Yahoo asks US court to dismiss 'political' China case (AFP)

Published in August 28th, 2007

WASHINGTON (AFP) - The Internet giant Yahoo has asked a US court to dismiss a lawsuit it called "political" and said its Chinese subsidiary obeyed local laws when it provided information about dissidents. ADVERTISEMENT
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The lawsuit, filed in a federal court in San Francisco by the wife of a Yahoo user jailed in China for promoting democracy online, accuses Yahoo of "aiding and abetting" torture and human rights violations.

"Free speech rights as we understand them in the United States are not the law in China," Yahoo said in a statement Monday. "Every sovereign nation has a right to regulate speech within its borders."

Yahoo filed a motion to dismiss the case, saying it was compelled by Chinese law to hand over information to authorities including user registration information and email content.

The suit filed in April by the wife of Wang Xiaoning accuses Yahoo of helping Chinese officials track down her husband and of linking her husband and others to email and online comments.

Yahoo was referred to 10 times in the 2003 Chinese court verdict that declared Wang guilty of "incitement to subvert state power" and sentenced him to a decade in prison.

The suit also involves Shi Tao, who was convicted in 2005 of divulging state secrets after he posted a Chinese government order forbidding media organizations from marking the anniversary of the Tiananmen Square uprising on the Internet.

"This is a political and diplomatic issue, not a legal one," Yahoo spokeswoman Kelley Benander said, according to the Los Angeles Times.

"The real issue here is the plaintiffs' outrage at the behavior and laws of the Chinese government. The US court system is not the forum for addressing these political concerns."

The suit filed under the auspices of the US Alien Tort Claims Act and the Torture Victim Protection Act names Chinese Internet search engine Alibaba as a defendant along with Yahoo's operations in China and Hong Kong.

The suit calls on the court to order Yahoo to stop cooperating with requests by China to identify Internet users and to pressure the government there to release Wang and others imprisoned as the result of such shared information.

Social network sites tempt investors (Reuters)

Published in August 28th, 2007

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NEW YORK/LOS ANGELES (Hollywood Reporter) - Social networking Web sites have fired up industry deal headlines the past couple of years — from News Corp.'s ground-breaking acquisition of MySpace to the recent purchases by the Walt Disney Co. and Viacom Inc.'s Logo network of Club Penguin and , respectively. ADVERTISEMENT

Now it looks as if social networking could heat up the market for initial public offerings.

United Online Inc., a provider of consumer Internet and media services, recently registered for an IPO of its Classmates Media Corp. arm, which operates networking site .

Wall Street observers believe Classmates could test the IPO waters for a couple of other big names: Facebook, which has emerged as the biggest challenger to MySpace, and the more business-oriented LinkedIn.

Add to that comments from the CEO of U.K. social networking powerhouse about a possible IPO, and one gets the potential for a social networking feeding frenzy on the Street.

Amid the current global debt market jitters, some have suggested that IPO deal flow could slow as investors focus on conservative, known stock plays. Others point out that there has been little to no effect on the IPO market, which has sizzled this year but is on its traditional mid-August through Labor Day break as investment bankers go on vacation.

Observers also said a broader base of investors seems ready to embrace social networks, citing as evidence the networks' rapid growth and funding rounds by venture firms and rich individuals. A recent case in point: the $40 million raised by Ning, an online service that allows consumers to create their own social network "for free in seconds," according to its Web site. Netscape pioneer Marc Andreessen is one of its co-founders.

All the hype and early success will give some social network companies a shot at going public, said Cody Willard, a hedge-fund manager who specializes in telecommunications — though he also guaranteed "some spectacular flops." After all, even Google failed in the U.S. to gain traction for its Orkut social networking product.

Naturally, the highest-ranked social networks in terms of users are the ones with the most IPO buzz.

MySpace continued to dominate the networking space in July with a unique audience of nearly 61.3 million, according to Nielsen//NetRatings, which like The Hollywood Reporter is owned by the Nielsen Co.

News Corp. management has shown little interest in a spin-off of MySpace, though analysts have at times suggested the company could pursue that path to merge MySpace with a larger Internet firm.

Facebook ranked a distant second with 19.5 million but sported year-over-year growth of 129% (MySpace grew at a 33% clip). Classmates ranked third in unique audience (12.7 million), and LinkedIn was eighth (4 million).

