Dec 30, 2011

Award unlocks wartime secrets

SOMETIMES a secret sits like a mothball hidden in a drawer, dissolving in time until there is nothing left at all. My mother-in-law, Joan Turnour, had such a secret relating to her work in World War II, and it might have gone that way but for a package arriving out of the blue last month. The package contained a special medal and certificate signed by British Prime Minister David Cameron, plus a letter from Iain Lobban, the head of Britain's highly secretive intelligence agency known as GCHQ. This recognition might be nearly 70 years after her wartime deeds, but for 40 of those years she wasn't even able to talk about them.

Joan's work was not in the jungles of New Guinea nor in London during the Blitz; it was in a long-since-demolished building in Albert Park known as ''Monterey Flats''. She was involved in cracking the codes used by the Japanese to try to ensure their battle plans gave them the advantage of surprise. The efforts of people who cracked those codes, and then were able to keep the cracking a secret, have since been credited with shortening the war by years. ''We were not even able to tell our families,'' says Joan, now 85. ''When anyone asked, we just said we worked as a writer. They thought we were secretaries or something.''

Such was the secrecy that each person in a section was entrusted with just a small piece of the jigsaw. ''We were presented with what looked like a jumble of letters and numbers and we spent our shift sorting them into some sort of order, which was the raw code that was then passed on to the next section. ''If there was a flap on, such as the Japanese moving their ships, they would virtually pull it out of your hands and run down the corridor.'' The total jigsaw was known only by a handful at the very top and this knowledge was considered so vital that in the upper echelon's offices there was said to be a cupboard containing pistols.

They were not for self-defence. Most at Joan's level believed if Australia was invaded and there was a chance those with the full picture were captured, they were to be shot. ''We came to understand that the seniors were not to fall into enemy hands. The story about them having to be shot was hearsay, but we believed it.'' When she told her family this story and how the shooting would be accepted without question, it left us in shock and seemed to highlight how much society's values had changed in less than a lifetime.

Lobban's letter referred to the cryptanalysts who worked with British, other Commonwealth and US agents as the ''Forgotten Army'' of the war. Joan's section was considered an outpost of Bletchley Park, the highly secret British code-breaking centre near Cambridge University where the German Enigma code was cracked.

But sometimes security could be breached with the best intentions. Joan recounts a US senator visiting Australian intelligence bases at the time, who then went back home and told newspapers how American ingenuity had cracked the Japanese codes. ''Of course, the Japanese immediately changed their codes and it took us about three weeks to unravel the new ones. This breach probably cost lives.''

Dec 29, 2011

A whale of a time on the high seas

So the Sea Shepherd anti-whaling protestors have run into trouble on the high seas again. Hardly surprising given that their whole purpose is to make trouble on the high seas.

Remember this incident nearly two years ago?

These people deliberately spend millions of dollars building boats that are designed to create mischief on the high seas. They spend a fortune getting there, take cameramen to film everything and then feed out the pictures, along with their spin, to the compliant worldwide media.

They get away with it because they are making a motherhood statement – saving the whales. No-one wants to disagree with them, so they carry on with their hi-jinks. Lots of people cheer them, many offer tacit support but very few people criticise them. Politicians from all parties fall over each other trying to be the greatest friends of the whales, and often damage our relationship with our very important trading partner and fellow liberal democracy, Japan, in the process.

I am happy to criticise the Sea Shepherd activists. They should find another way to make their case. Their campaign is a political and public relations one, and it shouldn’t require them wasting millions of dollars on fuel-guzzling, maritime, boys-toys and putting people’s lives in danger. Their modus operandi is to create conflict and newsworthy pictures so that they get a “good run” around the world – the good guys taking on the evil whale killers. It is time to grow up.

None of us should support the killing of endangered species. And thankfully international action has helped saved great creatures like the Blue and Humpback whale. But if the Japanese want to eat some of the plentiful Minke whales and the like – who are we to stop them? We don’t seem to mind slaughtering kangaroos, cows, pigs, emus, rabbits and turkeys.

And why doesn’t the Sea Shepherd and its crew go and tackle the whalers in the Caribbean or the East Coast of Russia? Oh that’s right, because it wouldn’t be such a public relations coup getting into a fight with indigenous whalers.

The Diploma In Your Pocket

Stephen Gordon asks the question: what if an employer were faced with a choice of applicants between a person with a regular diploma from a nondescript school and someone who had successfully completed an online course at MIT? Who should he hire?

Imagine a personnel manager at a mid-sized industrial corporation in Kansas who’s looking for a candidate with a particular set of knowledge. There are two candidates: one from the local state school with an appropriate college degree, a second with relevant MITx certificates of completion.

Let’s say all other things between the candidates are equal. Which should be chosen? It’s true that an online education is not the same as the college experience. The candidate who went to college probably enjoyed his experience more, but how much is that experience worth to a potential employer? Unless he’s a member of the same fraternity, probably not as much as the college candidate would hope.

His formulation of the problem is good, but perhaps it is not general enough. What Gordon is asking is: ‘which is the better proxy for competence, the online degree or the brick and mortar one?’ But it may go beyond that. Consider these other other scenarios:

  • An employer is asked to choose between someone with a computer science degree from Cambridge University and a high school graduate who has successfully developed a very complex, large scale software application.
  • An employer is choosing between a person who has an MBA from Harvard and someone with a BA from Stanford who got to California as a political refugee having escaped from China by trekking over Tibet and making his way down to India impersonating a Hindu.
  • An applicant for editor of an historical journal on the Napoleonic War is an senior academic who has taught the subject all of his life; the other is the recognized guru of a website devoted to the subject with millions of yearly visitors and who has walked every major battlefield of the Era himself.

In the general case you have two or more sets of proxy indicators for qualification at the task at hand. Sometimes one is traditional and the other is nontraditional.

Your job is to determine which of the two is the better descriptor of actual suitability. In an era when most people climbed steadily up a single career ladder the usual answer was to judge entry into the first rung by academic degree and to use job experience thereafter. In cases where people made a career change (shifted ladders) the basic idea was to predict suitability from one track record as to how the applicant might do in his new environment.

The two traditional repositories of proxy data were the diploma and the resume. The academic and job experience repositories. In order to make sense of this data, companies employed professional recruiters or human resources departments. But today things are no longer so simple.

In an era where the academic degree may be devalued by political considerations and when there are more alternative proxy indicators of competence than ever, the choices are no longer so cut and dried. The resulting multiplicity of indicators is challenging the old gatekeepers. Recruiters and HR departments now need to interpret a wider range of credentials to arrive at a value.

And what exactly is that value?

Wouldn’t it be really convenient if there were some market-validated way of assigning weights to different experiences and achievements and storing that as a secure hashed value? The value we are after would be a summary number, which for convenience we may call a reputation or alternatively, a decomposition of its components. That’s really what we want the HR department to compute.

But since people are good at manipulating their own reputational stores, one ideally wants a repository maintained by someone else. Perhaps by everyone in a transparent process. Now suppose each time a person did something cool in a valuable activity, the result could be stored in a log not as raw numbers, but as peer processed reputational data.

Such numbers could be positive or negative. Win the Medal of Honor and get a positive value. Rob a bank and get a negative value. Top the test scores at an online course and get a positive value. Top the class at MIT and get a positive value. Maybe do all of them together and let your mixed record speak for itself, at least to those who you authorize to analyze it. The first thing to realize is that the components are domain specific. A person with a Medal of Honor would be a god in some communities, but not necessarily among C++ programmers and vice-versa.

But this is an valuation problem and the employer can weigh them for himself.

The net result will be a world in which the school becomes not the Internet cafe, as Stephen Gordon suggests, but life itself. Rather than simply being a content delivery system for delivering subject area knowledge, a University could transform itself into a cross between an experience booking agency and a bank. The job of the University would be to enroll a student in jobs, expeditions, online courses, licensing exams and forum debates that are evaluated by peer communities other than the University itself. You can call these creditable activities, in traditional academic parlance.

The only restriction to enrollable “courses” would be that they are evaluable by others in the real world; that they produce results whose effect can be judged and challenged transparently by anyone qualified to do so. The role of University would simply be to ensure that the resulting reputation is decremented or incremented according to a secure process.

