Yahoo: New CEO. Same results

NEW YORK (CNNMoney) -- Yahoo on Tuesday reported quarterly results in line with analysts' expectations, a somewhat quiet start for new CEO Scott Thompson.

Yahoo posted a $296 million profit for the fourth quarter of 2011, up 5% compared to last year. Yahoo's earnings per share were 24 cents. The company's sales for the quarter came in at 1.3 billion, down 13% from last year. Excluding revenue shared with partners, sales came in at $1.17 billion, a 3% decline from last year.

Shares of Yahoo (YHOO, Fortune 500) were flat in after-hours trading. The company was upstaged by Apple (AAPL, Fortune 500), which also reported record-breaking results.

"In 2012 we will be aligning resources behind key areas of focus to enable us to move aggressively in market and grow our business, bringing innovative new products and experiences to both our users and advertisers," Thompson said in the earnings release.

What kind of resources and products? It's too early to tell.

"Given that we're two weeks into this, it's probably a bit early for me to articulate directionally where we're going," the new CEO said during a conference call with analysts. "We're considering a number of options and we're certainly considering ways in which we can increase the monetization of all the users."

Thompson said combing through the vast data troves Yahoo has collected on its 702 million users has been a focus for him, alluding to "interesting data-oriented products coming out sooner rather than later."

He added: "If you believe data and great technology and great technologists can begin to predict what's in a user's mind ... having that data to start from is a big advantage."

Speed is also a priority. "Those of you who know me understand I want to hear all the options," he said on the call. "But when it comes to making decisions -- I make them quickly and push to move fast, fast, fast."

It's been a tumultuous six months for the company, which has had a revolving door in its executive suite.

Most recently, Yahoo co-founder Jerry Yang resigned from the board of directors and all other positions at the company, leaving investors wondering if the company will be put up for sale. Such a move was reportedly opposed by Yang.

In early January, Thompson was named as CEO after a four-month search for a replacement for Carol Bartz. She was fired in September. CFO Tim Morse had served as Bartz's interim replacement during the transition.

Thompson joined Yahoo from eBay (EBAY, Fortune 500) subsidiary PayPal.

He faces many challenges at Yahoo. Google (GOOG, Fortune 500), despite reporting earnings and sales that missed forecasts last week, is a formidable competitor. Facebook has also emerged as a viable alternative for online advertisers.

Microsoft, Yahoo's search partner, reported strong results last week, but Microsoft (MSFT, Fortune 500) continues to lose money in its online services division.  

Facebook to Google: 'Don't be evil'

NEW YORK (CNNMoney) -- Facebook, Twitter and MySpace have a message for Google: "Don't be evil."

A group of developers from those companies banded together to call Google's bluff on claims about its controversial new Search Plus Your World tool. The recently launched tool prominently spotlights Google's fledgling Google+ social network in Google.com's search results -- while leaving rival social networks in the dark.

Google (GOOG, Fortune 500) says there are technical limitations that curb its ability to include competitors' content. A company spokesman says Facebook and Twitter, for instance, "don't allow us to crawl them deeply and store things."

But the opposition group -- which calls itself "Focus on the User" -- says Google already has the technology in place to offer a better "social search" service. It's called Google.com.

In a "proof of concept" bit of software code, Focus on the User released a "bookmarklet" that replaces Google.com's Search Plus Your World results with results from Google's regular, run-of-the-mill search algorithm.

Those changes accomplish much of what Google implied it couldn't do.

A search for "AT&T" through the altered code links the company's profile to its Twitter feed, which has far more followers than its Google+ page. That mirrors what happens in Google's organic search results, where AT&T's (T, Fortune 500) popular Twitter feed ranks much higher than its less frequently updated Google+ page.

In other words, Focus on the User's widget ranks information according to Google's search algorithm, instead of by prioritizing Google+.

The bookmarklet's name is "don't be evil" -- a snarky jab at Google's official code-of-conduct motto.

"We wanted to see how much better would social search be if Google surfaced results from all across the Web," says Blake Ross, Facebook's product director and an engineer on Focus on the User. "I think the results speak for themselves."

Google did not respond to a request for comment.

A spokesman from Facebook said Ross "said it best in the video" posted to the Focus on the User website and declined to comment further. Twitter also declined to comment.

The Focus on the User tool is far from perfect. It doesn't pull anything from rivals' social networks other than basic profile information like photos, names, and some bios. Want real-time tweets? You're out of luck.

The bookmarklet isn't actually intended to be a social search engine model. Its real goal is to highlight the flaws in Google's approach.

The quick-and-dirty prototype makes a pretty effective point: Google.com was already good at measuring social relevance, and surfacing content accordingly, long before Search Plus Your World.

Super Bowl gets social media command center

(Mashable) -- Super Bowl XLVI host city Indianapolis has concocted a new way to deal with the madness that comes with managing the world's biggest annual sporting event.

The solution? The Super Bowl's first-ever social media command center.

A team of strategists, analysts and techies will monitor the digital fan conversation via Facebook, Twitter and other platforms from a 2,800-square-foot space downtown. The station was set to open on Monday and run through Super Bowl XLVI on February 5.

The team will tweet directions to fans in search of parking, direct visitors to Indianapolis's best attractions, and stand by to provide information in case of a disaster.

"Social media is just how people interact now," said Taulbee Jackson, CEO of Raidious, the digital marketing agency that the Super Bowl's host committee tapped to manage the communications hub. "We felt it was critical to have some horsepower behind that aspect of the Super Bowl here, versus what you might have seen from other Super Bowls."

Some 150,000 people are expected to flood into downtown Indianapolis -- where the game will be played at Lucas Oil Stadium -- over Super Bowl weekend.

