Private picture of Mark Zuckerberg's family leaks

 Even Mark Zuckerberg's family can get tripped up by Facebook's privacy settings.
A picture Zuckerberg's sister posted on her personal Facebook profile was seen by a marketing director, who then posted the picture to Twitter and her more than 40,000 followers Wednesday.
That didn't sit well with Zuckerberg's sister, Randi, who tweeted at Callie Schweitzer that the picture was meant for friends only. Schweitzer replied by saying the picture popped up on her Facebook news feed.
Randi Zuckerberg eventually said Schweitzer was able to see the picture because they had a mutual friend. Those tweets have since been taken down.
Many people reacted sharply to Randi Zuckerberg, saying that her brother's company makes privacy settings hard to navigate.

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Foxconn's Big Improvements Include Chairs, Knitting Classes

The New York Times took a victory lap of sorts, when it published the latest installment of its iEconomy series explaining how Foxconn changed after global outrage over working conditions. In a way, a victory lap is warranted. The Times's series is partially responsible for raising awareness about how badly workers in Foxconn factories, elevating what had previously been rumors on fanboy blogs into Pulitzer bait. Nearly a year after the paper published a jaw-dropping story on the "human costs" of building an iPad, they've circled back to the Foxconn factory floor to find that things have improved, if only slightly.
RELATED: Foxconn Plant Closed After a Massive Brawl Among Workers
Take the case of Pu Xiaolon. Before the mistreatment of Foxconn workers was making headlines, she had to spend 12 or so hours a day inspecting iPads on a rickety wooden stool. Now she has a chair -- with a back. She's also been indulging in the knitting classes that Foxconn started offering a few months ago. These sound like tiny improvements, but it sounds like they're having a big impact on worker morale. Ms. Pu, for instance, doesn't feel as much like a robot any more. "“There was a change this year," she told The Times. "I'm realizing my value."
RELATED: Explosion at Apple Supplier Foxconn Kills Two
Chairs and classes won't solve all of Foxconn's problems, though. It was nearly a year ago that Foxconn claimed to have fixed all of its worker issues, but as the months went by, more reports surfaced of insane overtime hours, student interns being forced to work on the assembly line and The company is still breaking Chinese law by letting its employees work more than 49 hours a week, though it says it can have this resolved by next summer, and student interns are still showing up on Foxconn's factory floor. We haven't heard of suicide pacts, lately, but we haven't heard of Foxconn workers jumping for joy at their wonderful new working lives either.
RELATED: China Thinks It's Apple's Responsibility to Fix Foxconn
As The Times does a good job of expressing, though, Apple is going to have to get involved, if we're really going to see change in how electronics are built. Fat chance. "Apple is scared that if we open the kimono too wide, it will ruin what has made Apple special," said the former Apple official. "But that's the only way to really improve things. If you don't share what you know, then no one else gets a chance to learn from your mistakes and discoveries.

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Amazon most satisfying website to shop: survey

 Amazon.com Inc remained the best website for shopping online while JC Penney Co Inc suffered the largest drop in customer satisfaction of any major online retailer this holiday season, according to a survey released on Thursday.
Flash sale sites Gilt.com and RueLaLa.com were among the worst performers in online shopping satisfaction this season, according to ForeSee's Holiday E-Retail Satisfaction Index.
"The importance of satisfying them and giving a great consumer experience is going to pay back huge dividends in terms of profitability for these retailers," said Larry Freed, president and chief executive officer of ForeSee, which measures customer satisfaction for companies, including retailers.
Amazon has held the highest score in each of the eight years of the index, due in part to the wide variety of merchandise it offers and a site that is easy to use.
"They've really done a great job in setting the standard for everybody else," Freed said of Amazon.
Amazon's score was again 88 out of 100, while Gilt.com and Fingerhut.com shared the lowest score of 72. LLBean.com had the second-highest ranking, 85, up 4 points from a year earlier.
A score of 80 or higher is considered strong, Freed said.
JC Penney's score fell to 78 from 83.
"They've struggled a lot in their stores as they've tried to reinvent themselves a bit and that's carried over a little bit to the website," Freed said.
Other retailers that saw their ForeSee satisfaction scores drop included Apple Inc - down to 80 from 83 - and Dell Inc, which fell to 77 from 80.
At Apple, as the popular tech company has brought out more products, navigating the site has become more of an issue, said Freed. Improving the functionality of the site would give it the biggest boost, he said.
No. 1 U.S. retailer Wal-Mart Stores Inc, which is trying to grow its online sales, scored a 78 for its Walmart.com website, down from 79 in 2011. Rival Target Corp's website scored 79, up from 76 last year, when it had some struggles after taking over control of the site from Amazon.
As for those flash sale sites coming in at the low end of the scores, Freed noted that some are trying to grow beyond the premise of flash sales, which offer a limited amount of marked down merchandise at specific times.
"It works for some kinds of consumers, it's not going to work for every kind of consumer," said Freed. "Their models today are going to work and they're going to have a chance to be successful, but at the end of the day it's not the right answer for everybody."
ForeSee's 2012 report was based on more than 24,000 surveys collected from visitors to websites of the 100 largest online retailers from Thanksgiving to Christmas, up from 40 retail sites in prior years.