Your diploma would essentially become your reputation log, rather like the debits and credits that you see when you view your bank account. That is your “rep”; your human capital balance. In the end it will include achievements and bloopers that you may have forgotten yourself; including plaudits that will surprise you; or criticisms from others that still sting you and whose effects you have to work through, like the payments on the gold upholstered sofa you foolishly bought at a store.

The role of the University in such a world would be to add value to a student’s store of human capital over his working lifetime. To manage its students learning over time. It will suggest opportunities, make arrangements, put you in touch with others who might be interested in an entirely new ‘subject’. It would do far more than simply operate rooms in which a teacher lectures to students. It might still do that, but not just that. And that is exciting. Could this be the future of education?

Maybe not. It could be something different. But as education goes through a crisis of mounting costs and decreasing returns; as it struggles to throw off accusations of declining credential value, it is clear that higher learning must reform itself. One place to start is with the realizing that you don’t graduate once — to the strains of Land of Hope and Glory — but many times over your lifetime when your smartphone beeps to let you know that yet another entry has been made into the your online diploma.

Now, if they could only invent online beer.

Dec 28, 2011

The uncomfortable reality of development

Attend any aid or development conference and participants will invariably wax on about the importance of good governance, government accountability to citizens and uncorrupt rule as prerequisites to development.

Such talk was commonplace at the UN conference on least developed countries in Istanbul and the African Development Bank (AfDB) annual meeting in Lisbon, where there was much soul-searching at having failed to anticipate the Arab spring.

Anti-corruption, accountability and governance constitute the basic building blocks to development, according to the conventional wisdom. Yet, two countries that have made the greatest strides in poverty reduction can hardly be held up as models of good governance. In both cases, the governments are highly authoritarian – one-party rule – and accountability is limited.

The two countries that have won plenty of plaudits from the International Monetary Fund and the World Bank for lifting millions out of poverty are China and Vietnam. China lifted more than 600 million people out of poverty between 1981 and 2004. Vietnam has lifted about 35 million people out of poverty, its poverty rate has plummeted from 58% in 1993 to 14% in 2008 and it is well on its way to achieving middle-income status (defined by the World Bank as countries with a per capita income of $1,000).

China's success is even more stupendous. Using the poverty standard of a person living on $1.25 a day, the incidence of poverty in China declined from 85% in 1981 to 27% in 2004.

Granted, such success has had its downside, notably growing inequality and huge regional disparities, especially in China between the coastal regions and the interior. But there is no getting away from the overall impressive achievements of these two countries, where the communist party holds a monopoly of power and where dissidents such as Chinese artist Ai Weiwei are treated harshly.

Similarly, Ethiopia and Rwanda regularly win praise from Britain's Department for International Development (DfID) for their development efforts, but are hardly models of democracy and accountability.

So how do development experts explain how such "unsound" political practices – authoritarian rule, lack of political accountability and corruption – have resulted in impressive economic development? Dan Smith, the secretary general of International Alert, an independent peacebuilding group in London, who believes in the importance of governments building trust with their people to deal with challenges such as climate change, acknowledged the temptation to build simple narratives as a way of mobilising public opinion in the west in favour of development aid.

"We do need to focus on countries as they are," he told a seminar on delivering aid in fragile states, held in Westminster on Tuesday. Smith cited Turkey and South Korea as countries that combined development with authoritarian rule and managed to make the transition to democracy.

"Those countries had authoritarian governments, but they had a view of national wellbeing," said Smith. "There is a need for nuance, and there is no magic key for successful development."

Joanna Wheeler, a research fellow at the Institute of Development Studies in Sussex, who spoke about the importance of citizen participation at the grassroots levels through mechanisms such as local associations, said it was important to view development in broader terms than material consumption. For her, the key is that governments should be responsible to their citizens.

It could also be argued that the authoritarian model of development carries its own dangers, as the Arab spring has shown to dramatic effect. Officials at the AfDB have acknowledged they were too starry-eyed about headlines on strong economic growth and neglected problems such as income inequality that festered underneath the veneer of economic success.

No doubt the Chinese and Vietnamese authorities have taken on board the lessons from events in the Arab world and are thinking hard about "inclusive" growth. As Smith pointed out, Turkey and South Korea show that making the transition from top-down governments to regimes that are more accountable is possible, though undoubtedly difficult.

But in the meantime, the examples of Vietnam and China defy the current conventional wisdom about good governance as one of the preconditions of development. Corrupt and repressive regimes are not necessarily incompatible with lifting people out of poverty. It's an uncomfortable reality that does not fit well with the prevailing orthodoxy.

The Internet is a Dirty, Dirty Mistress

It’s been quite a while since I wrote or updated DFW, the I)ruidic FireWall. Included with that utility is a default iptables firewall policy which the user can use directly, tweak to their liking, or completely throw away and start over from scratch. NetFilter (iptables) has come a long way since I was actively working in the firewall space and regularly maintaining the DFW utility, so I thought it high time that I update the firewall policies on my servers to take advantage of some of it’s newer features, and in doing so update DFW’s default policy with some extra bells and whistles. The primary goal I wanted to accomplish was to significantly clean up my firewall logs, as the Internet is an extremely dirty and hostile place to connect a computer to. Regularly my logs would be full of default drop log entries for entire port-scans, the same worm-infected hosts connecting to the same closed ports over and over and over again, and other general random connection attempts.
The first thing I decided to do was add some rate-limiting to the allowed services. In the older policy, I did have rate-limiting, but it was policy-wide, and was intended to only be turned on while under active attack such as a DDoS. It essentially had the effect of rate-limiting all inbound traffic from a single source to one connection per second. While this is useful for it’s intended purpose, taking a service-centric approach allows for much more reasonable approaches to rate-limiting various types of traffic. Because DFW’s default policy is fairly strict by default, about all that’s allowed inbound is ICMP and SSH. Attacks against SSH rose sharply recently when SSH credential brute-forcing tools started showing up on the scene. One very effective way to curtail this attack is to severely rate-limit new SSH connections from a single source, and blacklist that source if they connect too many times beyond the allowed amount in a short time period, which brings me to the second feature I wanted to implement, a dynamic blacklist for bad sources. A number of the policy items I’ll be discussing here make use of this blacklist, so near the top of the INPUT policy table we need to both implement and handle some management of the blacklist...

The Internet: 'A Dirty Mess'

The digital revolution has degenerated into an underworld of organized crime, dirty tactics, black ops and terrorism, said science fiction writer and cyberpunk pioneer Bruce Sterling Tuesday.

Keynoting a morning session of Gartner's 10th Annual IT Security Summit here, Sterling said, "This is the birth of a genuine, no kidding, for-profit, electronic, multi-national criminal world. The global criminal world of oil, narcotics and guns now has broadband."

And, according to Sterling, they are fully utilizing the technology.

"These are not all old-school hackers. This is organized crime activity. They are profit driven," he said. "These are crooks. The crooks that in the future that are going to elbow the hobbyist kids aside and settle in for a nice, long vampire slurp from our e-commerce."

Sterling classified most computer crime as "ancient evils" running rampant in a new electronic world that does not recognize borders. The Internet, he said, is the public face of globalization, and corruption is not only thriving online, but winning.

"In 2004, it's about computer activities that used to be regarded as weird mischief or acts of deviant curiosity slowly sliding into the darkness," Sterling said, adding that the perpetrators of the crimes are not particularly technologically adept.

"Al Qaeda is not real cyber savvy. Neither, for that matter, are spammers, credit card thieves, ID thieves or software pirates," he said. "They are multi-national bloodsuckers. They have to be cyber savvy because they are crime savvy."

As examples, Sterling said there are very few new types of crime proliferating on the Internet. Phishing, he said, is just another form of doing business under false pretenses. Loan sharking, he pointed out, has found a new expression in financial scams, and theft of intellectual property is still theft even if it is "disguised in the form of peer-to-peer file sharing."

The solution, Sterling believes, is not more laws or even more law enforcement personnel. The bottleneck, he said, is prosecutors willing to go after cyber criminals.

"We have lots of computer cops, and American cops are as savvy about computers as any social group in the nation," he said. "We have a ridiculous amount of computer laws."

Sterling called the Can Spam Act passed earlier this year a "bunch of phoney baloney. People say it can't be enforced because the spammers will just move overseas. Nobody says we should have crack houses on every corner, because if we don't, crack dealers will move to Colombia."

