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BEIJING (AFP) - It may be decades before China gets democracy, but for many Chinese, political participation of sorts is only a mouse click away.

In the past few weeks, the Chinese have been anything but silent, faced with what they feel is an onslaught of unfair criticism from the West about their country's policy toward Tibet and the Olympic Games.

Chinese people began by using blog posts and websites to condemn foreign journalists for what they saw as biased coverage of China's crackdown on unrest in Tibet, following riots in the region's capital Lhasa on March 14.

France then became a target for its attitude toward the remote Himalayan region and the Olympic Games, culminating in the latest protests in China in front of stores belonging to the French supermarket chain Carrefour.

Throughout all of this, the Internet played a crucial role in mobilising people in a massive patriotic outburst.

Calls to come and protest, with locations and times, were posted on web portals popular with young Chinese.

“Internet and cellphones are powerful ways to connect people, spread information and mobilise political actions, especially among the urban, young and more educated population,” said Xiao Qiang, director of the China Internet Project at the University of California.

The first sign of online anger came just three days after the Lhasa riots, with calls for “death to separatists” posted on websites.

But it was the Western media's coverage of China's crackdown on the riots that set off a spate of online patriotic activities, fuelled by the state-run media's mass condemnation of foreign reports.

An anti-CNN website was set up by a Chinese entrepreneur, exposing errors in foreign reporting; pro-China videos were posted on YouTube; mass emails were sent to Western media outlets in China; and millions of MSN messaging service users put a heart followed by 'China' before their names.

The overseas Chinese community was as active as mainland inhabitants in whipping up condemnation.

“The Internet is a social networking tool, and it is an ideal communication tool for the overseas Chinese community,” Xiao said.

“Overseas Chinese go to familiar web portals which are in Chinese, just as foreigners around the world would look at familiar newspapers online,” Jonathan Unger, director of the Contemporary China Centre at the Australian National University said.

For Chinese people living on the mainland, the Internet was even more sought after due to its relative anonymity.

“In any media, when people feel safe that they don't have to disclose themselves, it encourages a lot of different opinions, and this is very important in the context of China,” said Wei Ran, a senior fellow at Nanyang Technological University in Singapore.

Last weekend, online protests turned into real ones with demonstrations in front of Carrefour stores across the country.

These would never have been on such a large scale had it not been for the Internet, but the technology itself was not enough to make things happen, Wei said.

“If people don't think strongly about something, then technology will not make it happen. But for a very highly charged issue like the whole Tibet issue, the Internet provides the right medium and technology to make things happen.”

The anti-France protests, fuelled by the chaotic Paris leg of the Olympic torch relay and allegations that Carrefour supports Tibet — a claim it denies — are similar to the anti-Japan protests of 2005, according to Unger.

“The Chinese used these (anti-Japan riots) as a way of being more patriotic than their own government. The implication was that their government had failed them in this respect, and by implication in other respects,” Unger said.

“And now with the Internet you don't have to go out in the streets, you don't have to put yourself in harm's way, and the movement can be much more massive.”

But at the end of last week, China's state media tried to calm the mood, in a sign the government is wary of the magnitude of the protests.

“In the current situation, Internet censors are purposefully and selectively allowing the nationalist messages to be transmitted without much censorship. This may change tomorrow but so far this is the case,” Xiao said.

Wei, however, said it was extremely difficult to control the 210 million Internet users in China.

“Most of these spend two to three hours a day on the Internet. If you tie that all up, it's a horrible number to oversee.”

Sony Corp. of America will buy Gracenote, which made its name with software that identifies digital music files, for about US$260 million.

Sony will keep Gracenote as a wholly owned subsidiary and use its technology in its own digital content, service and device offerings. But Gracenote's current business will keep operating separately and developing new technologies, and its management will remain, Sony said. It will pay $260 million plus “other contingent consideration,” the company said.

Although it pioneered portable music players with the Walkman cassette player and jointly developed the CD, Sony's digital and online music efforts have fallen short of competitors such as Apple. The company shut down its Connect music store last August after trying to compete against Apple's iTunes for three years.

