Technology latest news

Comcast and Pando Networks, a maker of peer-to-peer software, have kicked off a drive to create a “P2P Bill of Rights and Responsibilities” to help settle the conflicts between broadband providers and some P2P users.

The two companies will collaborate with ISPs (Internet service providers), P2P companies, content providers and others to seek consensus on the roles of consumers and service providers, they said on Tuesday.

The move comes a few weeks after cable operator Comcast said it would work with P2P software company BitTorrent on network management. Comcast had come under fire for throttling back some BitTorrent traffic being exchanged by its customers. As part of the March 27 deal, the companies said they would get the broader Internet community involved.

P2P software lets individual users exchange files over the Internet without relying on a central server. Exchanging large files such as music and video can consume a large amount of network capacity. Comcast, the largest cable operator in the U.S., acknowledged managing its network load by targeting particular protocols such as the ones used by BitTorrent. The service provider has since said it will stop doing so.

The controversy has become a flashpoint in the argument over what the government should do to enforce network neutrality. On Tuesday, the FCC invited Comcast and Pando to participate in a public hearing the agency will hold at Stanford University on Thursday.

The “Bill of Rights” Comcast and Pando are calling for would define what choices and controls P2P users should have and what practices ISPs should use to manage P2P applications running on their networks, the companies said.

Comcast and Pando will also test technology from Pando, called Pando Network Aware, on Comcast's network. Pando Network Aware can capture and analyze the data flow associated with downloading files with Pando's P2P software, they said. The test will measure the impact on bandwidth consumption on the network, as well as speed and other factors. Pando will conduct similar tests on DSL (digital subscriber line), fiber and wireless networks. The company says it can reduce network congestion and speed up content delivery by routing P2P traffic more effectively. Information from the tests will help Comcast move to a protocol-agnostic network management scheme, they said.

Also Thursday, the Distributed Computing Industry Association called on other concerned parties to get involved in crafting the P2P Bill of Rights and Responsibilities. The group includes Pando, BitTorrent, Cisco Systems, AT&T, and other vendors, service providers and content providers.

San Francisco - For years, hackers have focused on finding bugs in computer software that give them unauthorized access to computer systems, but now there's another way to break in: Hack the microprocessor.

On Tuesday, researchers at the University of Illinois at Urbana-Champaign demonstrated how they altered a computer chip to grant attackers back-door access to a computer. It would take a lot of work to make this attack succeed in the real world, but it would be virtually undetectable.

To launch its attack, the team used a special programmable processor running the Linux operating system. The chip was programmed to inject malicious firmware into the chip's memory, which then allows an attacker to log into the machine as if he were a legitimate user. To reprogram the chip, researchers needed to alter only a tiny fraction of the processor circuits. They changed 1,341 logic gates on a chip that has more than 1 million of these gates in total, said Samuel King, an assistant professor in the university's computer science department.

“This is like the ultimate back door,” said King. “There were no software bugs exploited.”

King demonstrated the attack on Tuesday at the Usenix Workshop on Large-Scale Exploits and Emergent Threats , a conference for security researchers held in San Francisco.

His team was able to add the back door by reprogramming a small number of the circuits on a LEON processor running the Linux operating system. These programmable chips are based on the same Sparc design that is used in Sun Microsystems' midrange and high-end servers. They are not widely used, but have been deployed in systems used by the International Space Station.

In order to hack into the system, King first sent it a specially crafted network packet that instructed the processor to launch the malicious firmware. Then, using a special login password, King was able to gain access to the Linux system. “From the software's perspective, the packet gets dropped … and yet I have full and complete access to this underlying system that I just compromised,” King said.

The researchers are now working on tools that could help detect such a malicious processor, but there's a big problem facing criminals who would try to reproduce this type of attack in the real world. How do you get a malicious CPU onto someone's machine?