Sterling advocates an aggressive "blame and shame" campaign against spammers that would begin with an "arrest-a-spammer-a-day" effort. For Sterling, that campaign would begin in Boca Raton, Fla., home of many spammers and characterized by Sterling as the "Capone-Chicago of cyber fraud."

"If they move out of the country, we'll grab them and throw them into Guantanamo," he said.

As for national cyber security, Sterling said the government's recent National Strategy to Secure Cyberspace has merit, but there is no such thing as "national cyberspace." International cooperation will be needed but warned that the Internet will not go away in any place it touches. Many of those places, he said, "are where no decent human being would want to go."

Further compounding the national security initiative is the report's author, Richard Clarke, who recently testified against the Bush Administration's preparedness for the 9-11 terrorist attacks.

Europe woes could hurt Australian economy | News | Business Spectator

The mining boom is expected to keep the Australian economy strong in the new year, but the threat of a global recession could spoil the party.

"The elephant in the room is Europe," ICAP senior economist Adam Carr said.

"Everything hinges on Europe. That's the bottom line."

Unlike many major economies, Australia escaped relatively unscathed from the global financial crisis, initially because of the government's stimulus, then as resources-hungry China kept buying up coal and iron ore.

However the protection that Australia's trade with China and Asia offers the domestic economy could come under threat if Europe dives into a deep recession.

Crippling government debt in the eurozone has sapped business confidence, frozen credit markets and caused turmoil on financial markets.

Greece, Ireland and Portugal have all needed bailouts from the international monetary fund and the European Central Bank.

Italy and Spain look to be next to fall, with Italy considered too big to rescue.

Mr Carr said Australia's domestic economy looks strong but the chance of a European recession remains high.

"We have the strongest private demand in a few years in a third quarter, driven by business investment and strong household spending," he said.

"The question is can that trajectory be maintained?

"If things flare up there (in Europe) it could be a horrible year. Unfortunately we just have to wait and see."

AMP chief economist Shane Oliver said Europe is already in a recession, it's just a matter of whether that recession will be mild or deep.

"The leading indicators for Europe, such as the business conditions indicators, suggest it has already slipped into recession," Dr Oliver said.

"If not now then it will be in the March quarter."

Dr Oliver said there was a 65 per cent risk of Europe having a mild recession and 35 per cent chance of a deep one.

Australia is believed to be largely shielded from a European downturn because of its Asia-focused trade.

In fact, during the global financial crisis Australia only recorded one quarter of economic contraction, in late 2009, despite Europe and the US falling into deep recessions.

However the slow rate of progress by European leaders to solve the debt crisis has taken a toll on business confidence in Australia.

It is also believed to be the main reason why 6300 jobs were lost in November as businesses delayed employing staff.

Only a fraction of Australia's trade is with the eurozone.

But Dr Oliver said there was an indirect exposure to a recession there because 20 per cent of China's exports go to Europe.

"If Europe gets settled down, we'd be looking at three per cent average growth through the year as a whole," he said.

"If alternatively Europe doesn't get its act together we're looking at getting back to the days of the global financial crisis; soft growth in Australia and much lower interest rates.

"We'd be seeing interest rates head back to lows of around three per cent."

ICAP's Mr Carr said it is not a fait accompli that Australia will fall into recession if Europe does.

"They could have a recession and we wouldn't even notice," he said.

"The problem is if the banking sector freezes up.

"Credit generally around the globe will just dry.

"It's the grease that every economy needs and that's the big threat, another financial crunch."

If a European recession does hurt the Australian economy the Reserve Bank of Australia (RBA) and the federal government are well placed to take action to stimulate growth.

Total accumulated government debt (net debt) for the major G7 advanced economies is projected to reach 93 per cent of gross domestic product in 2016.

This is more than 10 times higher than the expected peak in Australia's net debt of nine per cent of GDP, according to Treasury's Mid-Year Economic and Fiscal Outlook.

The RBA's cash rate stood at 4.25 per cent by the end of 2011, way above many nations where official rates are near zero and there are few opportunities to stimulate the economy.

The RBA cut the cash rate at both its November and December board meetings taking the rate from 4.75 to 4.25 per cent.

RBA governor Glenn Stevens said eurozone financial and banking problems were likely to weigh on economic activity over the period ahead.

"Financial markets have experienced considerable turbulence, and financing conditions have become much more difficult, especially in Europe," Mr Stevens said after the December decision.

In August, he told the House of Representatives economics committee the central bank was well placed to provide stimulus in the face of European shocks.

"We've got the ammunition in the cannon," he said.

"If we did see a very significant change in the global economy we would have plenty of interest rates (levels) to play with if need be."

Dec 27, 2011

Next year is one of those years that can't come soon enough for Microsoft.

It's not that 2011 was a particularly difficult year. The company posted record revenue for the fiscal year that ended June 30. And its 2-year-old PC operating system, Windows 7, hit 500 million copies sold, further embedding it as the most widely used operating system in the world. But 2011 had few big product launches at the company, Office 365 and Internet Explorer 9 notwithstanding.

Next year will be altogether different. Microsoft is prepping the big kahuna of its product arsenal, Windows 8. The company hasn't set a date, though most analysts expect the flagship operating system to debut before the end of the year, and perhaps in time for back-to-school shopping. From that product, much else from Redmond flows.

So here are five things to look for from Microsoft in 2012:

1. Windows 8 tablets

Windows 8 is one of the boldest bets Microsoft will make, radically changing the interface on the operating system to the company's tile-based Metro look, first used by Windows Phone 7 last year. The familiar desktop photo covered with application and file icons will be available to PC users who want it. But Microsoft is pushing the new touch-friendly interface to convince consumers to buy tablet computers that will run it.

It won't be an easy sell. Microsoft will be coming to the tablet market more than two years after Apple iPad launched and quickly became a commercial success. And this holiday season, Amazon debuted its Kindle Fire, which became the first non-Apple tablet to gain a meaningful foothold. Market analyst Forrester recently reported that consumer interest in Windows tablets is waning.

As the core of computing moves beyond the PC, Microsoft needs Windows 8 tablets to succeed. It's all the more pressing as PC growth sputters and the tablet computer market soars.

The market muscle of Microsoft and its partners will help propel Windows tablets at their debut. But unless Microsoft can convince developers to create tablet-specific apps that users can't live without, the devices will have a hard time making a dent in iPad's massive lead.

2. Xbox moves farther into live TV

Even in its earliest days, Microsoft's video game console business was pegged as a Trojan Horse to bring the company's technology from the office to the living room. But the brains behind Xbox knew they had to make a great gaming experience job No. 1. Now, leading the United States in console sales in 2011, Xbox is pushing in earnest beyond gaming.

Microsoft just brought the first hint of live TV to Xbox consoles with an updated look to its Xbox Live service earlier this month. In addition to introducing the Metro-style look to Xbox, it also let customers of Verizon's Fios cable television service choose from 26 different live TV channels--Comedy Central, HBO, and Nickelodeon. A handful of other partners are offering live programming through Xbox as well.

That's clearly just the start for Microsoft. The company is moving toward the goal of getting consumers to fire up their Xbox whenever they flip on their TVs, not just when they want to play a game. Next year will see more live television content come to Xbox Live. It's a foundation that Microsoft will build out as it readies the next version of the Xbox console, something a source on the Xbox team says will happen in 2013.

3. Windows Phone: We're No. 3

It may be a measure of the decade-long struggle to succeed in mobile telephony that, for Microsoft, a victory would be grabbing the third place spot in terms of smartphone market share for its Windows Phone software. While the company has wrestled to arrive at a winning formula, rivals Apple and Google have introduced mobile-phone operating systems that have seized business that Microsoft had hoped to grab.

Microsoft rebooted its phone effort at the end of last year, introducing a passel of new phones from partners running its brand new operating system, Windows Phone 7. The slick-looking software, refreshed in September with an update dubbed Mango, has won plaudits from reviewers for its animation and app integration.

While the technology is catching up with rivals, Windows Phone's market share hasn't. According to market research firm Gartner, just 1.5 percent of the smartphones worldwide run Microsoft's operating system. And rivals aren't standing still. Apple's new iPhone 4S has outsold every other mobile phone since its debut in October. And despite the market fragmentation of Google's Android, with different handset manufacturers running different versions of the mobile operating system, it continues to pull ahead in the marketplace.

