Women’s Silent Tears: A Unique Gendered Perspective on the Holocaust,” from Web sites.

Mr. Vayner, 23, contends that both the charity and investment firm are legitimate. And the accusations about his book, he said, were based on an earlier draft that has since been changed.

He says he has been interested in finance since he was 12, when he was creating financial data models. So Mr. Vayner, who is a member of the class of 2008 at Yale, decided a few weeks ago to look for a job at a Wall Street firm. He thought that making a video would help him stand out amid the intense competition for investment-banking positions. By emphasizing his various athletic pursuits, which he said included body sculpting, weightlifting and tai chi, Mr. Vayner said he could show that he had achieved success in physical endeavors that could carry over to the financial world.

“I felt demonstrating competency in athletics is a good way to stand out, because the same characteristics are the same in business,” Mr. Vayner said. “The need to set and achieve goals, to have the dedication and competitive drive that’s required in business success.”

Despite the mockery that the video has inspired, he still speaks proudly of his athleticism. Nearly all the feats in the video are his, he said, and they are real. But he says he is not certain that the skiing segment actually shows him.

In the end, though, Mr. Vayner said he was less concerned about the mockery than about what appeared to have been a leak of his application materials from UBS.

Mr. Vayner and his lawyer, Christian P. Stueben, said they were exploring legal options against the investment banks to which he sent the application.

A UBS spokesman said in a statement: “As a firm, UBS obviously respects the privacy of applicants’ correspondences and does not circulate job applications and résumés to the public. To the extent that any policy was breached, it will be dealt with appropriately.”

For now, Mr. Vayner said he was camping out at his mother’s residence in Manhattan, having taken a short leave of absence from Yale when his video hit the Internet. (A Yale spokeswoman declined to comment.)

He said he may have lost his chance to work on Wall Street, and added that he may not succeed in securing a financial job at all.

Real estate development is an option, he said, but for now his future is unclear.

In the meantime, he plans on taking his midterm examinations next week.
http://www.nytimes.com/2006/10/21/business/21bank.html





McDonalds Ships MP3 Players With a Trojan
Mikko

Earlier this month, McDonald's Japan shipped 10,000 MP3 players as prizes in a competition they organized with Coca-Cola.

The players, carrying the McDonald's "M" logo, were shipped with 10 preloaded songs.

Unfortunately, the players were also preloaded with a variant of the QQPass password-stealing trojan. We haven't seen these players ourselves, so we can't confirm how exactly you would get hit by this trojan, but some sources report you only had to plug it into your Windows PC.

More information for affected customers is available from McDonald's Japanese web site.
http://www.f-secure.com/weblog/archi....html#00000997





Video iPods Get Sick - and Apple blames Microsoft
Krysten Crawford

The Browser just loves a good round of mud-slinging. Apple has just disclosed that a number of video iPods shipped since mid-September are infected with the RavMonE virus, and is quick to take aim at its arch rival to the north for the problem, reports CNET.

The RavMonE virus affects only the Windows operating system. It turns out, a Windows machine at an unidentified contractor that manufactures iPods might be at fault. Apple says there have been fewer than 25 reports of a problem.

In an apology posted on its web site, Apple takes the blame but drags Microsoft down with it: "As you might imagine, we are upset at Windows for not being more hardy against such viruses, and even more upset with ourselves for not catching it."

The Browser looked but there isn't a nice juicy plug for OS X in that partial mea culpa. But we're pretty sure that Steve Jobs & Co. are going to be eager to make its opinions of Vista, the long-overdue operating system that's due out soon from Microsoft, well known.
http://money.cnn.com/blogs/browser/i...19139641626208





Onerous Vista Activation—A Time Bomb?
John C. Dvorak

There has been a lot of chatter recently over some of the newer activation and validation schemes that Microsoft may or may not implement with its new Vista operating system. Nobody at Microsoft is saying much, and a lot of bloggers and pundits are all over these alleged schemes, calling them bad news for users. I personally see these developments as bad news for Microsoft, especially if what I'm about to outline actually happens.

As we all know, Microsoft implemented full-throttle activation in Windows XP and managed to dominate the market, with very few complaints from users. Windows XP was generally liberal in the way it dealt with hardware swaps and upgrades. Even when it delivered an activation error—when you added some major system peripheral or rejiggered the system—you could usually get it back up and running with a simple call to the activation center. I did this a couple of times and although it took a little time, it always seemed to work.

I personally do not see why this wouldn't continue to work with Vista. So what's different? The difference is that Microsoft wants to put yet another layer into the mix, and this layer—Windows Genuine Advantage—could become a problem if the layer itself is ever targeted by a virus or Trojan horse.

In other words, what happens if Windows Genuine Advantage is itself corrupted? Windows Genuine Advantage is the layer we really do not need. There is no reason, as far as I can tell, to add a watchdog program to Windows to make sure users are not running bootleg versions of the OS. There has to be a better way.

Now I can understand how this happened. It happened in a committee inside Microsoft when someone came up with the brilliant idea of essentially creating a virtual policeman to watch over the operating system to make sure it has the right "papers." This is an interesting idea, but who watches and authenticates the policeman?—next: Hacking the Policeman >

I suspect the policeman will actually be hacked before the OS. It might actually be easier for the pirates to create a fake cop that constantly authenticates fake versions of Vista than it will be to create a Vista imitation that can pretend to be a legitimate version. There is some irony to that idea. But that's none of my concern. I'm more worried about some joker creating a virus or exploit that turns the good cop into a bad cop, and I can only imagine the destruction and hassle that will ensue.

First of all, this policeman program is also a traffic cop. Aside from having the potential ability to turn your operating system off so that it cannot work at all, it is the program that allows your OS to be upgraded. There will be no patches for an exploit against the program that turns off upgrades. Once a virus that makes the cop refuse to authenticate Vista hits the Net, then how can the problem be fixed? By definition and the way I see it, this will be an impossibility.

This concept of hacking the policeman is not new. If you recall some of the viruses from a few years back, many of them would first attack antivirus software to render it useless.

I do not even want to think of the consequences of Vista turning itself off in enterprise situations such as airline reservations or a hospital full of patients on life support. A serious collapse of the authentication network that could not be fixed without sending out discs or one-by-one-downloads will end up in the courts, and you can be certain that the shrink-wrap license agreement that holds Microsoft blameless will be tossed out as bogus.

Of course Vista isn't shipping yet, and a lot of final decisions have not been made. But Windows Genuine Advantage has already been test-marketed on Windows XP users. Why anyone running Win XP would ever install it is somewhat mysterious, but let's face it, most people are trusting, gullible, and naïve when it comes to big corporations pushing them around.

All I can say is that Microsoft's strategy could become a tremendous nightmare if the black-hat brigades target the Windows Genuine Advantage scheme with an answer of their own. Stay tuned. It could get ugly.
http://www.pcmag.com/article2/0,1759...079TX1K0000584





Microsoft to Release Privacy Guidelines
Allison Linn

Microsoft Corp. is preparing to release privacy guidelines based on its own internal practices in hopes of getting companies to adopt more cohesive standards for safeguarding people's personal information.

Microsoft will issue the hefty document Thursday, urging commonsense practices such as clearly telling customers why a company collects personally identifiable information like e-mail addresses or phone numbers.

Among other things, the document also calls for companies to make a business case for why the information is needed and recommends they delete data no longer needed for that purpose. Microsoft also recommends internal practices that can help keep personal information such as credit card numbers from accidentally getting into the wrong hands.

The company wants to work with other companies to eventually establish some more generally agreed-upon guidelines, although it's unclear how long that will take.

The move comes as more people are entrusting technology companies with their communications, digital photos, business documents and other data, raising concerns about how personal information might be amassed and used. Microsoft and other companies need to make sure consumers trust them, or they risk losing that business.

Analysts credit Microsoft with having a major change of heart about privacy about five years ago, following backlash over Hailstorm, a product that sought to store all sorts of personal information under one logon, so people could more easily access accounts and products online. The product, now called Passport, was scaled back considerably after people balked at leaving all their information in the hands of just one company.

Peter Cullen, Microsoft's chief privacy strategist, said the product was an eye-opener about the importance of giving users control of their own data.

"It's a great example of what on the surface was a solution to a very real problem - how do you manage identity?" Cullen said. "... What I think we didn't understand fully was that not everybody would be comfortable with a Microsoft in between."

Around that time Microsoft also launched a major effort to improve the security of its products, following a barrage of Internet attacks. Cullen said that effort, called Trustworthy Computing, included adding more privacy safeguards, such as what is laid out in the paper being released this week.

"Privacy is one of those areas, from my perspective, where Microsoft's done pretty well. It kind of had to," said Joe Wilcox, an analyst with Jupiter Research.

Wilcox said Microsoft may be able to gain an even greater competitive advantage if, through these guidelines and other measures, it can establish itself as the industry leader and the force behind any industry standards on privacy.

Marc Rotenberg, executive director of the Electronic Privacy Information Center, said Microsoft has spent more time thinking about these types of issues than some of its younger competitors, which may not have yet faced the privacy problems Microsoft has dealt with.

"Microsoft is now a grown-up, and there are a lot of kids running around," Rotenberg said. "I think Microsoft is sort of more willing to think about long-term policies and privacy protection and make that part of their business plan."

But Rotenberg said Microsoft could still do better. The company recently started a new business selling Internet-based advertising, called adCenter. It relies heavily on gearing ads toward people with specific demographic traits, which Rotenberg said could raise privacy concerns.

The company also took heat recently for a program that aimed to check whether copies of its Windows operating system were genuine. Microsoft initially failed to adequately disclose that the program would check in daily with the company. Microsoft has since changed the product and revised its disclosures.

Cullen said Microsoft has built safeguards to separate demographic information it uses in products like adCenter from personally identifiable information, such an e-mail address. But he concedes that the company initially fell short with its anti-piracy effort.
http://hosted.ap.org/dynamic/stories...10-16-17-33-38





Privacy Under Attack, But Does Anybody Care?

It's vanishing, but there's no consensus on what it is or what should be done
Bob Sullivan

Someday a stranger will read your e-mail, rummage through your instant messages without your permission or scan the Web sites you’ve visited — maybe even find out that you read this story.

You might be spied in a lingerie store by a secret camera or traced using a computer chip in your car, your clothes or your skin.

Perhaps someone will casually glance through your credit card purchases or cell phone bills, or a political consultant might select you for special attention based on personal data purchased from a vendor.

In fact, it’s likely some of these things have already happened to you.

Who would watch you without your permission? It might be a spouse, a girlfriend, a marketing company, a boss, a cop or a criminal. Whoever it is, they will see you in a way you never intended to be seen — the 21st century equivalent of being caught naked.

Psychologists tell us boundaries are healthy, that it’s important to reveal yourself to friends, family and lovers in stages, at appropriate times. But few boundaries remain. The digital bread crumbs you leave everywhere make it easy for strangers to reconstruct who you are, where you are and what you like. In some cases, a simple Google search can reveal what you think. Like it or not, increasingly we live in a world where you simply cannot keep a secret.

The key question is: Does that matter?

For many Americans, the answer apparently is “no.”

When pollsters ask Americans about privacy, most say they are concerned about losing it. An MSNBC.com survey, which will be covered in detail on Tuesday, found an overwhelming pessimism about privacy, with 60 percent of respondents saying they feel their privacy is “slipping away, and that bothers me.”

People do and don't care
But people say one thing and do another.

Only a tiny fraction of Americans – 7 percent, according to a recent survey by The Ponemon Institute – change any behaviors in an effort to preserve their privacy. Few people turn down a discount at toll booths to avoid using the EZ-Pass system that can track automobile movements.

And few turn down supermarket loyalty cards. Carnegie Mellon privacy economist Alessandro Acquisti has run a series of tests that reveal people will surrender personal information like Social Security numbers just to get their hands on a measly 50-cents-off coupon.

But woe to the organization that loses a laptop computer containing personal information.

When the Veterans Administration lost a laptop with 26.5 million Social Security numbers on it, the agency felt the lash of righteous indignation from the public and lawmakers alike. So, too, did ChoicePoint, LexisNexis, Bank of America, and other firms that reported in the preceding months that millions of identities had been placed at risk by the loss or theft of personal data

So privacy does matter – at least sometimes. But it’s like health: When you have it, you don’t notice it. Only when it’s gone do you wish you’d done more to protect it.

But protect what? Privacy is an elusive concept. One person’s privacy is another person’s suppression of free speech and another person’s attack on free enterprise and marketing – distinctions we will explore in detail on Wednesday, when comparing privacy in Europe and the United States.

Still, privacy is much more than an academic free speech debate. The word does not appear in the U.S. Constitution, yet the topic spawns endless constitutional arguments. And it is a wide-ranging subject, as much about terrorism as it is about junk mail. Consider the recent headlines that have dealt with just a few of its many aspects:

• Hewlett Packard executives hiring private investigators to spy on employees and journalists.
• Rep. Mark Foley sending innuendo-laden instant messages – a reminder that digital communication lasts forever and that anonymous sources can be unmasked by clever bloggers from just a few electronic clues.
• The federal government allegedly compiling a database of telephone numbers dialed by Americans, and eavesdropping on U.S. callers dialing international calls without obtaining court orders.

Privacy will remain in the headlines in the months to come, as states implement the federal government’s Real ID Act, which will effectively create a national identification program by requiring new high-tech standards for driver’s licenses and ID cards. We'll examine the implications of this new technological pressure point on privacy on Thursday.

What is privacy?
Most Americans struggle when asked to define privacy. More than 6,500 MSNBC readers tried to do it in our survey. The nearest thing to consensus was this sentiment, appropriately offered by an anonymous reader: “Privacy is to be left alone.”

The phrase echoes a famous line penned in 1890 by soon-to-be Supreme Court Justice William Brandeis, the father of the American privacy movement and author of “The Right to Privacy.” At the time, however, Brandeis’ concern was tabloid journalism rather than Internet cookies, surveillance cameras, no-fly lists and Amazon book suggestions.

As privacy threats multiply, defending this right to be left alone becomes more challenging. How do you know when you are left alone enough? How do you say when it’s been taken? How do you measure what’s lost? What is the real cost to a person whose Social Security number is in a data-storage device left in the back seat of a taxi?

Perhaps a more important question, Acquisti says, is how do consumers measure the consequences of their privacy choices?

In a standard business transaction, consumers trade money for goods or services. The costs and the benefits are clear. But add privacy to the transaction, and there is really no way to perform a cost-benefit analysis.

If a company offers $1 off a gallon of milk in exchange for a name, address, and phone number, how is the privacy equation calculated? The benefit of surrendering the data is clear, but what is the cost? It might be nothing. It might be an increase in junk mail. It might be identity theft if a hacker steals the data. Or it might end up being the turning point in a divorce case. Did you buy milk for your lactose-intolerant child? Perhaps you’re an unfit mother or father.

Unassessable costs
“People can't make intelligent (privacy) choices,” Acquisti said. “People realize there could be future costs, but they decide not to focus on those costs.

The simple act of surrendering a telephone number to a store clerk may seem innocuous — so much so that many consumers do it with no questions asked. Yet that one action can set in motion a cascade of silent events, as that data point is acquired, analyzed, categorized, stored and sold over and over again. Future attacks on your privacy may come from anywhere, from anyone with money to purchase that phone number you surrendered.

If you doubt the multiplier effect, consider your e-mail inbox. If it's loaded with spam, it's undoubtedly because at some point in time you unknowingly surrendered your e-mail to the wrong Web site.

Do you think your telephone number or address are handled differently? A cottage industry of small companies with names you've probably never heard of — like Acxiom or Merlin — buy and sell your personal information the way other commodities like corn or cattle futures are bartered.

You may think your cell phone is unlisted, but if you've ever ordered a pizza, it might not be. Merlin is one of many commercial data brokers that advertises sale of unlisted phone numbers compiled from various sources -- including pizza delivery companies.

These unintended, unpredictable consequences that flow from simple actions make privacy issues difficult to grasp, and grapple with.

Privacy’s nebulous nature is never more evident than when Congress attempts to legislate solutions to various perceived problems.

Marc Rotenberg, who runs the Electronic Privacy Information Center and is called to testify whenever the House or Senate debates privacy legislation, is often cast as a liberal attacking free markets and free marketing and standing opposite data collection capitalists like ChoicePoint or the security experts at the Department of Homeland Security. He once whimsically referred to privacy advocates like himself as a “data huggers.”

Yet the “right to be left alone” is a decidedly conservative -- even Libertarian -- principle. Many Americans would argue their right to be left alone while holding a gun on their doorstep.

In a larger sense, privacy also is often cast as a tale of “Big Brother” -- the government is watching you or a big corporation is watching you. But privacy issues don’t necessarily involve large faceless institutions: A spouse takes a casual glance at her husband’s Blackberry, a co-worker looks at e-mail over your shoulder or a friend glances at a cell phone text message from the next seat on the bus.

‘Nothing to hide’
While very little of this is news to anyone – people are now well aware there are video cameras and Internet cookies everywhere – there is abundant evidence that people live their lives ignorant of the monitoring, assuming a mythical level of privacy. People write e-mails and type instant messages they never expect anyone to see. Just ask Mark Foley or even Bill Gates, whose e-mails were a cornerstone of the Justice Department’s antitrust case against Microsoft.

It took barely a day for a blogger to track down the identity of the congressional page at the center of the Foley controversy. The blogger didn’t just find the page’s name and e-mail address; he found a series of photographs of the page that had been left online.

Nor do college students heed warnings that their MySpace pages laden with fraternity party photos might one day cost them a job. The roster of people who can’t be Googled shrinks every day.

And polls and studies have repeatedly shown that Americans are indifferent to privacy concerns.

The general defense for such indifference is summed up a single phrase: “I have nothing to hide.” If you have nothing to hide, why shouldn’t the government be able to peek at your phone records, your wife see your e-mail or a company send you junk mail? It’s a powerful argument, one that privacy advocates spend considerable time discussing and strategizing over.

It is hard to deny, however, that people behave different when they’re being watched. And it is also impossible to deny that Americans are now being watched more than at any time in history.

That’s not necessarily a bad thing. Without an instant message evidence trail, would anyone believe a congressional page accusing Rep. Foley of making online advances? And perhaps cameras really do cut down on crime.

No place to hide
But cameras accidentally catch innocents, too. Virginia Shelton, 46, her daughter, Shirley, 16; and a friend, Jennifer Starkey, 17, were all arrested and charged with murder in 2003 because of an out-of-synch ATM camera. Their pictures were flashed in front of a national audience and they spent three weeks in a Maryland jail before it was discovered that the camera was set to the wrong time.

“Better 10 guilty persons escape than one innocent person suffer” is a phrase made famous by British jurist William Blackstone, whose work is often cited as the base of U.S. common law, and is invoked by the U.S. Supreme Court when it wants to discuss a legal point that predates the Constitution.

It is not clear how the world of high-tech surveillance squares with Blackstone’s ratio. What would he say about a government that mines databases of telephone calls for evidence that someone might be about to commit a crime? What would an acceptable error rate be?