Advanced search tools and analytics will help Jackson and his team identify fans in need of help by indexing key words and phrases. For example, a fan won't need to tweet, "where can I find parking?" to get help; Raidious operatives will be able to pick up on a general phrase such as "parking sucks" to offer assistance.

But it won't be a simple operation. The command center will utilize more than a mile of Ethernet cable and more than 150 square feet of networked screen space. More than 20 people will man the center for 15 hours per day.

Researchers from nearby Ball State University's Center for Media Design will conduct a study of the command center, analyzing its strengths and weaknesses. Michael Holmes, director of the center's Insight & Research Unit, wrote in an email that the command center is an example of the "the ubiquity of social media and the absolute necessity for companies, organizations and communities to use these tools to improve their relations with their customer, audiences and citizens."

Both Holmes and Jackson said they would not be surprised if the Super Bowl's first designated social-media warroom sets a precedent for other major events.

"We're kind of breaking new ground here so we don't know the exact numbers yet of what we'll be dealing with, but we should be able to provide that after the game to other cities that have to deal with these types of issues," Jackson said. "I think a lot of brands will start to see a need for something like this."

Research In Motion CEOs to step down as part of overhaul

WATERLOO, Ontario –  After 20 years together at the helm of Blackberry manufacturer Research In Motion Ltd. (RIM), Jim Balsillie and Mike Lazaridis -- the company's co-chief executives -- said they planned to turn over the top job early Monday to a little-known company insider as part of a board and management shuffle.

For months, investors have clamored for a significant strategic overhaul, fresh leadership or a sale of the company as it struggled to stay competitive with rivals Apple and Google amid operational blunders and a tumbling share price, The Wall Street Journal reported.

That revamp is expected to begin with the appointment of RIM chief operating officer Thorsten Heins to replace the pair.
The surprise exit of Balsillie and Lazaridis from the top slots was a significantly more aggressive step than many critics had expected, according to the Journal. However they will remain as directors and shareholders.
"In every successful company that's developed by founders," Lazaridis said in a statement quoted by The New York Times, "there comes a time when it enters a new phase of growth and it's time for the founders to pass the baton to new management."
Heins is a 54-year-old German who joined the Canadian company in 2007, according to the Financial Times.
He said, "I'm here to ensure that RIM remains one of the top three wireless leaders in this industry.
"I want to maintain the focus on enterprise, but we need to communicate a bit more with our consumers. We need to do more marketing."
RIM's share of the US smartphone market declined during the three months ending in November, AFP reported, while Apple and Google's Android platform both made gains.
The Waterloo, Ontario-based RIM saw its share of US smartphone subscribers fall to 16.6 percent at the end of November from 19.7 percent at the end of August, according to industry tracker comScore.

Hackers retaliate over Megaupload website shutdown

Hackers have targeted the US government and copyright organisations following the shutdown of the Megaupload file-sharing website.

Megaupload displayed a video with celebrity endorsements before it was shut down

 

The Department of Justice (DoJ), FBI and the Motion Picture Association of America (MPAA) among others have been bombarded with internet traffic.
Web links have been been distributed which, when clicked, make the user's computer part of the attack.
A statement attributed to Anonymous claimed responsibility.
Blackout protest The DoJ announced on Thursday that it had taken action to force Megaupload and related domain names offline, and had charged the firm's co-founders and others with violating piracy laws.
Four of the employees have been arrested in Auckland, New Zealand, at the request of the US authorities.

 Four Megaupload employees appeared in court in New Zealand

Police also seized cash, valuable cars and a short-barrelled shotgun from the residence of the website's German founder, Kim Dotcom, formerly known as Kim Schmitz.
They appeared in court on Friday. One of their lawyers initially objected to media requests for photographs, but the accused said that they did not mind "because we have nothing to hide".
Their Hong Kong-based site had around 150 million users and 50 million daily hits. It had received celebrity endorsements from the model Kim Kardashian and singers Alicia Keys and Kanye West among others, making it one of the net's most high-profile file sharing sites.
The business had said it had been diligent in responding to complaints about pirated material.
News of the arrests came the day after thousands of websites had taken part in a "blackout" to protest against proposed anti-piracy laws; however, the DoJ suggested the two matters were not related.
A statement from the department noted that a grand jury indictment against the Megaupload employees was issued on 5 January.

'Unwanted traffic'
Hours later a statement linked to the @AnonymousWiki twitter account announced: "We Anonymous are launching our largest attack ever on government and music industry sites. Lulz. The FBI didn't think they would get away with this did they? They should have expected us."
It said that 10 sites had been taken offline in response to the Megaupload shutdown including the FBI, Universal Music, RIAA (Recording Industry Association of America) and Hadopi - the French government agency responsible for "protecting creative works on the internet".
On Friday, Universal's webpage said: "This site is under maintenance. Please expect it to be back shortly."
 Hadopi was also offline, reporting "technical problems". However, the other sites on the Anonymous list all loaded.
Security firm Sophos's blog said that the attacks were carried out by spreading links via Twitter and other parts of the internet which carried out distributed denial-of-service (DDoS) attacks.

"If you visit the webpage, and do not have Javascript disabled, you will instantly, without user interaction, begin to flood a website of Anonymous's choice with unwanted traffic, helping to perpetuate a DDoS attack," it said.
It noted that such attacks were illegal, meaning that users taking part in the action were breaking the law.
A tweet from one of the accounts associated with Anonymous suggested that efforts were also being made to resurrect Megaupload.
The attached link intermittently directed users to a site that resembled the shut down service. The address used a .bz domain name signalling it was registered in Belize.
However, one blogger warned that the site might be a scam designed to steal information from visitors to the page.
"Whenever file-sharing services go down, scammers and opportunists work quickly to ride on the wave of publicity generated by the targeted site's demise," said Andy Maxwell, co-editor of Torrentfreak.com.
"Megaupload is not yet 'back' and any site claiming to be them or says they're acting on their behalf should not be trusted."