Gracenote, formerly CDDB, maintains a database of information about music and uses it in a variety of applications, including identifying tracks, finding similar songs and presenting lyrics and other relevant content. Its customers include iTunes, Yahoo Music Jukebox, and companies in the mobile music business, such as Sony Ericsson, Japanese carrier KDDI and Europe's Musiwave. Consumer electronics suppliers, including Sony, also use Gracenote technology in their products. The company is based in Emeryville, California.

The companies expect the deal to close in late May.

SAN FRANCISCO - Yahoo Inc. delivered first-quarter results that eclipsed analysts’ modest expectations, but the performance did little to support the Internet pioneer’s demands for software maker Microsoft Corp. to raise its takeover bid above $45 billion.

The Sunnyvale-based company said Tuesday that it earned $542.2 million, or 37 cents per share, more than triple its profit of $142.4 million, or 10 cents per share, at the same time last year.

Most of the first-quarter improvement stemmed from a non-cash gain of $401 million recorded to recognize Yahoo’s stake in the parent company of Alibaba.com, a leading e-commerce site in China that went public last year.

If not for the Alibaba windfall, Yahoo would have earned 11 cents per share — comparable to its profit at the same time last year, on an apples-to-apples basis.

The earnings were two cents above the average estimate on the same basis among analysts surveyed by Thomson Financial.

Perhaps even more importantly, Yahoo provided the same full-year revenue outlook that it made in late January — just two days before Microsoft made its unsolicited bid.

“This doesn’t change the picture much at all,” Susquehanna Financial Group analyst Marianne Wolk said.

Yahoo’s first-quarter revenue climbed 9 percent to $1.82 billion.

After subtracting commissions Yahoo paid its advertising partners, its revenue totaled $1.35 billion — just $30 million ahead of analysts’ average projection.

Investors didn’t seem to be impressed as Yahoo shares shed 15 cents in extended trading after dipping a penny to finish the regular session at $28.54.

The first-quarter numbers provided a reminder of the ever-widening gap separating Yahoo from Google, whose profit during the same period climbed 30 percent to $1.3 billion on revenue that rose 42 percent to $5.2 billion.

Now it appears more likely the standoff between Yahoo and Microsoft will be resolved in a divisive battle that could drag on into the summer, opening the door for Google to grow even stronger while its two rivals are distracted by their duel.

Microsoft has threatened to oust Yahoo’s board if the 10 directors don’t accept the current offer Saturday. That risky course of action, known as a proxy contest, probably wouldn’t be settled until Yahoo’s shareholder meeting, which doesn’t have to be held until July.

The cash-and-stock bid — valued at $44.6 billion, or $31 per share, when it was first made — is now worth about $43 billion, or $29.88 per share.

Without specifying a precise price, Yahoo has maintained it’s worth more to Microsoft even though its shares had fallen below $20 before the bid.

Yahoo gained a little more credibility to its argument by topping analysts’ estimates, said Canaccord Adams analyst Collin Gillis. “They cleared another hurdle,” he said. “You can’t take a strong stance on your value and then not deliver the earnings.”

Steve Ballmer, Microsoft’s chief executive officer, reiterated the software maker has no plans to sweeten its offer. “We think we can accelerate our strategy by buying Yahoo and will pay what makes sense for our shareholders,” Ballmer said in remarks made before Yahoo’s first-quarter report came out.

Jerry Yang, Yahoo’s co-founder, CEO and a board member, made it clear the company won’t sell to Microsoft unless the bid is raised. “Our ability to execute on multiple fronts is clearly improving,” he told analysts during a Tuesday conference call.

Yahoo expects its revenue to increase more dramatically in 2009 and 2010 as the benefits from its expanded Internet advertising network start to kick in. “We feel we are on the verge of fundamentally changing the game,” Sue Decker, Yahoo’s president, said in Tuesday’s conference call.

An experimental advertising partnership with Google also could help boost Yahoo’s profit.