There's little doubt that Windows Phone share will grow, if only because of the marketing push Microsoft and partners, particularly Nokia, will make, coupled with the tiny toehold it currently has. But it's most likely to grab customers from Research In Motion's foundering Blackberry business rather than established Apple and Google customers.

4. Patent litigation aggressor

The ground Microsoft hasn't been able to take away from Android in the marketplace may well be covered by the revenue it's able to generate through the threat of litigation. The software giant has persuaded several handset makers--including HTC, Wistron, and Compal-- to pay it a vig for each Android device they sell to settle allegations that the mobile operating system violates Microsoft's patents.

The Android device makers that don't pay? Microsoft's taking them to court. Two high profile cases will move toward resolution next year-- Microsoft's suit against Barnes & Noble, whose Nook e-reader runs Android, and a separate suit against Motorola. (Google is in the process of acquiring Motorola Mobility.)

The tactic has proven so successful that in 2011, Microsoft started collecting fees from companies that make devices running Google's Chrome operating system as well, including Acer and ViewSonic. Expect Microsoft to continue to press device makers that use its rival's technology. Likewise, count on those manufacturers, particularly the smaller ones, to pay up rather than face Microsoft in the courthouse.

5. Growing search through social

Like the mobile-phone business, Microsoft has bounced from one strategy to the next in a bid to be more relevant in Internet search. It's re-branded its search engine a few times, added key partners, and cycled through senior executives, and still significantly trails market leader Google.

There's one Microsoft partnership that could start to pay off in 2012, and it's not the deal to handle search queries from Yahoo. It's Microsoft's deal with Facebook. In May, Microsoft began including recommendations from Facebook friends into its Bing search engine, creating customized results by elevating the ones that receive a "like" from someone in the searcher's Facebook network. So when someone is looking for a Thai restaurant in Seattle, for example, a spot that earned a like from a Facebook friend will rise in that person's particular search rankings.

Google is on to the same formula too, creating its Google+ social network to infuse its search results with customized answers to Web surfer queries. But in social networking, Facebook remains king. Using Facebook "likes" are just the first step. Microsoft clearly plans to add more social signals to Bing in 2012. And while that won't topple Google, it does offer the opportunity to grab a large slice of the search business by providing more relevant results.

Online Shopping vs. In-store shopping : News :

Daily Pulse Poll: Online Shopping vs. In-store Shopping

Do you like shopping online more than in-store shopping? Yes or No? Why or Why not?

A growing number of shoppers apparently need only the briefest of breaks before diving back in, especially if they can log in to shop.

IBM found that online shopping jumped 16.4 percent on Christmas Day over last year, and the dollar amount of those purchases that were made using mobile devices leaped almost 173 percent.

IBM tracks shopping at more than 500 websites other than, which is the largest. It found a huge increase in the number of shoppers making their purchases with iPhones, iPads and Android-powered mobile devices.

In fact, IBM says nearly 7 percent of all online purchases were made using iPads, just 18 months after the tablet computers werereleased by Apple.

Online Shopping vs. In-store Shopping
Do you like shopping online more than in-store shopping? Yes or No? Why or Why not?

Chinese boom could bust the Australian economy

IT'S difficult not to resort to hyperbole or cliche when talking about China's development. That's largely because it really is historically unprecedented in scale and rapidity. It's also hard to criticise a process that has lifted millions out of grinding poverty. But as Australia's own future prosperity becomes increasingly dependent on the Middle Kingdom's, China's economic prospects are of more than simply academic interest.
The disconcerting reality about China's rise is that, for better or worse, whatever happens to its political and economic system will profoundly affect Australia and the rest of the world. To judge from the reality on the ground in China, there are ample reasons for both optimism and concern.
Daqing is a city of more than three million people in freezing northeast Manchuria, but few outside China know of its existence. It is not unique in this regard. There are more than 100 similar cities of one million or more in China that few in Australia have heard of. In Daqing's case this is slightly more forgivable: it didn't exist before the 1960s and has been built from scratch in little more than 20 years. Its remarkable rise illustrates all of the strengths and possible weaknesses of China's unique model of development.
The scale of the building effort in Daqing is simultaneously awe-inspiring and alarming. One becomes accustomed to seeing dozens, even hundreds, of tower cranes alongside the massive apartment blocks and increasingly stylish corporate headquarters that dot the skylines of Chinese cities.
The imminent arrival of a bullet train line and the vast infrastructural development that entails can be greeted with a similarly insouciant shrug, even if such an event would be seen as an unparalleled triumph of nation-building in Australia.
But what really rings alarm bells in a place such as Daqing are the extras. In addition to China's normal frenetic apartment, road and rail-building, Daqing boasts no fewer than five sports complexes, three museums -- five if you include two private sector efforts -- as well as several city and district municipal buildings of Stalinist proportions and style. Did I mention the two opera houses? One opera house in a place famous for gritty, no-nonsense industrialisation would have been a surprise, but two? At least the new airport looks sort of justified, even if that of the provincial capital, Harbin, is only an hour down the road.
The phrase "more money than sense" comes to mind, but this is not how the locals see it. What some may see as the morbid symptoms of an economy over-reliant on domestic investment and too easily available capital, the political and economic elites of Daqing see as testimony to the underlying strengths of the local economy and a vote of confidence in the city's future.
After extensive discussions with some of the city's senior business and political elites, it's easy to be dazzled by their confidence and boundless ambition. Yet it's equally possible to see how it could all end in tears, and not just for the Chinese. Anyone visiting Ireland or Spain a few years ago would also have seen the tower cranes and heard the blarney about the once-in-a-lifetime investment opportunities in real estate. It's easy to be wise after the event, of course, but many worried about a bubble then -- they are right to do so now. The good news is that, for Daqing, at least, there are palpable underlying strengths as well as some visible weaknesses.
The reason Daqing exists is because oil was discovered there in 1959. Great tales are told about the heroism of the proletariat in developing the petroleum industry in truly appalling conditions, best imagined from the comfort of one of Daqing's growing number of five-star hotels. The contrasts really are astounding and not just evident to pampered Westerners. Local party officials are also painfully conscious their children may be more interested in the materialism that Marx and Mao derided.
Yet the great contradiction, as the Marxists used to say, is that insufficient demand -- for consumer goods, at least -- may be the achilles heel of the Chinese economy. The Chinese are some of the world's greatest savers for good reason. In the absence of an effective welfare state self-reliance remains a virtue. But who will shop in, much less rent, the thousands of spaces for new small businesses that are found at the bottom of many new apartment blocks, not to mention selling or letting the hundreds of thousands of new apartments up above?
The fact China has huge pent-up demand for housing suggests its problems are different from those of Ireland, Spain or the US, for that matter. The problem is that much of the new housing remains unaffordable. Inequality is a greater problem for China than it is in much of the West. This is, after all, the People's Republic, and many of the people's rising expectations remain unmet despite the manic infrastructure development.
Diminished expectations may prove a greater challenge for China than the West, especially if what looks like a bubble in the real estate sector collapses. In the West it seems our expectations of political leaders plumb new depths with every passing year, without threatening the overall political system itself. In China, by contrast, the Communist Party continues to enjoy surprisingly high levels of support, but its legitimacy is almost entirely dependent on its ability to maintain growth in an essentially capitalist economy, albeit one in which the state looms large.
Daqing's elites are aware of these contradictions. Indeed, they display a remarkably sophisticated view of the domestic political-economy and international relations. Whether they are capable of managing the impact of a nationwide economic downturn is debatable. But we must wish them luck. For better or worse our fates are now intertwined. Whatever the merits of China's manic building boom, if it stops abruptly, the pain will be felt much closer to home, in smaller towns and cities you actually have heard of

Dec 26, 2011

Violent storms shatter the peace of Christmas

A TORNADO, hailstones the size of golf balls, once-a-year rainfall and wind gusts of more than 100 km/h were among Mother Nature's Christmas gifts to Melbourne. The weather bureau reported four or five individual thunderstorm cells that began moving across metropolitan Melbourne late yesterday afternoon. Meteorologists were taken aback as the storms hit, including a tornado at Fiskville, near Bacchus Marsh. Spokeswoman Claire Yeo said such an event would likely only happen a few times each year.