Confusion
Analysts say that there is a risk that the Anonymous campaign could become confused with the broader campaign against the House of Representatives' Stop Online Piracy Act (Sopa) and the Senate's Protect Intellectual Property Act (Pipa).
"The action against the US bills was based on websites voluntarily censoring themselves in order to protest the restriction and damage to the internet that these laws would cause," Dr Joss Wright, a fellow at the Oxford Internet Institute, told the BBC.

 An unidentified group claims it is trying to return Megaupload to the web

"In one sense the actions of Anonymous are themselves, anonymously and unaccountably, censoring websites in response to positions with which they disagree.
"The goals of many Anonymous activists are a free and open internet, but the regular and blanket denial-of-service campaigns could easily be counter-productive if pro-Sopa and pro-Pipa advocates can portray these actions as representative of those who are against this legislation."

Piracy debate
Elsewhere, the inventor of the web, Sir Tim Berners-Lee, added his support to the campaign against Sopa.
He told the Inquirer the internet needed to be protected as an open space, adding that: "Folks in the UK should not be complacent. There are plenty of laws they should look out for already on the books that also have issues."
His comment may be a reference to the UK's Digital Economy Act, passed in 2010 but not fully implemented, and the Anti-Counterfeiting Trade Agreement (ACTA) which has the backing of the EU's Council of Ministers but has yet to be ratified by the European Parliament.
Candidates for the Republican Party's presidential nomination also weighed in on the matter at a debate on Thursday night.
Newt Gingrich said: "The bill in its current form is written really badly and leads to a range of censorship that is totally unacceptable."

Blackberry maker RIM says co-chief executives step down

Blackberry maker Research In Motion (RIM) has said its co-chief executives Mike Lazaridis and Jim Balsillie have stepped down in a shake-up.

 

Mr Lazaridis, who founded RIM in 1984, will become vice chairman. Mr Balsillie will continue to sit on the board but not have any operational role.

Chief operating officer Thorsten Heins will replace them starting Monday.

Investors have called for a strategy change as the company struggles to compete with Apple and Google.

 

Management shuffle

Mr Lazaridis, speaking after the announcement, said he recognized things needed to change at the company.

"There comes a time in the growth of every successful company when the founders recognize the need to pass the baton to new leadership," he said at a press conference at RIM's headquarters in Waterloo, Canada.

"Jim and I went to the board and told them that we thought that time was now."

Mr Heins started at RIM in 2007, having previously worked at Siemens Communications. He became the chief operating officer in August 2011, according to the company.

Mr Heins said: "As with any company that has grown as fast as we have, there have been inevitable growing pains".

"We have learned from those challenges and, I believe, we have and will become a stronger company as a result."

Barbara Stymiest, who has been on the board of RIM since 2007, has been made the new chairman, a post that Mr Balsillie and Mr Lazaridis also shared.

Sharp decline

Blackberry, which was once extremely popular with users has suffered major setbacks in recent months.

It had its worst service outage in 2011 and has been losing market share to its competitors in the smartphone markets.

Billions of dollars have been wiped from its market value as shares have tumbled 75% and sales have dropped.

One of its latest offering the PlayBook tablet, a reply to Apple's iPad, has not proven as popular as the company had hoped.

Tech and the movies: 3D printing brings new angle to animation

Sony Pictures' upcoming "The Pirates! Band of Misfits" still uses molding clay and traditional stop-motion animation to bring its wide-eyed characters to life, but creator Aardman Animations happily embraced a strange new technology to make those figures speak: 3D printers.

A 3D printer is much like an ordinary one, but it works in a third dimension, depositing a substance that eventually builds up, layer by layer, into an object -- a ball, a model airplane, or an animated critter.

“We built about 8,000 mouths,” key animator Ian Whitlock said, explaining how he brought the various characters to life in an unusually short time. “For the Pirate Captain model, we made 257 separate mouths. For someone like Charles Darwin, we probably had about 130 mouths.”

A 3D printer connects to a computer and receives a file that describes an object in three dimensions, explained Rich Brown, senior editor at cnet.com.

“It works much like a 2D printer,” he said. “The layers build up in liquid form. The material solidifies as it prints out each layer, and the end result is a 3D object in real life.”

The 3D printing of all those different mouths helped speed up the animation process, allowing for more details and characters in the film.

“We’d still be shooting now if we had to sculpt all of these mouths,” Whitlock said. “Even with 3D printing, you can easily spend two to three months on a character. I probably did five or six characters in the space of 10 months.”

The film’s animators broke down the mouth shapes of the characters by listening to an actor’s dialogue. “That would be broken down onto a ‘dope sheet,’ which is a phonetic breakdown,” Whitlock said. “When the directors were happy with the way the mouths looked, then the files would be sent off to a rapid prototype machine, which would then physically print the mouths out.

“When the mouths are printed out, they’re sort of a flesh color. It’s the same technology used to create hearing aides. They have about 14 different skin tones … once it’s done, we sand it and paint it.”

Whitlock said “The Pirates!” is the first animated film to widely embrace 3D printing, although the 2009 film “Coraline” used a similar technique on a smaller scale.

“Using 3D printing technology in animation is brand new to me,” Brown said. “I had no idea they were using 3D printing for a movie. I’m surprised that it turned out to be faster [than traditional animation].”

It’s not just faster, but a tremendous boon, Aardman Animations cofounder and movie director Peter Lord said.