Rather than having “nothing to hide,” author Robert O’Harrow declared two years ago that Americans have “No Place to Hide” in his book of the same name.

“More than ever before, the details about our lives are no longer our own,” O’Harrow wrote. “They belong to the companies that collect them, and the government agencies that buy or demand them in the name of keeping us safe.”

That may be a trade-off we are willing, even wise, to make. It would be, O’Harrow said, “crazy not to use tech to keep us safer.” The terrorists who flew planes into the World Trade Center were on government watch lists, and their attack was successful only because technology wasn’t used efficiently.

Time to talk about it
But there is another point in the discussion about which there is little disagreement: The debate over how much privacy we are willing to give up never occurred. When did consumers consent to give their entire bill-paying histories to credit bureaus, their address histories to a company like ChoicePoint, or their face, flying habits and telephone records to the federal government? It seems our privacy has been slipping away -- 1s and 0s at a time -- while we were busy doing other things.

Our intent in this week-long series is to invite readers into such a debate.

Some might consider the invitation posthumous, delivered only after our privacy has died. Sun’s founder and CEO Scott McNealy famously said in 1999 that people “have no privacy – get over it.” But privacy is not a currency. It is much more like health or dignity or well-being; a source of anxiety when weak and a source of quiet satisfaction when strong.

Perhaps it’s naïve in these dangerous times to believe you can keep secrets anymore – your travels, your e-mail, your purchasing history us readily available to law enforcement officials and others. But everyone has secrets they don’t want everyone else to know, and it’s never too late to begin a discussion about how Americans’ right to privacy can be protected.
http://www.msnbc.msn.com/id/15221095/





Privacy Options Limited for Net Services
Anick Jesdanun

If you don't like what your favorite Internet search engine or e-commerce site does with information it collects about you, your options are limited to living with it or logging off.

Major search engines, for instance, all keep records of your searches for weeks, months or even years, often tied to your computer's Internet address or more. Retailers, meanwhile, generally presume the right to send marketing e-mails.

Although online companies have become better at disclosing data practices, privacy advocates say the services' stated policies generally don't give consumers real choice.

"None of them have gotten to the point of giving a lot of controls in users' hands," said Ari Schwartz, deputy director of the technology watchdog group Center for Democracy and Technology. Privacy policies "are about notice ... not about control."

Recent developments - from companies losing laptops containing sensitive data to Time Warner Inc.'s AOL releasing customers' search terms - have again turned the spotlight on Internet privacy.

But the push for stronger federal protections is countered by Attorney General Alberto Gonzales' desire to require Internet providers to preserve customer records to help prosecutors fight child pornography. Officials have released few details, though they say any proposal would keep the data in company hands until the government seeks a subpoena or other lawful process.

Federal law already limits how personal financial and health care data may be used, but U.S. privacy laws are generally considered weak compared with Europe and Canada.

Industry groups have stepped in with guidelines that go beyond legal requirements.

One group, Truste, requires member companies such as AOL and Yahoo Inc. to give consumers a way to decline sharing personally identifiable information with outside parties. Companies also must disclose any use of tracking technology and specify personal information collected and how it is used.

"The fact that we don't license every person on the Internet gives consumers (the ability) to shop around," said John Tomaszewski, Truste's vice president for legal, policy and compliance. "We've got folks out there engaging in a higher standard than what is normally required."

Some companies go even further.

E-Loan Inc. customers worried about safeguards when data get outsourced to India can choose to have loan applications processed domestically, though loans in such cases would take two additional days to close.

Mark Lefanowicz, E-Loan's president, said about 80 percent of customers have agreed to outsourcing, and he said choice pre-empted any backlash.

"They have the right to deal with us under their terms," he said. "If we just disclosed we used an overseas provider, for a lot of customers it's irritating to them."

Comcast Corp., meanwhile, gives customers a range of options on how long its servers keep e-mail, while a small search engine called Ixquick promises to purge data within 48 hours.

In other cases, companies have responded to backlash from customers. When Facebook recently allowed easier tracking of changes their friends make to personal profile pages, users threatened boycotts and forced the company to apologize and offer more privacy controls.

But such cases are rare. Consumers generally haven't demanded better privacy options the way they shop around for better prices or ease of use, said Carl Malamud, senior fellow at Center for American Progress, a liberal think tank.

"As a consumer I don't choose based on practices for privacy," he said. "I choose based on functionality, and many consumers do the same."

So Google Inc. remains the leading search engine, even as it won't say how long it keeps data on what people search. Like other companies, Google says such information is helpful in improving services and fighting computer attacks and fraud.

Tom Lenard of the Progress and Freedom Foundation, a technology think tank that shuns government regulation, added that data retention lets credit card companies identify unusual activities and gives car dealers the ability to offer instant loans.

Limiting what companies can do would hurt consumers, Lenard said.

Many companies already restrict data sharing on their own but stop short of a total purge.

"There is such a mantra built around the information economy and how valuable the information is of the user that companies don't want to give that up," the CDT's Schwartz said.

Lauren Gelman, associate director of Stanford Law's Center for Internet and Society, said companies may not need all the data today, but they don't want to limit their future options, either.

She and others worry that keeping data longer than necessary could lead to abuse.

Already, many companies have acknowledged data breaches from Web site hacks or stolen laptops. And this summer, an AOL researcher released three months' of search terms on more than 650,000 subscribers without clearing it with superiors.

Jason Catlett, founder of the privacy group Junkbusters Corp., said individuals ought to have more opportunity to see, edit and delete records companies have on them. In many cases, he said, customers couldn't easily purge credit card numbers or their accounts entirely once they register with personal information, often a requirement just to make a single online purchase.

"There's still a lot of diversity in information practices," he said, "but there has been a convergence to what the average person would consider too low a standard."

Gelman said companies have little incentive to promise more.

"We're stuck where we have privacy policies that are basically written to the lowest common denominator," Gelman said. "Companies learn the only way they can get into trouble is to say they are doing something and then do something different. So they say they are allowed to do anything with the data to cover their butts."
http://hosted.ap.org/dynamic/stories...10-13-12-22-17





FBI Head Calls for Data Retention Rules
Nate Anderson

Do you hear it? That rhythmic beat is the sound of the data retention drum being thumped by politicians and security figures. On Monday, at a conference of international police chiefs, head of Homeland Security Michael Chertoff told his audience that terrorists were using the Internet to radicalize without having to travel. Yesterday, FBI Director Robert Mueller showed up at the same conference and delivered a similar message. "Terrorists coordinate their plans cloaked in the anonymity of the Internet, as do violent sexual predators prowling chat rooms," he said, according to CNet.

Mueller took a further step, though, arguing that the US needs stricter data retention guidelines. "All too often, we find that before we can catch these offenders, Internet service providers have unwittingly deleted the very records that would help us identify these offenders and protect future victims," Mueller said. The solution? Forcing ISPs to retain data for set periods of time.

Neither of these arguments is anything new. The Internet is regularly trotted out in speeches on terrorism; Mueller himself did it just weeks ago in a speech to Chicago executives. "Instead of training camps, we have seen a rise in websites that promote violent jihad and give step-by-step instructions on how to build suicide vests and explosives," he told them.

Government officials have also pushed repeatedly for retention guidelines that would control what sort of data an ISP must keep and for how long. Attorney General Gonzales, in particular, has lobbied for new retention laws for some time, arguing that they are necessary to help control child pornography and exploitation.

The thing about retention laws is that they require all data to be maintained, not simply the data from child pornographers and terrorists. This means that such laws are usually favored by other, unrelated groups who would like access to such log files. Groups like the music labels. In Europe, where retention rules are already in place, the entertainment industry has already stated its belief that the data should be available for use in the investigation of any crime, even copyright infringement.

This makes some people nervous, including some in government. After the AOL data release scandal broke, Rep. Ed Markey (D-MA) introduced a bill that would put limits on how long ISPs can retain customer information—exactly the opposite approach of that favored by the law enforcement community. Don't expect much action on such proposals with an election so near, though; Markey's bill has been stalled in committee since February.
http://arstechnica.com/news.ars/post/20061018-8017.html





EFF to Probe FBI's New Monster Database
Thomas C Greene

The Electronic Frontier Foundation (EFF) is suing the US Department of Justice to learn more about the FBI's new monster database, called the Investigative Data Warehouse, or IDW.

The Bureau has been eager to showcase its new counterterrorist gimmick, after expensive and largely humiliating efforts to launch its Trilogy and Virtual Case File gimmicks, which have produced nothing except the squandering of over $170 million in taxpayer money. The IDW system, in contrast, can at least be made to work well enough to dazzle reporters in a series of controlled demonstrations, which the FBI enacted around the fifth anniversary of 9/11, to highlight the Bureau's supposed progress as a counterterrorist outfit, and, of course, its first working computer system.

The FBI had boasted to the media of IDW's capacity to trawl vast reams of data efficiently and productively, and of its current (and no doubt rapidly growing) cache of nearly 600 million records. There are plans to connect the tool to databases maintained by DHS, the NSA, the CIA, and the military within a couple of years, for some extra terror-busting punch.

The EFF reckons that it would behoove us all to know just what sort of data bits are being used, how they are obtained, how they are secured, how personal they might be, how many citizens are affected, and how one might go about getting spurious data relating to oneself removed, or at least corrected. Indeed, it would be good to know whether this scheme is even legal, as we consider the number of patently illegal programs of the Bush administration's so-called war on terror, a number of which have been or are being legitimized by Congress during what is likely to be the final weeks of a Republican majority.

For all its eagerness to tout the IDW to journalists, the FBI has been less than forthcoming about its details, no doubt because if the man in the street had an inkling of the sort of information stored about him in this database, the Bureau would have a PR crisis on its hands. So it has decided, rather predictably, that the details should remain secret for national security reasons.

Hence the lawsuit (http://www.eff.org/news/archives/2006_10.php#004935). It's nice of the EFF to try, but they do have a rather spotty record when it comes to defending the public's interests. A well-meaning outfit perhaps, but ultimately not all that effective. But the IDW and a host of other dubious Bush administration innovations and assaults on privacy and liberty are no doubt going to figure prominently in some very public hearings on Capitol Hill once the Democrats win a majority. There will be a two-year period during which they can embarrass the administration, and possibly get some of the worst of the Bush legacy undone.

The pity is that they will all start defending the leftover mechanisms of executive power-abuse when a Democrat sits in the Oval Office, say around 2008, and even begin adding to them; but that's how the game is played.
http://www.theregister.com/2006/10/1..._fbi_database/





Ya think?

Radio Tags Spark Privacy Worries

A perceived threat to privacy posed by radio tags has emerged as the main fear in an EU study of the technology.

Unveiling the study, EU commissioner Viviane Reding said citizens needed re-assuring that radio tags would not lead to large-scale surveillance.

Many of those contributing to the EU study also wanted the radio frequency ID tags to be turned off if needed.

Ms Reding said she was ready to draft new laws to control how the radio frequency tags could be used.

Potential abuse

The Information Society Commissioner made her comments at a conference called to mark the end of a six-month EU consultation exercise in which it sought opinions about the growing use of radio-frequency ID (RFID) tags.

These "smart barcodes" are increasingly used by businesses to monitor goods as they move along supply chains. Governments are also starting to think about putting them in many identity documents such as passports.

A record number of people and organisations contributed to the consultation exercise, which was evidence, said Ms Reding, of the depth of feeling about the technology.

Early reports from the consultation exercise show fears about how RFID tags affect personal privacy was the main worry.

"The large majority are willing to be convinced that RFID can bring benefits but they want to be reassured that it will not compromise their privacy," said Ms Reding. "This is the deal that we have to strike if we want RFID to be accepted and widely taken up."

People wanted to decide how information was updated and used, said Ms Reding.

"The consultation shows that people are mainly afraid of losing control, of not being able to choose when and how they are exposed to risks," she said.

Many also wanted the ability to destroy the tags if need be, said Ms Reding.

Only 15% of the 2,190 organisations and individuals who contributed to a survey the EU ran during the consultation exercise thought had hopes that industry would do a good job of regulating how firms used RFID tags.

More than half, 55%, of those that filled in the survey said laws should be changed to ensure the tags and the information they allow firms and governments to collect, is not abused.

The EU has said that the final conclusions from the consultation process will be announced towards the end of 2006. Ms Reding said if new laws were needed, they would be drafted in 2007.

The consultation process was kicked off at the Cebit trade show that was held in Hanover in March 2006.
http://news.bbc.co.uk/go/pr/fr/-/2/h...gy/6055416.stm





Air Passengers 'Could Be Tagged'
Rebecca Morelle

The prototype technology is to be tested at an airport in Hungary, and could, if successful, become a reality "in two years".

The work is being carried out at a new research centre, based at University College London, set up to find technological solutions to crime.

Other projects include scanners for explosives and dirty bomb radiation.

Dr Paul Brennan, an electrical engineer, is leading the tagging project, known as Optag.

He said: "The basic idea is that airports could be fitted with a network of combined panoramic cameras and RFID (radio frequency ID) tag readers, which would monitor the movements of people around the various terminal buildings."

The plan, he said, would be for each passenger to be issued with a tag at check-in.

He said: "In our system, the location can be detected to an accuracy of 1m, and video and tag data could be merged to give a powerful surveillance capability."

Civil liberties

The tags do not store any data, but emit a signal containing a unique ID which could be cross-referenced with passenger identification information. In the future, added Dr Brennan, this could incorporate biometric data.

The project still needs to overcome some hurdles, such as finding a way of ensuring the tags cannot be switched between passengers or removed without notification.

The issue of infringement of civil liberties will also be key.

But potentially, said Dr Brennan, the tags could aid security by allowing airports to track the movement patterns of passengers deemed to be suspicious and prevent them from entering restricted areas.

It could also aid airports by helping evacuation in case of a fire, rapidly locating children, and finding passengers who are late to arrive at the gate.

The "proof of concept" of the system is about to be tested at Debrecen airport in Hungary. If successful, claimed Dr Brennan, it could be available elsewhere within two years.

The new centre will also be investigating a range of other airport security tools.

Professor Robert Speller has been developing scanners to detect explosives and drugs. The devices could be used at airports or other ports of entry.

Scattered photons

The scanners work by firing an x-ray at an item and then detecting how light particles called photons are scattered.

Different materials, he said, produce unique patterns of photon scattering, and this can be used to identify whether an explosive or type of drug is present. The scanners, he said, could be incorporated into the machines being used by airports to scan bags.

He is also developing a prototype "Compton camera".

This portable device, he said, could be used if a suspected dirty bomb had been exploded. It is able to detect if any radiation is present, and if so, its precise location.

He said it would help the emergency services identify dangerous areas, and would aid the possible clear-up operation.

The UCL Centre for Security and Crime Science, which opens on Friday, works across many different areas in science and is investigating a number of security and crime issues.

Professor Gloria Laycock, director of the centre, said: "Security is a major issue in today's society and can take many forms.

"We've got rising crime across the developing world, and that has been linked to rising opportunities for crime. The most effective means of tackling this is by tackling those opportunities. Science and technology can help us to do this."
http://news.bbc.co.uk/go/pr/fr/-/2/h...gy/6044310.stm





MTV Will Distribute Videos on Baidu
Joe McDonald

MTV and search engine Baidu.com on Tuesday unveiled a venture to distribute music videos via the Internet in China, boosting the music video channel's exposure in a market where regulation has limited its presence.

The companies said they will begin by offering 15,000 videos and MTV programs such as "Pimp My Ride," charging for some, while others will be free. They also will distribute programs from MTV's sister network Nickelodeon.

The deal lets MTV, a division of Viacom Inc., raise its profile in China's fast-growing media market, while Baidu, China's biggest search engine, expands its sideline in entertainment offerings.

"Expanding the reach of our brands and content through Internet and mobile is integral to our China strategy, and China is critical to our global digital strategy," said Bill Roedy, vice chairman of MTV Networks, speaking at a news conference.

The companies will split advertising and download revenues, said Roedy and Shawn Wang, Baidu's chief financial officer. They declined to give a forecast of revenues, saying it was too early to know how the venture will develop. They said they were still deciding how much to charge per download for videos.

MTV and other foreign broadcasters are eager to expand in China, the world's largest television market, with more than 400 million viewers. But regulators are trying to limit the presence of foreigners in the Chinese media market.

MTV broadcasts in China's mainland are limited to cable TV systems in a portion of the southern province of Guangdong, where the company says it reaches 13 million households. The company also has syndication deals with Chinese broadcasters.

Chinese authorities also are concerned about foreign entertainment content, and have imposed limits on use of foreign cartoons and other programming. Chinese media reported last week that the Culture Ministry canceled a Shanghai concert by American rapper Jay-Z because his lyrics were considered too vulgar.

But Roedy said MTV wasn't worried about running afoul of government censors. He said most of the videos and programming on the Web site will already have been approved by Chinese regulators to be shown on its cable channel.

"We've been doing business here for 10 years and feel very comfortable," he said. "The Internet is less regulated, but we're not looking to take advantage of that."

MTV has 136 similar Web sites in countries around the world, according to Roedy.

Customers who buy MTV videos from Baidu can use a payment system set up earlier by the six-year-old, Beijing-based company for online commerce, said Wang.

"This is one of the very important directions we both are heading," Wang said.

About 70 percent of MTV videos on Baidu will be by Chinese performers, the companies said.

The venture will offer Chinese-language versions of MTV's "Pimp My Ride," an auto makeover show, and "Cribs," about celebrity homes; Nickelodeon's "SpongeBob SquarePants" and "Dora the Explorer" and locally produced programs such as "MTV Music Wire" and Chinese pop concerts.

Meanwhile, Roedy said MTV has expanded its presence in China's mobile phone market by signing a deal with the country's No. 2 provider, China Unicom, to offer ringtones, entertainment news and other services to its 130 million customers.

The company already has a similar deal with China's leading mobile provider, China Mobile, and said that with the new venture, MTV now has access to all of China's more than 400 million phone users.

The company has about 300,000 monthly subscribers among China Mobile customers, who pay 8-15 yuan ($1-$1.90) each per month, depending on which services they buy, said Yifei Li, managing director for MTV Greater China.
http://hosted.ap.org/dynamic/stories...10-17-11-55-15





Universal Music Finds 'Long Tail' for Old Albums

Older songs no longer sold in stores, including a Greek singer's 2000 Christmas album, have been downloaded 250,000 times since February as part of a broad initiative by Universal Music Group to exhume its archives.

The most popular of the 3,000 tracks made available in digital-only form on online services such as Apple Computer's iTunes was Gun's 1994 U.K. hit "Word Up" and the most popular album was Big Country's "Steeltown," which was released in 1984.

The seven-month sales, disclosed by Universal on Tuesday, represent a fresh example of the "long tail" theory that low sales of many products can collectively create a huge market, particularly in the digital age where costs are lower.

"We are now able to respond to and quantify the appetite for more eclectic, diverse recordings from the past," said Olivier Robert-Murphy, vice president of strategic marketing at Universal Music's international arm.

"It's clear that this is a 'tail' worth chasing."