Wind gusts of up to 109 km/h at Melbourne Airport meant flight delays for travellers because of severe lightning. An airport spokeswoman said some flights had been diverted to Sydney as it was difficult to predict when planes could fly safely through lightning and strong winds. A Qantas spokeswoman said the longest delay was 40 minutes. SES spokesman Lachlan Quick said hailstones had ripped through skylights, windows and roof tiles in Taylors Lakes, Sunshine and Keilor.

The SES responded to more than 2500 calls for assistance, most of which were for building damage from hailstorms. More than 20 people were rescued after being trapped in their cars and homes by flash flooding. 3AW was off air from early evening - but still on the net, digital radio and mobile applications - after its transmitter was struck by lightning. In Briar Hill, near Greensborough, one resident tweeted evidence of a white Christmas as hailstones covered the lawn.

The weather bureau radar went from red to brown to black - the most severe rain warning. Laverton received 30 millimetres of rain in less than an hour, while Doncaster received 37 millimetres, an event the bureau said occurred only once every few years. Heavy rain is usually considered 10 millimetres of rain an hour or more.

A minor flood warning for the Yarra River, and moderate warning for Merri Creek were issued. Yarraville resident Trevor Hicks said the house opposite his on Stanger Street was burnt to the ground after being hit by lightning. No one was home. ''It looked like the lightning hit the roof and then it just exploded in flames,'' he said.

Europe is facing a double-dip recession

FEARS are growing that Britain and other parts of Europe are on the verge of plunging back into a double-dip recession as the eurozone debt crisis shows no signs of abating.
Activity in Britain's dominant services sector slumped by much more than expected in October, according to figures published at the weekend, while France's gross domestic product for the third quarter was revised downwards as it struggled to keep its AAA sovereign rating.
Britain's Office for National Statistics said that output in the services sector, which makes up about three-quarters of the economy, fell by 0.7 per cent in October, after no growth in September.
Only April was worse, but this was because of the royal wedding. Output in the three months to October was up by only 0.2 per cent, compared with 0.7 per cent in the three months to September. October's figures were driven mainly by a 2.5 per cent drop in transport, storage and communications and a 0.7 per cent fall in business services.
Markit chief economist Chris Williamson said: "Worryingly, the government provided the main boost to services growth in October, with output up 2.3 per cent on a year ago and growing at more than double the 1.1 per cent annual expansion seen for the sector as a whole. Government spending should weaken as budget cuts hit, taking this prop away."
Industrial output also fell at the sharpest pace for six months in October, raising the chances that Britain has already gone into recession.
Economists are predicting that the economy will contract in the final quarter of 2011 and the first three months of next year, pushing the country back into recession for the first time since 2009.
The picture was just as gloomy on the Continent, where France's statistics office said that the economy grew by a mere 0.3 per cent in the third quarter, instead of the previous estimate of 0.4 per cent.
The markets were expecting Standard & Poor's, the rating agency, to downgrade France's AAA credit rating this week but sources told Reuters it would publish its verdict on debt ratings for 15 eurozone countries next month.
There was a mixed picture in the US as durable goods orders and new home sales rose by more than expected, while consumer spending continued to trundle along the bottom.
Durable goods orders rose by 3.8 per cent in November, after no growth in October. Property also fared well, with sales of new single-family homes rising to a seven-month high. But consumer spending grew by less than expected in November, ticking up by 0.1 per cent. Economists had expected spending, which accounts for two-thirds of US economic activity, to rise 0.3 per cent.

Dec 25, 2011

Avoid carjacking, buy a manual

US thieves abort theft after discovering they have to shift gears.

Locking your doors and carrying capsicum spray is all well and good for thwarting carjackers, but drivers in the US have another potent weapon at their disposal - choosing a car with a manual transmission.

It seems that driving a manual is likely to reduce your risk of being held at gunpoint and forced to hand your car over to criminals.

The theory was borne out in two separate cases in the US recently where would-be car thieves put their plans on hold after realising the car they’d targeted didn’t shift gears on its own.

According to overseas reports, a woman leaving a petrol station was stopped at gunpoint earlier this week by a would-be car thief in Denver, Colorado.

After taking the woman’s purse and keys to her late-model Audi, the perpetrator got into the car and attempted to drive off … until it became clear that he did not know how to use the manual gearbox. The humiliated hoodlum chose to flee the scene rather than ask for a quick driving lesson.

It follows another case in Florida earlier this month where a man and woman were left bewildered after being victims of a similar confrontation.

Two armed men reportedly appeared at the window of the couple’s 2007 Nissan and ordered them out of their car at gunpoint. The carjackers then took hold of the car until they discovered a third pedal.

According to the victims, the two men gave up on stealing the car and fled the scene of the crime on foot.

Wanted to buy: geeks with big ideas

Australian technology entrepreneurs are partying like it's 1999. The boom times are back except this time, industry players say, tech start-ups have real business models behind them and are earning real money to justify their ballooning valuations.

In the past 18 months alone hundreds of millions of dollars have flowed to Australian technology entrepreneurs. Big US venture capital firms are stalking Australian start-ups with wads of cash.

''The combination of a lower cost of entry, the emergence of a real, connected Australian start-up community and an increase in investment capital has enabled Australian companies to build great products and take them to the international stage,'' says David McKinney, founder of Perth-based smartphone app maker Filter Squad, which received $1.1 million in local venture capital funding last month.

Ryan Junee ... Sold Omnisio to Google and now he's on to his next big hit, Inporia.

Ryan Junee ... Sold Omnisio to Google and now he's on to his next big hit, Inporia. Photo: Dustin Diaz

The collapse of the dot-com bubble in 2000 made the term ''start-up company'' shorthand for joke. Thousands of technology-oriented firms suddenly appeared around the world, they were high-risk investments but a few dot-coms hit it big time and gave huge returns on investment.

Fast forward a decade and the technology kings dominated the recent BRW Young Rich List, while a quarter of the BRW Fast 100 list of fastest-growing Australian companies are technology-related.

Already, several Australian firms - like enterprise software provider Atlassian, e-commerce platform BigCommerce, graphics design hub 99designs and outsourcing site - are global leaders in their niches.

"We're making data science into a sport" ... Kaggle founder Anthony Goldbloom.

"We're making data science into a sport" ... Kaggle founder Anthony Goldbloom. Photo: Rodger Cummins

A huge Australian start-up community has formed. Local incubators like Startmate, Pollenizer, PushStart, Blue Chilli, York Butter Factory and Angel Cube are flourishing, as are regular networking events such as SydStart, Tech23 and Silicon Beach.

But the boom is also causing a brain drain of Australian high-tech talent to the US. chief executive, Matt Barrie, who mentors many up-and-comers, says there are now 65 Australian start-ups in Silicon Valley - such a potent force they have been dubbed the ''Aussie mafia''.

And our governments seem eager to encourage entrepreneurs to head offshore, with Austrade providing assistance and the NSW government announcing it's setting up an international office in San Francisco.

BigCommerce founders Eddie Machaalani and Mitchell Harper.

BigCommerce founders Eddie Machaalani and Mitchell Harper.

''They all want to get to Silicon Valley,'' says Richard Horton, an Australian who is a partner with the global law firm DLA Piper and has helped several Australian start-ups make it big in the US.

''We've kind of got the second coming of the internet … there's a huge number of IT graduates coming out of Australia and … they're seeing they can work for themselves and do well.''

Jonathan Barouch, 29, founder and chief executive of personal tour guide app Roamz, which is now cashed up after a $3.5 million investment and is spreading its wings offshore, said the tech scene in Australia seemed to die after the dot-com crash but there had been a resurgence over the past 12 to 24 months.

Bardia Housman has sold two tech startups for a combined $100 million.

Bardia Housman has sold two tech startups for a combined $100 million.

But moving offshore seems to be a pre-requisite for raising US-based funds. It is clear that existing federal government grants through initiatives like Commercialisation Australia, which provides grants for innovative companies, isn't enough.

''If the government doesn't get their act together to create the right economic settings to support innovation we will have start-ups vanishing overseas,'' Barouch says.