Yang and Decker to declined to discuss the Google tests, which began two weeks ago. Analysts believe a long-term partnership between Yahoo and Google would be difficult to pull off because of the antitrust concerns that would raised, given the two companies control more than 80 percent of the U.S. search market.

Yahoo also has been exploring a possible merger with the Internet operations of Time Warner Inc.’s AOL, which has been struggling in recent years.

“We will not enter into any transaction that doesn’t recognize the full value of this company,” Yang said.

The confident tone of Yahoo’s management on Tuesday contrasted with a more glum attitude in late January when Yang warned economic “headwinds” might complicate the company’s turnaround efforts.

Given the Microsoft bid, Global Crown Capital analyst Martin Pyykkonen said the company’s optimism should be taken with a grain of salt. “You almost have to discount anything positive management has to say because they are just trying to get the (sale) price up,” he said.

Microsoft’s bid conceivably could rise above its original value without management upping the ante. It might happen if Microsoft’s own quarterly earnings report — due out Thursday — pushes its shares above $32.60. Microsoft’s stock price finished Tuesday at $30.25, down 17 cents.

Many analysts believe Microsoft will raise its offer to between $32 and $35 per share, or about $46 billion to $50 billion, to prevent its prickly courtship of Yahoo from becoming even more acrimonious.

Microsoft stands a better chance of making the complex deal work if it has Yahoo’s cooperation during the daunting process of melding the two companies’ disparate cultures and technologies.

Yahoo ended March with 13,800 employees, down from 14,300 workers at the end of 2007. The company jettisoned more than 1,000 workers during the first quarter, but offset some of the purge by hiring about 600 new employees.

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AP Business Writer Rachel Metz contributed to this report from New York.

Apple fans who were expecting an iPhone instant-messaging client based on AOL's popular software could be in for a surprise. Apple has applied for a patent on a chat feature.

The U.S. Patent and Trademark Office published an application entitled Portable Electronic Device for Instant Messaging on March 6. That's the same day Apple offered details on its software development kit for the iPhone.

Last month, Apple mentioned AOL's test version of the first “official” native Web chat for the popular iPhone. But that could be a temporary solution. The patent was filed in August 2007.

The Heart of the Patent

The application reads, “The GUI has a set of messages exchanged between a user of the device and another person. The set of messages (is) displayed in a chronological order. In response to detecting a scrolling gesture comprising a substantially vertical movement of a user contact with the touch-screen display, the display of messages (is) scrolled in accordance with a direction of the scrolling gesture.”

Of course, the iPhone already has SMS messaging. But an Apple-branded chat feature would offer Apple multiple benefits, so Ilan Barzilay, a member of the Electrical and Computer Technologies Practice Group at Wolf Greenfield in Boston, was not surprised to learn about the patent.

“Texting is a huge part of cell-phone service, so if Apple could build an IM client into its iPhone that's just another feature, that would be very appealing to consumers,” Barzilay said. “Apple could take that power out of the hands of the cell-phone companies so consumers have one less thing to worry about on their cell-phone bill.”

Keeping Apple in Control

If Apple releases its own chat feature, the company would also have more control over the modifications consumers make to the software. Apple has taken a relatively proprietary approach until now, only recently announcing a software developer's kit that could open up the platform to new third-party applications.

“Apple having its own IM client, it could control the look and feel of the interaction, which is very important to Apple. The company could also control the back end such that it could make it a little more flexible with various networks depending on what the iPhone is working on,” Barzilay said. “It could control how the IM client interacts with the operating system on the iPhone as well as all the other software out there.”

Could it Just Be a Rumor?

Barzilay said one of Apple's trademarks is to control the user experience, and this move follows that trend. There is still some question about whether Apple's patent reveals its intentions or just leaves the door open. Apple could not immediately be reached for comment.

However, Barzilay said, if Apple does develop a proprietary IM client, a patent could prevent other developers from tweaking the software or developing an IM system similar to Apple's.

“Apple and many other companies are looking for their own ways of doing things,” Barzilay said. “If Apple can find one that works well on its iPhone platform and has features not available elsewhere, it's just another incentive for customers to go to them.”

