SpaceX makes historic launch to space

CAPE CANAVERAL: An unmanned rocket owned by privately held Space Exploration Technologies blasted off from Cape Canaveral Air Force Station on Tuesday for a mission designed to be the first commercial flight to the International Space Station.

The 178-foot (54-meter) tall Falcon 9 rocket lifted off at 3:44 a.m. (0744 GMT) from a refurbished launch pad just south of where NASA launched its now-retired space shuttles.

The US space agency is counting on companies like Space Exploration Technologies, or SpaceX, to take over flying cargo - and eventually astronauts - to the $100 billion space station, which orbits about 240 miles (390 km) above Earth.

Currently, NASA is dependent on Russia to fly crew to the station, at a cost of more than $60 million per person. Russia, Europe and Japan also cargo to the station.

If its test flight is successful, SpaceX would become the first private company to reach the space station, a microgravity research complex for biological, materials, fluid physics and other science experiments and technology demonstrations.

SpaceX, founded and operated by internet entrepreneur Elon Musk, and Orbital Sciences Corp already hold contracts worth a combined $3.5 billion to fly cargo to the station.

SpaceX also is among four firms vying to build space taxis to fly astronauts, tourists and non-NASA researchers.

Separately, NASA contributed nearly $400 million to SpaceX's $1.2 billion commercial space program, which includes development and up to three test flights of Falcon 9 rockets and Dragon capsules.

An analysis by the US Government Accountability Office shows that a similar program under a traditional NASA procurement would have cost four to 10 times as much, said NASA's Alan Lindenmoyer, who manages the agency's commercial spaceflight initiatives.

If Dragon can be successfully maneuvered and operated in orbit, it is expected to be cleared for a berthing at the space station on Friday. (Reuters)

Engine problem delays US rocket launch

CAPE CANAVERAL: The launch of a privately owned Falcon 9 rocket from Cape Canaveral Air Force Station was delayed on Saturday when a computer detected a possible problem with one of the rocket's engines, a Space Exploration Technologies official said.

Preparations for the company's trial cargo run to the International Space Station proceeded smoothly until 4:55 a.m. EDT (0855 GMT) when, instead of the Falcon 9 rocket's main engines igniting, an onboard computer scrubbed the launch.

"Liftoff  we've had a cutoff. Liftoff did not occur," said NASA launch commentator George Diller.

A few minutes later a SpaceX official reported the cause of the delay - a high-pressure reading in one of the engine's chambers. With only a one-second launch opportunity on Saturday, SpaceX had no time to try to sort out the problem.

The company's next opportunity to launch is at 3:44 a.m. EDT (0744 GMT) on Tuesday.

The unmanned rocket, carrying a Dragon cargo capsule, will try to reach the International Space Station.

SpaceX is one of two firms hired by NASA to fly cargo to the $100 billion orbital outpost, which is owned by the United States, Russia, Europe, Japan and Canada.

Since the space shuttles were retired last year, NASA has had no way to reach the station and is dependent on its partner countries to fly cargo and crew. It hopes to change that by buying rides commercially from US companies. (Reuters)

Introducing the Knowledge Graph

Facebook boosts number of IPO shares

NEW YORK: Facebook on Wednesday boosted by 25 percent the number of shares for sale at its stock market debut, amid signs of strong investor demand for its initial public offering this week.

The move by the Internet giant comes one day after it filed paperwork with the US Securities and Exchange Commission raising its IPO share price from a range of $28 to $35, to between $34 to $38 per share.

Facebook's IPO is likely to take place on Friday.

The raised IPO share price, as well as the increase in the number of shares available, reflects confidence in stock for the Menlo Park, California-based company.

Facebook is already assured of becoming the most valuable US Web company at the time of an IPO, topping Google's $23 billion valuation in 2004.

Trading is expected to begin on Friday under the symbol "FB" on the technology-heavy Nasdaq. (AFP)

GM to drop FB ads due to low response

DETROIT: General Motors Co said on Tuesday it will stop advertising on Facebook, even as the social networking website prepares to go public.

A source familiar with the automaker's plans said GM's marketing executives decided Facebook's ads had little impact on consumers.

While GM's decision could be an exception in the advertising world, it marked the first highly visible crack in the Facebook strategy, said Brian Wieser, Internet and media analyst at Pivotal Research Group.

"This does highlight what we are arguing is the riskiness of the overall Facebook business model," he said. "It is not a sure thing. It sure looks likely that it will be one of the most important ad-supported media properties, but it's not certain because there will be marketers who are challenged to prove the effectiveness of the marketing vehicle."

Facebook Inc, founded eight years ago by Mark Zuckerberg in a Harvard dorm room, is expected to start trading on the Nasdaq on Friday. The world's No. 1 social networking site raised its IPO price range on Tuesday, potentially giving the company a valuation of more than $100 billion.

GM said it will still have Facebook pages, which cost nothing to create, to market its vehicles. GM pays no fee to Facebook for its pages, which allow the automaker to reach consumers directly.

GM said it regularly reviews how it spends its marketing budget and adjusts its approach as needed.

"It's not unusual for us to move our spending around various media outlets - especially with the growth of multiple social and digital media outlets," the company said in a statement.