Last month Anthony Goldbloom, who created ''crowd-sourcing for geniuses'' website in a small Bondi apartment, received an $11 million injection from some of the biggest investors in Silicon Valley - including the founders of PayPal and Sun Microsystems.

Nikki Durkin, 20, will soon have guaranteed access to the biggest players in Silicon Valley.

Nikki Durkin, 20, was accepted into the YCombinator entrepreneur program in the US. Photo: Michele Mossop

The site, which connects 17,000 of the world's best thinkers with the most intractable data-related problems, has come up with models for NASA to map the universe's dark matter and developed algorithms to help health care providers predict which customers will get sick.

But Goldbloom has now moved offshore, as have Anthony Marcar and Stuart Argue who, just days after the Kaggle deal was announced, sold their mobile shopping technology start-up, Grabble, to US retail giant Walmart for an undisclosed amount. Grabble, created in a Wollongong garage, allows retailers to send receipts to customers' smartphones so that instead of having to retain and manually capture receipts (for tax, expense reports, etc), the customer can track them through the app.

''In the US, working for or starting a start-up is a valid career choice … fewer than 10 of Australia's 50 largest companies are less than 50 years old compared with more than 40 in the US,'' Goldbloom says.

Marcar, 27, says Australians have a secret weapon in the Valley: their accents. ''It's a huge asset over there. It will help you stand out from the crowd and get meetings that wouldn't normally be possible,'' he says.

Ryan Junee, 32, has been living in Silicon Valley for almost a decade and now mentors the new generation of entrepreneurs. Junee sold his first start-up, Omnisio, to Google for an estimated $US15 million less than a year after it was created. Omnisio's features are now part of YouTube, while Junee is on to his next start-up, fashion recommendation site Inporia, which attracted $1.25 million in funding earlier this year.

''There is a tremendous ecosystem of support in Silicon Valley - ranging from successful entrepreneurs who have done it before, to investors that are more willing to take big risks at early stages, to lawyers who are intimately familiar with everything a start-up will go through and all sorts of other professionals who are experts in working with start-ups,'' Junee says.

''Perhaps one of the biggest advantages of being in the Valley is serendipity - the chance encounters that happen simply by being here, due to the fact that so many other great people are here.''

So why are venture capital firms so eager to throw money at the next big tech thing? BigCommerce co-founder Mitch Harper, 29, believes it is because investors only need one in 20 investments to take off to cover their fund.

Bardia Housman is one of the Silicon Valley Aussie mafia's founding members. He created Australia's first free email service,, in 1997 and it quickly became Australia's most trafficked website before it was sold to Looksmart in 1999, when Housman was 25. He sold his next company, Business Catalyst, to Adobe in 2009.

Housman's mission now is to help other entrepreneurs from Australia and New Zealand hit the big time. He has bought a building in the heart of San Francisco that he wants to transform into an incubator for Australian start-ups.

Virtually every start-up accepted into the local Startmate program has gone on to receive funding but Startmate founder Niki Scevak says ''way more needs to happen to qualify Australia as a great place for start-ups''.

''There isn't so much a brain drain as a brain boomerang,'' Scevak says, predicting many Australians who move to Silicon Valley will eventually return to Australia. Marcar agreed.

E-commerce platform, BigCommerce, raised $15 million in August and has since taken the world by storm after opening an office in Texas. But like Atlassian and 99Designs, it is keeping its Australian office open.

The creator of Silicon Beach, Australian Elias Bizannes, also founded the quirky StartupBus project, which involves buses full of geeks driving from six US cities to Austin, Texas, for the annual SXSW (South by Southwest) festival. By the end of the 48-hour journey the six teams on each bus - all strangers - are each expected to have created a functional prototype of their start-up. There have been 158 ''buspreneurs'' and 38 products created to date.

But industry insiders are quick with the reality check. Marcar said that chances are most first-time start-ups will fail while Goldbloom said it's virtually impossible to get a foot in the door in the US without strong networks.

Scevak concurred: ''Like a gambler's losses, you will rarely hear about the failures but for sure there are many more than winners.''

In a blog post titled You Guys Are Millionaires Right?, Australian smartphone app developer Shifty Jelly said it and many other Australian developers were struggling to keep their heads above water and facing tough user reviews.

Rebekah Campbell, former band manager for acts like Evermore and Operator Please, created as a way for fans to sell tickets on behalf of artists in return for commissions.

Just for the domain name, Campbell said she had to spend the deposit she saved for her first house. Closing a $1.5 million investment round took ''almost 1000 presentations and four trips around the world'', and even though the site launched in 2009, it has only just hit $165,000 in gross monthly revenue in February.

Campbell said the dearth of female software developers meant female tech start-up founders were few and far between.

But this is changing - Shoes of Prey founder Jodie Fox recently launched a new site, Sneaking Duck, selling glasses instead of shoes, while founder Nikki Durkin recently beat thousands of entrants to be accepted into the US YCombinator program, which has launched giants like the $1 billion accommodation finder AirBnB.

Are we headed for another dot-com bust? ''There's a risk it could happen again. The tech scene, like the stock market or real estate, works in cycles,'' Mitch Harper says.

The world's their oyster

Atlassian From a Sydney garage, Atlassian has gone global and beaten some of the biggest names with lower-priced, web-based enterprise software. The site raised $US60 million last year; founders Scott Farquhar and Mike Cannon-Brookes, both 31, are worth $360 million.

99Designs Matches designers around the world with businesses seeking graphic design work; raised $35 million earlier this year. Based in Sydney, Freelancer lets you outsource virtually any task to individuals around the world. It has 3 million users and is expecting about $35 million in turnover this calendar year.

Halfbrick Studios Based in Queensland, Halfbrick makes mobile games including Fruit Ninja, which has sold 20 million copies.

Firemint Melbourne game maker Firemint, which created titles such as Flight Control, sold to US giant Electronic Arts in May. Founder Rob Murray is now worth $24 million.

BigCommerce Started in a spare room above a mate's shop with $25,000 in loans, BigCommerce is a global e-commerce leader and raised $US15 million in August.

Kaggle Connecting the world's smartest minds with its toughest problems has been a windfall for Anthony Goldbloom, who moved to the US after raising $US11 million.

Grabble Built to help bricks and mortar retailers take advantage of mobile apps at the checkout. Was acquired by Walmart in November.

Catch of the Day Gabby and Hezi Leibovich sold part of their daily deals company in July for $80 million.

Spies spied on in $5 billion cyber bazaar

The intelligence operative sits in a leather club chair, laptop open, one floor below the Hilton Kuala Lumpur's convention rooms, scanning the airwaves for spies.
In the salons above him, merchants of electronic interception demonstrate their gear to government agents who have descended on the Malaysian capital in early December for the Wiretapper's Ball, as this surveillance industry trade show is called.
As he tries to detect hacker threats lurking in the wireless networks, the man who helps manage a Southeast Asian country's internet security says there's reason for paranoia. The wares on offer include products that secretly access your web cam, turn your cell phone into a location-tracking device, recognise your voice, mine your email for anti-government sentiment and listen to supposedly secure Skype calls.
He isn't alone watching his back at this US$5 billion cyber-arms bazaar - the event's real name is ISS World.