"You can get stronger individual animation styles to each face because of the way that they're made," Lord said. "You retain the style very faithfully, so that's very helpful.”

Animation technology has come a long way since Lord first made a bit of plasticine clay come to life in the ’70s. “My model-making skill was zero, so every character had to have huge feet with big, thick legs in order to stand up right,” he said.

“It was all shot on film with a clockwork camera and the exposure was all over the place. My animation was so bad … and of course there was no playback, so you’d animate all day, and everything that you’d done was hidden in the camera on a roll of film. Then you send it to the lab and keep your fingers crossed.”

Despite all the advances in animation technology, the Aardman team still painstakingly creates the expressions of the characters’ eyes using hand-molded plasticine -- much as Lord did almost 40 years ago.

“The most important thing for the performance is through the eyes,” Whitlock explained. “It meant having a more organic performance, keeping it as clay. It keeps the acting the way we want it.”

“The Pirates! Band of Misfits” is set to be released in theaters on March 30.

Wikipedia goes dark for 24 hours to protest web piracy bills

SAN FRANCISCO –  Can the world live without Wikipedia for a day?

The user-driven online encyclopedia is one of the Internet's most visited sites, and at midnight Eastern Standard Time it began a 24-hour "blackout" in protest against proposed anti-piracy legislation that many leading websites -- including Reddit, Google, Facebook, Amazon and others -- contend will make it challenging if not impossible for them to operate.

It's a dramatic response to the Protect Intellectual Property Act under consideration in the Senate and the Stop Online Piracy Act (SOPA) in the House, a pair of bills backed by the motion picture and recording industries that are intended to eliminate theft online once and for all. 

Related Video

Wikipedia Blackout?

Website will be shutdown to protest anti-piracy legislation

Simply put, S. 968 and H.R. 3261 would require ISPs to block access to foreign websites that infringe on copyrights. Online piracy from China and elsewhere is a massive problem for the media industry, one that costs as much as $250 billion per year and costs the industry 750,000 jobs, according to a 2008 statement by Patrick Leahy, D-Vt. But how exactly the bills would counter piracy has many up in arms. 

"There are smart, targeted ways to shut down foreign rogue websites without asking American companies to censor the Internet," Google spokeswoman Samantha Smith told FoxNews.com on Tuesday. The site joined Wikipedia by presenting readers with a black bar over its logo, and other websites have prominent SOPA protest content posted. But the online encyclopedia's blackout is a line-in-the-sand action -- and it isn't sitting well with some of its volunteer editors.

"My main concern is that it puts the organization in the role of advocacy, and that's a slippery slope," said editor Robert Lawton, a Michigan computer consultant who would prefer that the encyclopedia stick to being a neutral repository of knowledge. "Before we know it, we're blacked out because we want to save the whales."

Instead of encyclopedia articles, visitors to the site saw a stark black-and-white page with the message: "Imagine a world without free knowledge." It carried a link to information about the two congressional bills and details about how to reach lawmakers.

The shutdown adds to a very vocal body of critics who are speaking out against the legislation. But the bill's many supporters -- including the Motion Picture Association of America (MPAA), the Recording Industry Association of America (RIAA), the U.S. Chamber of Commerce and News Corp., the parent company of FoxNews.com -- argue that those critics simply misunderstand the bill.

“Anti-piracy legislation now before Congress finally addresses the threat of foreign piracy, and it’s unfortunate that so many opponents have resorted to inaccurate and flatly dishonest claims in an attempt to derail it," said Timothy Lee, vice president of legal and public affairs for the Center for Individual Freedom.

EXCLUSIVE: Online reputation manager hacked websites to 'inject' illegal code

(Fox News)

Worried about your online reputation? Watch out: The fix could be worse than the problem.

Online reputation management (ORM) has become a burgeoning business as individuals and companies alike seek ways to hide negative or damaging statements about them from the Web.

But let the buyer beware: The company that helps protect your reputation may have its own reputation issues.

Consider the case of Darren Meade, who in 2010 was working as interim CEO at a California-based company. In an effort to address a number of negative comments (about both himself and his company) posted online, his company hired Rexxfield, an ORM, also based in California.

But Meade said he became increasingly concerned about the relationship with Rexxfield when he discovered the company wanted to sell illegal hacker code to scrub negative comments from the web -- and planned a marketing campaign of fear based on the threat that it can wipe anyone offline.

“They called it Googlecide,” Meade, now an entrepreneur, told FoxNews.com.

ORM companies normally monitor search results from engines like Google or Bing and try to “push” down negative pages about their clients, so they’re seen by fewer people. Common techniques are heavy promotion of positive content or formal requests that websites take down negative or libelous content.

But Meade said Rexxfield owner and operator Michael Roberts was preparing to purchase a coding hack he called “injection source code” that lets the user manipulate the metadata behind a website, adding a “noindex" tag that drops the results on search engines like Google and Bing -- hiding them completely.

Meade said Roberts showed him the code injector’s effectiveness by hacking into Ripoff Report, a complaint board site.

“He told me, ‘watch what happens’ -- and sure enough, the results dropped,” Meade told FoxNews.com. “They were able to edit out anyone.”

Roberts has denied those charges, and told FoxNews.com he merely took notes when someone tried to sell the illegal code to him on a conference call. He insisted he never planned to buy it.

“He is lying,” Roberts said of Meade.

In an audiotape obtained by FoxNews.com of a meeting that included Roberts, Meade and others, those present are heard discussing a public relations fear campaign that would help them sell their services to worried parents.

“I would love to run an underground campaign that says, ‘Google is trying to destroy your reputation,’” an executive on the call is heard saying. “I like the idea of, ‘the more popular you are, the more dangerous it is,’ and giving people the scare tactic of, ‘the more exposure you have … the faster it is for your enemies to attack you.’”