"In terms of Facebook specifically, while we currently do not plan to continue with advertising, we remain committed to an aggressive content strategy through all of our products and brands, as it continues to be a very effective tool for engaging with our customers," GM said.

NO. 3 U.S. ADVERTISER

GM spends about $40 million on its Facebook presence, but only about $10 million of that is paid to Facebook for advertising, according to the Wall Street Journal which first reported GM's plans to drop Facebook ads. The remaining budget covers the creation of content and the advertising and media agencies involved, the newspaper said.

GM, the country's third-largest advertiser behind Procter & Gamble Co and AT&T Inc, spent $1.11 billion on U.S. ads last year, according to Kantar Media, an ad-tracking firm owned by WPP Plc. About $271 million of GM's total ad spend last year was for online display and search ads excluding Facebook advertising.

Facebook ads make up a small percentage of GM's advertising budget, but the company said it is committed to the website to market its vehicles.

For instance, the Facebook page for the Chevrolet Sonic small car as of 2000 GMT on Tuesday had more than 423,000 "likes." The first three months of Sonic's marketing campaign which began last October were exclusively digital, with TV ads not running until early this year.

REACHING YOUNGER CONSUMERS

While GM rival Ford Motor Co said it was committed to advertising on Facebook, the social media site is just one part of the No. 2 U.S. automaker's marketing strategy.

"You just can't buy your way into Facebook," said Ford spokesman Scott Monty. "You need to have a credible presence and be doing innovative things."

More than 20 percent of Ford's marketing budget is spent on digital and social media, he said. The company launched its new Explorer SUV on Facebook.

Automakers are increasingly turning to social media sites to reach younger consumers on their turf for less than a tenth of the cost of a traditional marketing campaign.

Ford first used social media on a wide scale to promote the Fiesta small car in 2009 in a campaign dubbed the "Fiesta Movement." It spent $5 million on the campaign for the car, which was returning to the U.S. market after roughly three decades.

After the Fiesta campaign, Ford said 60 percent of Americans who said they would buy a small car within two years said they were familiar with the Fiesta. That kind of recognition would cost $100 million through traditional means, the company said.

Most of Facebook's corporate clients, like Ford, are satisfied with the return they get from their ads, said Jason Beckerman, chief strategy officer for Unified, which helps companies analyze the impact of marketing campaigns on social networking sites. In addition to Ford, clients at his firm include German automaker BMW, P&G and Microsoft Corp.

Beckerman, who has worked with Facebook in the past, said companies tend to be dissatisfied when they simply "throw money" at social networking sites. "Without the proper planning and structure of your buys, you are asking for little to no results." (Reuters)

Captain tossed from troubled Yahoo! ship

SAN FRANCISCO: Yahoo! boss Scott Thompson stepped down Sunday in the face of controversy about his allegedly inflated resume, leaving the struggling Internet pioneer seeking its sixth CEO in five years.

As part of a truce in a proxy war with mutinous shareholder Daniel Loeb, Ross Levinsohn became interim Yahoo! chief and Fred Amoroso took charge of the board of directors.

"Yahoo! has been struggling over recent years and this new incident only makes matters worse for the company," said technology industry analyst Jeff Kagan.

"Yahoo! rode the wave up during the last decade, but during the last several years has crossed over the top and has been heading down the other side."

The changes are part of a settlement with Loeb's hedge fund Third Point, which is waging a proxy battle at the Sunnyvale, California-based firm.

Loeb and two of his picks -- Harry Wilson and Michael Wolf -- will take seats on the Yahoo! board Wednesday.

Five current board members, including director Roy Bostock and Patti Hart, will step down immediately and not end their terms at this year's annual shareholders meeting as originally planned, according to Yahoo!

"The board is pleased to announce these changes and the settlement with Third Point, and is confident that they will serve the best interests of our shareholders," Amoroso said in a statement.

Levinsohn's background includes running Fox Interactive Media when the News Corporation property bought then-flourishing social networking star MySpace for $580 million and cut a lucrative search deal with Google.

Levinsohn recently ran Yahoo! advertising sales in the Americas.

Yahoo! last week began investigating a charge leveled by Loeb that Thompson misstated academic credentials by claiming on his CV a computer science degree that he never earned.

Yahoo! acknowledged an "inadvertent error" in the CEO's online bio.

Third Point, which owns 5.8 percent of the struggling tech giant, wanted Thompson fired.

Thompson was named Yahoo! chief in January, four months after the company sacked his predecessor Carol Bartz over her unsuccessful efforts to turn the company around.

"To get another CEO is as hard as it is ever going to be for that company," said independent analyst Rob Enderle of Enderle Group. Anyone with the ability to do the job is probably too smart to take it."

Bartz was fired after less than three years in the job. She blasted her overseers as "the worst board in the country" after being pushed out the door.

Thompson left a job as head of online payments firm PayPal, a key unit of Internet auction powerhouse eBay, to take the Yahoo! helm.

Under Thompson, Yahoo! dumped products along with workers in a quest to put the company back on course.

Yahoo! said in April that it would slash some 2,000 jobs in a purge aimed at becoming a "smaller, nimbler, more profitable" company.

The 17-year-old firm had more than 14,000 employees at the end of 2011.

On Thompson's watch, Yahoo! filed suit against Facebook in US District Court in San Francisco accusing the social networking giant of infringing on 10 patents.