The company did not disclose specific sales figures, but said Nana Mouskouri's compilation album, "Les Plus Beaux Noels du Monde," was the fifth most popular album and sold in almost every country where the campaign was launched during a stretch of the year that did not include the Christmas holiday.

The albums made available in 20 countries, mostly in Europe, stretched back to the 1960s, including Brigitte Bardot's interpretation of "Je T'Aime...Moi Non Plus", which was also in the top five.

Noir Desir was the most popular of the unearthed acts.

Digital sales to portable music players and mobile phones represent about 11 percent of the $21 billion music industry and are slowly making up for the sharp decrease in CD sales.

iTunes has sold more than 1.5 billion songs, and accounts for roughly two-thirds of the digital download market.

Universal Music, a division of French media and telecoms conglomerate Vivendi, plans to bring back more than 100,000 deleted European recordings, many of which were only produced on vinyl LPs, over the next three to four years and sell them exclusively in digital form.

A second batch of Universal's back catalog will be made available in late November and will include songs from Maurice Chevalier, Peter Kraus, The Orb and Charles Trenet.

Other music companies are also selling backlist songs online, but Universal, the industry's largest player, is making the broadest concerted effort to revive its massive out-of-date library. Back catalog albums account for about 30 percent to 35 percent of the company's CD sales.

Digitizing music, particularly decades-old libraries, can be complicated by cumbersome layers of red tape because older contracts with musicians and publishers did not include digital rights.

eMusic, the world's No. 2 download service behind iTunes, often touts the long tail of older songs it sells from independent labels. It does not carry any music from the world's four majors because they do not make songs available in the MP3 format, which can be played on any portable device.
http://news.com.com/Universal+Music+...3-6126536.html





EMI's Mixed Messages
Louis Hau

Amid EMI Group's otherwise lackluster performance in the first half of its 2007 fiscal year, digital music sales provided a glimmer of light.

For the six months ended Sept. 30, the British recorded music and music publishing company expects to report a decline in total revenue of about 3% from the same period last year on a constant currency basis. Revenue at EMI Music, its record label division, is expected to dip 4% from a year earlier on a constant currency basis.

But the company noted that digital music sales "continue to show strong growth," representing 9% of EMI Music's revenue, compared to 5.6% in the fiscal year ended March 31.

Last week, the International Federation of the Phonographic Industry said worldwide digital music sales climbed 106% during the first six months of calendar 2006, to $945 million. That total accounted for 11% of worldwide recorded music sales, compared to 5.5% at the end of 2005, IFPI said.

The sharp increases in digital music sales come as the recording industry continues to grapple with a continued decline in the sale of prerecorded compact discs. While the industry is investing more in digital music sales, those efforts continue to be hampered by widespread unauthorized music downloads via online peer-to-peer networks.
http://www.forbes.com/digitalenterta...h_1016emi.html





Wal-Mart to RIAA: We're Not Gonna Take It!
Hannibal

I don't know about you, but I got my ~$12 check from the RIAA last year as part of the massive price fixing settlement between the music industry and the states. As a quick recap, the music industry was running a "minimum advertised pricing" scheme (MAPS), under which they'd withold valuable in-store promotional materials (i.e. giant cardboard cut-outs of Outkast, posters of Britney, and the like) from large retail chains that advertised CDs at low prices as a way of drawing people into the store. Wal-Mart is one of the chains that uses CDs as a loss leader, so when the feds found that MAPS was another just word for "illegal price fixing" Wal-Mart went right back to its loss-leading ways.

Now, the retailer is tired of losing money on CDs, and has told the music industry to lower prices, or else. Wal-Mart is looking to sell CDs for under $10 (still a rip-off in a world of $15 DVDs), and still make a profit. Here's a quote from the Rolling Stone coverage of this that gives you an idea of how much clout Wal-Mart has in the music industry:

Tensions are not as high now as they were last winter, but making sure Wal-Mart is happy remains one of the music industry's major priorities. That's because if Wal-Mart cut back on music, industry sales would suffer severely -- though Wal-Mart's shareholders would barely bat an eye. While Wal-Mart represents nearly twenty percent of major-label music sales, music represents only about two percent of Wal-Mart's total sales. "If they got out of selling music, it would mean nothing to them," says another label executive. "This keeps me awake at night."

I never thought I'd say this, but good for Wal-Mart. Maybe they can get CD prices lowered across the board. If this happens and CD sales go up, then it'll be yet more proof that the folks who're responsible for the current state of the music industry are myopic fools who should be tarred and feathered, or forced to watch MTV for a few hours, or some other such horrible punishment.
http://arstechnica.com/news.ars/post/20041014-4313.html





Yahoo's Profit Drops 37%; CEO Vows Changes

Yahoo Inc. said Tuesday that third-quarter profit slid 37 percent as sales growth fell to the slowest pace in four years.

The slowing revenue growth has raised investor doubts about the Internet bellwether's strategy and execution, and the disappointing results were compounded by a dimmed outlook for the current quarter.

But Yahoo Chairman and Chief Executive Terry Semel offered hope for a turnaround next year by acknowledging the company's recent difficulties and vowing to fix them with a "back to basics" approach.

The promise helped lift Yahoo's sagging stock price, which increased by about 3 percent in extended trading after ending the regular session on the Nasdaq stock market down 3 cents, at $24.15. The company's market value has plunged 38 percent this year, wiping out more than $20 billion in shareholder wealth.

Yahoo said net income declined to $158.5 million, or 11 cents a share, from $253.8 million, or 17 cents a share, a year earlier. It cited new rules requiring companies to deduct the cost of employee stock options. The most recent result was line with estimates.

Revenue increased 19 percent, to $1.58 billion, but after subtracting commissions Yahoo paid its advertising partners, revenue was $1.12 billion, missing lowered estimates.

Yahoo faces competition from Google Inc., MySpace.com and YouTube.com for customers. Last week, Google agreed to buy YouTube, stepping up pressure on Yahoo.

"Yahoo definitely has challenges, and they need to address these challenges one by one," said Jefferies & Co. analyst Youssef Squali. "There is very little incentive to own the stock at this point."

In Web search, Yahoo handled 29 percent of U.S. queries in August, down from 30 percent a year ago, while Google's market share rose to 44 percent from 37 percent, according to market researcher ComScore.

"Google remains the better horse to ride at this point," said Barry Randall at MTB Investment Advisors in Baltimore.

Semel punctuated his pledge by announcing that Yahoo had finally started to roll out much-anticipated improvements to its system for selling and distributing ads tied to search terms and other topics displayed on a Web page.

The new platform, which Yahoo abruptly delayed three months ago, is considered the key to the company's comeback efforts. The changes aren't expected to begin boosting Yahoo's profits until next year.

"I am not satisfied with our current financial performance, and we intend to improve it," Semel assured analysts in a conference call. "We are not exploiting our considerable strengths as well as we should be."

Yahoo didn't give investors any reason to feel better about the current quarter, traditionally the company's most lucrative because the holiday shopping season encourages more advertising.

Excluding ad commissions, Yahoo forecast its fourth-quarter revenue will range from $1.15 billion to $1.27 billion. Analysts are expecting $1.3 billion, according to Thomson Financial.

"There are definitely legitimate concerns" about Yahoo, said American Technology Research analyst Rob Sanderson. "It has become a `show-me' stock and [the company] hasn't been showing much."
http://www.chicagotribune.com/busine...i-business-hed





Apple Net Income Soars 27%

Maker of iPods and Macs reports solid sales, earnings for the fourth quarter; shares rally after hours.
Grace Wong

Apple Computer's profit soared 27 percent in the latest quarter on strong sales of its Macintosh computers and iPod digital music players, the company said Wednesday.

Apple reported net income surged to $546 million, or 62 cents a share, up from $430 million, or 50 cents a share, in the same period last year. Revenue jumped nearly 32 percent to $4.84 billion in the quarter ended Sept. 30.

Apple shares climbed 4.5 percent in extended trade on the results, which were released after the market close.

The results handily beat Wall Street's expectations. Analysts surveyed by Thomson First Call had forecast earnings per share of 51 cents on revenue of $4.67 billion for the company's fiscal fourth quarter.

Looking ahead, Apple said it expects revenue of $6 to $6.2 billion in its fiscal first quarter and earnings per share of 70 to 73 cents a share.

Guidance was slightly below Wall Street's estimates, but Apple tends to be conservative with its forecasts, analysts said. Analysts expect earnings per share of 77 cents on revenue of $6.44 billion for the first quarter.
Solid shipments

Cupertino, Calif.-based Apple said Mac shipments surged, climbing 30 percent to 1.61 million during the quarter. Laptops led sales of Macs, accounting for $1.34 billion in revenue versus $869 million for desktops.

"Apple changed paths tonight from being forever a niche player in the computer business to now being on track to be a legitimate market share player," Piper Jaffray analyst Gene Munster said.

Apple, which recently transitioned its entire line of Macs to include Intel (Charts) processors, trails PC market leaders Dell (Charts) and Hewlett-Packard (Charts) in terms of total shipments but has been rapidly growing its share of the market.

That's largely due to the popularity of iPods, which have exposed more people to the Mac platform, Munster said.

iPod sales remained a solid source of growth for the company. Apple said it shipped 8.73 million iPods during the fourth quarter, up 35 percent from the same period last year.

iPod sales have slowed from the skyrocketing growth of the past, but the quarterly results suggest there's still strength in the market.

"I don't see any end in sight. That market has plenty of juice," said Roger Kay, president of technology consulting firm Endpoint Technologies Associates.

Retail sales also were a bright spot for Apple, which said revenue at its stores climbed to $934 million in the quarter, up 41 percent from the same period last year.
New products

Apple could face stiffer competition in the digital music space this holiday season with Microsoft (Charts) set to debut its so-called iPod killer named Zune next month.

But CEO Steve Jobs provided an upbeat view. "Looking forward, 2007 is likely to be one of the most exciting new product years in Apple's history," he said in a statement.

Apple's recent product rollouts include a movie download service it launched in September and an updated line of its iPods.

The company also said Wednesday its new iTV gadget - which allows movies downloaded from iTunes to be streamed wirelessly from the PC or Mac to a large-screen TV in another room - would ship in the first calendar quarter of 2007.

The company finished an internal review of its stock option practices earlier this month and said grants made on 15 dates between 1997 and 2002 appear to be irregular. The company said it will probably have to restate its past financial results.
http://money.cnn.com/blogs/browser/i...19139641626208





Profit Doubles at Google as It Continues to Expand
Saul Hansell

Google just doesn’t stop.

The world’s largest search engine said yesterday that its third-quarter profits nearly doubled from a year ago, as it maintained a torrid growth rate that is highly unusual for a company of its size.

The numbers are all the more significant because Google’s largest rival, Yahoo, has been faltering, as sales have tapered off for both its search and display advertising.

“Forty-eight hours ago we were discussing Yahoo; the contrast is pretty amazing,” said Jordan Rohan, an analyst with RBC Capital Markets. “This is an eye-opening and refreshing quarter for Google investors.”

In after-hours trading, Google’s shares surged 7.5 percent. In regular trading, before the results were reported, the shares rose $6.75, or 1.6 percent, to $426.06.

Eric E. Schmidt, Google’s chief executive, attributed the company’s growth to its unusually high level of investment in research and computing equipment.

“In our model, the capital investments we are making give us differentially better service quality, better scale and better leverage,” Mr. Schmidt said. “And we intend to continue this.”

Google spent $313 million for research and development in the quarter, up 76 percent from a year ago.

It also invested $492 million in capital equipment, mainly for computers and networking systems.

At the same time, Google continued to pack more engineers and ad sales people into its overflowing campus in Mountain View, Calif., and its dozens of other sites around the world. The company added more than 1,400 employees in the quarter, for a total of nearly 9,400 workers on Sept. 30.

The profit margins from Google’s core search advertising business are so high that it can spend liberally on development and still report very strong profits.

Google earned $733 million, or $2.36 a share, up 92 percent from $381 million, or $1.32 a share in the period a year ago.

Excluding charges related to stock-based compensation, it earned $2.62 a share, well above analysts’ estimate of $2.42.

Google had revenue of $2.69 billion, up 70 percent from the quarter a year ago.

For advertising that Google sells that is displayed on other sites, the company passes a majority of the revenue to the site owner. Excluding those payments to Web sites, Google’s revenue was $1.86 billion, slightly more than the $1.82 billion analysts had expected.

Google continued to extend its reach overseas, with 44 percent of its revenue from outside of the United States, compared with 39 percent a year ago.

The company outlined a very aggressive program of expansion yesterday. Over the last quarter it has secured many large new outlets for displaying ads, through deals with Adobe, eBay, the News Corporation (which owns MySpace), Intuit and Viacom.

Last week, Google agreed to pay $1.65 billion for YouTube, the most popular video-sharing site.

Google is quickly expanding from text ads to ads with graphics and videos. Indeed it now sells video ads in 30 countries.

While Google’s plans for YouTube are still unclear, so far its video ads are much less intrusive than most of those on other Web sites because people have to click on them to start the video.

Google is also building systems to place advertising for cellphones, print publications, radio stations and television channels.

“We will use our targeting technology not only to find the right advertisement for the each person, but to find the right medium for each advertiser,” Sergey Brin, a co-founder of Google, said in an interview.

Mr. Schmidt added that in the long run, Google also foresaw very large businesses from lines other than advertising. These include its selling devices for corporations to search their own computer networks and the Google checkout service, which earns fees from processing credit card transactions for merchants.

Recently it introduced new services that will allow companies to run their e-mail, word processing and other functions entirely on Google’s network rather than on their own computers.

As for its core search business, which represents nearly all of the company’s revenue so far, Google continues to gain market share. In September, 50 percent of all Web searches in the United States were conducted on Google, compared with 23 percent on Yahoo.

The company said that while growth in users typically slows in the summer, it benefited from some changes in how its system chooses advertisements to show on a page. Most notably, it started to analyze the Web sites of advertisers to make sure that they were related to what users were looking for.

While this resulted in playing down some ads, Larry Page, the company’s other co-founder, said it actually resulted in higher income for Google.

“Over time, as people notice the ads are higher quality, they are more likely to notice them and click on them, and that does affect revenue,” Mr. Page said in an interview.

Mr. Brin said that he saw no end to other innovations. “You might imagine the lower-hanging fruit has been picked,” he said, “but at the same time we have built ladders and are reaching for larger, higher-hanging fruit.”
http://www.nytimes.com/2006/10/20/te.../20google.html





Sony Joins Laptop Battery Recall List
Gemma Simpson

Sony is recalling 90,000 of its Vaio laptop batteries across China and Japan following recent battery recalls from other PC makers.

Rumors are also circulating that Toshiba is set to sue Sony, after it was forced to recall 340,000 laptop batteries made by Sony.

Sony said its recall is preemptive, and not a reaction to any particular problem. "There isn't a problem with the Vaio itself but after the problems with the other manufacturers, we decided (the recall was) something we had to do," a Sony spokesman said.
Over the past two months, computer makers including Apple Computer, Dell, Fujitsu, IBM, Lenovo and Hitachi have recalled Sony batteries.

Mark Blowers, an analyst from Butler Group, told Silicon.com that the battery recall has "grown into a huge problem."

"One moment it's one or two overheating batteries, now it's a manufacturing problem," he said.

The Sony battery recall is isolated within Japan and China but the analyst said he "can't believe it's not a global problem." He added: Sony "(doesn't) really know what the problem is so can't restrict recalls to a certain country."

If Toshiba files suit against Sony, it would be the first company affected by the Sony lithium-ion battery recall to seek compensation.

Blowers said Sony offered to cover the cost of replacing the Toshiba batteries, as it did with every other company with battery problems.

"Toshiba is worried about its brand being damaged," he said. "Toshiba may be gesticulating to get a better deal or more recompense with this move."

Reacting to rumors of the suit, Toshiba said in a statement: "We are studying various possibilities but nothing has been decided at this time and we are not commenting on rumors or speculations."
http://news.com.com/Sony+joins+lapto...3-6126493.html





Sony Battery Recall to Hit 9.6 Million
AP

The number of laptop batteries Sony is recalling will total 9.6 million worldwide, the company said Thursday, shedding more light on the scope of a problem that has rattled confidence in the company's image.

The estimate came just hours after Sony Corp. slashed its fiscal year profit forecasts due to the massive battery recalls and price cuts in Japan for the next-generation PlayStation 3 video game console.

Sony said the recalls of lithium-ion batteries will boost its costs by 51 billion yen ($429 million) in the July-September period. Sony spokesman Takashi Uehara said the 51 billion yen figure doesn't include "provisions for possible lawsuits" suggesting costs may actually grow.

Sony's defective battery packs have caused massive recalls, with nearly every major laptop computer maker to ask customers to return their batteries subject to replacement.

The problem stems from batteries that can short-circuit, causing some computers to overheat or even burst into flames. Previously, Sony had not provided a figure of how many batteries would be subject to recall.

Earlier Thursday, the Tokyo-based electronics maker cut its earnings forecast, saying it now expects group net profit of 80 billion yen ($673 million) for the fiscal year through March, down 38 percent from the 130 billion yen it had forecast in July.

Sony-made batteries have been recalled in recent weeks by U.S. makers Dell Inc. and Apple Computer Inc., as well as Japanese makers Toshiba Corp., Hitachi Ltd., Fujitsu and Sharp Corp. whose laptops also use Sony batteries.

Sony is joining the recall with its own Vaio laptops and that will also trim earnings for the current fiscal year, Sony said.

The estimated total of 9.6 million batteries include the latest recalls of 90,000 batteries in Vaio, Sony said.
http://hosted.ap.org/dynamic/stories...10-19-07-13-38





Wall Street Woos Film Producers, Skirting Studios
Laura M. Holson

Since the birth of Hollywood, movie studio chiefs have been makers and breakers of careers, arbiters of taste and gatekeepers who decide which movies are made.

But as Hollywood power shifts more to Wall Street investors, financiers are starting to bypass studio bosses by dealing directly with successful producers.

Now, instead of deals being cut over lunch at Spago or the Grill, movies are increasingly being greenlighted in conference calls to New York.

The reason is a simple desire for more control. Wall Street financiers want a greater say over what movies they finance and who makes them; producers want more artistic independence and a larger share of the profits.

The studios themselves are nudging the trend along, too, since they are making fewer movies.

A result for moviegoers is that they could begin to see even more thrillers, comedies and horror movies at the multiplex — the types of movies Wall Street favors, because of their more predictable payoff.

Joel Silver, the producer of the “Lethal Weapon” and “The Matrix” movies, is the latest and most important Hollywood figure to cut a big deal with Wall Street.

He has just joined forces with a consortium of financiers who have agreed to provide $220 million to produce 15 films over the next six years. Mr. Silver will not only have creative control, he will own the movies outright.

“I’ve spent 20 years working for studios,” Mr. Silver said in a recent interview beside an L-shaped azure swimming pool at his Brentwood mansion, a home he referred to as the house ‘The Matrix’ built. “It was always their call.”