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Private picture of Mark Zuckerberg's family leaked

Even Mark Zuckerberg's family can get tripped up by Facebook's privacy settings.
A picture that Zuckerberg's sister posted on her personal Facebook profile was seen by a marketing director, who then posted the picture to Twitter and her more than 40,000 followers Wednesday.
That didn't sit well with Zuckerberg's sister, Randi, who tweeted at Callie Schweitzer that the picture was meant for friends only and that posting the private picture on Twitter was "way uncool." Schweitzer replied by saying the picture popped up on her Facebook news feed.
The picture shows four people standing around a kitchen staring at their phones with their mouths open while Mark Zuckerberg is in the background.
Randi Zuckerberg, who used to run Facebook's marketing department and now produces a reality television show, eventually said Schweitzer was able to see the picture because they had a mutual friend. Those tweets have since been taken down.
Schweitzer declined to comment when reached by The Associated Press. Randi Zuckerberg didn't reply to a message via Twitter seeking comment.
Randi Zuckerberg used the dustup to write about online sharing etiquette.
"Digital etiquette: always ask permission before posting a friend's photo publicly. It's not about privacy settings, it's about human decency," she posted on Twitter.
But Randi Zuckerberg's comments sparked sharp reactions from people who thought the issue wasn't about etiquette, but rather Facebook's often changing and often confusing privacy settings.
"The thing that bugged me about Randi Zuckerberg's response is that she used her name as a bludgeoning device. Not everyone has that. She used her position to get it taken it down," said Eva Galperin of the Electronic Frontier Foundation, a privacy advocacy group in San Francisco.
While Facebook has made improvements in explaining the social network's privacy settings, Galperin said they remain confusing to most people. She added that with people using Facebook as part of their everyday lives, the consequences of fumbling privacy settings can become serious.
"Even Randi Zuckerberg can get it wrong. That's an illustration of how confusing they can be," she said.
The Menlo Park, Calif., company recently announced it is changing its privacy settings with the aim of making it easier for users to navigate them.
The fine-tuning will include several revisions that will start rolling out to Facebook's more than 1 billion users during the next few weeks and continue into early next year.
The most visible change — and perhaps the most appreciated — will be a new "privacy shortcuts" section that appears as a tiny lock at the top right of people's news feeds. This feature offers a drop-down box where users can get answers to common questions such as "Who can see my stuff?"
But Galperin said Wednesday's incident also illustrates a general concern about Internet privacy. Essentially, she said, if you share information or a photo with your social network, people in your network have the ability to share that with whomever else they choose.
The mobile photo-sharing service Instagram, which is owned by Facebook Inc., had to answer to backlash to privacy concerns recently when new terms of service suggested user photos could be used in advertisements. The company later said it would remove the questionable language.