Facebook filed a countersuit contending that Yahoo! was violating the social network's patents -- and not the other way around.

Yahoo! has been trying to reinvent itself as a "premier digital media" company since the once-flowering Internet search service found itself withering in Google's shadow.

Yahoo's share of overall US online ad revenue dropped from 15.7 percent in 2009 to just 9.5 percent last year, according to industry tracker eMarketer.

While the online advertising market is expected to grow 23.3 percent to $39.5 billion this year, Yahoo's share of revenues will fall further to 7.4 percent, eMarketer forecast.

As the company strived for a new identity, it saw an exodus of talent that commenced during a failed bid by technology giant Microsoft to buy Yahoo! four years ago for about $45 billion.

Thompson's ouster is likely to have other Silicon Valley firms, and unhappy investors, digging into whether top executives exaggerated credentials on career paths, according to Enderle.

"This may be an endemic problem that goes outside Yahoo!" Enderle said. (AFP)

FB founder says mobile first priority

PALO ALTO, California: Facebook CEO Mark Zuckerberg, whose limited role in promoting the No. 1 social network's market debut has drawn criticism, laid out its growth strategy to investors on Friday, saying that transforming its mobile and advertising experience are top priorities in 2012.

Integrating online apps more strongly into Facebook is also a major goal, he told hundreds of investors at an event that capped the first week of Facebook's cross-country "roadshow" to pitch its highly anticipated initial public offering.

Facebook aims to raise about $10.6 billion, dwarfing the coming-out parties of tech companies like Google Inc and valuing it at up to $96 billion - rivaling Amazon.com Inc's.

Zuckerberg, 27, who started Facebook in his Harvard dorm room 8 years ago, said Facebook's key priorities in 2012 were to improve its mobile application, to build stronger ties incorporating its social network with other online apps and to create a "transformative" advertising experience.

The company is "just getting started" with its mobile app, said Zuckerberg, who appeared on stage in a grey T-shirt and dark trousers at Palo Alto's Crowne Plaza, flanked by Chief Operating Officer Sheryl Sandberg and finance chief David Ebersman.

With 900 million users, Facebook is the world's dominant social network. Zuckerberg was Time Magazine's Person of the Year in 2010 and was depicted in the fictionalized 2010 movie "The Social Network".

"Over the next 10 years or so, every consumer category should be transformed to be built around people," Zuckerberg told fund managers and Silicon Valley glitterati such as Netscape co-founder and venture capitalist Marc Andreessen.

"People will listen to music and watch TV with other people" through Facebook.

"We only recently reached this tipping point," Zuckerberg said as the audience consumed a lunch of curried chicken salad and chocolate-chip cookies.

"It is a bit of a celebrity event," said Alice Evans with London-based F & C Asset Management. "You're not expecting to learn that much but it's as close as you can get to kicking the tires."

NO STOPPING IT?

Wall Street had been concerned about the company's ability to wring revenue from mobile users, considered crucial for long-term growth, as well as slowing growth in Facebook's main advertising business.

But that may not dampen demand for shares of the high-flying Web company, which is as much a cultural phenomenon as it is a business success story. On Thursday, a source close to the process told Reuters its IPO was already oversubscribed, a week before final pricing.

Facebook has indicated an IPO price range of $28 to $35 a share on Thursday, which would value the company at $77 billion to $96 billion.

Zuckerberg - sans his trademark "hoodie" sweatshirt - made brief introductory comments at the event, which took place 8 miles from Facebook's new Menlo Park headquarters at One Hacker Way, before opening the session up to questions.

The company had provoked some grumbles from investors earlier this week, when it took limited questions from the audience at an event in New York. And Zuckerberg skipped other stops on the roadshow this week, such Boston.

Investors managed to get in more than 10 questions at Friday's event, ranging from capital spending to regulation, even as Facebook maintained tight control over the proceedings, forbidding follow-up questions.

Zuckerberg and Sandberg said Facebook's overall advertising business was gaining steam, with increased spending by most of its marketers. The two executives highlighted social ads as an important tool for Facebook to tackle its mobile challenge.

The ads, which incorporate information about Facebook users' friends who "like" certain products, are better suited to the smaller screens of smartphones, from which more than half of Facebook's users access the service, executives said.

As Facebook collects more user data, such as location, it will be able to offer more relevant mobile ads, executives said.

Asked about Facebook's $1 billion purchase of mobile app maker Instagram, its largest acquisition, Zuckerberg said the deal was under consideration for one to two months before it occurred. Media reports had said it was forged over a weekend.

The number of Instagram users has already grown from 30 million to 50 million since the deal was announced in early April, he noted.

Facebook's offering marks a watershed moment for the new generation of Web companies that are challenging established players such as Google and Yahoo for consumers' online time and for advertising dollars.

The company's shares, which will be listed on Nasdaq under the symbol FB, could begin trading as soon as May 18.

"They did a good job of addressing the tough questions. They have a clear vision," said one investor who attended the event but did not want to be named. (Reuters)

Yahoo in talks to sell Alibaba stake

SAN FRANCISCO: Yahoo Inc could be weeks away from selling 15 to 25 percent of Alibaba Group's stock back to China's largest e-commerce company, in a deal designed to eliminate complexities that had scuttled the parties' previous negotiations, a person familiar with the matter said.