United Online recently took the first steps toward taking Classmates public via a U.S. Securities and Exchange Commission filing, which didn't disclose the number or expected price range of shares to be offered in the IPO. However, the firm said it expects to raise $125 million at the most in a first estimate. It acquired the site in 2004 for $100 million.

Jefferies & Co. analyst Youssef Squali projected 33% revenue growth for Classmates' fiscal-year 2007 to $200 million and a 17.5% adjusted operating cash flow margin, which would bring cash flow to $35 million.

However, some have doubts that Classmates is a perfect trial balloon for social networking IPOs.

John Keeling, a senior vp with the Motley Fool investor service, said that while the site has "been fairly successful in building their community," his enthusiasm for the business is tempered because too many of its users lack a reason to visit the site daily.

Meanwhile, Facebook has impressed market watchers with strong user growth and regular additions to its list of popular tools for its clientele. Observers also have lauded the site for attracting an increasing number of business and professional users and more consumers in the 35-plus age categories than is usual for networking sites, which often skew younger. All this should mean growing advertising revenue.

As such, many Wall Street and Silicon Valley observers have suggested Facebook is likely to eye an IPO during the next year or two, and they have estimated the company's overall value to be in the billions of dollars — well above a reported $1 billion takeover offer from Yahoo Inc. that Facebook founder and CEO Mark Zuckerberg rejected last year.

"We're not looking to sell the company, and we're really not looking to an IPO any time soon," he told the Wall Street Journal in late July. "Our board and we believe it's probably best to push some of these things off as long as possible."

Nonetheless, Silicon Valley detectives have argued this summer that the Palo Alto, Calif.-based company has at least started laying the groundwork for a stock market listing.

Case in point: In late July, Facebook hired former Yahoo and YouTube exec Gideon Yu to oversee its books, with observers saying he brings the skill set that a publicly traded firm needs.

Given Facebook's high profile these days, one Wall Street source predicted that if the firm does indeed opt for an IPO at some point, it will see the biggest level of investor interest in the crop of IPO contenders. "MySpace and soon Facebook are making a fortune," Willard added. He guesses Facebook's public float value on Wall Street will exceed $1 billion.

The Motley Fool's Keeling predicted that Facebook will not be doing an IPO until later. "It looks closer to a Craig's List. It's purpose driven and in no hurry to go public," he said. "They've created scale and a path to profitability, which is more attractive than their balance sheet."

Meanwhile, LinkedIn could be a well-received IPO, given the networking site for the business class is already profitable and projects $100 million in revenue next year.

The company, whose backers include venture firms Sequoia Capital, Greylock and Bessemer, has been priming for an IPO, recently hiring a slew of top executives, including CFO Steven Sordello, who exited TiVo to join LinkedIn. Before his brief stint at TiVo, Sordello was CFO of AskJeeves before it was sold to Barry Diller's IAC/InterActiveCorp and its name changed to .

LinkedIn boasts many entertainment executives among its members and derives revenue three ways — subscriptions, advertising and fees paid by job recruiters.

Reuters/Hollywood Reporter

iPhone-Freeing Software On Hold After AT&T Call (TechWeb)

Published in August 28th, 2007

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A company that claims it was ready to sell software to unlock iPhones said it will hold off for now. ADVERTISEMENT
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announced on August 25 that it was prepared to sell the software from its Belfast headquarters until a lawyer called at about 3 a.m. to inform them that the move could constitute copyright infringement and illegal software dissemination. The lawyer claimed he was calling on behalf of AT&T.

"UniquePhones is taking legal advice to ascertain whether AT&T was sending a warning shot or directly threatening legal action," the company stated in a post over the weekend. "The logistics of different continents as well as it being a weekend factors into how the situation develops."

UniquePhones indicated it would assess the potential legal ramifications of releasing the software and decide what to do if denied the right to sell it.

"A substantial delay caused by any legal action would render the unlocking software a less valuable commodity as well as creating unforeseen security issues for the company," the company said in a prepared statement.

The company claims to offer unlocking services for more than 1,500 handsets from leading companies like Nokia, Motorola, Samsung, and Sony Ericsson.

It was one of three sources to announce this weekend that it had unblocked the iPhone. A New Jersey man, who started his first day on the Rochester Institute of Technology's campus Monday, also claimed to have unblocked the iPhone. A Web site called also claimed to have cracked the code. The Web site said it would sell software to unlock the phones beginning next week.

Despite Apple's exclusive agreement with AT&T for the operation of the iPhone, the handheld device drew global media attention and long lines in several cities when it was released about two months ago.

