Vogel Internet, Information Technology and e-Discovery Blog : Texas Internet, Information Technology, eCommerce & E-Discovery Lawyer & Attorney Peter S. Vogel : Gardere Wynne Sewell Law Firm : Dallas TX

Social networking remains headline news as Facebook got a $200 million infusion from a Russian based company while at the same time Iran changed its blocking policy and unblocked Facebook in the midst of a heated June 12th election. Both of these reports demonstrate important messages about social networking in spite of the fact that Facebook, Myspace, and YouTube are not generating the revenue expected given their size and evolution. But at the same time reports of phishers harvesting Facebook passwords for profit should be a sobering reminder that social network users are very vulnerable since they trust their friends, who may be taking personal identities and passwords.

$200 Million = 1.96% Equity

When you do the math and see that Digital Sky Technologies (DST) paid $200 million for 1.96% of equity of Facebook that translates to a $10 billion valuation, which is a third less than Microsoft’s October 2007 $240 million invest for 1.6%. These numbers can make anyone dizzy, notwithstanding that Facebook doubled in size between August 2008 and April 2009 to 200 million friends. Since Facebook reports that more than 70% of its users are outside the US it makes lots of sense for DST as it invests mostly in Internet companies in Russia and Eastern Europe.

A World Message

DST’s Eastern Europe reach reinforces social networking’s power, but Iran’s concern about Facebook influencing an election is an even bigger message. Since the Facebook ban in Iran lasted only a few days the social pressure forced the change. Surely Iran will not be the only country to limit access to social networks which was worried that anti-government groups could band together on Facebook to impact the June 12th election.

You would have to live on Mars to not be aware that President Obama maximized the use of social networks to raise funds, support, and ultimately election. No wonder the White House has a YouTube page. We should all keep an eye on political uses of social networks as we watch the evolution of the Internet.
 

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There are reports that Microsoft’s new search engine known as Kumo is about to be released (ultimately it may be called “Bing”) which will replace “Live Search.” Apparently Microsoft leaked copies of Kumo recently and from all reviews there’s nothing too radical, but what is radical is the Wolfram|Alpha search engine which was seen on TV news last week. The Wolfram|Alpha search engine provides users very different information, however since it is so radically different it remains to be seen how successful its approach will be.

Update on Search Engine Rankings

comScore just released its new search engine rankings without much surprise- Google increased slightly from 63.7% to 64.2% of all Internet searches between March and April 2009 while Yahoo!, Microsoft, Ask, and AOL were relatively flat. Since Microsoft (20.4%) and Yahoo! (8.2%) searches combine for 28.6% of all Internet searches, there has been renewed speculation that Microsoft and Yahoo! will form an alliance to try to get a larger market share and be more competitive with Google.

Microsoft vs. Google- Search Engines and Browsers

From earlier blogs you will recall that Google is complaining about Microsoft’s deployment of Internet Explorer in the EU as anticompetitive. Interestingly part of Microsoft’s defense is apparently that by expanding competition in the browser market in the EU will only encourage more Google Internet searches which will be anticompetitive to Microsoft. So it will be interesting to see how Microsoft’s deployment of Kumo may allow Google to argue to the EU that Microsoft’s defense should fail since Microsoft is aggressively competing with Google in the search engine market.

What do you think? I welcome comments.
 

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Since Google accounts for more than 63% of all Internet searches, it’s no wonder that Google’s stock fell last week when Google users had significant problems when Google’s servers were overloaded and Google services were operating at a crawl. Google claims that there were problems in 3 of their Asian data centers (out more than 30 data centers worldwide) which affected about 14% of Google’s users. Many Internet users rely on Google for services beyond searches, including gmail, Google Apps, and Google Latitude to name a few. Google’s server failures meant many users could not conduct business during this outage period.

Protecting Privacy Google

A recent article in Computerworld gives Google users 6 tips about protecting privacy:

1. Know your privacy rights: Use the Google Privacy Center.
2. Protect your content on the services you use.
3. Turn off the suggestion feature in the Chrome browser.
4. Turn off Web History.
5. Opt out of interest-based ad serving.
6. Add SSL to Gmail.

However, since most Internet users do not take the time to review privacy policies it’s unlikely that this advice will be heeded by many Google users.