The two companies have been in talks for a month, the person said, but cautioned that there is no guarantee a deal will be reached.

Numerous discussions have been held in recent years about a deal for Alibaba to reclaim some or all of the 40 percent stake in the company that Yahoo acquired in 2005.

A $17 billion tax-free asset swap between the two companies fell apart in February.

The latest deal would not be tax-free and would be much more straightforward, the person told Reuters on Friday.

"The overall complexity of this deal is much simpler. There's no IRS risk, there's no complications with regards to the identification of assets," the person said. In a best case scenario, a deal could be weeks away, the person said.

The situation may have become more complicated following Thursday's revelation that Yahoo Chief Executive Scott Thompson's resume falsely stated that he had earned a computer science degree in college.

Yahoo, which initially called it an "inadvertent error," has since said its board is reviewing the matter. Activist investor Third Point, which is leading a proxy fight against Yahoo's board of director and which discovered the error in Thompson's resume, has demanded that Yahoo fire Thompson by Monday.

Yahoo and Alibaba declined to comment.

Yahoo acknowledged that it was in talks with Alibaba, during its first-quarter earnings conference call with analysts last month. During the call, Thompson said the two companies were working on a "simplified" transaction to "monetize" a portion of Yahoo's stake in Alibaba.

To fund the deal, Alibaba would raise capital. The valuation that Alibaba receives in the fund-raising will determine how much Yahoo earns in the transaction, the source said.

In September, Alibaba was valued at $32 billion when Silver Lake and other firms invested in the company, according to media reports at the time. At that valuation, Yahoo could make $4.8 billion to $8 billion by selling 15 to 25 percent of Alibaba.

"Of all the previous ones we've worked on, this one feels like it might actually have a chance of getting done. Or at least it did until a day and a half ago," the person said, referring to the controversy around Thompson's resume. (Reuters)

Nokia defends strategy to investors

HELSINKI: Nokia's chairman-designate Risto Siilasmaa defended its turnaround strategy on Thursday before meeting shareholders who are losing patience with the company's efforts to catch up in the smartphone market.

Nokia lost out to Apple Inc and Google Inc in the first wave of smartphone business and is now pinning hopes of a turnaround on Lumia, a new range which uses Microsoft software.

"I am confident that Nokia has the right team, right strategy and now increasingly also the right products on the market to get us through this transition period," Siilasmaa told reporters as he headed into the meeting.

Sales of Nokia's new smartphone range have so far been slow and are yet to compensate for diving sales of previous products. Nokia also lost its position as the largest volume cellphone maker to Samsung Electronics last quarter.

Investors have seen the value of their Nokia holding fall 90 percent in less than five years -- two-thirds of that since its new chief executive Stephen Elop unveiled the company's strategy shift to Microsoft in February 2011.

"The situation of Nokia and Nokia Siemens Networks is close to catastrophic," shareholder Pekka Jaakkola told the meeting in Helsinki. "Nokia is fighting against time."

Ratings agencies Fitch and Standard & Poor's both recently cut Nokia's credit rating to "junk" status given its bleak outlook.

Investors said they were willing to give Elop and the company more time, but wanted to see signs of a turnaround soon.

"Something needs to happen this year that brings confidence back," said Tomi Lahti, who said he was holding onto the shares because the company was the country's industrial flagship.

"It's more of a sentimental thing I have, it probably has nothing to do with numbers. I have to believe in it since it is this famous Finnish company," he said.

Ari Rikkila, head of Finnish software company Efecte, said he bought Nokia shares a few months ago in hopes Siilasmaa would help the company recover.

"This year the strategy should be implemented. Next year we should be seeing results," he said. (Reuters)

Sun setting on Nokia in emerging markets

NEW DELHI/HELSINKI: Nokia phones once took pride of place in Manish Khatri's Mumbai store, but now models made by Samsung Electronics get the limelight.

He has nothing against Nokia, he says, but it's better for business to push the more popular models.

That simple calculation is being made in thousands of stores across India and similar emerging markets, where Nokia's rivals used to be relative minnows.

For 14 years the world's biggest seller of mobile phones, it was overtaken by Korea's Samsung in the first quarter of this year, having already watched both Apple and Samsung leapfrog its lead in the lucrative smartphone segment last year.

In the popular narrative of Nokia's eclipse, it is Apple's iPhone that steals the light, but the company is also losing its shine in the basic phone market, which had been a reliable generator of profits and carried the promise of years of strong growth in emerging markets.

No more.

Its basic phone sales fell 16 percent in the first three months of 2012, and have fallen in four of the last five quarters, while competitors like China's ZTE and Huawei have been growing fast.

In India, the world's second-biggest mobile phone market, with more than 900 million subscribers, Nokia's market share has halved in the three years to 2011, when it sold 31 percent of the total 183 million handsets sold, according to Indian researcher CyberMedia.

Analysts say it has failed to keep up with the changing tastes of the growing middle class, and, in a country where the thin-margin network operators don't tend to subsidize phones, is losing storeowners like Khatri, who influence buyers' choices.

"For dealers like us, we face a lot of problems from Nokia for getting even the basic (demonstration phone) dummies to show to the customer," he said. "There is no push from the company."