Sony BMG just became the second recording label to join Nokia's mobile music platform and service.

Dubbed Comes with Music, Nokia has already wooed Universal Music Group to its new system for delivering music on mobile phones.

Here's how it works: People who buy a Nokia Comes With Music device will have a year of access to the Sony BMG catalog of music. Consumers will be able to download tracks to both their mobile device and computer through the Nokia Music Store during the first 12 months that they own their Nokia device.

“As one of the leading major music companies in the world, our collaboration with Sony BMG means we can offer a huge range of fantastic music from both international and local artists via Comes With Music,” said Tero Ojanpera, executive vice president and head of the Nokia Entertainment and Communities business. “It's great to have them on board as we move forward with bringing our unlimited music bundle to the market.”

Expanding Music Industry Revenue

As Ojanpera sees it, Nokia Comes With Music is an innovation that not only helps people discover and enjoy music, but also expand the overall business and revenue for the benefit of artists, labels and other rights holders.

At the end of the one-year period, consumers can keep their downloaded tracks and, should they purchase a new compatible device or computer, can transfer their downloaded material by substituting their new device or computer for the original devices. That means music fans who participate in the Comes With Music experience will be able to keep their downloads on their device and/or computer for the rest of their lives.

Consumers will have a number of options for continuing to get new music after the Nokia Comes With Music subscription is over: They will be able to continue to purchase additional tracks from the Nokia Music Store, or move on to a Nokia “unlimited access” subscription service to enjoy new releases and catalog tracks not downloaded during the initial year.

Comes With Music is expected to launch in the second half of 2008 on a range of Nokia devices in selected markets.

This initiative represents a critical new way of gaining access to music, according to Thomas Hesse, president of Sony BMG Music Entertainment's Global Digital Business and U.S. Sales.

“We think this business model will encourage users to sample a wide range of material, expand their musical tastes, and listen to more music than ever before,” Hesse said. “In the process, we think it will provide new opportunities to artists from every genre of music, and increase demand for music overall.”

Building the Musical Bandwagon

The addition of Sony BMG's music catalog is good news for Nokia, as it needed a broader selection of music artists for its service, according to Deepa Karthikeyan, a wireless data analyst at Current Analysis.

Consumers do not think of music in terms of record labels, and the failure to provide a broad range of artists via record label variety risks making Nokia Comes With Music a frustrating, hit-or-miss experience, Karthikeyan said. “Nokia Comes With Music will help the handset vendor launch itself into the consumer content-services space with an original, eye-catching and potentially disruptive proposition that currently has no equal.”

Nokia unveiled two handsets Tuesday that support its recently launched music-distribution service: the 5220 XpressMusic and the 5320, which will sell for $255 and $352 respectively. The phones are moderately priced and should gain traction quickly, which enhances the overall appeal of the concept, Karthikeyan said.

“Nokia Comes With Music promises to be an effective iPhone spoiler, set to arrive in the same timeframe as the promised 3G-enabled iPhone,” she concluded. “Nokia Comes With Music is a demonstration of just how aggressive Nokia plans to be as a hybrid-device manufacturer/content services provider.”

NEW YORK - An advertiser sued Google Inc. in federal court Tuesday claiming the company deceived him and charged for ads displayed on third-party Web sites, even though he left blank an “optional” box that seemed to address the issue.

The dispute is over Google’s popular AdSense program, which targets ads to keywords in articles and other content at participating sites. The program complements the traditional AdWords program, which runs targeted ads alongside Google’s search results. Ads under both programs generate the bulk of Google’s revenues.

The lawsuit accuses Google of defrauding advertisers out of millions of dollars collectively by “redefining the universally understood meaning of an input form left blank.”

The plaintiff in the case, David Almeida, had signed up for Google ads to promote his private investigation business in Massachusetts. Because he did not want to buy AdSense ads, Almeida said he left the maximum per-click bid blank, believing “optional” meant he could opt out of the AdSense program by doing so.

Instead, it turned out the AdWords bid applied when he did not exercise that option, and he should have put “zero” into the box to opt out, said his attorney, Brian Kabateck.