“I think there’s a whole other campaign where we can break the parents,” the executive continued. “Send them a picture of their kid with a gun in his mouth -- Google did it. ‘Little Johnny is going to commit Google-cide. Can you stop it?’”

Roberts, Rexxfield’s owner, responded with this statement to FoxNews.com on Friday afternoon: "We categorically deny the assertions by the article's author regarding the use of illegal and/or unethical means in combating attacks against the reputation of our clients."

Whatever the marketing techniques involved, the use of “injection source code” to promote such techniques is patently illegal, said Ira Victor, a forensics expert with Nevada-based Data Clone Labs, referring to the Computer Fraud and Abuse Act (18 USC 1030).

“You cannot use this technique without breaking the law,” Victor told FoxNews.com. “It most certainly raises the level of computer fraud and abuse.”

“To add the ‘noindex’ tag,” he said, “you would need to break into a website ... but if they can break into a server, what’s to stop them from just deleting all the data?”

Many sites, like Ripoff Report, lack the proper security methods to prevent the “injection source code” technique, Victor said.

“There are a tremendous amount of websites that are on the Internet with a tremendous amount of vulnerabilities,” he said. “It can be as simple as changing around a few letters in the URL.”

And that, says Jason Stern, a New York-based attorney who specializes in Internet issues, is against the law.

"You can't inject code into anyone's system without their knowledge," Stern said. "It constitutes trespassing. If you leave your car unlocked, it doesn't mean I can take your car. The law is the same for a website, even if there is weak security."

A statute in California penal law, he said, further states that no one is allowed to transmit, destroy or alter another person's website without their knowledge.

Sources told Foxnews.com the case caught the attention of the attorney general’s office in Arizona, where RipoffReport is based. A spokesman at the attorney general’s office told FoxNews.com it could not comment on whether or not there is an ongoing investigation.

Roberts, Meade and others have also said the code injector can be used to access the metadata on sites like Blogger, Yahoo, Bing and even Google.

Sources at Google told FoxNews.com that developers at the site have not encountered any issues from such hacks. The search giant takes a strong stance against online reputation management in general.

"While there is nothing in our guidelines that explicitly forbids reputation management, if we uncover link schemes or other violations, we reserve the right to take action in response," a Google spokeswoman told FoxNews.com.

Cyberattack prevented from crippling DOJ website

WASHINGTON – (Fox News) A former senior intelligence official tells Fox News the justice department pulled its website offline Thursday evening, following signs hackers planned a denial of service attack on the site -- an assault clearly linked to arrests in New Zealand of a massive, worldwide piracy ring.

Hackers aligned with the global cyber-collective known as Anonymous claimed responsibility Thursday for taking down at least six prominent websites, including those of the U.S. Department of Justice and Universal Music Group. The hackers said their actions were retaliation for the shutdown of content-sharing site Megaupload.com and the arrest of several related to the site.

But the intelligence official tells a slightly different story, saying there were signs early on a cyberassault was imminent. The denial of service attack on the justice department website brought a surge of Internet traffic -- raising it from 50 hits a minute to beyond 1,000 hits -- at which point the DOJ took the site offline to install filters based on the incoming IP addresses.

Fox is told the incident lasted about 5 hours.

“The investigation is like a fresh crime scene,” the source told Fox News. “You got a body and a guy holding a smoking gun, but you don’t know if he’s the one who pulled the trigger. In this case whether Anonymous is really behind it.”

On at least four other occasions, the source said, there were inklings the DOJ site was being targeted -- incidents that did not pan out. And this type of attack will only become more frequent in the future, General Dale Meyerrose with Harris Corp. told Fox News earlier this week.

"I think that we're going to start seeing more and more of these things as the tool of choice. Because it's high-value payback, but it's really low risk," he said. Meyerrose, who served as chief information officer in three major U.S. Air Force Commands and was the director of Command Control Systems, Headquarters North American Aerospace Defense Command, said a major arrest could serve to deter the brazen hackers. 

"The [fear] that someone is actually going to suffer the consequence for carrying out either a propaganda, a retribution or maybe even a trial run of some future operation is, is really the key, the element of this whole thing."

The FBI’s special cyber taskforce was a central part of the investigation, and the Department of Homeland Security's Computer Emergency Readiness Team (US-CERT) stated that it assisted the DOJ and FBI in their investigation. 

The cyberattack was one in a series of assaults Thursday night, all of which the Anonymous collective claimed responsibility for. Following outages at Universalmusic.com, the websites of the Recording Industry Association of America (RIAA) and the Motion Picture Association of America (MPAA), the group threatened that the FBI's website would be hacked next.

"Word has it that FBI.gov is next to go down ... will report when it is," a Twitter account affiliated with the group said.

The account, under the name @YourAnonNews identifies itself on Twitter as the infamous hacker collective, saying "We are Anonymous, We are legion, We never forgive, We never forget, Expect us."

Earlier Thursday, the FBI shut down Megaupload.com and charged the site's founders and five others with Internet piracy crimes for running "an international organized criminal enterprise."

"The government takes down Megaupload? 15 minutes later Anonymous takes down government & record label sites," the group wrote earlier Thursday.

"Megaupload was taken down w/out SOPA being law. Now imagine what will happen if it passes. The Internet as we know it will end. FIGHT BACK," the group added, in a reference to the ongoing battle in Congress over the controversial Stop Online Piracy Act (SOPA).

The proposed legislation would crack down on the online sharing of pirated copies of music, movies and other material.

Investigators said there was no connection between arrests in their two-year investigation of Megaupload.com and the political firestorm that erupted this week over the pending vote on SOPA.