This would not be easy, King said, but there are a few possible scenarios. For example, a “mole” developer could add the code while working on the chip's design, or someone at a computer assembly plant could be paid off to install malicious chips instead of legitimate processors. Finally, an attacker could create a counterfeit version of a PC or a router that contained the malicious chip.

“This is not a script kiddie attack,” he said. “It's going to require an entity with resources.”

Though such a scenario may seem far-fetched, the U.S. Department of Defense (DoD) is taking the issue seriously. In a February 2005 report , the DoD's Defense Science Board warned of the very attack that the University of Illinois researchers have developed, saying that a shift toward offshore integrated circuit manufacturing could present a security problem.

There are already several examples of products that have shipped with malicious software installed. In late 2006, for example, Appleshipped Video iPods that contained the RavMonE.exe virus.

“We're seeing examples of the overall supply chain being compromised,” King said. “Whether or not people will modify the overall processor designs remains to be seen.”

Online advert system Phorm could make the net less secure and breaches human rights, the service’s creators have been told.

Phorm’s bosses met with members of the public in London to discuss concerns around its controversial deployment.

Kent Ertugrul, Phorm’s chief executive, defended the service, saying it would be a crucial revenue source for ISPs and website owners.

BT, Virgin and Carphone Warehouse have signed up to trial Phorm.

Phorm works by connecting a users’ web surfing habits to a series of advertising channels in order to target adverts.

Keywords in websites visited by a user are scanned and connected to advertising categories, and then matched to particular adverts.

It means a user who has been visiting web pages with lots of references to cars, for example, could then see adverts for cars when visiting a website that has signed up to Phorm’s service.

Privacy worries

But concerns have been raised about privacy implications.

Dr Richard Clayton, treasurer of the Foundation for Information Policy Research and a professor at Cambridge University, told the meeting the architecture of Phorm made the internet potentially less secure.

“I don’t think it improves the stability of the internet,” he said.

Dr Clayton carried out an assessment of the architecture of Phorm following an invitation from the company.

He explained that in some cases a user’s attempt to visit a webpage resulted in the request bouncing back and forth between Phorm’s service and the website three times before completing.

The Phorm system does this in order to connect a user to a particular website when visiting for the first time.

Phorm’s senior vice president of technology Marc Burgess said this type of redirection would happen in less than 1% of browsing, would be invisible to the user and would not affect the online experience.

‘Global warehouse’

But Dr Clayton said this redirection was open to potential abuse and mis-use, potentially by criminal gangs online seeking to connect a Phorm user to his or her web surfing habits.

He said Phorm’s system was illegal in his view because it relied on the interception of data - both the user’s data and data from websites it trawls.

But he also praised the service for its data protection policies in that no personal information about user was stored or processed by Phorm.

Mr Ertugrul told the meeting that the firm had taken months of legal advice before announcing its plans and was satisfied the service broke no UK law.

“Laws are made by due process not by people standing up and saying it is illegal,” he said.

Speaking at the meeting, IT specialist Alexander Hanff said Phorm infringed people’s human rights with respects to privacy.

“What Phorm is trying to do is to turn people into products - a global warehouse selling pieces of us to the highest bidders,” he said

But Mr Ertugrul said Phorm had the potential to transform the economics of the internet.

“The internet today is two to three professionals - Microsoft, Yahoo and Google - and 9,999,999 hobbyists.

“Phorm makes all websites capable of making a living,” he said, adding the technology could end the stranglehold Google has online advertising market.

Narrow margins

Mr Ertugrul said Phorm’s ability to put adverts on participating websites based on the users’ interests would be much more valuable that the current advertising model, which is based on the content on the actual web page.

“Even small websites can make money with Phorm,” he said.

He said Phorm would aid ISPs who were struggling to provide a service to customers.

“In the UK the business of connecting you to the internet is almost not worth doing; margins are so thin,” he said.

Mr Hanff added: “The public perception is that they find it offensive that Phorm are profiling them. They do not want it.”

