Monday 10 June 2013

Facebook is losing 'its grip on consumers'

SAN FRANCISCO - Facebook, which once seemed poised to take over the Internet, is showing its limitations: a host of newer services are gaining ground among trend-setting youth; a much-hyped smartphone app has received a tepid response; and grand ambitions such as taking on Google in the search business seem ever more fanciful.

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In a volatile Internet industry where companies can rise and fall almost overnight, one might even say that the nine-year-old Facebook Inc is suffering a mid-life crisis.
Yet even if the social network falls short of its goal of becoming an all-encompassing Web destination that consumers turn to for everything from messaging to shopping, experts say Facebook has likely achieved enough scale and ubiquity to assure its staying power.
"They've gotten so big that it's one of those things you have to use," Dan Niles, chief investment officer of hedge fund firm AlphaOne Capital Partners, said.
"You may not like the electricity company, but I guarantee you you're still getting electricity."
Concerns that Facebook is losing its grip on consumers, underscored by a recent report from Pew Research that showed declining enthusiasm among some teens, have kept a lid on the company's share price even as stock markets rallied.
With 1.11-billion users, a rich trove of data on those users' interests and relationships, vast personal collections of photos and online identity profiles that serve as the log-in for many other services, Facebook faces little near-term risk that consumers will abandon it in large numbers.
Consumers spend more time on Facebook than on competing online properties such as Google, Microsoft or Yahoo, according to Nielsen Media Research.
And the number of Facebook users who visit the site every day increased to 59.9% in the first quarter, compared to 58.3% in the fourth quarter.
"The newer, exciting stuff is coming from start-ups, but Facebook is really going to be the glue at the middle," Bill Lee, an entrepreneur who has started several Web companies, said.
For that reason, he said, Facebook is not going to "pull a MySpace", referring to the one-time social networking leader that was bought by News Corp before it all but collapsed when users lost interest and decamped to Facebook.
Teens use Facebook more than any other social service, according to the Pew report.
But in focus groups that were part of the same study, many mentioned waning enthusiasm for the site, citing the increasing number of adults on the service and the flood of frivolous posts shared by friends.
The most immediate threat to Facebook, analysts say, comes from a new crop of mobile apps designed for messaging and photo sharing that are attracting millions of users and threatening to siphon some of their time away from Facebook.

Google close to securing map startup Waze: report

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Citing anonymous sources, Bloomberg says that the startup will be purchased for $1.3 billion, a report coinciding with a similar article by financial newspaper Globes. The publication says that a deal could be reached and announced as early as this week, putting an end to months of negotiation.
If a deal with Google goes ahead, it could be one of the Internet giant's most expensive acquisitions to date. Some of the most expensive purchases include Motorola Mobility in 2011 for $12.5 billion, online advertising firm DoubleClick in 2007 for $3.2 billion, and YouTube for $1.65 billion in 2006.
Apple and Facebook are also interested in buying the five year-old startup, according to people familiar with the matter.
Microsoft is an investor within the company.
Waze uses crowdsourced information to update traffic and navigation services in real-time through Android and iOS applications. The firm's website says it helps roughly 45 million users "outsmart traffic and get everyone the best route to work and back, every day."
The free application is ad-supported, used in 190 countries and draws on GPS information to improve maps. In addition, a dedicated forum of drivers contribute to the project by refining routes and adding warnings for traffic accidents and speed cameras.
Mapping technology is important for companies that are trying to secure and retain mobile device users. Google Maps is one of the most popular services currently in use, but continual research and development is required to stay ahead of rival companies.
It would be advantageous to Google, Facebook or Apple to own a firm rather than simply license the technology, as it will allow the tech giants to refine services to make them personalized for users. Furthermore, as GPS and mapping technology becomes more sophisticated, expanding these services can also attract more developers who want to use location-based technology in their applications -- showing users where they are on a map, where local attractions or facilities are, or even how close friends are.
In recent months, Google has focused on personalizing the Google Maps experience by adding local business ratings and friend visits based on search histories. It is possible that adding Waze could contribute much to this cause by offering Google a ready-made network of friends to be integrated within the tech giant's map service if they are already using the application.