For three days, attendees digging into dim sum fret about losing trade secrets to hackers, or falling prey to phone interception by rival spies. They also get a tiny taste of what they've unleashed on the outside world, where their products have become weapons in the hands of regimes that use the gear to track and torture dissidents.
"I'm concerned about my calls or internet being monitored, because that's what they sell," says Meling Mudin, 35, a Kuala Lumpur-based information-technology security consultant who takes defensive measures as he roams the exhibits. "When I make phone calls, I step out of the hotel, I don't use my computer and I also don't use the wireless services provided."
'We meet again'
ISS, which convenes every few months in cities from Dubai to Brasilia, is the hub of the surveillance trade. In recent years, countries such as Syria, Iran and Tunisia bulked up their monitoring by turning to some of ISS's corporate sponsors, such as Italy's Area SpA and Germany's Utimaco Safeware (USA) and Trovicor, a Bloomberg News investigation showed.
Business is booming, with annual revenue of US$3 billion to US$5 billion growing as much as 20 per cent a year, ISS organiser Jerry Lucas estimates.
Lucas, 68, an American with a PhD in physics, is perfectly cast for the part of spyware convention mastermind. With sweeping eyebrows and a bare pate that make him a look-alike of Democratic strategist James Carville, he greets an uninvited journalist at his Prague event in June with "We've been expecting you."
Then in Kuala Lumpur this month, he descends an escalator from the convention floor and intones: "We meet again."
Warning attendees
Lucas, whose conference company TeleStrategies, is based in McLean, Virginia, makes the point that his marketplace serves police who conduct criminal investigations and intelligence services that prevent terror attacks. Virtually every communications network in the world includes wiretapping for prosecutors, or location tracking to rescue people in emergencies. And customers at ISS also include phone company executives.
Still, Lucas describes spy-vs-spy intrigue that emerges when he convenes ISS (short for Intelligence Support Systems). The potential for hacking has led him to warn attendees to comply with the law of host countries.
"We tell them 'do not bring in radio equipment that is not allowed by the government,'" says Lucas, who started ISS nine years ago. Some gear can intercept mobile phone or internet transmissions, impersonating legitimate networks by sitting in the middle of the data flow.
"These guys can be your base station," Lucas says.
'Hide your laptop'
Attendees routinely guard against hacking, says Nikhil Gyamlani, a Munich-based developer of monitoring systems who has attended several ISS events. He says being in close contact with competitors versed in the dark arts gives them a chance to secretly copy documents saved on hard drives or sent via email. He advises preventive measures.
"Absolutely no use of wireless networks, and hide your laptop in a safe," says Gyamlani, 34, the founder of a new surveillance company, GlassCube. "The fear is very justified."
Some who haven't taken such precautions have learned to be more careful.
At ISS in Prague this year, an employee of an African telecommunications regulator was cruising Facebook on his Archos (JXR) tablet computer when he found his every click being projected on a screen at the front of the room, he recalled afterwards in the lobby. He'd been using the hotel's wireless internet.
Watching the detectives
While ISS is closed to journalists, a Bloomberg News reporter dropped in on two 2011 installments, walking hotel corridors, sitting in bars and haunting lounges.
In Prague, at a hotel connected to a shopping mall food court, potential buyers included Thailand's Department of Special Investigation and the US Drug Enforcement Administration. In the lobby, contingents from Greece and Turkey sat on opposite sides of the room.
Many conventioneers carried black canvas tote bags from Utimaco, whose systems were used in a Syrian surveillance project that was exposed this year by Bloomberg News and shut down before it could become operational.
Approaches by a journalist at ISS only triggered more paranoia among some executives. At a fourth-floor conference room rented by Trovicor in Prague, an employee, Jesper Mathiesen, not only declined to talk, but declined to trust the reporter's business card as reliable identification.
Rock star
"Anyone can print a business card," he said, as another employee led a delegation from Serbia into the room.  In the Prague hotel's elevators, an employee of Andover, UK-based Gamma International rode up and down, escorting government delegations to back-to-back, appointment-only demonstrations of Gamma's FinFisher intrusion system, conducted in darkened rooms.
Once secretly planted on a target's computer, FinFisher allows remote control of the device. The tool became widely known early this year when a copy of a FinFisher proposal turned up in Egypt after the February revolution and was posted online.
The notoriety helped make the German hacker-turned-executive behind FinFisher a rock star of the ISS circuit.
Listed in the conference agendas only by his initials, MJM, he is Martin J. Muench, 30, the managing director of Gamma's German unit. One of his talks in Kuala Lumpur is titled, "Offensive IT Intelligence Information-Gathering Portfolio -An Operational Overview."...

Dec 23, 2011

The 10 dumbest tech moves of 2011 | Cringely - InfoWorld

As always around this time of year, I like to look back with a Grinch-like smile at the dumbest moves made during the past year in the world of tech. As always, the competition in 2011 was intense. Here are 10 companies that deserve a big lump of coal in their stockings.

HP. Where is the world's No. 1 computer maker headed? I haven't a clue -- and neither, apparently, does HP. Trying to figure out HP's direction in 2011 was like following a blind man through a house of mirrors. It hired Léo Apotheker as CEO, who decided to kill HP's PC biz and focus on services for the enterprise, only to fire him after 11 months. It launched a long-awaited tablet based on the Palm's WebOS, then killed it a month later. Now with the electorally challenged Meg Whitman holding the reins, HP is back in the PC biz and may re-enter tablets as well. She needs to decide who and what HP is before the rest of us stop caring.

[ Want to cash in on your IT experiences? InfoWorld is looking for stories of an amazing or amusing IT adventure, lesson learned, or tales from the trenches. Send your story to If we publish it, we'll keep you anonymous and send you a $50 American Express gift cheque. ]
RIM. Remember the BlackBerry? You soon won't. The troubled smartphone maker is sinking fast, thanks in part to a dual CEO team that has two heads too many. Can you say "acquisition bait"? I knew that you could.
HBGary Federal. The little-known company was looking to make a big splash at the RSA security conference last February by pulling the mask off "Anonymous" -- or, at least, one of the key Anonymii. But the splash turned into a splat, as not only did CEO Aaron Barr finger the wrong guy as ringleader, he got his clock handed to him by the real Anonymousers, who broke into his company servers and exposed Barr's personal data -- and his company's ineptitude.

Sony. After taking a hard line against PlayStation 3 jailbreakers George "Geohot" Hotz and fail0verflow, Sony got thoroughly spanked by hackers who took down the PlayStation Network and the Sony Online Entertainment offline for a week, spilling the data on more than 100 million customers. Sony then pointed the finger at Anonymous for the attacks, instead of accepting responsibility for its own pitiful security lapses.

AOL-HuffCrunch. I knew when AOL bought TechCrunch in Sept. 2010 it was only matter of time before the sparks began to fly. When AOL added the Huffington Post to its stable of news/rumor sites last February -- and put L'Arianna in charge of Mr. Crunchy, Michael Arrington -- that was like dumping gasoline on lit embers. After Arrington and AOL jefe Tim Armstrong launched a venture fund to invest in some of the companies TechCrunch was (ahem) writing about, the blaze grew into a conflagration that's still burning. Nearly everyone who was on board at TC then has left for greener (hopefully less ethically challenged) pastures. Still, AOL-HuffCrunch is the gift that keeps on giving.

Facebook. Just when we were starting to forget about all of its nasty privacy indiscretions, Facebook tried to put the smear on Google by claiming that the Googlers are -- wait for it -- violating users' privacy by displaying information from Facebook and other social nets. The smear campaign stumbled when it was revealed to have been orchestrated by Facebook PR firm Burston Marseller, though a handful of news orgs still took the bait. Can you say "adult supervision needed"? I knew you could.

Carrier IQ. Never before has a tiny company vaulted from total obscurity to complete idiocy virtually overnight -- except for maybe HBGary. CIQ's first mistake: Trying to sue Trevor Eckhard instead of answering the security geek's questions about what its software was doing on his phone. Mistake No. 2: Hiding under their desks for weeks as bloggers and reporters pummeled CIQ with questions about what data it was collecting from our phones and who else got to see it. Now Sprint and Apple are dumping CIQ, while the U.S. Senate and the FTC are demanding answers. It's not going to be a merry Christmas or a happy new year for these folks -- can't say I feel sorry for them, though.
The United States Congress. There are so many reasons why members of both houses deserve lumps of coal in their stockings, but the recent debate over the Stop Online Piracy Act (SOPA) is reason enough. Shouldn't some sort of digital literacy test be required before they're allowed to take the oath of office?
Comcast. Last February, the largest U.S. cable TV and Internet service provider (and owner of NBC) fired an employee for posting a 17-year-old clip from the "Today" show on YouTube. The content of that 1994 video? Show hosts Bryan Gumbel, Katie Couric, and Elizabeth Vargas discussing a strange, geeky phenomenon known as "the Internet." Who else posted the very same clip on the Web but did not get fired: the 2011 version of the "Today" show.
Demand Media. The purveyor of craptastic websites couldn't make the poorly paid minions at its Demand Studios content farm happy, so it did the next best thing: sued them to stop them from complaining. So far, is still standing, and Demand is still sucking. But Arianna must be happy -- DM makes her Huffington Post look like the New York Times.