He said his store, which sells around 500 phones a month, is probably not a priority for Nokia, but Samsung has been sending staff to visit.

LOCAL FAVOURITES

In China, the world's largest cellphone market, operators have started to play a bigger role in selling phones, and that trend is working against Nokia.

"They prioritize domestic vendors over international companies," said analyst Pete Cunningham from Canalys.

In January-March its sales there shrank 62 percent from a year ago. Its share of the market had dwindled to 24 percent last year from 39 percent two years earlier, according to research firm Strategy Analytics.

In Africa, too, its market share slipped to 51 percent last year from 62 percent two years before. It's still ahead of rivals because of its superior distribution on the continent, says Neil Mawston at Strategy Analytics, but it has to act to arrest the decline.

"Nokia is drying up like a puddle in the sun and urgently needs new products to refill the puddle," he said.

In the meantime, it is racking up losses, its shares have lost more than three quarters of their value in a year, and this week two agencies cut its credit rating to junk status.

Nokia says it is continuing to invest to attract customers in these markets.

"Our mobile phones portfolio continues to be strong, especially in key markets like India, Nigeria, Brazil and Mexico where the Asha products are receiving record high scores from consumers," said Mary McDowell, EVP Mobile Phones.

She said the company would be announcing data plans for the new Asha 202 basic phone model with five operators in India on Monday.

MISSING TOUCH

Analysts also say Nokia can be slow to react on popular technology.

In emerging markets, for example, multi-SIM models have been a draw for people who want to take advantage of freebies doled out by competing carriers, but Nokia lacked such phones until mid-2011.

Another costly gap in its basic phones offering is a full touch-screen model. Around 105 million such phones were sold last year globally, according to Strategy Analytics.

"Nokia left the door wide open for Samsung and others by not delivering a full-touch feature phone. The Koreans figured it out three years ago, yet Nokia still does not have a product," said Ben Wood, head of research at CCS Insight.

"In the meantime, prices of Android smartphones have dropped, and Nokia's window of opportunity is almost closed."

Nokia is due to unveil a full-touch 306 feature phone model in the coming months.

SLIPPED HALO

"Nokia's main challenge this year is to arrest the sharp decline in its flagship smartphone portfolio and use it to rebuild a positive halo-effect for the overall Nokia brand," said Mawston.

The company abandoned its own Symbian smartphone operating system last year in favor of the largely untried Windows Phone alternative after Stephen Elop joined as chief executive from Windows maker Microsoft. Symbian sales have nosedived before the Windows models got off the ground.

This month it started sales of the first Windows smartphones in China with an aggressive marketing campaign and huge ads at subway stations, in magazines and newspapers.

There are some positive noises coming from customers.

"I just bought a new Nokia Windows phone and wasn't very used to its tile design, but the experience was quite good after half an hour. All the basic functions I need are there, and I'm beginning to think that Windows phones will make it," Wang Xiao said on his Sina microblog.

"Having an operating system which is Windows-based doesn't excite me," said 22-year old student Akshay Johar in New Delhi, looking at one of Nokia's new Lumia models, but added: "The phone has great features, it looks good, the touch screen is very responsive."

He is considering buying one, he said.

About 27 million people need to make that decision this year, 55 million next year, and 94 million in 2014, according to analysts polled by Reuters.

That only 2 million did in the first quarter shows how steep is the mountain that Nokia must climb. (Reuters)

Samsung puts smartphone crown in dispute

NEW YORK: Smartphones are the hottest gadgets in the world. But who's the biggest smartphone maker? We don't really know.

Samsung, Apple's chief competitor, gives only vague indications of how many it makes, which means industry watchers come up with widely diverging estimates. Apple Inc. reports its iPhone sales down to the thousands. In the January to March period, it shipped 35,064,000. South Korea's Samsung Electronics Co. may have sold 32 million, 37.5 million or 44.5 million, depending which analyst you believe. The company itself refuses to say.

What's at stake, of course, are bragging rights. More accurate sales figures from Samsung would also be useful to competitors and to partners like wireless carriers and retailers.

When it reported first-quarter results Friday morning, Samsung said only that overall phone shipments (including "dumb" phones) were down more than 10 percent from the fourth quarter, and that smartphone sales were about the same percentage of the company's overall sales as they have been before.

US regulators aim at Google: reports

SAN FRANCISCO: The odds of an antitrust showdown with Google rose on Thursday with reports that the US Federal Trade Commission hired a veteran outside attorney known for winning cases to handle the investigation.

Former Justice Department prosecutor Beth Wilkinson was brought in to head the team looking into whether Google abused its dominance in online search, according to media accounts during a visit here by the FTC chief.

Wilkinson's formidable legal track record includes being a lead prosecutor on the team that convicted Timothy McVeigh in connection with the bombing of a federal building in Oklahoma City in 1995.

US regulators last year launched a probe into Google's lucrative search and advertising business in a move that could pose the most serious legal challenge yet to the Internet giant.

The Mountain View, California-based company confirmed the FTC inquiry in a blog post at the time and expressed confidence it could withstand the scrutiny.

Google said in a Securities and Exchange Commission filing last year that it received a subpoena from the FTC "relating to a review by the FTC of Google's business practices, including search and advertising."