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China tightening controls on Internet

 China's new communist leaders are increasing already tight controls on Internet use and electronic publishing following a spate of embarrassing online reports about official abuses.
The measures suggest China's new leader, Xi Jinping, and others who took power in November share their predecessors' anxiety about the Internet's potential to spread opposition to one-party rule and their insistence on controlling information despite promises of more economic reforms.
"They are still very paranoid about the potentially destabilizing effect of the Internet," said Willy Lam, a politics specialist at the Chinese University of Hong Kong. "They are on the point of losing a monopoly on information, but they still are very eager to control the dissemination of views."
This week, China's legislature took up a measure to require Internet users to register their real names, a move that would curtail the Web's status as a freewheeling forum to complain, often anonymously, about corruption and official abuses. The legislature scheduled a news conference Friday to discuss the measure, suggesting it was expected to be approved.
That comes amid reports Beijing might be disrupting use of software that allows Web surfers to see sites abroad that are blocked by its extensive Internet filters. At the same time, regulators have proposed rules that would bar foreign companies from distributing books, news, music and other material online in China.
Beijing promotes Internet use for business and education but bans material deemed subversive or obscene and blocks access to foreign websites run by human rights and Tibet activists and some news outlets. Controls were tightened after social media played a role in protests that brought down governments in Egypt and Tunisia.
In a reminder of the Web's role as a political forum, a group of 70 prominent Chinese scholars and lawyers circulated an online petition this week appealing for free speech, independent courts and for the ruling party to encourage private enterprise.
Xi and others on the party's ruling seven-member Standing Committee have tried to promote an image of themselves as men of the people who care about China's poor majority. They have promised to press ahead with market-oriented reforms and to support entrepreneurs but have given no sign of support for political reform.
Communist leaders who see the Internet as a source of economic growth and better-paid jobs were slow to enforce the same level of control they impose on movies, books and other media, apparently for fear of hurting fledgling entertainment, shopping and other online businesses.
Until recently, Web surfers could post comments online or on microblog services without leaving their names.
That gave ordinary Chinese a unique opportunity to express themselves to a public audience in a society where newspapers, television and other media are state-controlled. The most popular microblog services say they have more than 300 million users and some users have millions of followers reading their comments.
The Internet also has given the public an unusual opportunity to publicize accusations of official misconduct.
A local party official in China's southwest was fired in November after scenes from a videotape of him having sex with a young woman spread quickly on the Internet. Screenshots were uploaded by a former journalist in Beijing, Zhu Ruifeng, to his Hong Kong website, an online clearing house for corruption allegations.
Some industry analysts suggest allowing Web surfers in a controlled setting to vent helps communist leaders stay abreast of public sentiment in their fast-changing society. Still, microblog services and online bulletin boards are required to employ censors to enforce content restrictions. Researchers say they delete millions of postings a day.
The government says the latest Internet regulation before the National People's Congress is aimed at protecting Web surfers' personal information and cracking down on abuses such as junk e-mail. It would require users to report their real names to Internet service and telecom providers.
The main ruling party newspaper, People's Daily, has called in recent weeks for tighter Internet controls, saying rumors spread online have harmed the public. In one case, it said stories about a chemical plant explosion resulted in the deaths of four people in a car accident as they fled the area.
Proposed rules released this month by the General Administration of Press and Publications would bar Chinese-foreign joint ventures from publishing books, music, movies and other material online in China. Publishers would be required to locate their servers in China and have a Chinese citizen as their local legal representative.
That is in line with rules that already bar most foreign access to China's media market, but the decision to group the restrictions together and publicize them might indicate official attitudes are hardening.
That comes after the party was rattled by foreign news reports about official wealth and misconduct.
In June, Bloomberg News reported that Xi's extended family has amassed assets totaling $376 million, though it said none was traced to Xi. The government has blocked access to Bloomberg's website since then.
In October, The New York Times reported that Premier Wen Jiabao's relatives had amassed $2.7 billion since he rose to national office in 2002. Access to the Times' Chinese-language site has been blocked since then.
Previous efforts to tighten controls have struggled with technical challenges in a country with more than 500 million Internet users.
Microblog operators such as Sina Corp. and Tencent Ltd. were ordered in late 2011 to confirm users' names but have yet to finish the daunting task.
Web surfers can circumvent government filters by using virtual private networks — software that encrypts Web traffic and is used by companies to transfer financial data and other sensitive information. But VPN users say disruptions that began in 2011 are increasing, suggesting Chinese regulators are trying to block encrypted traffic.
Curbs on access to foreign sites have prompted complaints by companies and Chinese scientists and other researchers.
In July, the American Chamber of Commerce in China said 74 percent of companies that responded to a survey said unstable Internet access "impedes their ability to do business."
Chinese leaders "realize there are detrimental impacts on business, especially foreign business, but they have counted the cost and think it is still worthwhile," said Lam. "There is no compromise about the political imperative of controlling the Internet.