To his new partners, Mr. Silver seems like a good bet. In more than two decades as a producer on the Warner Brothers lot, he has produced 46 movies, which have generated $5.6 billion in global ticket sales.

Ivan Reitman, the director of “Animal House” and “Ghostbusters,” struck a $200 million deal with Merrill Lynch in August to produce 10 low-cost films. Tom Cruise and his producing partner, Paula Wagner, after splitting with Paramount Pictures over the summer, are in discussions with potential investors, as are several other producers.

“Hedge funds are picking out who they want to be in business with,” said Rob Moore, president for worldwide marketing, distribution and home entertainment at Paramount Pictures, who gets calls weekly from producers lining up money. “They don’t claim to know how to make movies. They are investing in a track record.”

But such investments are not risk-free, as others have learned. At least since the early 1980’s, studios have occasionally distributed and marketed movies financed by outsiders, some of them from overseas. In the late 1980’s, for example, Crédit Lyonnais famously backed a troubled MGM and Carolco Pictures, which went bankrupt.

Indeed, Hollywood is rife with stories of financiers who came to town with a pocketful of cash, only to leave empty-handed, except for a photograph of themselves with a smiling starlet.

But the new investors are hoping that with enough analysis, they can avoid the fate of some of their predecessors.

In deciding whether to invest with Mr. Silver, the investment firm CIT Group examined not only genre films he had produced, but similar films made by competitors, as well as a wide range of other movies. This style of movie financing has been driven by necessity. Studios have been forced to trim their slates because of higher costs, but they still need a steady stream of movies to distribute. In turn, producers need financing, because the studios are backing fewer films. And cash-rich financial institutions are looking for places to invest, hoping to earn double-digit returns while limiting their exposure to the fluctuations of the stock market.

“It’s a confluence of interests between the people with the cash, studios and producers,” Mr. Reitman said. “As Wall Street gets involved in movie financing, hedge funds don’t want to be ‘stupid money’ and want to align themselves with people who have a history of success. They are looking for a guide. They don’t want to be sold a script that’s been around for eight years.”

Studio executives, who earlier would have balked at such deals, are now open-minded. “I wouldn’t say it’s bad timing given where our strategy is going,” said Jeff Robinov, president of production at Warner Brothers, which, like many studios, is making fewer films. With Mr. Silver providing his own movies, Mr. Robinov said, he can focus on bigger films, like the “Harry Potter” and “Batman” movies.

And regardless of who finances the movies, the studios still make money from distributing them.

Two years ago, studio-slate financing was the toast of Hollywood, with hedge funds and other investors linking up with studios to co-produce films. But many of those deals have yet to pay off. In some cases, studios kept lucrative film franchises for themselves. In others, financiers picked the wrong movies to back.

“Here is a huge industry with a lot of capital,” said Wade Layton, managing director of CIT Communications, Media and Entertainment, referring to private investors. “First, they start off with studios as a way to get up to speed. Then you start to look for deals with producers.”

So far, Mr. Silver’s deal, which includes the investors J. P. Morgan and D. E. Shaw, is the most generous a producer has landed. Mr. Silver will produce a mix of horror, comedy and action movies that will cost $15 million to $40 million apiece to make. Mr. Silver’s Dark Castle Entertainment currently has enough money for eight movies and if those are successful, the revenue will be used to finance the remaining films.

The films are to be distributed by Warner Brothers Pictures, which gets a distribution fee. The first film to be released under the deal is “White Out,” an action thriller about a United States marshal who tracks a serial killer across Antarctica. It is to be released in 2008.

“I would never take a big movie to a financier,” said Mr. Silver, who also has a separate producing deal with Warner through 2009. “What do you say if you go over budget by $10 million? What do you say?”

“With these movies, 30 days and you are done,” he said, wiping his hands together.

Mr. Reitman’s Cold Spring Pictures — a venture among Mr. Reitman; his producing partner, Tom Pollock; Merrill Lynch; and two other investors — retains half the copyrights to its movies. Cold Spring must find a studio to distribute the films and put up 50 percent of the budgets. The financing is $50 million in equity and $150 million in debt. “We don’t want them telling us what to make,” Mr. Pollock said. “But we know if we don’t perform, they won’t be happy.”

Mr. Reitman’s group, like Mr. Silver, will share in 100 percent of DVD sales, which are often highly profitable, compared with an industry norm of 20 percent.

In return for giving up potential profits, financiers want to curb Hollywood’s notoriously wild spending. “We are not making investments for them to fund development,” said Michael Blum, a managing director at Merrill Lynch.

But Wall Street financiers are loath to meddle with the movie-making itself. And producers prefer it that way. “When bankers start reading scripts, you know you are in trouble,” Mr. Layton said.

Mr. Silver agreed: “I don’t mind if they come to premieres. If they want to come to the set, that’s fine — but I’m not making movies in L.A.” (Mr. Silver’s movies are filmed around the world.)

Two weeks ago, Mr. Silver invited his new backers to his estate, Casa de Plata, where they celebrated over sushi, roast beef sandwiches and cocktails. The same week, Mr. Reitman and Mr. Pollock took their partners to Cut, Wolfgang Puck’s new steakhouse, where, Mr. Reitman noted, Merrill Lynch, paid the bill.

“I don’t think any of them are in it for the glamour,” Mr. Pollock said. “They kept talking about their next big deal, which was recreational vehicles.”

But Mr. Reitman said his investors wanted the lowdown on John Belushi, Bill Murray and Dan Aykroyd in their younger days.

Did he share any gossip?

“A little,” Mr. Reitman said, smiling.
http://www.nytimes.com/2006/10/14/bu...8&ei=5087%0 A





Chan: Hollywood Rules Impede Stunt Work

HONG KONG - Hong Kong actor Jackie Chan, famous for his daredevil stunts, says he's frustrated by Hollywood's safety rules.

"There are so many safety and insurance rules to follow," Chan said in an interview on his Web site Sunday.

"I know that they want to make sure that I'm safe when I do my stunts, but sometimes they insist that I use protective gear for even simple things, and that is frustrating. It takes so much time," he said.

Chan said he feels less encumbered when making films in Hong Kong.

"In Hong Kong we just go ahead and do what needs to be done. There is no safety captain on the set. I use my own stunt team because they have experience and I trust them to make the action and stunts safe," he said.

Chan also said that when he first broke into Hollywood, he'd had little control over his own moves, even though he'd been choreographing stunts for decades in Hong Kong.

But that that has changed over time.

"When I first started making Hollywood films, the directors wouldn't listen to anything I said when it came to the action," he said.

"It's different now; the directors respect me and listen to me. Over the years I have gotten more involved in the planning of the action and stunts on my American movies and that makes me happy. But mostly it is difficult," Chan said.
http://www.charlotte.com/mld/charlot...c/15766982.htm





Hollywood Film Chain’s Latest Link
David M. Halbfinger

A year ago, the director Sam Mendes collected his “director of the year” prize at a star-studded but still otherwise obscure, untelevised gala called the Hollywood Awards, two weeks before his film “Jarhead” was even released. “I’m very fond of giving awards to movies you’ve never seen,” he joked to a knowing audience of filmmakers, actors and studio executives.

This time around, the estimable Mike Medavoy is being named “Hollywood producer of the year” in connection with what might have been the Oscar campaign for “All the King’s Men” — had the film not turned into one of the biggest disappointments of his storied career. The Oscar winner Eric Roth will be named “Hollywood screenwriter of the year” even though his only film of 2006, “The Good Shepherd,” doesn’t open until mid-December and is still being edited. And the production designer John Myhre, a two-time Oscar winner, is being similarly honored, though his movie “Dreamgirls” won’t come out until Christmas.

All of these dubious honors — not to take anything away from the honorees themselves — will be handed out on Monday night at the Hollywood Awards, in what has become the first mandatory stop on the flashbulb-and-red-carpet-lined moving sidewalk of self-congratulation that is the awards season. Primarily seen as a publicity vehicle for late-year releases, the awards show and its promoters have lately made pretensions to Oscar oracling: Jamie Foxx won the “breakthrough actor of the year” prize for “Ray” in 2004, after all, and Paul Haggis and his ensemble cast were honored for “Crash” four months before it won best picture.

Still, the story behind this peculiar Hollywood extravaganza is emblematic of some aspects of the town itself: dreamt up almost overnight, built on facades more than foundations and, at bottom, a money-making enterprise.

The architect and chief financial beneficiary of it all is Carlos de Abreu, a Portuguese-accented P. T. Barnum who once worked in intelligence on what he called “the wrong side” of the African National Congress for colonial Mozambique, flew jets in its air force and marketed Cartier watches to rich Americans before quitting his job to study film at the University of California, Los Angeles, and marrying Janice Pennington, then a model on “The Price Is Right.”

Together the two set about finding ways to help novices enter the film industry while making a buck themselves. They started a screenplay competition in 1991, hoping to attach themselves to any winners that were produced. In 1996 they founded the Hollywood Film Festival, after learning to their surprise that the name wasn’t yet taken, Mr. de Abreu said.

In a telephone interview Mr. de Abreu said he had been working for more than a decade to “bridge the gap between established Hollywood and emerging talent,” and cited a screenwriting how-to book of which he is a co-author and an Internet bulletin board for screenwriters he set up.

In Mr. de Abreu’s retelling, he had an awards show in mind all along, but was urged by friends to try a film festival. So he created both. Yet while the awards show now looms large on the industry’s fall calendar, and while the Hollywood Film Festival has turned up discoveries like the director Craig Brewer, it is still not a rival to independent film festivals like Sundance, Telluride or the New York Film Festival. Its premieres are also not the cream of the crop: last year’s opening feature was the action-comedy “Kiss Kiss, Bang Bang.” This year’s is the family film “Flicka.”

Moreover, unlike those and many other film festivals — and even the Golden Globes, whose organizers give away millions of dollars to charity — Mr. de Abreu’s business, including both the film festival and the awards show, is anything but a nonprofit enterprise. He declined to reveal its revenues but insisted he was not getting rich: his Mercedes, he said, is 16 years old.

Mr. de Abreu said he did once establish a philanthropy called the Hollywood Film Foundation, but that it was no longer active. Asked why, he said: “I don’t have time for everything.”

No doubt, Mr. de Abreu has been busy raising his game since his first festival in 1997. (The New York Times was a sponsor of the festival in its early years but is no longer involved.) And he has proven a canny marketer. To attract A-listers early on, he staged the awards show in August, when few if any industrywide events compete for celebrities’ time; in 2002, he moved it to October, at the start of the Oscar-campaign preliminaries. Today he packs a ballroom at the Beverly Hilton, honoring not only industry players but also international films, chosen by a jury, and American popcorn movies, chosen by a Web poll.

Mr. de Abreu also hired the publicity powerhouse PMK/HBH, which steered some of its own clients to attend and lent the fledging awards show credibility by association, and signed Paula Wagner, Tom Cruise’s producing partner and a former top talent agent, as his co-chair. While PMK no longer handles Mr. de Abreu’s press, Ms. Wagner continues to urge her industry peers to make appearances at the awards show or contribute films to the festival, several industry executives said. Pat Kingsley, head of PMK/HBH, and Ms. Wagner both declined to comment.

Mr. de Abreu said he viewed his “of-the-year” honors as lauding a body of work; Mr. Medavoy, for one, is turning out five movies this year, not just “All the King’s Men.” Mr. Roth said he had agreed to be honored partly because it put him in good company — Robert Towne once accepted it, too — and partly because he hoped it would help Universal promote “The Good Shepherd.” Robert De Niro, who directed the film, is to present Mr. Roth with his honor.

Mr. de Abreu has honed his own tricks, of course, for enticing top stars and industry people to participate — the starry ensemble of “Bobby,” somewhat predictably, is being honored en masse — and for getting major film companies to help foot the bill. (Tables for 10 run from $10,000 to $25,000, though Mr. de Abreu said his honorees, presenters and all the independent filmmakers are admitted free.)

To no one’s objection, Mr. de Abreu’s awards show spreads the wealth. Every major studio has at least one film represented, from Universal, with six honors, to Warner Brothers, with two.

Executives at three studios, who demanded anonymity lest they be revealed as resentful, cowardly and spendthrift, complained that Mr. de Abreu had proved himself adept at manipulating even reluctant studios into participating, often by signing up their stars and filmmakers before approaching the company — especially those embarking on a sales blitz for a forthcoming movie or a campaign for an Oscar contender. Once the talent is tagged for an honor, studio executives said they felt obligated to get on board.

For his part, Mr. de Abreu said he always plays fair. Films and filmmakers are honored whether their studios buy into the show or not, he said, and his awards-picking process is “transparent” — though he declined to identify anyone involved, other than his wife, Ms. Wagner and himself.

More to the point, he asked that his industry awards not be measured by others’ standards. “They’re not competing,” he said. “There is no contest. Our organization could be you and me. We’re trying to celebrate film.”

A surer sign of Mr. de Abreu’s concern for film over the bottom line may be his reluctance to sell the show’s broadcast rights. He said he has had offers but rejected them rather than drop some of the “below-the-line” categories of awards, like makeup and costume design.

On the other hand, he added, “We may change our mind.”
http://www.nytimes.com/2006/10/18/movies/18holl.html





The Judge and the Auteur: Revisiting the Polanski Case
Charles Lyons

MARINA ZENOVICH’S office here looks as if it should belong to an absent-minded film professor. A cluttered room adjacent to an editing suite on the city’s west side, it is packed with file folders containing hundreds of press clippings and the inevitable stacks of videotape. But a corkboard on the wall betrays a preoccupation that stirs more than academic passions in these parts.

The board is dominated by two photographs. One shows an almost young Roman Polanski, dressed in a dapper suit, hair parted to one side, looking lean, boyish and handsome. The other reveals a man in a black robe, with thinning white hair and a roundish face supported by a stocky frame. The caption under it reads, “Laurence J. Rittenband, Judge.”

“These two men met their match in each other,” said Ms. Zenovich in an interview last month.

Laurence J. Rittenband, who died in 1993, was the California judge who almost 30 years ago presided over the notorious case in which Mr. Polanski pleaded guilty to having unlawful sex with a minor. Even after Mr. Polanski fled to France in advance of his sentencing date, the judge vowed to stay on the bench until he returned to the United States.

Instead, Mr. Polanski, now 73 and a French citizen, remained a fugitive, and prospered as a film director, winning an Oscar in 2003 for “The Pianist.” Judge Rittenband, who left the bench in 1989, died at 88 without completing his quest. But he left behind enough professional and personal drama to have joined Mr. Polanski as a central character in Ms. Zenovich’s forthcoming documentary, which promises to shed new light on one of modern Hollywood’s more perplexing episodes.

The new film, unfinished and untitled, is being produced by Jeffrey Levy-Hinte (“Thirteen”) and Lila Yacoub (“The Anniversary Party”), and has Steven Soderbergh as an executive producer. It was recently acquired for distribution in Britain by the BBC, and when it eventually appears here in theaters or on the festival circuit, it will likely renew the debate over whether Mr. Polanski still has a price to pay if he returns to the United States.

Ms. Zenovich, a 43-year-old former actress who once had a small part in “The Player,” said it is impossible to reach conclusions about Mr. Polanski without drawing Judge Rittenband into the equation.

“I’ve never set out to diminish the seriousness of what Polanski did, but it comes down to crime and punishment,” she explained. “How much do you have to pay for the crime? What I’ve always set out to prove is, despite what Polanski did, which was awful, he was treated unfairly by the judge. That’s the bottom line.”

Convinced that even reasonably well informed people do not completely understand the Polanski case, Ms. Zenovich pursued a doggedly reportorial course, undeterred by Mr. Polanski’s refusal to participate. (A spokesperson for Mr. Polanski confirmed that he has no involvement with the documentary.) She conducted on-camera interviews with nearly 100 people, including Samantha Geimer, the girl, now in her 40’s, with whom Mr. Polanski had sex and who has publicly forgiven him. Other interview subjects included figures connected with the director’s film career, among them Mia Farrow, Nastassja Kinski, Robert Evans and Robert Towne.

But considerable attention is reserved for Judge Rittenband, who was something of a legend in his own right, having overseen murder cases involving the so-called Billionaire Boys Club and Sarai Ribicoff, during his time on the California Superior Court. Ms. Zenovich sees both Mr. Polanski and Judge Rittenband as men who rose by force of will from humble roots. Mr. Polanski survived Nazi persecution and lost his mother in the Holocaust. The judge, from a less dire background, was a poor Brooklyn boy who, upon graduating high school at 15, bypassed undergraduate work for New York University Law School; he later attended Harvard, because he was too young to take the New York bar exam, graduating Phi Beta Kappa.

Ms. Zenovich describes the judge as having lived the kind of vibrant personal life easier to associate with Mr. Polanski. “He was never married, and he loved being kind of a swinging bachelor, juggling a couple of girlfriends at once,” she said. “What’s most interesting about him is that he tried to come across as so moralistic, but eventually I found out that this was a man who had a 20-year-old girlfriend when he was 54.”

In a rough edit of the film, Richard Brenneman, who covered the case for The Santa Monica Evening Outlook, recalls drafting an affidavit immediately after Judge Rittenband’s death, in which he documented his conversations with the judge in chambers: “Most specifically, how he asked me what sentence to impose on Polanski, which was illegal.”

In another clip the producer Hawk Koch recounts that his father, the late Howard W. Koch, recalled overhearing Judge Rittenband at the exclusive Hillcrest Country Club, where the judge was a popular member.

“One of the gentlemen at Hillcrest came up to Rittenband,” Mr. Koch tells Ms. Zenovich, “and said, ‘Are you really going to let that little Polish blah-blah-blah off?’ And Rittenband said: ‘Well, he thinks so, but no way. We’re going to put that little blank-blank away for the rest of his life.’ ”But Judge Rittenband certainly has his devotees, including his nephew, Elliot Rittenband.

“He felt an obligation and a duty to do what he felt was best, and he always stuck to it,” Mr. Rittenband tells Ms. Zenovich. Marsh Goldstein, one of the judge’s calendar deputies, recalls to Ms. Zenovich: “He was one of the most intelligent men I’ve run across — literate, well read, with a wonderful vocabulary, a wonderful way of quoting famous writers and philosophers in the course of your calling calendar.”

A key revelation, Ms. Zenovich said, came from the case’s retired prosecutor, Roger Gunson, who suggests in the film that Judge Rittenband acted improperly before Mr. Polanski decided to skip the country in 1978. At first all sides had agreed that the only sentence he should serve would be a 90-day psychiatric evaluation in prison at Chino, Calif. But when Chino authorities, fearing for Mr. Polanski’s safety, released him after 42 days, an infuriated Judge Rittenband called in both sets of lawyers and announced a new plan. He wanted to put Mr. Polanski back in prison for another 48 days or deport him, Mr. Gunson says in an interview with Ms. Zenovich.

Mr. Gunson also says the judge told the assembled lawyers how he wanted them to argue their sides of the case. Recalling that day in chambers, Larry Silver, one of the lawyers present — he still represents Ms. Geimer — tells Ms. Zenovich how he, Mr. Gunson and Mr. Polanski’s lawyer, Douglas Dalton, had afterward sat together in stunned silence. In all their years in the legal profession, Mr. Silver says, none of them had ever seen anything like that.