As it has grown from a scrappy startup into an Internet titan, Google has branched out into various businesses including online mapping, shopping and travel and providing operating systems for mobile phones and tablet computers.

But Google makes most of its money from search-related advertising and that is why an FTC investigation targeting its core business is seen by analysts as a potentially serious risk to the company.

Google has drawn increasing scrutiny from US and European regulators as it has grown over the years into an Internet powerhouse. (AFP)

China shuts 'rumour' blogs in crackdown

SHANGHAI: One of China's most popular microblogging services has shut several accounts for spreading "malicious" rumours, as Beijing tightens control over the Internet after the ouster of a top leader.

The move followed a broad crackdown on the Internet after rising political star Bo Xilai's downfall in March, sparking a series of online rumours, including one suggesting his supporters had staged a coup.

Chinese Internet giant Sina said late Tuesday it had closed down four "weibo" accounts, China's equivalent to Twitter, including one held by the writer Li Delin, whose postings about military vehicles in Beijing sparked the coup rumours.

A posting by a friend on Wednesday claimed Li had disappeared.

"Recently, some lawbreakers have made use of weibo to without reason fabricate and spread malicious political rumours, producing a bad influence on society," Sina said in an announcement to its more than 300 million users.

It added the four cases had been handed over to the police for handling "under the law".

Other accounts, which did not use real names, included "Yangguang De Yuanshi" who has posted about the Bo scandal and "Guangzhou Wu Guancong" who has called for officials to make public their earnings.

The fourth was "Long Yi Tian-945", Sina said. None of them could be immediately reached for comment.

Bo was removed as the Communist Party chief of Chongqing after his former police chief fled to a US consulate and reportedly demanded political asylum.

Authorities later stripped Bo of his elite party position and placed his wife under investigation for the murder of a British national.

China last month closed 16 websites and made a string of arrests for spreading the coup rumours. Sina itself halted microblog users from commenting on other people's posts for three days along with another operator, Tencent.

The government has also shut two political websites sympathetic to Bo which said they had been ordered to temporarily close after they "maliciously attacked state leaders" and gave "absurd views" about politics.

In its announcement, Sina urged users to obey Chinese law. (AFP)

Facebook beefs up patent arsenal

SAN FRANCISCO: Facebook struck a $550 million deal Monday to get its hands on hundreds of AOL patents from Microsoft as the social network hardened its defenses before it goes public on the Nasdaq.

Facebook will pick up around 650 of the 925 patents Microsoft bought earlier this month in an auction from AOL in a nearly $1.1 billion deal, Facebook and Microsoft said in a statement.

Facebook's general counsel called the move "another significant step in our ongoing process of building an intellectual property portfolio to protect Facebook's interests over the long term."

"Today's agreement with Facebook enables us to recoup over half of our costs while achieving our goals from the AOL auction," added Microsoft Executive Vice President Brad Smith.

Facebook also arranged to license the remaining 275 remaining patents or applications in the portfolio being bought by Microsoft, which gets the right to use the patented technology going to the California-based social network.

"Today's agreement with Microsoft represents an important acquisition for Facebook," said the social network's general counsel Ted Ullyot.

While the companies did not disclose specifics on the patents, AOL's trove of intellectual property is believed to include technology for messaging, search, imaging, and Internet telephony.

The patent deal enhances a longtime relationship between Facebook and Microsoft that has them apparently acting as allies against a common rival - Google.

Microsoft owns a small stake in Facebook, which is expected to go public next month in a much-anticipated stock market debut.

The company will trade on the technology-heavy Nasdaq exchange under the symbol "FB," it said in a filing with US regulators.

Facebook could raise as much as $10 billion in the largest flotation ever by an Internet company on Wall Street. (AFP)

RIM hires law firm for restructuring

NEW YORK/TORONTO: BlackBerry maker Research In Motion has hired law firm Milbank, Tweed, Hadley & McCloy LLP to work out a restructuring plan that could include selling assets, seeking joint ventures or licensing patents, people briefed on the matter said.

As part of the struggling Canadian smartphone maker's strategic review, the RIM board is discussing ways to boost revenue from its new BlackBerry 10 operating system and possibly opening up its proprietary network, the sources said.

At one point, RIM was hoping to add as much as $4 billion in revenue from deals with major telecom carriers, sources said.

"This is a very mature strategy and RIM was very far down the road with a lot of those discussions with carriers," one of the sources added.

The restructuring efforts come as the Blackberry maker tries to stem customer losses to Apple Inc's iPhone and smartphones running Google Inc's Android software.

RIM posted a $125 million loss in its most recent quarter as it wrote down BlackBerry inventories. It took an even larger hit on its underperforming PlayBook tablet computers three months earlier. RIM's stock has plunged 75 percent in the last 12 months, giving the company a market value under $7 billion.

Representatives for Milbank and RIM declined to comment.

A number of investment banks have approached RIM over the past several months, vying for a role as financial adviser. But for now, RIM is not expected to hire a banker unless it decides to sell off a major asset or if the company receives takeover interest from an industry competitor, the sources said.

RIM has worked with Milbank previously and also retains law firm Skadden, Arps, Slate, Meagher & Flom LLP and the consulting firm Monitor Group for strategic advice. The two firms were not immediately available for comment.