Contractor Says He Is Source of NSA Leak

A 29-year-old government contractor publicly identified himself Sunday as the source of recent disclosures about secret National Security Agency data-gathering programs, an admission that exposes him to criminal prosecution and resolves a mystery that has captivated the country for nearly a week.
Edward Snowden said he leaked the information because he wanted to spark a national debate about the surveillance of U.S. citizens. In an online story and video posted by the Guardian news organization, Mr. Snowden said he was a former employee of the Central Intelligence Agency and currently a consultant at Booz Allen Hamilton, a strategy and technology consulting firm, and until recently had been working at an NSA facility in Hawaii. Booz Allen confirmed his employment.
While the government has pursued a number of criminal leak cases in recent years, Mr. Snowden's case stands out in that few leakers have publicly revealed themselves and, in essence, dared U.S. authorities to pursue them.
Edward Snowden, a U.S. government contractor, identified himself as the source of recent disclosures about secret National Security Agency data-gathering programs. The WSJ’s Alex Frangos tells us why Mr. Snowden chose to reveal himself in Hong Kong.
Mr. Snowden said he was in Hong Kong and had stayed holed up in a hotel room for weeks leading up to the publication of stories by the Guardian and the Washington Post about documents he had provided them on secret NSA programs. The Justice Department on Sunday said it had started a criminal investigation "into the unauthorized disclosure of classified information by an individual with authorized access." The Wall Street Journal was unable to reach Mr. Snowden for comment independently.
What is the top-secret PRISM program, and how does it work? How does the U.S. government get access to data from U.S. companies? WSJ's Jason Bellini has "The Short Answer."
"I understand that I will be made to suffer for my actions,'' the Guardian quoted Mr. Snowden as saying. He said he would be satisfied "if the federation of secret law, unequal pardon and irresistible executive powers that rule the world that I love are revealed even for an instant.''
The U.S. has an extradition treaty with Hong Kong, which was negotiated with Beijing's participation in 1997, just before Hong Kong reverted to Chinese rule. But the proceedings can take months, and a provision of the treaty gives the Chinese government the right to veto an extradition request if it affects Beijing's "essential public interest or policy."
Booz Allen said that Mr. Snowden had been an employee of the firm for less than three months. It called reports of the leaks by Mr. Snowden "shocking'' and said it would "work closely with our clients and authorities in their investigation of this matter."
The NSA didn't immediately comment. A spokesman for the Director of National Intelligence said U.S. intelligence agencies are "currently reviewing the damage that has been done by these recent disclosures."
Mr. Snowden told the Guardian he grew up in Elizabeth City, N.C., though his family later moved to Maryland. He described himself as having been a poor high school student who eventually obtained a GED. He enlisted in the Army in 2003, but left the military after a training accident. He started working as a security guard at an NSA site, went on to work for the CIA, and left that job in 2009, he told the Guardian.
Mr. Snowden told the Guardian there were many other secrets he could have revealed if he had wanted to harm national security, but said that wasn't his aim. Rather, he said, his intent was to disclose those details that would spark a national debate over government surveillance. He said he understood he was risking his future and could face criminal prosecution.
"If I had just wanted to harm the U.S., then you could shut down the surveillance system in an afternoon, but that's not my intention," he said in a video posted by the Guardian. "The greatest fear that I have regarding the outcome for America of these disclosures is that nothing will change.''
Mr. Snowden's move to out himself may force the hand of government officials who have been considering the risks and benefits of prosecuting the leaker. At the same time, his public statements create a complication: The more he can show himself to be a whistleblower, whose goal was to create a policy debate, the more prosecutors may worry about his ability to draw sympathy from jurors.
Any prosecution of Mr. Snowden would also have to be balanced against the risk a public trial could reveal more government secrets.
Mr. Snowden's announcement likely will reignite questions about the number of federal contractors who are cleared to access troves of classified documents. As of last October, nearly five million people held government security clearances. Of that, 1.4 million held top-secret clearances. More than a third of those with top-secret clearances are contractors, which would appear to include Mr. Snowden.
Mr. Snowden attributed his access to documents seemingly beyond the purview of his job to his work in network security, which would allow him to access a wide variety of secret files. Some large companies are currently lobbying the federal government to grant more of their employees security clearances, in part to fend off hackers from Iran, China and elsewhere.
The U.S. went through a similar debate in 2010, when Army Pfc. Bradley Manning admitted turning over hundreds of thousands of documents to the website WikiLeaks that he had obtained despite being a low-ranking officer. Mr. Manning's trial over whether he aided the enemy began last week.
"The public is owed an explanation,'' Mr. Snowden said in his interview with the Guardian, describing himself as a small player in the intelligence world who wanted to effect a major re-examination of how the government conducts surveillance.
"I'm no different than anybody else. I don't have special skills. I'm just another guy who sits there day to day in the office, watches what's happening and goes, 'This is something that's not our place to decide. The public needs to decide whether these programs and policies are right or wrong.' ''
Within hours of publication of Mr. Snowden's statement, lawmakers were urging his extradition and trial.
"If Edward Snowden did in fact leak the NSA data as he claims, the United States government must prosecute him to the fullest extent of the law and begin extradition proceedings at the earliest date," said Rep. Peter King (R., N.Y.). "The United States must make it clear that no country should be granting this individual asylum. This is a matter of extraordinary consequence to American intelligence."
—Alex Frangos, Dion Nissenbaum and Siobhan Gorman contributed to this article.