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Prosecutor killed in Guatemala along with 6 others

 Guatemala's attorney general dispatched a special team Monday to investigate the slaying of a federal prosecutor and six other people in an attack near the Mexican border.
Attorney General Claudia Paz y Paz said she was sending prosecutors and investigators to the area of northern Guatemala where Irma Yolanda Olivares, who worked in one of the prosecutor's regional officers, was slain along with an official working for a government social service agency and five others on Sunday night.
President Otto Perez Molina blamed the attack on drug traffickers, who have taken over swathes of territory along the border with Mexico.
The Interior Ministry said that a group of armed, masked men had intercepted the sport-utility vehicle carrying Olivares and three other passengers, who were returning from the inauguration of a hotel in the city of La Mesilla. The attackers opened fire, then burned the victims' bodies, officials said. Three other people were found fatally shot and burned in another vehicle nearby, official said.
Officials were not immediately able to determine the identities of the three or whether they were killed by the same attackers, said Ricardo Guzman, sub-secretary general in the prosecutor's office.
"The death of a member of the attorney general's team is a serious attack against the institution and against the work done by each prosecutor's office to fight impunity in this country," Paz said.

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Pardon for pope's butler who stole papers expected

The Vatican has summoned journalists for a briefing on what Italian news reports say is an expected pardon for Pope Benedict XVI'S former butler, who stole the pontiff's personal papers and leaked them in a bid to expose the "evil and corruption" in the Catholic Church.
Paolo Gabriele was arrested May 23 after Vatican police found heaps of papal documents in his Vatican City apartment. He was convicted of aggravated theft by a Vatican tribunal on Oct. 6 and has been serving his 18-month sentence in the Vatican police barracks.
The Vatican has made no secret that the pope would pardon Gabriele. The only question was when. A pre-Christmas pardon was widely expected.
Veteran Vatican journalists reported the announcement would come Saturday, and the Vatican press office scheduled a last-minute briefing.

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Pope stresses family values as gay marriage gains