BALSILLIE'S PROPOSAL

RIM, which once dominated the smartphone market, appointed a new CEO, Thorsten Heins, in January when longtime co-CEOs Mike Lazaridis and Jim Balsillie resigned under pressure.

Before he left, Balsillie had led a three-pronged plan to double RIM's service revenue by allowing carriers to use its services for messaging, content delivery, and analytics on all smartphones, sources with knowledge of his plan told Reuters.

Balsillie's plan offered carriers a way to tempt budget customers to upgrade to smartphones, with a data plan restricted to social networking and messaging services.

The sources said it also involved a "carrier cloud" to compete with device-specific services such as Apple's iCloud and cross-platform products, like DropBox and Netflix.

RIM started talks with the world's largest telecom companies more than six months ago and they were still going on as late as January at the Consumer Electronics Show in Las Vegas.

But the board got cold feet on concerns about cost and fears that the company's smartphones could lose more market share if the popular BlackBerry Messenger chat system was available on other devices. Balsillie quit RIM's board in March.

Sources declined to discuss pricing details for the aborted plan, citing the potential for deals to still get done.

It was not clear how much of Balsillie's plan will be incorporated in the restructuring that Milbank is advising on.

STRATEGIC ACQUISITIONS

Since late 2010, RIM had been taking steps to make its network services available to other devices, and made a string of acquisitions to support that strategy, according to several sources with knowledge of the matter.

Last October, RIM bought Dublin-based digital content company Newbay Software, which stores photo and video albums, music, address books, calendars on its own servers and can deliver it to any Internet-connected device, including mobile phones, personal computers, tablets and televisions.

When RIM bought it, Newbay boasted more than 80 million subscribers and had relationships with many of the carriers that Balsillie was negotiating with.

Earlier in 2011, RIM bought small Swedish video-editing company Jaycut, German social gaming company Scoreloop in June, and Waterloo-based tinyHippos, which owned a cross-platform app testing tool. (Reuters)

Google dumps publisher payment platform

SAN FRANCISCO: The One Pass payment platform for Internet news websites was shut down on Friday as Google continued house cleaning launched when co-founder Larry Page took charge last year.

One Pass, which failed to catch on since it launched in February of 2011, was swept out with Google Talk free voice or text conversation Web applications for smartphones other than Android-powered handsets with the software built in.

"Over the last six months we've done a lot of spring cleaning -- although it's all happened out of season," cloud services director Matthias Schwab said in a blog post at the California-based company's website.

"Spring has now arrived and we're ready to close or combine another round of products."

One Pass let publishers set prices for online articles, with Google getting a 10 percent cut of revenue as opposed to the 30 percent bite that iPhone and iPad maker Apple takes out of transactions in gadget applications.

One Pass features, and users, were being shifted to a Google Consumer Surveys service, according to Schwab.

Page has made it a priority to get rid of products that are performing poorly so resources can be focused on more promising offerings.

The latest house cleaning included moving an online service providing maps to where flu vaccinations are available in the United States being moved to HealthMap Flu Vaccine Finder.

Support for Google Sync for Blackberry smartphones was eliminated.

A Patent Search homepage devoted to intellectual property registered with US regulators was being re-directed to the main query engine at google.com.

"The new experience loads twice as fast as the old Patent Search homepage, contributes to a unified search experience across Google, and sports Google Doodles as well," Schwab said.

"The team looks forward to including patents from other countries soon, and will be rolling out additional features to Patent Search on google.com in the future." (AFP)

Apple denies e-book pricing scheme

SAN FRANCISCO: Apple on Thursday denied a charge that it schemed with publishers to hike prices for e-books, portraying itself as a hero for prying Amazon's "monopolistic grip" from the market.

"The DOJ's accusation of collusion against Apple is simple not true," Apple spokesman Tom Neumayr said in an emailed statement a day after a Department of Justice antitrust suit was filed.

"The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon's monopolistic grip on the publishing industry."

The Justice Department sued Apple and five publishing firms Wednesday alleging a conspiracy to raise prices and limit competition for e-books. It immediately announced a partial settlement in the case.

Officials said three of the publishers agreed to end the scheme to force retailers such as Amazon to accept a new pricing plan that ended their ability to offer discounts for electronic books.

Hachette Book Group, HarperCollins and Simon & Schuster reached a settlement but the case will proceed against Apple and the other two -- Macmillan and Penguin Group -- "for conspiring to end e-book retailers' freedom to compete on price," the Justice Department said.

Attorney General Eric Holder said that as a result of the conspiracy, "consumers paid millions of dollars more for some of the most popular titles," and competition was eliminated.

Prior to the introduction of Apple's iPad, online retail giant Amazon sold electronic versions of many new best sellers for $9.99.

After Apple's "agency" model was adopted, the prices rose to $12.99 and higher, the suit said, and price competition among retailers was "unlawfully eliminated." (AFP)

Facebook lets users take more data home

SAN FRANCISCO: Facebook on Thursday began letting members of the world's leading online community take more of their pictures, posts, messages and other data home with them.

Facebook expanded the types of information its approximately 845 million members could download from their personal account histories to include data such as friend requests and IP addresses of
computers used to log-in.

"This feature will be rolling out gradually to all users and more categories of information will be available for download in the future," Facebook said in a message at its Public Policy Europe page.