“Most of the customers that actually fall victim to this scam are the unsophisticated advertisers,” Kabateck said. “The sophisticated advertisers will know better, will know how to do it. These are the little guys that don’t have money to lose on a program like this.”

Google declined comment, saying it had not yet received the complaint.

The lawsuit was filed in U.S. District Court in San Jose, Calif., by Kabateck, Brown and Kellner, a law firm that has frequently filed consumer-protection lawsuits that seek multimillion dollar judgments or settlements. The lawsuit seeks unspecified damages and class-action status.

Kabateck estimated the unwanted advertising involved brings hundreds of millions of dollars in revenue to Google, though he could not immediately say how much Almeida specifically lost.

Kabateck has tussled with Google before and ultimately joined in a $90 million settlement in 2006 over “click fraud,” in which merchants are billed for fruitless traffic generated by someone who repeatedly clicks on an advertiser’s Web link with no intention of ever buying anything.

Kabateck also reached a multimillion dollar settlement with Yahoo Inc. over similar complaints.

SAN FRANCISCO - Yahoo Inc. delivered first-quarter results that surpassed analysts’ modest expectations, but the performance might not be enough to fortify the Internet pioneer’s defense against Microsoft Corp.’s takeover bid.

The Sunnyvale-based company said Tuesday that it earned $542.2 million, or 37 cents per share, more than tripling from its profit of $142.4 million, or 10 cents per share, at the same time last year.

Most of the first-quarter improvement stemmed from a one-time gain of $401 million generated by Yahoo’s stake in the parent company of Alibaba.com, a leading e-commerce site in China.

If not for the Alibaba windfall, Yahoo would have earned 11 cents per share — comparable to its profit at the same time last year, on an apples-to-apples basis.

The results were 2 cents above the average estimate among analysts surveyed by Thomson Financial.

Revenue climbed 9 percent to $1.82 billion.

After subtracting commissions paid to Yahoo’s advertising partners, the revenue totaled $1.35 billion — just $30 million ahead of analysts’ average projection.

Perhaps even more importantly, Yahoo didn’t raise its revenue outlook for the remainder of year.

That could be good news for Microsoft, which has been betting that its takeover bid would become irresistible if Yahoo can’t substantially accelerate its growth amid the decaying U.S. economy.

Microsoft has threatened to oust Yahoo’s board if the 10 directors don’t accept the current offer Saturday, but that risky maneuver — known as a proxy contest — could extend the current impasse into July.

The cash-and-stock bid, valued at $44.6 billion when it was first made nearly three months ago, is now worth about $43 billion, or $29.88 per share.

Without specifying a precise price, Yahoo has maintained it’s worth more to Microsoft even though its stock price had fallen below $20 at the time of the bid.

“Yahoo is beginning to realize the benefits of the very substantial and deliberate long-term investments we’ve made to capitalize on the opportunities ahead,” said Jerry Yang, the company’s co-founder and chief executive.

Yahoo shares edged up 4 cents in extended trading after dipping a penny to finish Tuesday’s regular session at $28.54.

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AP Business Writer Rachel Metz contributed to this report from New York.

SANTA ANA, Calif. - Federal officials charged semiconductor-maker Broadcom Corp. on Tuesday with falsifying its reported income by illegally backdating stock options for five years.

The Irvine-based company agreed to pay $12 million to settle the charges without admitting or denying the allegations, the U.S. Securities and Exchange Commission said in a statement.

The SEC said that as a result of the fraud, Broadcom restated its financial results in January 2007 and reported more than $2 billion in additional compensation expenses — the largest accounting restatement to date because of backdating.

“The backdating scheme at Broadcom went on for five years, involved dozens of option grants,” Linda Chatman Thomsen, director of the SEC’s enforcement division, said in a statement. “The scope and magnitude of the fraud warrants the significant penalty imposed on the company.”

Brian Marshall, an attorney representing Broadcom co-founders Henry T. Nicholas III and Henry Samueli, referred calls to Nicholas’ spokesman, Mark Saylor. Saylor did not return a call seeking comment.