More Google

Google announced a number of new services for desktops and mobile phones which includes search capabilities in multiple contexts so that when searching from a cell phone, Google will take into account the GPS location and what other mobile users have searched in that locale. Also Google will offer a new tweak to search on Search Options that allows a user to drill by topics, time, or images. About to make its debut is a much hyped search engine known as Wolfram Alpha.

Google Too Successful?

A big question may now be has Google been too successful? As Google offers these new features to sell ever more ads space, surely Google hopes to draw more users. Without question the recent system slow-down is an ominous sign of potential bad news on the horizon. No doubt Google’s search engine competitors like Yahoo!, Microsoft, and AOL are watching with great interest to see if they can capture Google users who may abandon Google if the system outages become a pattern.
 

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Recent reports from the EU potentially impact a number of Internet and IT industry issues of great import, including plans for new laws to protect consumers from IT security breaches, Microsoft’s strategy to defend antitrust claims regarding the Internet Explorer (IE) browser, and a ruling that Intel violates antitrust laws.

EU Notice for Loss of Data

The EU plans to pursue new laws that would create more stringent reporting of IT security breaches, more like the US and Japan. Of course IT breaches are not a new topic in the IT community nor on this blog. However the new California law in 2003 requiring notice to consumers was a model that many states of have adopted, and citizens are clearly better off that they are notified of possible loss of their personal information.

Microsoft Browser Strategy

Recent blogs that Google, joined Mozilla and Opera complaining about Microsoft’s anticompetitive distribution of the IE browser is taking an interesting turn. Apparently Microsoft plans to argue in defense that restrictions on distribution of its IE will strengthen Google’s search-advertising market in an anticompetitive way. Apparently the EU estimates that 85% of the browsers in the EU are Microsoft’s IE, but if Microsoft has its way IE will continue to be distributed with Windows Operating Systems as it has since 1995.

Intel to Get an Adverse Ruling

The EU is expected to rule this week that Intel’s marketing in the EU violates antitrust laws, and Intel’s 81.9% market share is not because it has superior products. Rather the EU will rule that Intel has illegally handed out rebates and paid computer makers to delay products with rival chips.

EU Impact on IT

It’s probably about time that the EU enacted IT security breach laws to protect consumers like many US states. The EU is taking IT very seriously, and not reacting well to US IT companies’ market strategies that may be acceptable in the US. As more countries provide high speed Internet access to all citizens, countries around world will need to be even more vigilant to protect their citizens, by informing them of IT security breaches to protect personal identity and from anticompetitive behavior.

Since I see the Internet as the greatest social change in the history of humans (since there are no boundaries of time and geography), it seems reasonable that governments will only have a higher responsibility to protect citizens since we are all more and more reliant on the Internet and IT.
 

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After a three-year study a panel (of former military leaders and IT professionals) from the National Academy of Sciences reported that the US has no clear military policies for cyberattacks. Notwithstanding a recent blog about the NSA exceeding its authority to intercept email, we are not much safer from cyberattacks. One would have to live under a rock to have not noticed the significant number of system breaches. As a matter of fact as pointed out in other blogs, LexisNexis just warned 32,000 individuals about data breaches that personal information may have been improperly accessed in a credit card scheme as far back as 2004.

Proposed Federal Legislation to Update FISMA

The US Congress will be considering an update to FISMA (the Federal Information Security Management Act) called the "U.S. Information and Communications Enhancement Act of 2009." This proposed Act will create hacker squads to test defenses of agency networks, and the agencies will be required to show how they can effectively detect and respond to cyberattacks. Currently there are only about five federal agencies who conduct this type of testing.

Cyberattacks From Within

A former Sysadmin (System Administrator) recently pled guilty to a charge of cyber extortion by threatening his former employer and faces up to five years in prison and a fine of $250,000. After the Sysadmin was terminated last year he complained about the severance and threatened to cause extensive damage to his former employer’s systems. Apparently he left many back doors in the systems he managed that allowed him to enter and cause havoc, which of course as a Sysadmin he had the authority to do so.

How Safe Should We Feel?

Hopefully the US should get control of cyber security because it seems patently obvious to the most casual observer that at this time the US is extremely vulnerable. Maybe spending the US should $19 Billion on cyber security rather than on Electronic Health Records (EHR) since the US is so dependent on the use of the Internet today, and the US’s dependence on the Internet will only increase. Cyber safety is more critical than EHR.
 

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