The move comes as the California-based Internet star works to reassure regulators, members and advocacy groups concerned about how much privacy and control of personal information people have at Facebook.

The "Download Your Information" tool was launched in 2010 to allow Facebook members to keep copies of what they share with friends at the social network.

Facebook is expected to make a much-anticipated debut next month on the technology-heavy NASDAQ exchange. Facebook in February filed to go public and could raise as much as $10 billion in the largest flotation ever by an Internet company on Wall Street.

Facebook, which is shifting operations to a former Sun Microsystems campus in the California city of Menlo Park, had a reported net income of $668 million last year.

Revenue nearly doubled to $3.7 billion in 2011, with most of it coming from targeted advertising gleaned from personal information shared by the platform's hundreds of millions of users.

Facebook's value has been estimated at between $75 billion and $100 billion. (AFP)

Google likely next in antitrust push

WASHINGTON: Google is likely the next major tech target of US and EU trust-busters after the US Justice Department sued Apple Wednesday for illegally colluding with publishers in the e-book market, legal experts said.

In an industry in which companies can soar to near-monopoly positions in a few years, justice authorities on both sides of the Atlantic will keep pursuing tech giants as they fight to defend their
market positions, they said.

But tech industry dynamics -- the pace of change, and the complex economics of technology and network-bound markets -- could make it harder to prosecute any of them.

"There are economic conditions that are present in the industry, together with the speed at which it changes, that make it an industry that the government really has to keep an eye on," said Gary Reback, a Silicon Valley lawyer who was deeply involved in the landmark anti-trust push against Microsoft in the 1990s.

"In the tech industry we have the network effects, which are very strong; we have the first-mover advantage," like Microsoft locking users into its program platform, he said.

"We have all kinds of things like that which makes the industry more susceptible to monopolization."

Wednesday's Justice Department charges against Apple and five large book publishers is at face value a more garden-variety anti-trust case, alleging that the publishers colluded to set prices for e-books.

Apple, as a reseller, allegedly worked with them as it sought to erode Amazon's dominance in the business. (AFP)

Suit over e-books price-fixing

SAN FRANCISCO: E-books are the future of publishing, and the legal tangle launched Wednesday shows how high the stakes are in fledgling but fast-growing industry.

Unlike music and film makers who struggled to harness the revenue potential as people devoured entertainment on computers or mobile gadgets, book publishers tapped into a flourishing market ignited by Amazon's Kindle readers.

More that $2 billion will be spent this year on e-books, according to Forrester analyst James McQuivey, and that figure is projected to top $10 billion dollars annually by 2016.

"This is one of the few industries where all of the stars are aligned when it comes to going from analog to digital and (publishers are) actually making money doing it," McQuivey told after the US Justice Department filed an antitrust suit against Apple and five publishers alleging a conspiracy to raise e-book prices.

"There is a perfect storm," he continued. "This is why Apple, Amazon, Barnes & Noble and everyone jumped in."

While the music and film industries were vexed by young fans with little cash eager to get free songs or movies online, books have a more mature audience with money to spend.

"Book publishing is the pinnacle of the culture industry; a business in which people greet one another with two kisses on the cheeks even if they are not from Europe," McQuivey said.

"TV and movies are the most powerful culture business but the one people are most embarrassed of because it is a little tawdry," he continued.

"But books are the world of Ernest Hemingway... there is language and national culture bound in this industry."

A Pew study released last week showed that US book lovers are increasingly turning inkless pages.

Slightly more than a fifth of US adults reported having used an "e-book" during the past year, their ranks swollen by the popularity of Kindles, Nooks, iPads and other gadgets during the year-end holiday gifting season.

The percentage of adults reading digital books jumped from 17 percent in mid-December to 21 percent by February, according to Pew research funded by the Bill & Melinda Gates Foundation.

"Every institution connected to the creation of knowledge and storytelling is experiencing a revolution in the way information is packaged and disseminated," said Lee Rainie, an author of the study.

"It's now clear that readers are embracing a new format for books and a significant number are reading more because books can be plucked out of the air."

E-reader users are far from letting go of ink-and-paper works, with 88 percent of them saying they have read traditional printed books in the past year.

When Seattle-based online retail titan Amazon.com released the first Kindle in late 2007, book publishers were eager to invigorate their industry with the availability of digital works.

As Kindle e-readers dominated the market, Amazon.com set a standard for selling new releases for $9.99 in a move that frustrated publishers accustomed to getting higher prices for hardcover books in brick-and-mortar shops.

After the release of the iPad tablet computer two years ago, Apple courted book publishers with the freedom to set their own prices for digital editions on the coveted gadgets -- with the California company taking a cut of revenue.

"Steve Jobs broke the pricing model," McQuivey said, referring to the late Apple co-founder.

Apple winning over publishers with freedom to set prices was ironic, given that the company used the popularity of iPod MP3 players and the iTunes online shop to impose a 99-cents-per-song standard on music sales, the analyst noted.

"It was all a ploy and it worked well," McQuivey said of Apple busting into the e-book market. "I think publishers flew right from meeting with Jobs in California to meeting with (Amazon chief) Jeff Bezos in Seattle."

Amazon caved into the pressure to raise e-book prices, getting guarantees of 30 percent profit and adding notices informing shoppers that the publishers were at fault for making them pay more. (AFP)