Google says social network has 90M users

(CNN) -- Google's infant social network experienced a recent growth spurt.

Google+ has more than 90 million registered users, Google CEO Larry Page said during the company's earnings presentation on Thursday. That more than doubles the 40 million that Google reported in October.

"We're very excited about the growth we've had, and we've certainly seen a tremendous number of people added every day," Page said. "That notion of identity is a deep part of what we're doing."

Google launched its social network last June. Since then, it has added toolbars and other buttons on its websites to aggressively promote the service. Google stirred up controversy last week when it began giving prominent placement to Google+ pages in results delivered by its search engine.

On average, Google engineers have introduced a new feature related to Google+ every day since its launch, Page said.

It took Facebook about four years to reach 90 million users, according to Facebook's public statements. After starting as a students-only service, Facebook now has 800 million people checking their accounts at least once a month, about 10 times that of Google+.

Analysts say Google+ was built specifically to challenge Facebook's growing dominance on the Web. Google and Facebook generally do not collaborate. Another rival social network, Twitter, complained that the recent changes to Google search favor Google+ and harm Twitter's ranking on results pages.

"We provide a lot of third-party data in search, and we would love to have more," Page said in response to an analyst's question. "Generally, companies have been walling that data off."

People who register for Google+ tend to be dedicated users of Google's search engine, e-mail and documents services. More than 60% of them use Google products every day, and 80% visit a Google site at least once a week, Page said.

Page, who posted his comments on his Google+ page, did not say how often or what percentage of users specifically visit its social networking service. "Engagement on Plus is also growing tremendously," Page said. A Google spokesman declined to comment.

This is the year Microsoft fights back

(CNN) -- Microsoft's revenue has been growing -- slowly, but growing.

Profits have been growing faster than revenue, as the company clamps down on expenses. The company's core business software like Office 2010 has been showing great results for more than a year now, and the Xbox had its best holiday season ever, as Microsoft sold a million in a single day after Thanksgiving. Plus, it's got more than $50 billion in cash.

So why has the company's stock stubbornly refused to move for the last decade?

Why do big investors keep calling for CEO Steve Ballmer's head?

The problem comes down to a simple statistic that should scare the heck out of Microsoft and its investors:

Five years ago, 95% of devices connected to the Internet were Windows PCs.

Right now, less than 80% are, and some folks expect the number to drop below 20% in a few years.

That's a historic shift, and is just one of many signals that the personal computer is no longer dominant in the ever-shifting world of consumer technology.

Credit the explosion in smartphones, led by Apple's iPhone and a bunch of other phones running Google's Android (which is more popular than the iPhone by sheer numbers).

Apple's iPad has also made a big dent, taking up the equivalent to about 10% of the PC market -- and it's less than 2 years old.

Microsoft is nowhere in the worlds of smartphones or tablets.

But this year, the company hopes to change all that.

Next month, the company will let the masses download and test a not-quite-finished version of Windows 8, which Ballmer has called the most important product in company history.

Windows 8 is going to be a little bit all over the place. On the surface, it will have a cool, modern look and feel that's meant to be used with touchscreen tablets. Call it an iPad killer if you will. It's cutting edge and friendly, filled with bright, colorful squares and sliding screens, and it's going to have a lot of features that will be familiar to iPhone and iPad users, like an app store.

If you buy a Windows tablet, that's probably what you're going to see and use most of the time.

But Windows 8 will also run on regular old PCs, and underneath the new tablet-friendly interface, it will look and feel a lot like the old version of Windows. If you're using a desktop PC or laptop PC at work, you'll probably end up using the old interface.

It's a tricky balancing act to pull off, and lots could go wrong -- for instance, it's not exactly clear how smooth it will be to switch between the two types of Windows, or if you'll even be able to get the old Windows on certain types of tablets (that is, tablets that run the power-efficient ARM processors used by the iPad and most other tablets today).

But if past Windows launches are any guide, Microsoft will help its cause by spending hundreds of millions of dollars on high-profile TV ads, viral whisper campaigns and "co-marketing" money for its PC hardware partners and the resellers who push Microsoft software to big corporations.

But Windows 8 is only half the equation.

Microsoft came out with a surprisingly good smartphone platform way back in fall 2010 -- in some ways, it was better than the iPhone from the moment it launched.

But for a variety of reasons -- including mediocre phones that run the operating system, lack of support from big carriers like Verizon and some big gaps with features and apps -- it flopped.

A year later, Microsoft 's Windows Phone platform is still at less than 2% market share, way behind Apple, Android and even the struggling BlackBerry.

But this year, Microsoft has teamed up with Nokia, the biggest cell phone maker in the world, to push a new line of Windows Phones. Its flagship phone, the Lumia 900, has received universally great reviews -- almost like the kinds of reviews the iPhone got when it came out.

Equally important, Microsoft has committed hundreds of millions of dollars to marketing these new phones, including paying commissions to staffers at retail stores. That's critically important, as a lot of retail store clerks didn't even know what a Windows Phone was last year.

Google shares tank as profit comes up short

NEW YORK (CNNMoney) -- A search for Google on Friday will return some pretty ugly results.
Shares of the search giant tanked 8% Friday, after Google (GOOG, Fortune 500) reported quarterly profit and sales late Thursday that rose from year-ago results but badly missed Wall Street's forecasts.