(Mr. Polanski’s defense submitted an affidavit charging Judge Rittenband with bias, prejudice and unprofessional conduct, and Judge Rittenband ultimately agreed to allow another judge to handle the case.)

Still, Ms. Zenovich said she was determined to create a balanced film, and her preliminary edit includes views from people who appear less concerned with whether Mr. Rittenband botched the case than with Mr. Polanski’s actions.

“This man committed a rape, committed a bunch of other atrocities and got away essentially with nothing,” says Philip Vannatter, a former Los Angeles police officer. “And I don’t think that’s right.”

Even from the unfinished film, it is apparent that Ms. Zenovich — who made an earlier documentary, “Who Is Bernard Tapie?” without the participation of its subject, the French financier and politician — has become intent, like documentary filmmakers before her, on using the form to delve deeper than the written word or television usually allow.

“A sense of truthfulness is like a drug that hooks you and won’t let you go,” said Barbara Kopple, the documentary filmmaker and two-time Academy Award winner, reached by telephone in her New York office, where, with Cecilia Peck, she is completing “Dixie Chicks: Shut Up and Sing.” “Once you’ve seen it it’s hard to go back. I think that’s why the audience for documentaries keeps growing.”

For her part Ms. Zenovich said her feelings toward Mr. Polanski, as well as those of her mostly female crew, have vacillated in the course of their work.

“You love him one day,” she explained. “You hate him the next. I tell some people I’m doing this and they say: ‘That pedophile! That child molester!’ But all my research leads me to believe he’s misunderstood and endlessly fascinating.”
http://www.nytimes.com/2006/10/15/movies/15lyon.html





The Still-Life Mentor to a Filmmaking Generation
Randy Kennedy

For much of a half-century of taking quiet, subtly powerful pictures that demand and reward long looking, Jerome Liebling has been known as a photographer’s photographer. The label is both a high compliment and an acknowledgment that Mr. Liebling, now 82, has not enjoyed the acclaim accorded to many of his contemporaries who first took their cameras to the streets of New York after World War II.

But a more fitting way to describe Mr. Liebling would be as a documentarian’s photographer. And judged by that standard, his work has rarely suffered from a lack of attention. In fact, spend any time watching the films of Ken Burns, or those of the legions of documentary makers he has inspired, and you will see Mr. Liebling’s work, in a sense, even if you have never laid eyes on one of his photographs.

His influence on a generation of nonfiction filmmakers — what Mr. Burns describes as “all of us coming within Jerry’s radiational sphere” — will be the subject of a tribute tonight at the Museum of Television and Radio by several of the students taught by Mr. Liebling, starting in the early 1970’s.

While Mr. Burns is probably the best known of the group, Mr. Liebling also taught Buddy Squires, the cinematographer who has helped to shape many of Mr. Burns’s films, as well as the directors Roger Sherman, Kirk Simon, Karen Goodman and Amy Stechler, who have several Emmys and Academy Award nominations among them. Sometimes called the Hampshire Mafia, they all attended Hampshire, the experimental college in Amherst, Mass., which has produced an unusual number of successful filmmakers and photographers.

Interviewed this week in a Midtown Manhattan studio as he was editing “The War,” an epic soldier’s-eye view of World War II that is to run next year on PBS, Mr. Burns described how he set off for Hampshire College in 1971 with youthful Hollywood dreams of becoming the next John Ford. But under the tutelage first of the photographer Elaine Mayes and then of Mr. Liebling, and no doubt also propelled by Hampshire’s Age of Aquarius idealism — no grades, no departments, no tenure — he fell in love with the power and relative purity of documentary filmmaking.

Mr. Burns recalled how he and his fellow students were terrified of Mr. Liebling. A gravel-voiced Brooklynite who had served with the 82nd Airborne Division in World War II before studying with Paul Strand and joining the Photo League, Mr. Liebling had founded one of the first college-level photography and film programs at the University of Minnesota, where he spent 20 years. The fear was fueled less by Mr. Liebling’s gruffness, he said, than by the fierce honesty of his teaching and by his pictures, which were firmly rooted in the social documentary tradition but seemed to have a resonance that transcended their genre.

“He was so authentic, in a way that a lot of us had never experienced,” Mr. Burns said. “You wanted to be like him. You wanted to tell the truth. You’d go out to take pictures with him, and we all saw the same things he did, and then we’d come back, and he’d put up his prints, and you’d put up yours, and you were devastated.”

He added, still seeming to wince all these years later at the memory: “Sometimes you’d do some work you thought was really great, and you’d show it to him, and he’d stand there for a while and then say, ‘Well ...’ And it was like, ‘Oh God.’ That was all it took. That ‘well.’ You knew you hadn’t done it.”

Mr. Liebling is often mentioned in the company of other photographers with cult followings among their peers, like Frederick Sommer or Dave Heath, whose classic 1965 collection, “A Dialogue with Solitude,” has long been out of print. But Mr. Liebling’s interest in documentary filmmaking — which he has also pursued through the years — has embedded his legacy deeply in the American documentary style that has emerged over the last 30 years.

On the most practical level, Mr. Burns said, Mr. Liebling led him to realize how still photographs could be incorporated powerfully into documentaries. It’s a technique that has become so closely associated with Mr. Burns’s style that Apple’s iPhoto software now offers a feature called the Ken Burns Effect, which incorporates slow, portentous zooms and pans into otherwise ordinary slide shows of family snapshots.

“The essential DNA of all my films issues from still photography,” Mr. Burns said. But Mr. Liebling’s influence on his work, he said, reached much deeper, to a personal and ultimately philosophical level that has guided many of his choices of subject and approach.

“It was this broadly humanistic mantra that he instilled in us,” he said, adding: “Jerry turned me and made me look inward, and it was not always a comfortable thing. I changed as a result of it. It was like molting.” He also taught, Mr. Burns said, that “all meaning accrues in duration — sometimes you have to just slow down and look.”

Mr. Burns smiled and added: “Of course, when you ask Jerry about this, he’s not going to cop to any of it. He’s just going to say, ‘What’s Kenny talking about?’ ”

But in a telephone interview Mr. Liebling actually did cop, at least to some of it. He said that when he was a child of the 1930’s in New York, his photographic impulse from the start was to “go figure out where the pain was, to show things that people wouldn’t see unless I was showing them.”

In doing so, his subject matter was often dark and uncompromisingly noncommercial: the blood-drenched workers at a Minnesota slaughterhouse; mental patients in a state hospital; cadavers used by New York medical students.

In teaching, he said, he tried mostly to impart a deep suspicion of dogma, of piousness and of the compromises that can lie just beneath the surface of American culture. “I wanted them to see that there are no shortcuts,” he said. “It’s too easy if everything is soft, and you can just buy your way and live well.

“I kept asking: ‘Where is your work coming from? Why are you doing it? What is it you see?’ And after a while they started to really look.”

Mr. Liebling, interviewed as he was preparing to drive from Amherst to New York for the tribute, part of the museum’s annual documentary festival, was asked if it bothered him that his work was not better known (though it is in several major collections, including those of the Museum of Modern Art and the Corcoran Gallery in Washington).

“Would I want to sell more?” he said, laughing. “Well, yeah. Who wouldn’t?” But he added: “Basically, I just hope that what I have to say in the photographs has validity and that I did it as well as I could.”

Though age has finally begun to slow him, he said, he is still hard at work with a camera and has in fact just returned to printing a series of pictures he first began in 1979 in an apple orchard near his house.

“I guess that’s a long time to be working on an apple orchard, isn’t it?” he said. “But the apples still keep growing each year.”
http://www.nytimes.com/2006/10/19/ar...gn/19lieb.html





Technology 'Can Beat Film Piracy'
Ian Youngs

New technology is the key to beating movie piracy, the UK film minister has told industry executives.

Making films available on demand as soon as they are released at cinemas could help stop fans watching illegal copies, Shaun Woodward said.

"The real answer is in the technology," he told the BBC News website, citing the success of legal music downloads.

"People will take the legal way and I think ultimately that's the solution for film piracy as well," he said.

Film pirates in the UK make an estimated £300m profit a year, according to the Federation Against Copyright Theft (Fact).

Most illegal gain comes from pirate DVD sales, and much is believed to help fund organised crime.

A number of major companies, including Sky, BT and AOL, already offer film downloads in the UK, while giants such as Apple and Amazon offer similar services in the US.

Movies are also available on demand on TV in the UK through services such as cable provider NTL Telewest and broadband broadcaster Homechoice.

But no-one offers films at the same time as they are released at the cinema - whereas pirate copies usually hit the streets or the internet within days, if not hours, of their first screenings.

'More ingenious'

Mr Woodward told film executives at an anti-piracy campaign launch on Thursday: "You're going to have to look at release dates in a slightly different way than you have done before.

"You're going to have to look at slightly more ingenious ways of making electronic copies available so that people may actually pay a different price for something that they can download at home, which is just being released in the cinema.

"If they want to watch it at home, then maybe you should make it available to them.

"But they should pay a premium rate for having it earlier on and it should be encrypted in such a way that it can't be copied."

Some gangs used film piracy to finance "some appalling organised crime around the world, which often reaches into terrorism", he added.

More than 90% of pirate DVDs came from people recording films with camcorders in cinemas, a Fact spokesman said.

Camcorded copies of hits including Pirates of the Caribbean 2, X-Men: The Last Stand and V for Vendetta have been traced back to the UK.

On Thursday, Fact and the Film Distributors' Association launched guidelines to help cinema staff and police catch people making surreptitious recordings.

They also published procedures designed to keep film prints secure at every stage of their release.

Fact chairman and Sony Pictures UK finance director Brian Robertson said Mr Woodward's idea about simultaneous download and cinema releases was an "interesting suggestion".

"At the moment it's probably not technically possible," he said.

"But in a few years, yes, I'm sure it will be possible and it's part of the whole economic model of film-making that will have to be looked at.

"It is a radical thought and the film-makers themselves may have an issue with it because they want people to experience something on the big screen, not on the small screen.

"It will certainly be an interesting debate."
http://news.bbc.co.uk/go/pr/fr/-/2/h...nt/6044980.stm





Hollywood’s Democrats Watch and Wait, Cautiously
Allison Hope Weiner

At last week’s fund-raiser celebrating the 25th anniversary of People for the American Way, one of the core liberal groups in Hollywood, the comedian and master of ceremonies George Lopez left no room for doubt about his expectations for next month’s Congressional elections. “We’re in! We’re in!” Mr. Lopez shouted from the stage, to loud applause from a crowd of 600 at the Beverly Hilton.

In their more sober moments, however, the film industry’s Democrats and Democratic sympathizers remain pointedly reluctant to declare this election cycle a hit, even while the conventional wisdom points toward coming Republican losses in the House and Senate.

“Two years ago we thought we understood the country and we thought there would be change and we got smashed,” said Irina Medavoy, a major fund-raiser for the Democrats who is married to the producer Mike Medavoy, in a telephone interview. “After the last time, there will be no strutting or Bruce Springsteen playing. We have learned.”

With three weeks remaining before the vote, liberal Hollywood has been watching the Congressional midterm elections with the kind of attention usually reserved for presidential races and Oscar night. Potential donors are fielding invitations to as many as three fund-raisers for a single Democratic candidate. “So many people are doing events that you just can’t go to them all,” said Lawrence Bender, a producer of the global-warming documentary “An Inconvenient Truth.” “There tend to be at least two events every night.”

Still, the dominant note, at least among more than a dozen prominent Hollywood Democrats interviewed in the last several days, stops noticeably short of confidence. Several players, like Ms. Medavoy, pointed toward bitter disappointments in the past, when a politically energized film community found itself flummoxed by the perceived maneuvering of Republican strategists and the tendencies of a complex electorate.

“I’ve learned not to be too optimistic,” said Alan Horn, president of Warner Brothers, though he was quick to add, “I believe the tide has turned.”

Along with natural reluctance to declare victory in advance, Hollywood Democrats may feel a certain reserve born of the fact that Congressional politics is something that mostly occurs elsewhere. Few of the House seats in California are likely to change hands, thanks to a redistricting arrangement that rendered most of them “safe” for whichever party has them in hand.

All of this points toward a stay-at-home election night for many on Hollywood’s glamour circuit. The filmmaker Rob Reiner, for instance, said that he planned to watch the returns on television with his friend the philanthropist and film producer Steve Bing, and that he remained distinctly cautious. “You don’t want to spike the ball at the 10-yard line,” Mr. Reiner said.

In the last several weeks many of the industry’s Democratic regulars, including Haim Saban, a Democratic fund-raiser and movie producer, and the former Paramount Pictures chairwoman Sherry Lansing, got a bit closer to the action by throwing support behind Arnold Schwarzenegger, the state’s Republican governor, in his so-far-flourishing re-election bid.

But there is also an abiding sense here that Democrats have in the past defeated themselves by underestimating the skill and motivation of their foes. “There are still a lot of things they could pull with three weeks to go,” Mr. Bender cautioned, notwithstanding polls that favor his team and a recent Time magazine cover that looked for “the end of the Republican revolution.”

On the other side of the aisle, at least one member of Hollywood’s somewhat truncated Republican establishment also saw an up side in the current mood. “I’m a much more popular lunch guest of late,” said Lionel Chetwynd, a conservative-leaning writer and producer, who finds Democratic friends more than usually interested in his views.

Mr. Chetwynd, who predicted that the Republicans would hold one and perhaps both sides of Congress, added that his feelings were not all that different from those of his opponents. “The truth is, we share a cautious optimism,” he said. “I hope there’s enough to go around.”
http://www.nytimes.com/2006/10/16/movies/16mood.html





Video Game Sales Soar in September
AP

September's video game sales jumped by a whopping 38 percent compared with the year-ago period, according to data from the NPD Group, a market research company.

Year-to-date, the industry is up 11 percent and there are no signs of slowing down, according to video game analyst Anita Frazier, who added that a record year for the industry "is a given."

Total video game sales were $777 million for the month, up from $563 million in September of last year.

Hardware sales rose 71 percent to $244 million from last year's $143 million, led by the Nintendo DS, which sold more than 400,000 units, bringing its U.S. total to 6.3 million.

Software sales climbed 29 percent to $446 million from $347 million in the year-ago period, and sales of accessories jumped 21 percent to $88 million from $73 million.

In terms of dollar sales, this was the best September in the industry's history, Frazier said.

Sony and Nintendo are both set to release much-awaited next-generation consoles in November. Frazier said she expects the available inventory for both PlayStation 3 and the Wii to sell out.
http://hosted.ap.org/dynamic/stories...10-13-06-50-10





Maker Defends School 'Bully' Video Game
Matt Slagle

The creators of the popular, but oft-criticized "Grand Theft Auto" games are set to release a new title in which players assume the role of a 15-year-old wannabe tough guy, a premise that drew outcry almost as soon as it was announced last year.

But amid a rash of recent school violence, lawsuits and an ongoing discussion about the influence of video games on children, the developers at Rockstar Games defend "Bully" and say the issues are out of their hands: All they can do is try to make good video games.

"Some people like our games; some don't," company spokesman Rodney Walker said. "We can't try to beat these arguments. Our whole process we believe with 'Bully' is we have to let the game speak for itself. We just want them to know that this is just entertainment."

Actual game players certainly have enjoyed Rockstar's previous titles. Its games, ranging from the "Grand Theft Auto" series to this summer's "Rockstar Games Presents Table Tennis," have received favorable reviews. "Grand Theft Auto: San Andreas" was the top-selling game in 2004, beating out perennial hits like "Madden NFL" that year.

The $39.99 "Bully," out Tuesday for Sony Corp.'s PlayStation 2, uses the same freeform design of "Grand Theft Auto" but is rated "T" for teenagers age 13 and older instead of "M" for mature players 17 and older. In it, players assume the role of Jimmy Hopkins, who thinks he's the big fish in the pond - until he enters Bullworth Academy.

Players in the living, breathing world of "GTA" could drive cars, perform missions - and shoot pedestrians and police officers with reckless abandon.

With "Bully," there are plenty of fisticuffs but no guns, no blood and no dying. The most powerful weapons include a slingshot and a baseball bat.

More importantly, actions have consequences: Stay out past curfew, and the screen blurs as you become sleepy and eventually pass out. If you're skipping class, you'll have a swarm of adults around you voicing their disapproval.

There's even some incentive for attending the twice-a-day classes: Your character gets an enhanced ability to flirt with girls or recipes to make stink bombs and other prank devices.

Ultimately, Hopkins faces bullies instead of becoming one as he negotiates a complex social hierarchy dominated by various cliques like greasers, jocks, nerds and preps.

Rockstar's success and explanations have done nothing to appease Jack Thompson, a Florida attorney long critical of violence in video games and other popular media.

Without ever having seen or played the game himself, Thompson has called "Bully" a "Columbine simulator" and sought a ban.

Earlier this week, he persuaded a circuit court judge in Miami-Dade County to play "Bully" himself and determine if it should be sold to minors.

"The premise of Bully is that it is sometimes acceptable to deal with bullying by becoming the ultimate bully," Thompson wrote in his complaint. "This was the dynamic at Columbine. It has been the dynamic in other tragic instances of school violence."

The judge ultimately saw no reason to restrict sales and dismissed the complaint on Friday.

Rockstar was embroiled in a different ratings controversy last year after a hacker uncovered a hidden sex scene in "Grand Theft Auto: San Andreas."

Meanwhile, several pending lawsuits blame Rockstar and parent company Take Two Interactive Software Inc. for real acts of violence.

Last month, relatives of three people slain by a 14-year-old on newsman Sam Donaldson's New Mexico ranch sued Rockstar for $600 million, claiming the crimes would not have occurred had the teenager never played the violent game.

Another $600 million case in Alabama against Rockstar, Take-Two and Sony blames "Grand Theft Auto" for the 2003 murders of two police officers and a dispatcher at a rural police department.

In both cases, Thompson is the attorney for the plaintiffs.

Joan Bertin, executive director of the National Coalition Against Censorship in New York, said newer forms of media have always been targeted for society's problems - because they're new.

Comic books were blamed for juvenile delinquency in the 1950s, and similar arguments have been raised over the years against rock and rap music, she said.

"It presents the perfect irony about censorship," she said. "People who want to censor things don't really think about them. They just want the subject off limits. They're into creating taboos."

The game's producer, Jeronimo Barrera, said "Bully" influences came from Hollywood movies such as "Sixteen Candles" and novels like J.D. Salinger's "The Catcher in the Rye" - a coming-of-age book that has been one of the most banned since it was first published more than 50 years ago.

"We want to be on the same equal footing with other media because then we wouldn't be having all these problems that we have with our critics," Barrera said.

Controversy won't end with "Bully." Coming up in a few weeks is "Grand Theft Auto: Vice City Stories" for Sony's PlayStation Portable system. And sometime late next year, Rockstar plans to release "Grand Theft Auto IV" for the new generation of consoles from Sony and Microsoft Corp.