Mr Ertugrul dismissed concerns that Phorm’s technology was open to future abuse through “mission creep”.

“The ISPs stand to lose far more for breaching trust than anything else. If anybody not interested in mission creep, it’s the ISPs, because they will lose your trust,” said Mr Ertugrul.

Mr Ertugrul invited privacy and security experts to examine the firm’s technology embedded into ISPs at any time they wanted. An in-depth look at Phorm - the controversial ad-serving system

PHILADELPHIA - History seems to be repeating itself at newspaper publisher Journal Register Co., which — like its predecessor, Ingersoll Publications Co. — is struggling under debt from numerous acquisitions.

Shares of Journal Register — which owns more than 300 publications in Michigan and along the East Coast, including the flagship New Haven Register in Connecticut among 22 daily newspapers — will be suspended from trading on the New York Stock Exchange on Wednesday, and eventually delisted.

Journal Register said it will not appeal its suspension.

With its revenue falling in parallel with the circulation and advertising declines publications across the country have seen this year, observers now wonder whether the company can recover.

“I’m not sure they’re going to get out of it whole,” said industry analyst John Morton. “They can spin off the assets, but they won’t get much for them.”

Journal Register shares, which traded as high as $23.875 a decade ago, closed Tuesday at 32 cents — less than the weekday paper’s newsstand price.

Moody’s Investors Service pushed the company’s rating deeper into junk status last week due to falling revenue and a “heightened probability of default stemming from eroding liquidity.”

The troubles plaguing Journal Register are a replay of sorts for longtime shareholders who remember its predecessor, Ingersoll Publications Co. Both companies ran into trouble making payments on the debt they incurred in several heavily leveraged purchases.

“Journal Register was the remnants of the old Ingersoll group, which got into similar trouble or worse,” Morton said.

In the 1980s, Ingersoll bankrolled purchases with junk bonds and amassed heavy debt.

E.M. Warburg Pincus, Ingersoll’s financier, stepped in when revenue fell, and Robert Jelenic, an Ingersoll executive, became CEO at the successor company, Journal Register Co., which went public in 1997.

The company’s cash earnings hit their peak the same year, with a 37 percent margin for earnings before interest, taxes, depreciation and amortization.

Jelenic expanded the chain by buying clusters of publications but kept a tight rein on other costs. In 2001, Forbes magazine profiled Journal Register in a story called “Cheapskate Journalism.”

The Newspaper Guild-Communications Workers of America, which represents union members at six newspapers, said average salaries are near the bottom among the 100 dailies under the Guild.

“It was just a really miserable place,” said Chris Collins, a former Journal Register employee who said he had to work with broken chairs and desks with jagged pieces of metal sticking out. “It became impossible not to be depressed or sick to your stomach.”

Journal Register did not return calls for comment.

Jelenic left the company last year, due to illness, with $4.76 million in severance, plus restricted stock and options.

Journal Register’s latest woes stem from the $415 million purchase in 2004 of 21st Century Newspapers Inc., which had four dailies and 87 non-daily publications in Michigan.

A Moody’s report in 2004 analyzing the deal described it as pricey but in line with valuations of high-quality assets. Debt payments would be manageable as long as revenue kept growing, Moody’s said.

But the Detroit area economy took a downturn and a severe advertising decline hit the newspaper industry as increasing numbers of readers turned to the Internet for their news.

John Page, senior publishing analyst at Moody’s, says the company paid a high price. He said he doesn’t think the company will recover this time around — though many papers have rebounded from ad weakness in the past — because so many former readers now get their news online or by cell phone.

Journal Register’s revenue has been falling since 2005 and the company found itself increasingly squeezed by its debt, which hit a high of $778 million in 2004, according to Securities and Exchange Commission filings.

Last year, its revenue was $463 million and total debt about $625 million.