Though the number of clicks on Google's ads increased, the amount that advertising partners pay per click decreased substantially: Paid clicks surged 34%, but cost-per-click fell 8% compared to last year. Google noted that increased clicks can sometimes lead to lower cost-per-click rates.
The company explained that the share of mobile ad clicks grew, which are less expensive for advertisers to purchase. Google also tinkered with its search algorithm, which temporarily led to a greater amount of clicks on lower-cost ads.
It wasn't all doom and gloom, however. Google+, the company's new social network, soared to 90 million users -- well shy of Facebook's 800 million but still rapid growth, considering the service only launched in June.
What's more, Page said that 60% of Google+ users engage with the service every day, and 80% use Google+ on a weekly basis. Some analysts suggested that users were signing up for the service and not returning to it, but Google's latest stats seem to counter that belief.
Yet Google's new Search Plus Your World integration with Google+ has drawn accusations of anti-competitive practices, worrying investors that Google will face harsh antitrust scrutiny going forward.
"By building a meaningful relationship with our users through Google+, we will create amazing experiences across our services," Google CEO Larry Page said on a conference call with analysts.
Other Google products grew as well, proving that Google continues to grow beyond its core search business.
Android, Google's mobile operating system, is soaring, with more than 700,000 smartphones activated every day. There have now been 250 million Android devices sold, up 50 million from November.
Page said that Google is still "very early in the monetization stage" of Android, but added that the company is making money on it and is very optimistic about mobile revenue growth for the future.
Gmail usage grew to 350 million active users, and Google's Chrome browser is used by about a quarter of all Web users, according to some metrics. Display advertising -- banners and in-video ads -- grew to a $5 billion annualized sales rate in the quarter.

By the numbers

The world's online search leader said its net income in the fourth quarter rose to $2.7 billion, up 7% from a year earlier.
Results included one-time charges totaling $420 million. Without the charges, Google said it earned $9.50 cents per share. Analysts polled by Thomson Reuters, who typically exclude one-time items from their estimates, had forecast earnings of $10.49 per share.
Profit rose less than expected. Google's costs soared as the company continued its hiring and spending spree. The search giant upped its headcount by 4% compared to last quarter, and spent nearly $950 million on new infrastructure. The company said it expects to continue to make "significant" capital expenditures going forward.
As headcount rises, so does the amount it costs to pay those employees. Stock-based compensation for the quarter soared 35% over a year ago to $536 million. Page made no apologies for the amount the company spends on its staff, and he said he was "super excited" that the company topped Fortune's Best Places to Work list for 2012.

Sales for the Mountain View, Calif.-based company rose 25% to $10.6 billion -- the first time Google's quarterly revenue exceeded the $10 billion mark.
Excluding advertising sales that Google shares with partners, a figure also known as traffic acquisition costs, the company reported revenue of $8.1 billion, which missed analysts' forecasts of $8.4 billion.
Despite missing forecasts, Google's Chief Financial Officer Patrick Pichette noted that the fourth quarter of 2010 was so good that it served as a difficult comparison. He said he's "not worried, because we continue to have very strong growth."

Why the iPad won't transform education just yet

(Mashable) -- Apple's announcement on Thursday that it would be introducing a new iPad textbook experience and iBooks authoring tool presents huge opportunities for technology in classrooms.

The company is selling textbooks from McGraw-Hill, Pearson and Houghton Mifflin at a price comparable to print versions, and it's presented an unprecedented opportunity for teachers to compile their own materials.

But Apple has a long way to go -- and logistical hurdles to clear in tens of thousands of schools -- before it dominates K-12 classrooms the way it has done the music industry.

Instructional Technology Resource Teacher Jenny Grabiec recently purchased iPads for two of the ESL classrooms in her 160-school district using federal funds allocated for students with limited English proficiency.

Apple wants schools to center on iPad

Getting approval for the actual purchase was fairly easy. She sent a written request to the district CIO, and he approved it. But it took five months to get the iPads up and running after they arrived.

In order to download new apps, she needed to get the Apple volume purchase program approved as a vendor by the budget group. But who would explain to the budget committee the process of paying with an Apple ID? Who would be responsible for downloading the volume-purchased apps? Could the students use them outside of their hour-long ESL class? The list of logistical issues went on.

"Because nobody in our district had done it before, it took a long time," Grabiec says.

Becoming the next big thing

By Apple's count, 1.5 million iPads are being used by schools. But there are 55.5 million students enrolled in more than 130,000 U.S. schools. No matter how you slice it, the iPad is not a mainstream phenomenon in K-12.

Nor is there any guarantee it will become so. One-to-one initiatives for laptops have been pushing forward for years without mainstream adoption. Maine, for instance, gave 33,000 middle school students and 3,000 teachers personal laptops as early as 2002.

But in 2009, a survey by the National Center for Education Statistics found that while 99% of public school teachers have some access to computers, just 29% of public school teachers use them during instructional time "often." Just 3% of schools in a 2010 survey by the FCC said they have a one-to-one computer ratio.

iPads do have a couple of advantages over one-to-one laptop initiatives. Grabiec points out that the iPads' batteries last longer than the laptops she oversees in other classrooms. They also have been less expensive to maintain than the computers — not a single one has been damaged — and don't work as stand-ins for desktop computers, but as cameras, GPS devices and video cameras.

"With a laptop you were stuck with consuming content," says Timothy Smith, who works as an Instructional Technology Specialist in the same district as Grabiec. "But with the iPad you're taking videos and looking at ideas in a new way."

Textbook availability

Even though Apple's first iPad textbooks will sell for $15 or less, they won't be any less expensive for schools than paper books. Vineet Madan, head McGraw-Hill Higher Education eLabs, tells Mashable that iBooks will be sold to schools rather than directly to students, but that schools will grant students access to those books through their personal IDs.

In other words, even if a school reuses iPads, it won't be able to reuse books. The books will be kept on individual students' iTunes accounts.

Schools reuse the same paper book for about five years, and those books usually cost about $75. Because a new book will be purchased every year, the iBook version still costs $75 for five years.