Google invests in more renewable energy production capacity | Data Center - InfoWorld

Google has paid $94 million for a stake in four photovoltaic power generation projects around Sacramento, California, bringing its total investment in renewable energy generation this year to $880 million, it announced Tuesday.  The photovoltaic projects were set up by Recurrent Energy, and Google teamed with private equity fund KKR (Kohlberg Kravis Roberts) to buy them.

The projects will be among the first to profit from a special feed-in tariff offered by the SMUD (Sacramento Municipal Utility District) to encourage renewable electricity generation. It guarantees a minimum payment of 6.14 cents per kWh during the spring off-peak period, rising to a summer peak of 24.73 cents per kWh when demand for air conditioning is at its highest. The utility resells that same electricity to consumers for 9.67 cents in winter, and up to 18.59 cents in summer. Other businesses hoping to profit from the tariff are out of luck: The utility has now filled its quota for the tariff and has a waiting list.

| Read Bill Snyder's Tech's Bottom Line blog for what the key business trends mean to you. ]

Together, the four projects are expected to generate almost 160GWh in their first year of operation, about the consumption of 13,000 homes, and will have a peak generating capacity of 88MW when they come online next year, Google said. SMUD put the generating capacity of the four Recurrent Energy projects (PDF) at nearer 70MW.

Google has already made investments aimed at putting photovoltaic panels on 10,000 homes, but this is its first investment in utility-scale generation, it said. It does, though, already have its own massive photovoltaic generation system on its Mountain View, California, campus.
The company is keen to promote its green credentials. It announced earlier this year that it has been carbon neutral since 2007, and appears to be competing with another Web giant, Facebook, to see who can build the greenest data centers. A common measure of this is the PUE (power usage effectiveness) of the data center, the ratio of total power consumption (including lighting, ventilation and cooling) to power consumed by the IT equipment. A data center with a PUE of 1.0 would waste no power on ancillary functions.

Dec 22, 2011


The Chinese locomotive has been losing steam throughout 2011 as investment and real estate led growth becomes harder and harder to come by due to diminishing marginal returns. The effects of the slowing of the up-and-coming Asian giant ripple through Asia Pacific and push othercountries into recession. If there ever was a country dependent on the well-being of China itis Australia with its heavy dependence on mining and natural resources. And as China’s demand for these goods weakens Australia is pushed into a recession, which is then exacerbated as the housing sector finally experiences its long overdue crash – a half decade after the rest of the developed world. Saxo Bank Dubai

Roubini: Goodbye China, hello Indonesia | Nouriel Roubini Blog

In an article on the Financial Times dated October 25, 2011 entitled " Goodbye China, hello Indonesia " Professor Nouriel Roubini was very bullish about the Indonesian economy which has low inflation, low debt, young demographics and accelerating growth unlike China which heading for a hard landing , Finally Fitch Ratings has upgraded Indonesia’s long-term, foreign and local, currency issuer default ratings to investment grade (to ‘BBB-’ from ‘BB+’) a move that has Nouriel Roubini’s blessing as he wrote himself in a twitter message "Indeed Indonesia deserves that investment grade rating @ChrisAdamsMKTS: In a move that will get @nouriel blessing " he wrote .....

Nouriel Roubini : Double-Dip Recession in the US by 2013 | Nouriel Roubini Blog

"By 2013 at the latest, but possibly already in 2012, a perfect storm of a double-dip recession in the U.S., a disorderly scenario in the euro zone and a hard landing in China could materialize," Dr. Nouriel Roubini wrote in an article published on the Financial Times "It will become clear in 2012 that this game of 'kicking the can down the road' is a zero-sum game," He explained "The euro zone has been in denial of the fact that some of its member states are insolvent, as well as unable to survive and grow in a monetary union," He added

Internode falls to iiNet acquisition temptation • The Register

Popular Adelaide-headquartered national ISP Internode, a pioneer in Australia’s ADSL2+ market and vocal critic of National Broadband Network price strategies, is to be acquired by number two broadband provider iiNet.

The $AU105 million buy, announced on December 22 to the Australian Securities Exchange, may not be greeted with universal glee by Internode’s devoted and relatively tech-savvy fans.

However, it continues the ongoing ISP consolidation trend in the Australian market, with fixed line growth flattening and with the future of DSLAM infrastructure grandfathered by the rollout of NBN fibre.

At least for now, Internode has said that it will operate as an independent business unit of iiNet, perhaps in an attempt to maintain the junior telco’s reputation as a “geek’s ISP”.

Internode also operates a CBD fibre network in Adelaide, along with VoIP, mobile broadband resale, and some regional wireless services in South Australia.

Tepid response to e-security review | The Australian

THE Gillard government has batted aside 30 recommendations of the year-long parliamentary inquiry into High-Wire Act: Cyber Safety and the Young, accepting only two uncontroversial findings.

Twelve recommendations were accepted in principle, but any decisions will be dependent on the outcomes of a Cyber White Paper launched by former Attorney-General Robert McClelland in early June -- two weeks before the Joint Select Committee on Cyber-Safety tabled its 600-page report on June 20.

The government quietly tabled its 24-page response to the High-Wire report late Tuesday.

The committee had received 169 submissions from individuals and organisations and heard evidence from 95 witnesses at 11 public hearings held around the country.

Chaired by retiring South Australian senator Dana Wortley, it had recommended new approaches to cyber-bullying, data and privacy breaches and legal enforcement, along with innovative educational strategies.

Senator Wortley said the report focused on "how young people can be empowered and connect to the internet, and use new technologies, with confidence".

"Consulting with young Australians was a key priority," he said in June. "Our findings show that younger generations not only hold the key to their own safety, but also that their knowledge and risk management strategies are frequently undervalued.

"The most significant points to emerge include the need for children and young people to be in control of their own experiences online through better education, knowledge and skills; the need for enhanced privacy provisions and research in many areas, and importantly the need to assist parents, carers, teachers and others dealing with young people."

But these recommendations are on hold until public consultations on the Cyber White Paper are concluded by the department of Prime Minister and Cabinet; the report is due before mid-year.

"The responses to the (High-Wire report) reflect the government's announcement that it will develop a White Paper examining the full spectrum of cyber issues such as better coordination of awareness-raising activities, the development of skills, more centralised reporting of cyber incidents and a more coherent approach to cyber education," the formal response says.

"Public consultation for the White Paper commenced mid-September, and many of the topics that will be explored are relevant to the joint committee's recommendations."

Eight further recommendations were noted, but will await the possibly even longer outcomes of the government's deliberation on the second tranche of privacy law reforms, originally flagged by the Australian Law Reform Commission in May 2008.

Labor has been promising to rewrite the 23-year-old Privacy Act for the digital age since 2009, but is still struggling to implement the first tranche of reform.

Earlier this month, a spokeswoman for former privacy minister Brendan O'Connor said any changes to mandatory data breach notification laws would be done as part of the second tranche of privacy law reforms.

"The government is working through the ALRC's extensive recommendations methodically and in consultation with stakeholders," she said. "The government is initially focusing on amending the Act to implement (a uniform, single set of) Australian Privacy Principles and a new credit-reporting scheme.

"The government remains committed to responding to the rest of the ALRC's recommendations. Where appropriate, the government will proceed with legislation giving effect to those recommendations."

Meanwhile, the government accepted a further five recommendations from the High-Wire report in principle, but said these would be subject to agreement by the states and territories; three more would depend on availability of future Budget or other funding, while two required negotiations with industry.

The two successful recommendations involved consultations to establish an agreed definition of the term cyber-bullying, and for the federal government to continue working to develop "strong online privacy protections" internationally and within the region.

Those awaiting the White Paper include cyber safety education programs for preschoolers and primary students; national core standards for cyber safety education and "acceptable use" agreements for online access at schools; and training programs for teachers, police officers and court staff.

Recommendations awaiting reform of the Privacy Act include tightening data breach laws for small businesses with significant holdings of personal data, or which transfer data offshore; new guidelines for privacy consent for website users; a ‘Do Not Track' code to rein in online advertisers, and stronger accountability by local organisations for data held offshore.

Following last week's cabinet reshuffle, new Attorney-General Nicola Roxon has taken on responsibility for privacy and Freedom of Information.

Prime Minister Julia Gillard, however, has removed cyber security policy from the AG's portfolio, and taken it into the department of Prime Minister and Cabinet.