“They made a bet on the Michigan economy turning around. It turns out to be a bad bet,” Morton said. “They went really deep into debt to do it.”

The company can still service its debt, but room to maneuver has been shrinking.

“The question is, it is enough room?” said Charles Strauzer, an analyst at CJS Securities in White Plains, N.Y., who’s also a shareholder.

LOS ANGELES (Reuters) - Digital entertainment company CinemaNow and Technicolor said on Tuesday they had developed a new digital movie delivery platform to sell to online retailers and hardware companies.

Jason Alexander, director of marketing for privately-held CinemaNow, said the company would seek to provide the platform to existing and new partners in the consumer electronics industry.

CinemaNow currently provides an online movie service that is accessible through its own website as well on various devices.

The platform should make it easier for device makers and retailers to provide an online movie service and features functions like content encoding and encryption, digital rights management (DRM), ad management, order fulfillment across various consumer electronics categories.

Technicolor, a unit of French media group Thomson SA, and privately-held CinemaNow said they were also working to add high-definition movies to CinemaNow's library of more than 10,000 titles.

(Reporting by Sue Zeidler; Editing by Tim Dobbyn)

SAN FRANCISCO - Intel Corp.’s first-quarter profit matched Wall Street’s subdued expectations, a sign the company’s core microprocessor business remained healthy amid fears of a broader slowdown in technology spending.

The stock jumped about 7 percent in after-hours trading Tuesday after the technology bellwether forecast higher profit margins in the second quarter and signaled that it is thriving while its smaller rival, Advanced Micro Devices Inc., continues to stumble.

Santa Clara-based Intel said Tuesday that its net profit for the three months ended March 29 was $1.44 billion, or 25 cents per share. That represents a 12 percent decline from the year-ago period, when Intel earned $1.64 billion or 28 cents per share. But it was in line with the average estimate of analysts polled by Thomson Financial.

Intel’s sales of $9.67 billion — a 9 percent improvement over last year and a record for the first quarter — came in slightly higher than Wall Street’s estimate of $9.63 billion.

Intel’s chief financial officer, Stacy Smith, said the results reflect the company’s ability to overcome slumping prices in some segments of the semiconductor market with a new chip-making process that lowers the manufacturing costs for each chip.

“What we’re seeing is the strength of the core business is offsetting that weakness,” he said in an interview.

Intel warned in March that a steeper-than-expected drop in prices for a type of memory chip called NAND flash — commonly used in digital cameras and MP3 players — hurt profits more than anticipated. Analysts lowered their estimates.

Memory chip prices have been under pressure because of oversupply and fierce competition, a trend that has cut deeply into the profits of companies like Samsung Electronics Co., the world’s largest memory chip maker.

It was a surprise that Intel, whose primary business is making microprocessors — a different type of chip that acts as the brain of personal computers and servers — was hurt so badly.

Intel is the world’s No. 1 maker of microprocessors with about three-quarters of the worldwide market. AMD, which has been dragging under the weight of heavy acquisition costs and fierce competition, is No. 2.

Intel began making NAND flash in 2006 under a joint venture with Micron Technology Inc. to cash in on growing demand for the most popular type of memory for consumer electronics, a move that some analysts now say was ill-timed considering the price plunge for those chips.

Intel Chief Executive Paul Otellini said the joint venture is rethinking how much factory space it wants to devote to making NAND flash and has delayed construction on its new factory in Singapore for the memory chips as a result.

He added that economic jitters didn’t appear to have harmed Intel in its major markets during the latest quarter.

Microprocessor prices were flat in the first quarter and unit sales declined from the fourth quarter. Smith said those results were in line with seasonal trends in the semiconductor industry.

The company forecast second-quarter sales of between $9 billion and $9.6 billion, which was in line with analyst expectation.

Intel’s gross profit margin — a key measure of its ability to control the cost of making its chips — is expected to be 56 percent, plus or minus a couple percentage points, higher than the gross profit margin of 53.8 percent in the first quarter.