Relying on iBooks as textbooks isn't a feasible option for most public schools at the moment because Houghton Mifflin Harcourt, McGraw-Hill and Pearson have each dedicated just a small number of titles each. Madan puts the typical cycle for textbook approval in most states at about five years.

Unless the school happens to be using one of the selected titles, it can't use iBooks yet. Most other options for digital textbooks that can be read on an iPad --including Coursesmart, Kno, Chegg and Inkling — focus on books for higher education.

Unless major publishers decide to add more of their titles to iBooks, it won't be a feasible default reader in most schools. Madan says that McGraw has already committed to adding five additional titles before September, but it will commit to additional titles based on uptake.

Broadband and red tape

In a FTC 2010 survey of the schools in its program for discounted telecommunications, almost 80% said their Internet connections don't fully meet their current needs.

"It's not atypical to see one classroom of students on connected devices bring down a network," Madan says.

Before schools introduce connected devices, many of them will need to introduce better Internet connections. And that's just one logistical issue. Schools and districts will likely have a longer list specific to their circumstances. Consider the situation that Smith, who recently helped put an iPad in the hands of every administrator in his district, faces when he thinks about introducing iPads district-wide:

Some types of funding, like the one used to buy iPads for the ESL classrooms, can't be used for anything already being paid for by the school district. If the district bought iPads for some students, in other words, it would be cutting off other sources of funding. It's a puzzle.

Bringing iPads to the mainstream

Many schools already use iPads in their courses. Policies that allow students to bring their own devices to school might make make this more common.

According to a 2011 Pearson Foundation survey, 70% percent of college students and college-bound high school seniors are interested in owning a tablet device, and 20% expect to purchase a tablet within the next six months.

Phone, tablet users spend more time with apps than Web

(CNN) -- Phone and tablet owners used to spend most of their time surfing the Web.

Now they're using apps, according to data from Flurry Analytics.

A year and a half ago, mobile users tended to spend considerably more time -- an average of 64 minutes per day -- using the Web browser on their phone or tablet. By comparison, they spent only 43 minutes per day in apps.

Now mobile users now spend an average of 94 minutes per day using apps, but just 72 minutes browsing the mobile Web, according to Flurry's report, which was released earlier this month on the company's blog.

This doesn't necessarily mean mobile users are spending nearly three hours per day looking at their phones. Flurry's Web and app statistics came from different sources.

But, overall, we do appear to be spending much more time looking at our phones than we used to.

What's driving the growth in time spent in mobile apps? According to Flurry, consumers are using their apps more frequently. That is, the number of daily sessions is growing, although the duration of those sessions is not.

Flurry predicts that smartphone users will continue to spend even more time proportionally with apps vs. the mobile Web -- and in fact, from June to December 2011, they observed that average daily time spent on the mobile Web decreased slightly.

"Users seem to be substituting websites for applications, which may be more convenient to access throughout the day," the report said.

Why is the mobile Web holding our attention less?

According to Flurry, it might be because Facebook's app is so popular.

"This drop appears to be driven largely by a decrease in time spent on (Facebook's mobile website). In June 2011, the average Facebook user spent over 33 minutes on average per day on the (mobile) website. Today, that number is below 24 minutes. ... (Mobile users) are increasingly accessing (Facebook and other) online services through mobile applications."

Once Facebook is factored out of those statistics, Flurry notes that average time spent elsewhere on the mobile Web actually grew by about 2% in the same time frame.

It's worth noting that Flurry is not a disinterested party here. This company sells mobile application analytics and an advertising platform that can be incorporated into mobile apps. Advertisers are very interested in the amount of time that people might be exposed to their ads.

But the mobile Web, mobile browsers, and the nature of mobile apps are changing fast.

More and more sites are being built using the latest Web markup language, HTML5, which gives websites more app-like features. For instance, HTML5 supports geolocation, makes Web forms easier to fill out on your phone, supports coding scripts that enable custom features, and it also loads multimedia elements faster in Web pages.

Consequently, more and more mobile apps will actually be delivered through the mobile Web browser -- making them Web apps.

Want to see this in action? Visit YouTube or Twitter via the Web browser on your phone or tablet. You'll see a lot of conspicuously app-like functionality.

In November Adobe announced that it was finally abandoning development of Flash for mobile browsers, and refocusing on HTML5 for delivering interactive features and video -- the death rattle of a long struggle in which Apple resisted letting Flash run on its iOS mobile operating system. With this turnabout, many designers began converting Flash-based websites (especially ad-supported ones) to HTML5.

The rise of HTML5 mobile Web apps could also eat into profits from today's leading app marketplaces.

HTML5 Report noted, "The mass migration to HTML5 will eliminate the need to rely on companies like Apple and Google, which take up to 30% of all revenues generated from applications."

That's a powerful financial incentive for app developers, digital publishers, and online services to start deploying more Web apps. There's another bonus: "Native" apps are built to run on a specific platform. That's why so many apps come in separate versions for the iPhone, Android and other mobile platforms.

Building, updating and supporting all those separate pieces of software is fairly expensive and complex. But HTML5 is inherently cross-platform -- which means you build it once and it can run on any mobile device with a sufficiently advanced browser.

And of course, users must download and install most native mobile apps in order to run them on their device. That's a considerable hurdle -- only one in four mobile apps really engages mobile users, and 26% of all apps downloaded are opened only once and then never used again. With HTML5 Web apps, users don't have to download, install, launch or update anything. It just runs.

So apps as we have come to known them are in the midst of a radical change. Whether the rise of HTML5 will lead mobile users to start spending more time with their browsers than native apps remains to be seen -- but for many mobile users, and for many apps, that distinction may start to become irrelevant.