A visit to the Manhattan headquarters of Rockstar Games reveals a playful, laid-back workplace that typifies many other video-game offices.

Employees in jeans, sneakers and T-shirts ride their bicycles on the hardwood floors or bounce a basketball, maneuvering between stacks of cardboard boxes. Vintage arcade machines line one wall, while in the distance employees in cubicles hover over their computers.

The developers at Rockstar may be the ones feeling bullied, but they vow to continue making the games on their own terms.

"We usually pick things that are really difficult to do," Barrera said. "In this case, it was the experience of your school days in this living breathing world. We're not the types that do market research. It's more from the heart. We have a passion for what we do."
http://hosted.ap.org/dynamic/stories...10-13-18-43-08





YouTube Confusion Shuts Down Utube Site
John Seewer

YouTube's enormous popularity has created a big headache for another "utube" - a company that sells used machines that make tubes.

Universal Tube & Rollform Equipment Corp.'s Web site, utube.com, was inaccessible for most of the week, overwhelmed by millions of people looking for the popular online video site.

The confusion took off a couple of months ago, said Ralph Girkins, Universal Tube's president.

The company with just 17 employees got 68 million hits on its site in August, making it one of the most popular manufacturing Web sites.

The site shut down last weekend just before Google Inc. announced plans Monday to buy YouTube for $1.65 billion. A move to a new server didn't help, but by late Thursday Universal Tube's site was back up after the company added more capacity.

"We couldn't work on it, couldn't do anything," Girkins said Friday. At least 50 customers called during the week to point out the problem, he said.

He hasn't figured out yet how much it has cost to get the site running.

"Just get me going. I don't care." Girkins said. "If I miss a $300,000 sale because of a Web site problem, it doesn't make any sense to not to fix it."

Universal Tube, based in suburban Perrysburg and founded in 1985, has about $12 million in annual sales.

The company is looking to sell the Web address and find a new home for its Web site even though the company uses the utube.com name to advertise to customers overseas, Girkins said.

"We know we can't keep it," he said. "It's going to be a never-ending problem."
http://hosted.ap.org/dynamic/stories...10-13-13-21-37





The Google of Drug Discovery?

New Tool Aims to Link Diseases with Treatments

In September, researchers in Boston launched what they hope will become the Google of drug discovery, a free, genetic search engine they call the “Connectivity Map.” One goal is to match diseases with potential treatments, another is to suggest how drugs can be applied in new ways to treat diseases like cancer.

To build a searchable bridge between drugs and disease, researchers had to find a common language, says Justin Lamb, a lead researcher for the project and a senior scientist at the Broad Institute of MIT and Harvard. “Our decision then was to represent disease and drugs using the language of gene expression,” Mr. Lamb says.

To create the Connectivity Map, the team measured the genomic signatures of 164 drugs, then designed a computer program to compare the signatures of the drugs with each other, and with the signatures seen in diseases.

Using signatures as one would use keywords with Google, users can explore how a compound might impact a disease. And so far the map has yielded some interesting finds.

Mr. Lamb cites, for example, the discovery of a drug that can help therapy-resistant patients fight a fast-moving form of leukemia called acute lymphoblastick leukemia. The drug was sirolimus, an immunosuppressant, Mr. Lamb says. Made by Wyeth Pharmaceuticals, sirolimus is normally used to help prevent the body from rejecting organ transplants.

Researchers at the Dana-Farber and Children’s Hospital in Boston are now planning to trial the drug.

But their map is still some ways off from acquiring Google-like status. The database is hardly encyclopedic at this point. Although researchers plan to pump it up with the signatures of every FDA-approved drug, about 1,400, Mr. Lamb says more work will be needed to determine how useful the Connectivity Map will be.

The map is not the first searchable database in this area. Mountain View, California-based Iconix Biosciences, for instance, uses similar technology to help big pharma garner a better understating of a potential compound’s toxicity. And as odd as it may sound, Iconix salutes the arrival of the Connectivity Map. “I think it’s a great validation for the approach,” says Don Halbert, Iconix’ vice president of R&D.

That said, there are big differences between the two search engines. The Iconix engine harnesses the ability to search and understand compound toxicity in rats. The Connectivity Map looks at gene expression using human cells. As such, Mr. Halbert says the map doesn’t pinpoint how an entire organism’s system might react to a drug.
http://redherring.com/Article.aspx?a...g+Discovery%3f





Planet Google Wants You
Alex Williams

AS Dan Firger, a law student at New York University, strolls from class to class during the course of his day or pauses for a breather in Washington Square Park, his cellphone is routinely buzzing inside his messenger bag. He can often guess who it is: Google.

Six to eight times a day text messages pop up, courtesy of Google Calendar, a free daily organizer introduced this year. The program can scan appointments and send reminders of coming events.

Google is everywhere in Mr. Firger’s life. He scours the Web with its search engine; he chats with friends in Bolivia using Google Talk; and he receives e-mail messages on a Google Gmail account.

“I find myself getting sucked down the Google wormhole,” Mr. Firger said with equal parts resentment and admiration. “It’s all part of Google’s benign dictatorship of your life.”

It seems almost quaint to recall how people used to think Google was everywhere, back around 2003, when its search engine became a cultural phenomenon and a verb. Since then, in a push for global ubiquity, Google has introduced more than two dozen applications and tools. And last week it bought YouTube, the 18-month-old video-sharing site, one of the most habit-forming services on the Web.

While the company says it will keep the YouTube name and Web address, the acquisition gives Google’s regular users — 41 percent of those who search the Internet, according to Nielsen/NetRatings — one more reason to feel they are living on Planet Google.

Since the dawn of personal computing, software makers have sought to be not just providers of products, but universes unto themselves, into which users merge a piece of their identity. Consumers label themselves Macintosh people or derive a psychic sense of belonging from an e-mail address that places them at aol.com or yahoo.com.

Marketing experts consider a Web site an experience — different from using a product like a soft drink — because it’s someplace you go, an arena in which you live out your life. And in this way many people develop a sense of intimacy within it, even trust.

People may think they use Google because they like it, but really, “it’s the reverse,” said Rashi Glazer, a business professor at the University of California, Berkeley, and a director of its Center for Marketing and Technology. “You use something and in seeing yourself using it, you say to yourself, ‘Hey, I’m using it all the time, must be because I’m loyal to it.’ It becomes a virtuous circle.”

Donna L. Hoffman, a founder of eLab 2.0, a research center at the University of California, Riverside, that studies online consumer behavior, said that Google has in the minds of many users “become one with the Internet,” achieving a meta-status because as the most-used search engine, “it literally augments your brain. I don’t have to remember quite a few things now because Google can remember them for me. Google is an additional memory chip.”

Some people give their brains over to Google willingly, in part because they accept the anticorporate credo of the company’s founders, Larry E. Page and Sergey Brin: do no evil.

“I really think of them as the good guys’ response to the evil empire,” said Donald C. Hubin, a philosophy professor at Ohio State University, referring to Microsoft. Professor Hubin said he uses one Google program or another hundreds of times a day: Gmail, Google Calendar, Google Earth, Picasa or Google Scholar, which allows academics to troll for books and peer-reviewed papers.

“Microsoft always seems to be trying to force you to do things their way, like when they released the version of Windows with Internet Explorer embedded, forcing you to use it,” Professor Hubin said, explaining how he could develop a sense of intimacy with one Internet behemoth yet view another with distrust.

Like Apple, Google has lured the young and the early adopters by making the utilitarian — say, Gmail — seem hip. Part of the allure stems from the clean Euro-minimalist design of its applications. Part of it stems from the company’s reputation for innovation.

Google is “very leading edge, very young and very appealing to 20- and 30-year-olds,” said Russell S. Winer, a professor of marketing at the Stern School of Business at N.Y.U. “If you walked around with a Google T-shirt, people would think that’s a hip thing to wear.”

Some Google disciples, mainly younger ones, are in denial that Google is a huge corporation, out to make money from them, said John Perry Barlow, a founder of the Electronic Frontier Foundation in San Francisco and a fellow at the Berkman Center for Internet and Society of Harvard Law School.

“They see a couple of basically O.K. young guys — and they still are, in my opinion — join forces with a truly decent older guy and resolve not to be ‘evil.’ ” Mr. Barlow wrote by e-mail, referring to Mr. Brin, Mr. Page and Eric E. Schmidt, Google’s chief executive. “How cool is that? What they don’t understand is that once a company sells its soul to the stockholders — which it must at that point — good versus evil is no longer a practical consideration. Google has already crossed that Rubicon.”

It has had its share of controversies. In January it rankled free-speech advocates by agreeing to censor its search service in China to gain a greater foothold there. While Google may seem ubiquitous thanks to its dominance of Internet searches — Yahoo is in second place — the company lags far behind in areas like e-mail and chat, partly because it is a recent entrant.

Still, few in Silicon Valley would discount Google’s potential to become a larger part of more people’s daily lives. While Yahoo was, according to the September figures of comScore Media Metrix, the American market leader in users, with 129.7 million, the company grew only 5 percent in users over the previous year. But Google, now at 107.4 million, grew by 23 percent.

The expansion of Google’s reach into so many areas of people’s lives has some worried. Other than the National Security Agency, said Kevin Bankston, a lawyer at the Electronic Frontier Foundation, “I don’t think any entity has ever been in a position to collect so much private data about people.

“This kind of profile-building, if it was being done by authorities in a Communist regime, people would immediately object.”

For its part, the company takes “the responsibility of holding our users’ data very seriously,” said an e-mail message from Courtney Hohne, a spokeswoman for Google, which is based in Mountain View, Calif. “We’re thinking about user privacy constantly, literally from the earliest stages of product design.”

In its fight for mind share — of the overall market and of the consciousness of users — Google seems poised to extend itself even further.

Many users seem committed to the company, even when they are skeptical of its reach. Mr. Firger, the law student, acknowledged feeling a “weird tension” about his love of Google’s products and his fear about its omnipresence in his life.

“I don’t know if I want all my personal information saved on this massive server in Mountain View, but it is so much of an improvement on how life was before, I can’t help it,” he said.

Toni Carreiro, a Web designer in San Rafael, Calif., and a self-described Google addict, said that the elegant simplicity of Google’s design is a blank slate upon which she can impose her own personality: It’s not there to sell you on anything, just to help you, while other sites, she said, are full of blinking ads and clutter.

“They have all this animation going,” she said. “I just want my stuff. That’s what Google gives you — ‘me.’ ”
http://www.nytimes.com/2006/10/15/fashion/15google.html





It Pays to Have Pals in Silicon Valley
Miguel Helft

Every now and then, a group of former PayPal employees get together to catch up on life and work. It might be at a backyard barbecue, a birthday celebration at a classy San Francisco restaurant or a simple late-night reunion at someone’s house.

Almost inevitably, the conversation turns to business, and soon enough, a new start-up is born or has found a financial backer.

This is what happened last year with YouTube, the Web video company that Google has agreed to acquire for $1.65 billion. It also happened the year before with Yelp, whose Web site lets users review doctors, dry cleaners and other local services.

Since 2002, when dozens of employees left PayPal after it was bought by eBay for $1.5 billion, those workers have gone on to start or join a new generation of Internet companies and other ventures. They have remained a tight-knit group, attending each other’s parties, helping to shape each other’s business plans, backing each other’s companies and recruiting each other for new projects.

Silicon Valley was largely built by networks of people and companies whose interlocking relationships help to spawn new start-ups. But the PayPal alumni have been unusually prolific, especially given the company’s modest size compared to Internet giants like Netscape, eBay and Yahoo.

“PayPal may have the highest ratio of individuals going off to start or finance new start-ups in the Valley,” said Scott Dettmer, a founding partner of Gunderson Dettmer, who has been providing legal advice to venture capitalists, start-ups and entrepreneurs since the 1980’s.

None of the PayPal network’s other offspring is anywhere near to matching the success of YouTube. But the PayPal alumni have started a number of promising ventures, mostly revolving around the Internet.

Among them is LinkedIn, the largest business-oriented social networking site, which was started by Reid Hoffman, a former PayPal executive vice president. It received funding from, among others, Peter Thiel, PayPal’s co-founder and former chief executive. Mr. Thiel himself started a hedge fund, Clarium Capital, which he said has grown from $11 million in assets to more than $2.3 billion in four years. He also runs a small venture firm with other PayPal alumni.

Another new Internet venture is Slide, a company started by Max Levchin, a PayPal co-founder, that makes it easy to publish, find and view slide shows on the Web. A handful of other start-ups are in earlier stages of development.

David O. Sacks, the former chief operating officer of PayPal, started a movie production company called Room 9 Entertainment. Its first film, “Thank You for Smoking,” a satire about the tobacco industry, has grossed more than $24 million at the box office. Mr. Thiel, Mr. Levchin and Elon Musk, another PayPal founder, all helped finance Room 9. Mr. Sacks said he had other film projects in the works, but he is also in the process of starting a new Internet company, for which Mr. Thiel provided some funding.
Mr. Musk started a company called Space Explorations Technology, or SpaceX, that is developing relatively low-cost rockets and is backed with $100 million of his own money.

YouTube was hatched by Chad Hurley, Steven Chen and Jawed Karim, all PayPal alumni, early last year. At a backyard barbecue last summer, Mr. Karim showed the site to a friend, Keith Rabois, a former PayPal executive who now works at LinkedIn. Mr. Rabois later told PayPal’s former chief financial officer, Roelof Botha, who is a partner at Sequoia Capital, the venture firm that has backed Apple, Google and Yahoo, among other big names. After meeting with YouTube’s founders, Mr. Botha got Sequoia to invest in it.

“What happened at PayPal is pretty unusual in that the PayPal alumni have ended up founding some pretty impressive teams and companies,” said Ron Conway, an “angel” or early-stage investor who has backed more than 400 start-ups.

Mr. Thiel added: “We had an incredible team at PayPal. Four years after the fact, I think it is far more incredible than we realized at the time.” He said only 200 of PayPal’s 900 employees at the time of the sale were engineers or managers.

The story of engineers and executives leaving a company to start new ones is as old as Silicon Valley itself. AnnaLee Saxenian, dean of the School of Information at the University of California, Berkeley, and an expert on the region’s professional networks, traces the phenomenon back to the late 1950’s, when eight engineers left Shockley Semiconductor to start a competitor, Fairchild Semiconductor. A decade later, two of those engineers, Robert Noyce and Gordon Moore, left Fairchild to start Intel, one of Silicon Valley’s earliest companies.

But the network of PayPal alumni is unusual in that it operates a bit like a microcosm of Silicon Valley itself, and its achievements help to explain one of the enduring paradoxes of the Internet age. Even as the global network, in theory, makes it easier for innovation to happen anywhere, most blockbuster Internet successes continue to be born and bred in Silicon Valley.

The effectiveness of the PayPal network stems, in part, from the fact that it includes all the elements needed to put together a start-up: Talented engineers and entrepreneurs with innovative ideas and a love of the start-up life; experienced managers who can turn ideas into businesses; and financiers, most notably Mr. Thiel and Mr. Botha, but also Mr. Hoffman, Mr. Levchin and others, who have used their PayPal money to become angel investors. The fact that most key PayPal employees were in their 20’s and 30’s, and not ready for retirement, helped too.

The long hours, sleepless nights and intense pressure of life inside a start-up often create strong bonds among its employees. In its early years, PayPal was all about pressure and the struggle for survival. The company was losing millions each month. It was besieged by hackers who used technological trickery to siphon off huge sums from the company’s coffers. And it faced blistering competition from, among others, eBay, which eventually admitted defeat when it shut down its own online payment service and bought PayPal.

Mr. Levchin said the pace at PayPal was so intense that employees had little time for much else. “We all became each other’s social life,” he said. “Because of that, we formed really deep connections.”

Many of those bonds were already in place, and life at PayPal merely strengthened them. From the beginning, PayPal hired people whom its founders or other early employees already knew.

Mr. Thiel tapped his network of friends from Stanford, many of whom had worked at the Stanford Review, a libertarian magazine that Mr. Thiel co-founded in 1987. They populated PayPal’s business ranks. Mr. Levchin, for his part, hired engineers in large part from his alma mater, the University of Illinois at Urbana-Champaign, which had earlier been home to the team that developed the software that would be the basis for Netscape’s Web browser.

One of the first engineers Mr. Levchin hired at PayPal, for example, was Russel Simmons, who went on to become a co-founder of Yelp. Mr. Simmons, in turn, helped convince another engineer, Yu Pan, to join PayPal. Mr. Pan went on to become one of the first people hired at YouTube. Other University of Illinois recruits included Mr. Chen and Mr. Karim, two-thirds of YouTube’s founding troika. “YouTube is like a PayPal reunion,” Mr. Levchin said. A YouTube spokeswoman declined to make Mr. Hurley and Mr. Chen available for this story.

The long-standing bonds created an atmosphere of openness and trust, which not only helped PayPal succeed, but also made it easier for members of the network to embrace each other’s post-PayPal projects.

The founding of Yelp in the summer of 2004 is a prime example. It happened after a lunch celebrating Mr. Levchin’s 29th birthday at the Slanted Door, an upscale Vietnamese restaurant in San Francisco’s Ferry Building. There were about 16 people at the lunch, a majority of them ex-PayPal employees, Mr. Levchin said. At one point, the conversation turned to how hard it was to find, say, a good dentist. That got Mr. Simmons and Jeremy Stoppelman, PayPal’s former vice president of engineering, talking about a Web site where people could review local services.

On the walk back from the restaurant to their offices — an incubator for start-up companies run by Mr. Levchin — Mr. Stoppelman and Mr. Simmons discussed the idea further. “We were bubbling with excitement,” Mr. Stoppelman said. “As soon as we got back to the office, we pulled Max aside and pitched him the idea.” Mr. Levchin liked it, and the next day he agreed to back the project with $1 million.

When Mr. Stoppelman and Mr. Simmons were ready to look for venture capital, Mr. Rabois helped them put together a presentation. Mr. Hoffman has frequently offered guidance to the company. And Mr. Thiel also gives Mr. Stoppelman business advice, sometimes when the two jog together along the San Francisco waterfront.

The support that members of the network give each other can happen in more informal ways. Mr. Hurley, the chief executive of YouTube who was once a Web designer at PayPal, for instance, sketched the logo for Room 9 Entertainment, according to Mr. Sacks. And when YouTube was starting out, Mr. Rabois and Mr. Hoffman made space for their former colleagues at the Palo Alto offices of LinkedIn. Those offices were once home to PayPal.

Of course, not everything that members of the PayPal network touch is guaranteed to be a hit. The financial success of Yelp, Slide and even LinkedIn remains far from assured. And although it is not strictly a product of the PayPal network, Epoch Innovations, a company that offered a product designed to improve the reading skills of those who suffer from dyslexia, has already folded. Mr. Rabois worked at Epoch and Mr. Thiel invested millions in it.

Still, former PayPal employees say the intense struggles that defined PayPal’s short life as an independent company proved to be good preparation for a new generation of serial entrepreneurs. “Nothing focuses your attention quite like losing money and the sense that you are going to die soon.” Mr. Hoffman said.