Intel and AMD have both been hurt by their intensifying competition.

AMD is scheduled to report first-quarter results Thursday. The Sunnyvale-based company warned last week that sales across all business units were lower than expected and that it plans to cut 10 percent of its global work force, or about 1,600 workers. Analysts are expecting a loss of 51 cents per share on $1.51 billion in sales.

Intel finished cutting about 10,500 workers, or 10 percent of its own work force, last year in a move to shore up profits amid fierce competition with AMD.

Intel shares rose $1.51, or more than 7 percent, to $22.42 in after-hours trading. They closed Tuesday up 22 cents at $20.91 before the results were released.

Windows XP Service Pack 3 (SP3) will reportedly debut later this month. Tech news outlets are widely reporting that the much-anticipated update will be available on April 29. Microsoft was not immediately available for comment.

The final version of Windows XP SP3 was slated for delivery during the first half of 2008, but Microsoft seems intent on downplaying the attention it might get in favor of pushing Windows Vista, especially in light of the uproar about extending the life of XP.

Tests by Devil Mountain Software show that Windows XP, coupled with Service Pack 3, runs some desktop computing tasks roughly twice as fast as Vista. Devil Mountain also discovered that SP3 offers a 10 percent performance boost over XP with SP2, while performance gains with SP1 for Vista were negligible.

Not Much New Here

Windows XP debuted in October 2001. The last update, SP2, was released in August 2004. SP3 is slated to be the last major upgrade of the OS. Like most service packs, XP SP3 combines fixes that were previously released.

Most of the fixes have already been available to users who keep their system updated though Windows Update or who visit Microsoft's Download Center to download fixes individually.

That's an important point, according to Michael Cherry, an analyst with Directions on Microsoft. Consumers who have diligently kept up to date with Microsoft downloads, he said, have a PC that operates much the same as PCs waiting for XP SP3.

“There is some new functionality for XP. Windows Server has a new feature called Network Access Protection. I believe Microsoft's plan is to shift the client for Network Access Protection for XP in the service pack,” Cherry said.

Saving Time on Rebuilds

That said, one of the advantages of having SP3 in a bundle is making computer rebuilds easier. Service packs, Cherry said, can save time for people who are rebuilding machines. He speaks from experience.

“I was rebuilding a machine that has XP on it. It previously ran XP SP2. I had to download an incredible number of patches to bring it up to date. What XP SP3 would let me do is download one massive [collection] of patches, and I don't have to worry about what order I apply them in,” Cherry said. “I know it's going to happen correctly.”

Still, for the most part, XP SP3 won't mark a significant change. While it may patch some issues that Microsoft did not initially release patches for, Cherry said, it will not have the impact XP SP2 did.

“XP SP3 is not going to change the operating system the way that XP SP2 did. It's not faster; there are no new features. There were no features removed,” Cherry said. “It's going to be much closer to what Vista SP1 was, where an awful lot of people said, 'So what?'”

SAN FRANCISCO - Hard-drive maker Seagate Technology’s third-quarter profit jumped 62 percent from a year ago, though the company acknowledged weakness in the market for drives used in notebook computers.

In the quarter ending March 28, Seagate earned $344 million, or 65 cents per share, compared with $212 million, or 37 cents a share, in the same period a year ago. Revenue grew 10 percent to $3.1 billion from $2.8 billion last year.

Excluding one-time items, Seagate earned $369 million, or 70 cents per share. On that basis, analysts surveyed by Thomson Financial were expecting the company to post a profit of 69 cents per share on revenue of $3.25 billion.

Seagate Chief Executive Bill Watkins said the results were driven by strong global demand for storage, but the company fell short in the notebook and retail market.

“We continue to believe that there is significant opportunity in the notebook and retail markets — two areas where the company recently has not performed to expectation,” Watkins said Tuesday. “We expect to see improved performance in these areas in the June quarter and through the calendar year,” Watkins said in a company statement.”