KACE Launches Appliance For Managing Virtual, Physical Servers (TechWeb)

Published in August 28th, 2007

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Server systems appliance maker KACE on Monday launched a new product designed for managing virtual and physical environments. ADVERTISEMENT
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The latest KBOX Systems Management Appliance is for companies looking to reduce the complexity of managing mixed environments. KACE claims its new appliance can be deployed in a day and at a third of the cost of software alternatives.

"There's no denying the benefits of virtualization, but using separate management tools for both types of environments adds another layer of complexity to the management process," Marty Kacin, co-founder and chief technology officer for KACE, said "KACE's technology allows customers to manage heterogeneous environments from the ease of one central appliance, which is significantly more efficient and less expensive to run."

KACE has introduced in KBOX a technology the company calls vState Management, which enables customers to re-provision or reconfigure a virtual machine based on a centrally defined system image. The feature is meant to save time when managing large numbers of virtual workstations.

Other features in the KBOX appliance include agent-less deployment of physical and virtual machines from a centralized deployment library; and VM management support that covers software distribution, patching, configuration management, license compliance and vulnerability scanning.

In general, the KBOX 1000 Series Systems Management Appliances is for automating routine IT maintenance tasks for end-point nodes on a network. The company also makes the KBOX 2000 Series Systems Deployment Appliances for centralized provisioning and remote system recovery.

Virtualization is the use of technology that makes it possible to run different operating systems on the same computer system, thereby using all available processing power for running a variety of business applications. Virtualization is to consolidate servers, and reduce power consumption through better efficiency.

Space Tourism Industry Takes A Blow

Published in August 28th, 2007

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As a female voice coos, “Welcome to space,” six passengers in skintight spacesuits unbuckle their seatbelts and somersault in zero gravity, occasionally peeking back at Earth through the private spaceship’s large portholes.

Virgin Galactic showed off this animated video promoting the weightless joys of commercial space travel at a trade show for experimental aircraft last month. But the excitement was overshadowed three days later when a deadly flash explosion rocked a Mojave Desert facility where top-secret tests were underway for Virgin’s unfinished spaceship.

The accident at the remote site run by famed aerospace designer Burt Rutan rattled the fledgling space tourism industry, which has enjoyed a honeymoon period since 2004 when Rutan launched SpaceShipOne, the first private manned rocket into space.

It also offered insight into how two pioneering companies that forged an unlikely partnership two years ago to fly civilians to space reacted to the tragedy. In a reversal of roles, Richard Branson’s publicity-seeking Virgin Galactic kept a low profile while its usually silent partner, Rutan’s Scaled Composites LLC, took to the Internet to mourn its workers.

Some space experts believe Virgin Galactic is following the right strategy because the accident was of an industrial nature and not directly related to spaceflight. But eventually customers and the public will demand answers, they say.

“It’s natural for a company to not be out there talking immediately afterward. I don’t think that would be good PR (public relations),” said Kathleen Allen of the University of Southern California’s Marshall School of Business, who follows the commercial space industry.

Virgin Galactic did privately contact its prized customers known as founders, who have paid the full $200,000 to be among the first to experience four minutes of weightlessness.

Stephen Attenborough, Virgin Galactic’s astronaut liaison, reassured the founders in an e-mail that the accident’s impact on the first commercial spaceflights - expected in late 2009 or 2010 - will be “minimal” and that it was “business as usual.”

In a telephone interview, Virgin Galactic President Will Whitehorn said it is not the company’s place to comment because the blast occurred in Rutan’s backyard. He added that four new customers have signed up since the mishap and none of the astronauts-in-waiting have asked for a refund.

“It hasn’t affected Virgin Galactic as a business at all,” Whitehorn said. “It hasn’t put a stop to anything.”

The Mojave accident invoked memories of NASA’s Apollo 1 tragedy 40 years ago in which three astronauts were killed in a flash fire during a routine launch pad test. The accident forced NASA to temporarily halt its space race with the Soviet Union and make design changes that led to the successful moon landings.

In Scaled’s case, three technicians died and three others were critically injured while performing a routine cold-flow test of nitrous oxide that did not involve a rocket firing. The company, which has done the test numerous times before without a problem, uses the chemical as an oxidizer in its spaceship’s hybrid rocket motor.

California occupational safety regulators are investigating the July 26 explosion and have six months to complete a report.

The first fatalities of the new space race stunned the commercial space community, which until now has spoken about risks in abstract terms.