Mr. Thiel added: “It was a successful company, but the success didn’t come too easily. People learned not to be too pessimistic and they learned that you have to do a lot of things right.”
http://www.nytimes.com/2006/10/17/te.../17paypal.html





Wallflower at the Web Party
Gary Rivlin

JONATHAN ABRAMS was in a spot. He could take the safe bet and accept the $30 million that Google was offering him for Friendster, the social networking Web start-up he began only a year earlier, in 2002. Saying yes to Google would provide a quick and stunning payout for relatively little work and instantly place the Friendster Web site in front of hundreds of millions of users across the globe.

But at the same time, some of the biggest names in Silicon Valley were lobbying Mr. Abrams, a computer programmer, to reject Google’s offer. America Online had offered the two founders of Yahoo a few million dollars each in the mid-90’s for their Web site — and both became billionaires because they said no. Sell us a stake in your company for $13 million, the advisers told Mr. Abrams, and we will help build Friendster into an online powerhouse worth hundreds of millions — if not billions — of dollars.

“It really didn’t take much persuading,” said Russell L. Siegelman, a partner at the venture capital firm Kleiner Perkins Caufield & Byers, which has poured around $10 million into Friendster since November 2003. “Jonathan clearly wanted to go for it.”

Go for it, he did. Mr. Abrams spurned Google’s advances and charted his own course. In retrospect, he should have taken the $30 million. If Google had paid him in stock, Mr. Abrams would easily be worth $1 billion today, according to one person close to Google. And with Google’s ample resources, Friendster might have solidified its position as the pioneering front-runner in social networking. Instead, Mr. Abrams has the distinction of founding a company that is shorthand for potential unmet.

Roughly once a week, David L. Sze, a venture capitalist at Greylock Partners, hears from entrepreneurs who say they have the next MySpace, the copycat social networking site that has trounced Friendster. “The counter to that is, ‘Tell me why you aren’t going to be the next Friendster,’ ” Mr. Sze said. “It’s become the iconic case of failure.”

Reality must smack even harder just after the blockbuster deal in which Google agreed to pay $1.65 billion for YouTube, the video-sharing Web site that has yet to celebrate its first anniversary or its first profits. Friendster essentially created the social networking sector three years ago by offering users a site where they could browse profiles posted by friends and the friends of friends in search of dates and playmates. But so badly did Friendster fumble its early lead that, as of last month, it ranked 14th among all social networking sites tracked by comScore Media Metrix, trailing even myYearbook.com, a site started last year by a 16-year-old high school student.

It is not too late for Mr. Abrams and his investors to see a handsome payout from Friendster, a well-known brand in a nascent business sector. But why and how Friendster missed the mark is a salutary Silicon Valley tale so instructive that Mikolaj Jan Piskorski, an assistant professor at the Harvard Business School, uses the company’s inglorious fall as a case study in his strategy classes.

Friendster’s fate is “a real puzzle,” Professor Piskorski said. “This was a company that had the talent and had the connections.” he said. “They had this great idea that people really took to.”

There is no single reason that explains Friendster’s failures, Professor Piskorski added, which is what makes it academic fodder. “It’s a power story,” he said. “It’s a status story. It’s an ego story.” But largely, he said, Friendster is a “very Silicon Valley story that tells us a lot about how the Valley operates.”

EVERY good Silicon Valley start-up story needs an engaging tale about its founding. The YouTube boys — Chad Hurley, Steve Chen and Jawed Karim — supposedly conjured up the idea of a video-sharing product almost by accident, after a late-night dinner party. (That, at least, is the way two of the three founders tell it.) Earlier, Larry Page and Sergey Brin decided to start Google after Yahoo declined to buy their search technology — for a paltry $1.6 million. Mr. Abrams drew his inspiration to create Friendster from a broken heart brought on by a failed relationship and the eternal lures of the mating dance.

“Basically, Jonathan wanted to meet girls,” said Mark J. Pincus, a Silicon Valley entrepreneur who provided Mr. Abrams with some of the seed money to finance his project at the end of 2002. “He told me himself, he started Friendster as a way to surf through his friends’ address books for good-looking girls.”

The second half of the 1990’s had seen any number of failed social networking sites, including forgotten enterprises like Six Degrees and SocialNet. “We all basically hit the market several years before the market was ready for social networking,” said Reid G. Hoffman, the founding chief executive of SocialNet and an early investor in Friendster.

Mr. Abrams, though, had perfect timing. Friendster made its Web debut in March 2003, and though it was then a speck of a start-up that spent no money on marketing, it signed up three million registered users by the fall. Publications including Time, Esquire, Vanity Fair, Entertainment Weekly, US Weekly and Spin were writing about Friendster before anyone had heard of MySpace. So popular was Friendster in those early days that Mr. Abrams appeared on “Jimmy Kimmel Live” — and then boasted that the Yahoo founders had never been guests on a late-night television talk show.

“Jonathan is very much an acquired taste,” said Larissa Le, a former Friendster employee and longtime friend of Mr. Abrams. “He’s your typical engineer from the Valley who can come off as very arrogant.” For a time Mr. Abrams, then in his early 30’s, cut a high profile in the Valley, showing up regularly at parties with a strikingly attractive woman on each arm and his head in the stars.

His fellow entrepreneurs might have shaken their heads over the size of Mr. Abrams’s ballooning ego, but they also could not deny that he had invented something significant at an opportune moment, when the area was still struggling to shake off its post-bubble doldrums.

The list of venture capitalists enticing him to say no to Google and to go it alone included John Doerr, the legendary venture capitalist at Kleiner Perkins whose list of greatest hits includes Google, Netscape and Amazon.com, and Bob Kagle, the Benchmark Capital partner who first spotted eBay.

Andrew L. Anker, a former venture capitalist who is now a top executive at Six Apart, a popular blogging company that considered buying Friendster last year, said he recalled Mr. Abrams’s quandary. “Jonathan had the Google offer,” he said, “but he also had these very-well-regarded V.C.’s saying, ‘Let’s make this thing huge.’ ”

It did not take much to convince him. Mr. Abrams, a former engineer at Netscape, is a byproduct of the Valley, an environment finely calibrated to create monster-sized companies. “There aren’t thousands of V.C.’s running around Silicon Valley to fund a company just to flip it for a quick payout,” Mr. Anker said. “The Valley is all about making things huge.”

Mr. Doerr and Mr. Kagle took seats on Friendster’s board, as did another investor, Timothy A. Koogle, who had been the chief executive of Yahoo through the second half of the 1990’s. Other investors included Peter A. Thiel, a co-founder of PayPal, which eBay bought for $1.5 billion in 2002, and K. Ram Shriram, one of the first investors in Google and perhaps the most-sought-after angel investor in Silicon Valley. In turn, this gold-plated group helped to recruit to Friendster an equally impressive cadre of top executives and computer programmers.

Back in late 2003, Mr. Abrams spoke of the all-star cast that had joined him at Friendster the way a Yankee fan might boast about the Murderer’s Row that George Steinbrenner assembles each year in pursuit of another World Series ring. Now, however, Mr. Abrams casts that same board — then composed primarily of men in their 50’s who were far older than the site’s target demographic — and the recruits they drafted as the main cause of Friendster’s great stumble.

Through a colleague from a previous tech start-up, Melissa Gilbert, Mr. Abrams declined to comment for this article, saying he was too busy working on a new start-up to talk about the past. Ms. Gilbert, though, who described herself as the first investor in Friendster, echoed the comments of others close to Mr. Abrams, who has loudly proclaimed that he will never again accept a dime in venture capital. Mr. Abrams believed that he had developed a sound business plan for building Friendster into an Internet powerhouse — and that the plan foundered when his well-known investors shoved him aside and proceeded to mess everything up, Ms. Gilbert wrote in an e-mail message.

“Friendster ended up with three levels of V.P.’s, C.E.O.’s and board members who, although they had great résumés, they were not connected to the social networking concept and didn’t really use Friendster,” she wrote.

Mr. Doerr, at Kleiner Perkins, disputed this. He said that he visited the Friendster site at least once a day. “It’s certainly not fair to say we were out of touch when we were willing to commit millions of dollars to this market,” he said. “We understood the opportunity. The company didn’t seize that opportunity.”

But Mr. Siegelman, one of Mr. Doerr’s partners at Kleiner Perkins, said Mr. Abrams had a point. The original board had little feel for the product, said Mr. Siegelman, who attended most meetings and eventually replaced Mr. Doerr. But Mr. Siegelman also described Mr. Abrams as a founder in way over his head, which is why, in April 2004, only a few months after investing in the company, the board replaced him as chief executive.

“All of a sudden Jonathan had all these high-powered investors to please,” Mr. Siegelman said. “He had all this money in the bank, so there was all this pressure to hire people and get things done. Open up new territories: China, Japan, Germany. Add all these new features. Meantime, he took his eye off the ball.”

But the board also lost sight of the task at hand, according to Kent Lindstrom, an early investor in Friendster and one of its first employees. As Friendster became more popular, its overwhelmed Web site became slower. Things would become so bad that a Friendster Web page took as long as 40 seconds to download. Yet, from where Mr. Lindstrom sat, technical difficulties proved too pedestrian for a board of this pedigree. The performance problems would come up, but the board devoted most of its time to talking about potential competitors and new features, such as the possibility of adding Internet phone services, or so-called voice over Internet protocol, or VoIP, to the site.

THE stars would never sit back and say, ‘We really have to make this thing work,’ ” recalled Mr. Lindstrom, who is now president of Friendster. “They were talking about the next thing. Voice over Internet. Making Friendster work in different languages. Potential big advertising deals. Yet we didn’t solve the first basic problem: our site didn’t work.”

In retrospect, Mr. Lindstrom said, the company needed to devote all of its resources to fixing its technological problems. But such are the appetites of companies fixated on growing into multibillion-dollar behemoths. They seek to run even before they can walk.

“Friendster was so focused on becoming the next Google,” Professor Piskorski said, “that they weren’t focused on fixing the more mundane problems standing in the way of them becoming the next Google.”

The board replaced Mr. Abrams with one of its own, Mr. Koogle, the former chief executive of Yahoo. But Mr. Koogle served only three months, a temporary caretaker who showed up at the office only sporadically, former Friendster employees said. The board next chose a television industry executive, Scott M. Sassa, to replace Mr. Koogle. That selection might have made sense if the company had been in position to start cutting big advertising deals. But it was not, given that its Web site was not up to speed. Mr. Sassa left after less than a year, which was nearly twice the tenure of his successor, Taek Kwan, who left at the end of 2005, six months after he started.

“After a while all the changes really wear on you,” said Jeff Winner, who served under three chief executives in just 12 months as the head of the company’s troubled engineering team. “Every C.E.O. represented a change of direction, and when a company changes direction, the engineers really get jerked around.”

Mr. Winner left at the end of 2004, he said, “because like a lot of people I no longer believed Friendster was on a course for massive success.”

People inside the company recognized that they needed to add new features to the site if it was to compete with the new crop of copycat sites trying to cash in on Friendster’s early success.

“There really wasn’t much to do once you set up your network and found your old friends,” said Ms. Le, one of several people who could describe themselves as a former product manager at Friendster. Other social networking sites, including MySpace, were adding features like blogs and tools that people could use to jazz up their profiles. But adding new features to Friendster would only slow down the site further.

“People had great ideas all the time,” Mr. Lindstrom said, “but it always boiled down to, ‘O.K., but first let’s get the basic thing working.’ ”

ONE of the good ideas, Mr. Doerr said, was to encourage users to organize around favorite bands — the very idea that proved so crucial to MySpace’s success.

“We completely failed to execute,” Mr. Doerr said. “Everything boiled down to our inability to improve performance.”

People inside Friendster were closely monitoring MySpace, which was founded by a pair of Los Angeles music aficionados in the fall of 2003, inspired by Friendster’s early success. MySpace would have been hard to ignore, given its phenomenal traffic growth starting in early 2004.

“I was giving people regular updates on MySpace,” said Jim Scheinman, who served as Friendster’s head of business development from October 2003 until leaving in May 2005 to work at a social networking rival, Bebo.com. “But a lot of people refused to take them seriously.”

Many people working at Friendster sneered at MySpace. The holy grail at Friendster — and the cause of most of its technical problems — was its closed system: users at Friendster could view only the profiles of those on a relatively short chain of acquaintances. By contrast, MySpace was open, and therefore much simpler from a technological standpoint; anybody could look at anyone else’s profile.

The two companies also mirrored their founders: where Friendster reflected the ordered vision of its engineer-founder — early on, the company famously removed the profiles of people who put up joke pictures, like photographs of their dogs in place of themselves — MySpace was more L.A.-laid back. At MySpace, they rode the wave instead of fighting it, and encouraged users to do pretty much as they pleased.

Besides, those behind Friendster were so convinced that they were destined to be the next big thing that they instead fixated on the actions of their presumed peers — at least that is Mr. Siegelman’s recollection. “I remember going to these board meetings and feeling disgusted,” he said. “Half of every board meeting was taken up by a discussion of what Google’s going to do, or Yahoo.”

Today, MySpace has more than 50 times the number of monthly domestic visitors as Friendster, according to comScore Media Metrix. The social networking offerings of Yahoo and Google are also tiny when their American audiences are compared with that of the market leader: MySpace’s audience is 10 times as big as Yahoo 360, and 200 times that of Orkut, Google’s answer to Friendster.

Last fall, Friendster hired an investment banker to shop the company around. In part, the board was inspired by the $580 million that Rupert Murdoch’s News Corporation agreed in July 2005 to pay for Intermix Media and its primary asset, MySpace. In the end, though, the investors failed to find a suitor willing to pay even $20 million for the company.

Friendster was nearly out of cash by the end of last year. It had halved its payroll, to 25 employees, and advertising was hard to come by on a site that, three years after its debut, still did not work right. The venture capitalists considered shutting down the company. But a sense of obligation (“It was my feeling that the investors and the board had done something of a disservice to Friendster,” Mr. Siegelman said) and economics (Friendster still had a well-known brand and millions of registered users, even if most had not visited the site in some time) prompted Kleiner Perkins, Benchmark and some of the private investors to sink an additional $3 million into the company at the start of 2006.

THE venture capitalists reconstructed the board — “I took all the 50-year-old white guys off,” said Mr. Siegelman, who is white and 44 — and put Mr. Lindstrom, who had been with the company since mid-2003, in charge. The company hired yet another chief of engineering, who laid down the law: at least 80 percent of his people would work on performance and stability issues until the Web site worked as well as it should.

“In the past, we had often chosen the more exotic solution over the more simple solution,” Mr. Lindstrom said. Trailblazing a new field like social networking was enough of a challenge. “But we were also trying to innovate on the tech side as well,” he said. The company finally licked its performance problems this last summer, Mr. Lindstrom said.

The team now running Friendster valiantly soldiers on, hoping that it can position the company as a site for an older demographic group — people 25 to 40 — who do not have the time or inclination to spend hours each day on MySpace.

Now the challenge, Mr. Lindstrom said, is “to focus on a market for more than two months.” A second challenge is figuring out ways to cash in on its popularity overseas. Three quarters of Friendster’s users live outside the United States, mainly in the Philippines, Malaysia and other, smaller southeast Asian countries.

“In the past we’ve seen that as a problem,” Mr. Lindstrom said, “but now we see this as a huge opportunity.”

The investors apparently are satisfied with this new, less ambitious version of Friendster. In the summer, they sank another $10 million into the company.

“Friendster missed the chance to become a multibillion-dollar company,” said Mr. Thiel, the PayPal co-founder who has continued to invest in Friendster. “But I still see a lot of opportunity here.”

Mr. Doerr added: “There are plenty of second acts in American business.”
http://www.nytimes.com/2006/10/15/bu.../15friend.html





New Ways to Strike it Rich on the Web

Clever entrepreneurs are using the Internet to build a healthy customer base - before they even have the ability to deliver what they're selling.
Paul Sloan

One of the many remarkable aspects of the Internet is how easily people can use it to pretend to be something they aren't. There are, of course, terrifying results, such as when crooks pose as your bank.

But David Carter has taken that capacity for misdirection and made it into a legitimate way to make money.

For instance, Carter didn't know a thing about asbestos when he launched AsbestosSurveys.com - yet it sure looked as if he did. He wrote about regulatory changes in his native England by culling data from a government website. He explained what property owners needed to do to comply. He even posted local phone numbers for his "business" in London, Manchester, and Birmingham, each of which was forwarded to an answering service.

When inquiries flooded in, Carter steered them to an acquaintance who really was an asbestos surveyor. The requests were far more than one surveyor could handle, but Carter continued to book new customers.

"I told them there was a big backlog," recalls Carter, who is 47 and lives in Birmingham. "Then I said, 'Oh, God. What do I do now?'"
For Google search, generic is good

To Carter, there was really only one answer: Become a surveyor himself.

So with eager customers, Carter turned his site and follow-on properties into an actual business, called AsbestosServices.com. He took a half-week course, got certified, and teamed up with his friend. Today, once or twice a week -essentially whenever he feels like getting out of the house - Carter surveys a property, armed with a digital camera and notepad. The effort, he says, will net the pair about $350,000 this year.

Carter set up the site three years ago as an experiment to see what would happen if he dressed up a website to reflect a more serious and professional operation than it actually was. In doing so he stumbled across what turned out to be a clever way to cash in on the power of Internet search and marketing. The basic strategy: Build the customer base first, and then figure out how to sell to it.

In many cases, Carter simply becomes the middleman, using the Web to attract willing buyers that he hands off to others for a fee.

He identifies a business niche or a hot growth area like commercial real estate. Then he buys domain names around the topic, saving money by shunning pricey domains for names with hyphens, such as http://www.commercial-property.co.uk/.

He builds the sites, adds content, and waits for customers. Search the phrase "commercial property" in MSN, for instance, and Carter's site pops up on the first page, advertising that it has people eager to sell and buy commercial property. In truth, Carter has only a few contacts.
Different shades of gray

Yet calls are coming in.

One guy wants to buy an industrial park; another wants to rent a warehouse. Carter takes the information and then starts calling around to find a referral. "I don't have any inside information, but I know how to ring up a landlord," he says.

Carter argues that local businesses have created a great opportunity because they often make the mistake of advertising on the Web using their company's name, even though people generally search by product or topic. That's why Carter's general-sounding names usually pop up before something like SmithAsbestos.com. If you're not going to provide the service yourself, Carter recommends that you work with local businesses looking for customers.

The whole strategy might sound slightly deceptive, and in a sense it is. But so long as the customer ultimately gets what he wants, Carter doesn't see a problem.

"The Internet's just a big bluff," he says. "If you can make a site look pretty and sound credible, you can pull inquiries in for just about anything and turn the Internet into one great sales-generation machine."

THE ANGLE: Line up your customers first, then create a business around them.