The company also said it sold 43 million disk drives in the third quarter.

Seagate shares were down 10 cents, to $20.07, in after-hours trading on Tuesday.

Seagate, which is based in the Cayman Islands but operates out of Scotts Valley, raised its profit outlook in March, saying it sold more high-end hard drives than it had expected. In the second quarter, Seagate nearly tripled its profit over the year before as shipments jumped 20 percent amid strong demand for storage from both consumers and businesses.

SEOUL (AFP) - US online social network MySpace Tuesday launched a Korean service to try to penetrate a highly competitive market dominated by local players, officials said.

The service, owned by Rupert Murdoch's News Corp, has exclusive features tailored to local users such as “minilogs,” a type of online notebook in which users can make daily jottings.

MySpace faces strong competition from local firms such as market leader Cyworld, which commands some 18 million users running blog-style homepages and uploading photos, comments and other multimedia contents.

“We don't think MySpace will pose a great threat to our service, which is based on strong off-line group ties,” Cyworld spokeswoman Shin Hee-Jung told AFP.

“There is a positive factor. The Korean service of MySpace is expected to enlarge the domestic market,” she said.

MySpace president Chris DeWolfe has arrived in Seoul for talks with industry personnel and Internet users, Yonhap news agency said.

South Korea is one of the world's most wired countries, with some 70 percent of homes having high-speed Internet access. But it has largely shunned popular overseas services.

The world's top Internet search engineGoogle, which launched a Korean-language site in 2000, has been striving to boost its presence here.

WASHINGTON - With classified revenue dwindling, the news industry must get better at tailoring articles and display advertising to online readers, several newspaper executives said Tuesday.

Papers must more aggressively “slice and dice” content to readers’ particular interests, Leon Levitt, vice president of digital media for Cox Newspapers Inc., said during a panel discussion at the annual conference of the Newspaper Association of America.

“We’re at the early stages of doing that,” said Levitt, whose company, a unit of privately held Cox Enterprises Inc., owns 17 daily and 26 non-daily newspapers, including the Atlanta Journal-Constitution, The Palm Beach Post in Florida and the Austin American-Statesman in Texas.

Newspapers faced with dwindling print advertising are turning more to the Internet to make up for lost revenue. Overall newspaper advertising revenue last year fell 7.9 percent, including a 9.4 percent dip in print advertising that was offset partially by an 18.8 percent hike in online advertising, according to the newspaper association.

Levitt said newspapers are leaning most heavily on online display advertising, which is growing at a faster clip than classified advertising.

Other newspaper executives on the panel said the industry must first become more familiar with readers’ online behavior before they can deliver personalized content and advertising.

Several executives said they’re developing multiple Web sites, blogs and other products to reach distinctive audiences.

Vivian Schiller, senior vice president and general manager of NYTimes.com, said The New York Times is a “strong believer” in creating multiple brands.

She said DealBook blog, which provides financial news, started as an e-mail newsletter service in 2001 and then also became a Web site two years ago. The company also has a Great Homes and Destinations Web site that provides information about the luxury real estate sector.

She said despite the housing market’s current situation, there is “still an appetite for it,” she said.

Eleanor Cippel, director of innovation for Cincinnati-based E.W. Scripps, said her company started a $1.5 million “entrepreneurial fund,” similar to a venture capital fund, more than a year ago to bankroll business ideas mainly from their employees.

In that time, the company has reviewed about 175 ideas and funded about 15 mostly Web-related products, she said. Examples are RedBlueAmerica.com, which caters to readers who want to know about opinions from different sides of an issue, and Rootclip, another Web site that invites users to submit short videos.

The idea, she said, is to grow loyalty within such audiences.

Scripps, which owns daily and community newspapers in 16 markets, 10 broadcast TV stations, and other media properties, plans this year to split into two companies by June 30.