In a statement, Broadcom spokesman Bill Blanning said, “This is a major step in the process of closing this chapter as we remain focused on the company’s business today and for the future.”

The agency alleges that a two-member option committee approved up to 88 grants between 1998 and 2003, in many cases without meeting on the dates the grants were supposedly approved.

The agency accused Broadcom of using the backdated options to recruit and retain the most highly qualified staff without paying them higher salaries.

The U.S. attorney’s office has also launched a probe into stock-option backdating at Broadcom. In a court hearing in January, federal prosecutors told a judge that Nicholas and Samueli were “unindicted potential coconspirators” in the probe.

A former human resources executive, Nancy Tullos, pleaded guilty to obstruction of justice earlier this year in the criminal probe, and settled with the SEC for $1.4 million without admitting wrongdoing. She is cooperating in the ongoing U.S. attorney’s investigation.

In the SEC case, a complaint filed in U.S. District Court alleges Broadcom’s top officers misrepresented the dates on which stock options were granted to its executives and employees.

Backdating stock options involves retroactively setting the exercise price to a low point in the stock’s value to increase profits for an executive or employee when shares are sold.

If companies backdate options without properly disclosing and accounting for the move, its profits may be overstated and taxes underpaid.

Broadcom also reported after markets closed that its first-quarter profit rose 21.8 percent to $74.3 million, or 14 cents a share, from $60.9 million, or 10 cents a share, during the same period of 2007.

Revenue rose 14.5 percent to $1.03 billion from $901.5 million.

Broadcom’s shares slid 1.1 percent, or 27 cents, to $23.55 during regular trading, then surged $1.45 to $25 after hours.

NEW YORK (Reuters) - Chip maker Broadcom Corp (BRCM.O) beat its quarterly revenue target on Tuesday, citing strength in its wireline business segments, enterprise and broadband, and it forecast continued revenue growth, sending its shares up about 8 percent.

Broadcom, which makes chips for mobile phones, network equipment and consumer devices said its profit rose to $74.3 million, or 14 cents per share, from $61 million, or 10 cents a share, in the year-ago quarter.

Revenue rose to $1.03 billion from $901.5 million.

This compared with its forecast for first-quarter revenue between $975 million and $1.005 billion and average analyst estimates for $992.16 million, according to Reuters Estimates.

The company said that, while it remains “cautious on the macroeconomic front” it expected solid revenue growth for the current quarter, citing strong customer order trends.

“While we remain cautious on the macroeconomic front, based on strong ordering trends from our customers throughout the first quarter, we expect solid revenue growth for the second quarter within each of our three major target markets,” Chief Executive Scott McGregor said in a statement.

Broadcom's business segments include enterprise and broadband, which it said were both stronger than expected in the quarter, as well as wireless, including cell phone chips.

The report follows a disappointing outlook for the current quarter from bigger wireless chip rival Texas Instruments (TXN.N). Broadcom shares rose to $25.40 after closing down 1 percent at $23.55 in regular Nasdaq trading.

(Reporting by Sinead Carew; Editing by Andre Grenon)

SAN JOSE, Calif. - EBay Inc. sued Craigslist on Tuesday, alleging the classified site unfairly tried to dilute the online auctioneer’s stake in it.

EBay purchased a 28 percent stake in privately held Craigslist in 2004 from an unnamed former executive. The financial terms of the deal were not disclosed.

But in January, eBay says, Craigslist’s board, consisting of founder Craig Newmark and Chief Executive Jim Buckmaster, unilaterally acted to dilute eBay’s economic interest in Craigslist by more than 10 percent.

EBay spokeswoman Kim Rubey declined to say what eBay’s stake is now.

The company is asking Delaware’s Court of Chancery to negate the board’s actions.

The complaint is under seal because of confidentiality restrictions, according to a company statement. Craigslist may ask the court to make the complaint publicly available, eBay said.

Craigslist spokeswoman Susan MacTavish Best said the company would likely post a response later Tuesday on its Web site regarding the lawsuit.