1. Identify an overlooked need for services kicked up by, for instance, relatively obscure regulatory changes.

2. Construct a first-rate website with a generic domain name that will draw in prospective customers.

3. With clients in hand, create the business, providing the service yourself or subcontracting to established players.
http://money.cnn.com/magazines/busin...ion=2006101610





Idiosyncratic and Personal, PC Edges TV
David Carr

Last Wednesday, I was working late but left the office in time to watch the second episode of ABC’s “Lost.” But when I got home and booted the computer to check messages before hitting the couch, I happened to notice one of my twin daughters at a far-flung Big 10 campus was live on Yahoo! Messenger.

I clicked on “View my Webcam,” as did Erin, a freshman at the University of Wisconsin, and suddenly I had the chance to inspect the disturbingly large ring she recently had implanted in her lip. Live video may seem straight out of the Jetsons, but I have the computing skills of Fred Flintstone. Still, between my PC and my daughter’s Mac, we managed to get a serviceable video chat going, assisted by speakerphones on cells.

My 9-year-old wandered over and, once she saw a live image of her now distant sister, acted as if I had invented electricity. We made Erin drag her new friend Sam into the picture so we could give him the once over. “He’s kind of cute,” my wife whispered sotto voce as she craned over my shoulder. (I’m reserving judgment until I can menace him in person.) Then we pinged Meagan, Erin’s twin sister up the road at University of Michigan. As soon as she accepted my invitation to view the Webcam, she exclaimed, “You’re here!”

One thing led to another and we ended up watching the strangely compelling treadmill dance from the music group OK Go on YouTube, which clicked through to a parody, which led to, well, you get the idea. It was “television” with an audience that could be counted on a single hand but compelling enough that “Lost,” my one piece of appointment viewing for the night, was quickly forgotten. Madonna might be scheduled to mud-wrestle Britney Spears on premium cable and I’d still probably pick video-chatting with my children.

Computers, which were designed to save time, have become machines that make it disappear and threaten to take traditional models of wasting hours (i.e., television) with them. About 20 percent of the audience of “Lost” has gone missing since last year, even though the show has suffered no discernible decline in quality. It is less likely that its audience fled to NBC’s “The Biggest Loser” in the same time slot than that it found other diversions.

In the past week, Google and YouTube put a price tag of $1.65 billion on ubiquitous digital video and CBS, perhaps noticing that 100 million streams were being up- and downloaded a day, announced a revenue-sharing partnership with YouTube as well.

The specter of YouTube dominated a panel discussion held at NextFest, a futuristic conference put on by Wired magazine, late last month. Chris Anderson, the editor of Wired, pointed out that much of the content on YouTube might seem marginal — “Grandma getting hit with a brick” was the phrase he used — but that there was lots of mainstream content there as well, with everyone from Jon Stewart to Jessica Simpson benefiting from gigantic viral promotion.

One of the panelists, Jeff Zucker, chief executive of NBC, was asked what he would do if he found out that YouTube had run a piece of copyrighted NBC material. “We will claim outrage, demand that it be taken down and then check back in a week to make sure it has been done,” he said. His sly-devil acquiescence is informed by YouTube’s ability to take a Saturday Night Live skit called “Lazy Sunday” last year and market it to more young people than have sampled S.N.L. in years.

Jennifer Feikin, the director of Google Video and the only panelist not invested in the old model, did her level best to let sleeping dogs lie, calling online video “definitely not a substitute in any way” for television. She has some facts on her side: according to Nielsen Media Research, last year, the average household watched television 8 hours and 14 minutes a day, a 3-minute increase from the 2004-5 season and a record high.

But Howard Shimmel, a senior vice president at Nielsen, said research had shown something else: “Internet homes, including broadband and dial-up, watch 9 percent less television over all than the general population. The impact by network differs, with some experiencing 25 percent lower ratings and others substantially unaffected.” (He added that wired homes were generally well-off, a population that watches television less as a matter of course.)

Anecdotally, I can say that our family ends up finding the remote less often. Tally up all the bereft fathers video-chatting with college-age daughters, bored teenagers making videos for other bored teenagers and geeks mashing up existing content to hilarious effect, and there is ferocious, idiosyncratic competition for consumers’ attention.

The threat isn’t new media displacing old media as much as personalization. Media has become something people make, forward, link and program. When we took the 2,000-mile road trip to drop the girls off at their respective campuses, we switched between my iPod and theirs rather than flip fruitlessly through radio channels that had been aggregated and formatted into musical sameness.

Newspapers felt the pain of technological disruption first, when people had dial-up modems capable of transmitting modest, largely text-based data. As fatter pipes developed, music performed a jailbreak, leaving behind a maimed industry. And now, with the number of ever-faster connections spreading and the advent of the Flash player, television seems positioned as roadkill, with great big movie files soon to fall after that.

The question remaining is how these industries will choose to react. Television, it seems, may have learned some of the hard lessons endured by the music industry and taken an attitude of cautious engagement with downloaders rather than randomly slapping them with lawsuits.

I still caught Wednesday’s episode of “Lost,” downloading it to my iPod to view on my commute and sending $1.99 to ABC and Steve Jobs to split. Through the magic of that time-and-platform shift (and my willingness to pay for free content), I remained a part of the “Lost” tribe, although not the kind that shows up on Nielsen.

Selling programming that way is a smaller business for the networks, but not a bad one. Maybe this time, Grandma saw the brick coming.
http://www.nytimes.com/2006/10/16/te...gy/16carr.html





Study: Does Television Cause Autism?
Michael Waldman, Sean Nicholson, Nodir Adilov, Neff Hall

Autism is currently estimated to affect approximately one in every 166 children, yet the cause or causes of the condition are not well understood. One of the current theories concerning the condition is that among a set of children vulnerable to developing the condition because of their underlying genetics, the condition manifests itself when such a child is exposed to a (currently unknown) environmental trigger.

In this paper we empirically investigate the hypothesis that early childhood television viewing serves as such a trigger. Using the Bureau of Labor Statistics’ American Time Use Survey, we first establish that the amount of television a young child watches is positively related to the amount of precipitation in the child’s community. This suggests that, if television is a trigger for autism, then autism should be more prevalent in communities that receive substantial precipitation.

We then look at county-level autism data for three states – California, Oregon, and Washington – characterized by high precipitation variability. Employing a variety of tests, we show that in each of the three states (and across all three states when pooled) there is substantial evidence that county autism rates are indeed positively related to county-wide levels of precipitation.

In our final set of tests we use California and Pennsylvania data on children born between 1972 and 1989 to show, again consistent with the television as trigger hypothesis, that county autism rates are also positively related to the percentage of households that subscribe to cable television. Our precipitation tests indicate that just under forty percent of autism diagnoses in the three states studied is the result of television watching due to precipitation, while our cable tests indicate that approximately seventeen percent of the growth in autism in California and Pennsylvania during the 1970s and 1980s is due to the growth of cable television.

These findings are consistent with early childhood television viewing being an important trigger for autism. We also discuss further tests that can be conducted to explore the hypothesis more directly.

The Paper





Laser TV Predicted to be Death of Plasma

It's being hailed by its developers as the next revolution in visual technology - a laser television that will make plasma screens obsolete.

Soon-to-be-listed Australian company Arasor International and its US partner Novalux unveiled what they claimed to be the world's first laser television in Sydney, with a pitch that it will be half the price, twice as good, and use a quarter of the electricity of conventional plasma and LCD TVs.

Manufacturing company Arasor produces the unique optoelectronic chip central to the laser projection device being developed by Silicon Valley-based Novalux, which is being used by a number of television manufacturers.

And displayed beside a conventional 50 inch plasma TV, the Mitsubishi-built prototype does appear brighter and clearer than its "older" rival.

With a worldwide launch date scheduled for Christmas 2007, under recognisable brands like Mitsubishi and Samsung, Novalux chief executive Jean-Michel Pelaprat is so bold as to predict the death of plasma.

"If you look at any screen today, the colour content is roughly about 30-35 per cent of what the eye can see," he said.

"But for the very first time with a laser TV we'll be able to see 90 per cent of what the eye can see.

"All of a sudden what you see is a lifelike image on display."

Combine that with energy efficiency, price advantage and the fact that the laser TVs will be half the weight and depth of plasma TVS, and Mr Pelaprat says "plasma is now something of the past".

Mr Pelaprat predicted LCD TVs would come to dominate the market below 40 inches, and laser television the market above that screen size, displacing plasma.

The optoelectronic chip-laser technology won't be confined to TVs.

The technology is also being trialled in mobile phones, where it will be used to project images onto any surface, and in home theatres and cinemas.

The unveiling of the laser TV prototype was held on the eve of Arasor's public float on the Australian Stock Exchange next week.
http://www.theage.com.au/news/NATION...246121576.html





Cyberface: New Technology That Captures the Soul
Sharon Waxman

THERE’S nothing particularly remarkable about the near-empty offices of Image Metrics in downtown Santa Monica, loft-style cubicles with a dartboard at the end of the hallway. A few polite British executives tiptoe about, quietly demonstrating the company’s new technology.

What’s up on-screen in the conference room, however, immediately focuses the mind. In one corner of the monitor, an actress is projecting a series of emotions — ecstasy, confusion, relief, boredom, sadness — while in the center of the screen, a computer-drawn woman is mirroring those same emotions.

It’s not just that the virtual woman looks happy when the actress looks happy or relieved when the actress looks relieved. It’s that the virtual woman actually seems to have adopted the actress’s personality, resembling her in ways that go beyond pursed lips or knitted brow. The avatar seems to possess something more subtle, more ineffable, something that seems to go beneath the skin. And it’s more than a little bit creepy.

“I like to call it soul transference,” said Andy Wood, the chairman of Image Metrics, who is not shy about proclaiming his company’s potential. “The model has the actress’s soul. It shows through.”

You look and you wonder: Is it the eyes? Is it the wrinkles around the eyes? Or is it the tiny movements around the mouth? Something. Whatever it is, it could usher in radical change in the making of entertainment. A tool to reinvigorate the movies. Or the path to a Franken-movie monster.

The Image Metrics software lets a computer map an actor’s performance onto any character virtual or human, living or dead.

Its creators say it goes way beyond standard hand-drawn computer graphics, which require staggering amounts of time and money. It even goes beyond “motion capture,” the technique that animated Tom Hanks’s 2004 film “The Polar Express,” which is strong on body movement but not on eyes, the inner part of the lips and the tongue, some of the most important messengers of human emotion.

“One of our principal tenets is to capture all the movements of the face,” Mr. Wood said. “You can’t put markers on eyes, and you can’t replicate the human eye accurately through hand-drawn animation. That’s pretty important.”

Ultimately, though, Image Metrics could even go beyond the need for Tom Hanks — or any other actor — altogether.

“We can reanimate footage from the past,” said Mr. Wood, a stolid man with a salesman’s smile. He was hired to introduce Hollywood to the technology, which the computer scientists who founded the company sometimes have difficulty articulating.

“We could put Marilyn Monroe alongside Jack Nicholson, or Jack Black, or Jack White,” he continued, seated in the conference room where the emoting actress and her avatar shared the screen. “If we want John Wayne to act alongside Angelina Jolie, we can do that. We can directly mimic the performance of a human being on a model. We can create new scenes for old films, or old scenes for new films. We can have one human being drive another human character.”

To prove the point Mr. Wood brought up on-screen an animated character that he showed at the Directors Guild of America this past summer. The character, a simple figure comprising just a few lines drawn in the computer, made the “I coulda been a contender” speech from “On the Waterfront,” in Marlon Brando’s voice. (Because Brando didn’t gesture much, the stick figure’s movements were based on those of a hired actor.) Then he pulled up a video of the musician Peter Gabriel singing a scat beat alongside a half-dozen animated figures who, one by one, joined him in precise concert. Finally he brought up a scene from a Marilyn Monroe movie in which animators replaced the original Marilyn with a computer-drawn version of her. The image isn’t perfect — or rather, it’s a bit too perfect for credulity — but it clearly shows the path that lies ahead.

The breakneck pace of technology combined with the epic ambitions of directors has, up to now, taken movies to places undreamed of in the past: the resinking of the “Titanic”; war in space between armies of droids; a love story between a dinosaur-sized ape and a human-sized woman. (Whoops, we had that one before.)

But if Image Metrics can do what it claims, the door may open wider still, to vast, uncharted territories. To some who make the movies, the possibilities may seem disturbing; to others, exciting: Why not bring back Sean Connery, circa 1971, as James Bond? Or let George Clooney star in a movie with his aunt, Rosemary; say, a repurposed “White Christmas” of 1954? Maybe we can have the actual Truman Capote on-screen, performed by an unseen actor, in the next movie version of his life.

Projects are already circulating around Hollywood that seek to revive dead actors, including one that envisions Bruce Lee starring in a new Bruce Lee picture.

Asked what he might do with the new technology, Taylor Hackford, the director of “Ray” and a dozen other movies, was at first dismissive. “It’s phenomenal, but its uses are in the area of commercials,” he said. (Image Metrics made a commercial last winter that revived Fred and Ethel Mertz of “I Love Lucy” discussing the merits of a Medicare package.) But after a moment’s reflection, he shifted his view. “If you’re working on ‘The Misfits,’ and Clark Gable died before the end of the film, you could have used it in that instance,” he reflected.

Or what if Warren Beatty, or Robert Redford, wanted to play a younger version of himself? “If you had Warren or Redford in a great role, and there was a flashback to a young character” — he mused — yes, that would be a reason to use it. Perhaps in “The Notebook,” he went on, in which Ryan Gosling played the young version of James Garner’s character? Mr. Garner could have played both versions himself.

Still, one thought was holding Mr. Hackford back. “If you want Ethel Barrymore to give you an incredible, heartfelt and painful performance, that comes from the soul of the actor,” he said. “It’s not something you can get by animation.”

IMAGE Metrics began in the living room of Gareth Edwards, a shy, baby-faced, 34-year-old biophysicist from Manchester, England. He, Alan Brett and Kevin Walker, all postdoctoral students from the University of Manchester, were conducting research into image analysis, a technique first developed to help computers analyze spinal X-rays. “We were very much scientists looking for the big problem,” he said. “Big in terms of the problem, and big in terms of the benefit.”

They decided to start a company, of which Mr. Edwards is the chief technical officer. He doesn’t work out of his living room anymore; now he works in the Santa Monica offices. (His colleagues remain in England along with a half-dozen other computer and physics Ph.D.’s.) But some things remain the same. “Image analysis is a difficult scientific problem,” he said. “You’re trying to analyze complex objects: the human spine, or the mapping of the human face. How do you teach a computer to understand the context of an image when that image is complex?”

Many surveillance devices rely on facial recognition software, but it produces a lot of false positives. Mr. Edwards and his colleagues took a different approach, one that starts with the generic model of a human head and layers onto that a mathematical distillation of an individual’s expressions. He compared his approach to describing a new bicycle. The person who’s listening is likely to picture the new bicycle based on other bicycles she has already seen.

“It’s model-based computer vision,” Mr. Edwards said. “The idea is, if you know an object, you can picture it. The key for animation was that realization: that we needed to build a computer system with the prior concept. The mathematical structure describes the basic concept of the face and maps the subtle variations.”

The first step has been using Image Metrics to allow live actors to animate virtual characters. Thus Kiefer Sutherland himself has been able to drive the performance of the animated version of his television character, Jack Bauer, in the computer game “24,” based on the hit show. Warner Brothers is using Image Metrics, along with several other companies, to animate a new character in the forthcoming “Harry Potter and the Order of the Phoenix,” a monstrous relation of Hagrid, animated by an actor.

Larry Kasanoff is the producer and director of “Foodfight!,” which will be the first full-length movie to use Image Metrics technology. Sitting in his Santa Monica production office, surrounded by plush toys of characters (who will be played by Charlie Sheen, Hilary Duff and Eva Longoria), he talked about the difference between image analysis and standard computer-generated imagery, or C.G.I.

In a C.G.I. film, he said, “every time someone would say something, banks of people would have to figure out how the lips move, how the eyes move — and it’s not even that good.”

“Now we don’t have to spend three years having people meticulously hand-animate Charlie Sheen’s lines,” he added. “He says, ‘Food fight!’ in real time, live action, and it’s applied, via Image Metrics technology, to the character.”

So whereas a film like “Cars” cost $120 million and took dozens of animators five years to make, Mr. Kasanoff says that “Foodfight!,” which has not yet begun production, will be finished by February.

And movies are just the beginning. “For creating characters that don’t exist, this is unparalleled at the moment,” said Alex Horton, the animation director for Rockstar Games, which has been using Image Metrics for two years in top-selling titles like “Grand Theft Auto: San Andreas” and “The Warriors.” Games, he explained, don’t require the level of detail that movies do, but they demand far more screen time than the average film.

“There’s no taking away the fact that a team of animators can sit and make some very convincing animation if they want to,” he said. “But I challenge anyone to do the volumes that I need in the time that I need, at this level of quality, and to capture the nuance of the voice actor.”

IT sometimes seems that every six months or so another technology comes along that promises to revolutionize Hollywood and supplant what came before. “Toy Story” gave C.G.I. characters an early sense of humanity. Great excitement accompanied Stuart Little and his remarkable fur. Another fanfare erupted over Gollum, the gnomelike hobbit played by Andy Serkis through computer magic in the “Lord of the Rings” movies. In recent years the focus has been on motion capture, for which actors are wired with tiny digital sensors. Lately yet another system has emerged, called Contour, that tracks actors’ facial and body movements by coating them with phosphorescent powder.

But Hollywood producers seem to agree that this is something truly different.

“It’s a giant leap from the motion capture technology used today,” said Sam Falconello, the chief operating officer of Cinergi Productions, which made the “Terminator” series and is considering using Image Metrics to make “Terminator 4.” “I really believe in this technology. It is scaleable. It makes our effects budgets go further.”

It’s also far easier on the actors. Instead of being painted with a chemical or covered in sensors, they need only do what they would ordinarily do: act.

Mr. Kasanoff said that for comedy especially convenience was a central issue. “Try to get an actor to be funny and relaxed with 900 dots on his face,” he observed. “Now, when we direct the actors, they don’t even know the camera is there. They just act.”
Debbie Denise, a senior vice president at Sony Imageworks who tracks new technology developed both in house and elsewhere for the movie studio, said that her company’s motion capture technique has advanced to where it can credibly track subtle facial expressions. It is being used in the current production of “Beowulf,” a computer-generated version of the ancient tale directed by Robert Zemeckis, who directed “Polar Express.”

But she agreed that the Image Metrics approach was “very promising.”

“It’s been a challenge for everyone in this field to get away from markers,” she said. “How can you just videotape somebody? The way they’re doing it is very interesting.”

As for reanimating former movie stars? “That sounds terrific,” said Chris deFaria, head of visual effects for Warner Brothers. “I’d love to see it.” But, he added, “There are real complexities involved with that.”

Undoubtedly so. But at least one former movie star thinks the ideas holds some promise. Arnold Schwarzenegger, now the governor of California, has conducted tests with Image Metrics to use his Conan the Barbarian character in political ads.
http://www.nytimes.com/2006/10/15/movies/15waxm.html