The pope pressed his opposition to gay marriage Friday, denouncing what he described as people eschewing their God-given gender identities to suit their sexual choices — and destroying the very "essence of the human creature" in the process.
Benedict XVI made the comments in his annual Christmas address to the Vatican bureaucracy, one of his most important speeches of the year. He dedicated it this year to promoting traditional family values in the face of gains by same-sex marriage proponents in the U.S. and Europe and efforts to legalize gay marriage in places like France and Britain.
In his remarks, Benedict quoted the chief rabbi of France, Gilles Bernheim, in saying the campaign for granting gays the right to marry and adopt children was an "attack" on the traditional family made up of a father, mother and children.
"People dispute the idea that they have a nature, given to them by their bodily identity, that serves as a defining element of the human being," he said. "They deny their nature and decide that it is not something previously given to them, but that they make it for themselves."
"The manipulation of nature, which we deplore today where our environment is concerned, now becomes man's fundamental choice where he himself is concerned," he said.
It was the second time in a week that Benedict has taken on the question of gay marriage, which is currently dividing France, and which scored big electoral wins in the United States last month. In his recently released annual peace message, Benedict said gay marriage, like abortion and euthanasia, was a threat to world peace. The Vatican went on a similar anti-gay marriage media blitz last month after three U.S. states approved gay marriage by popular vote.
After the peace message was released last week, gay activists staged a small protest in St. Peter's Square. On Friday, gay activists sharply criticized the pope's take on gender theory and insisted that where gay marriage has been legalized, families are no worse off.
Italy's main gay rights group Arcigay called the pope's comments "absurd, dangerous and totally out of synch with reality." And a coalition of four U.S. Catholic organizations representing gay, lesbian and transgender people said the pope had an "outmoded" view of what it means to be man and woman.
"Increasingly Catholics in the United States and around the world see what we see. Catholics, following their own well-formed consciences, are voting to support equal rights for LGBT people because in their churches and communities they see a far healthier, godly and realistic vision of the human family than the one offered by the pope," according to a statement from the groups Call To Action, DignityUSA, Fortunate Families, and New Ways Ministry.
Church teaching holds that homosexual acts are "intrinsically disordered," though it stresses that gays should be treated with compassion and dignity. As pope and as head of the Vatican's orthodoxy watchdog before that, Benedict has been a strong enforcer of that teaching: One of the first major documents released during his pontificate said men with "deep-seated" homosexual tendencies shouldn't be ordained priests.
For the Vatican, though, the gay marriage issue goes beyond questions of homosexuality, threatening what the church considers to be the bedrock of society: a family based on a man, woman and their children.
In his speech, the pope cited Bernheim as lamenting how a new philosophy of sexuality has taken hold, whereby sex and gender are "no longer a given element of nature that man has to accept and personally make sense of: it is a social role that we choose for ourselves, while in the past it was chosen for us by society."
He said God had created man and woman as a specific "duality" — "an essential aspect of what being human is all about."
Now, though, "Man and woman as created realities, as the nature of the human being, no longer exist. Man calls his own nature into question. From now on he is merely spirit and will."
The Vatican's opposition to gay marriage has been falling largely on deaf ears. In addition to the U.S. election gains, the Constitutional Court in largely Roman Catholic Spain upheld the law legalizing gay marriage last month. Earlier this month, the British government announced it will introduce a bill next year legalizing gay marriage, though it would ban the Church of England from conducting same-sex ceremonies.
In France, President Francois Hollande has said he would enact his "marriage for everyone" plan within a year of taking office last May. The text will go to parliament next month. But the country has been divided by vocal opposition from religious leaders, prime among them Bernheim, as well as some politicians and parts of rural France.
The Socialist government's plan also envisions legalizing same-sex adoptions. Benedict quoted Bernheim as denouncing the plan, saying that it would mean a child would essentially be considered an object people have a right to obtain.
"When freedom to be creative becomes the freedom to create oneself, then necessarily the Maker himself is denied and ultimately man too is stripped of his dignity as a creature of God," Benedict said.

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Margaret Thatcher in UK hospital after operation

 Former British Prime Minister Margaret Thatcher is recuperating at a hospital after an operation to remove a bladder growth, a friend said Friday.
The 87-year-old Thatcher went to see her doctor after experiencing some discomfort and subsequently had the growth removed, according to longtime adviser Tim Bell.
The operation was "completely satisfactory," Bell said. He said he couldn't go into detail as to the nature of the growth and declined to name the hospital, saying he did not want it to be inundated with calls.
Thatcher, Britain's first female prime minister, has been in fragile health since she suffered a series of small strokes more than a decade ago. Although she has occasionally appeared at private functions, she has not made public statements for some time.
Thatcher was not well enough to join Britain's queen for a lunch with former and serving prime ministers earlier this year, and two years ago she missed an 85th birthday party thrown for her by Prime Minister David Cameron at his official residence at No. 10 Downing Street. But in October she was well enough to mark her birthday with a lunch out in London with her son Mark and his wife.
Thatcher's declining health was a focus of Oscar-winning biopic "The Iron Lady," which premiered last year.
Thatcher served as prime minister from May 1979 until her resignation in November 1990. She was the first leader to win three consecutive elections, dominating British politics throughout the 1980s.
She was a firm supporter of her American ideological peer, President Ronald Reagan, but is a divisive figure in Britain, where the fruits of her legacy are still debated.

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Margaret Thatcher in hospital after operation

 Former British prime minister Margaret Thatcher, the country's first woman elective leader, is in hospital recovering from surgery to remove a growth on her bladder, a source close to the family said on Friday.
After experiencing pain in her bladder earlier in the week, he 87-year-old went to hospital where she underwent a minimally invasive operation, Tim Bell, a public relations executive who once served as image maker to Thatcher, said.
"The operation was completely satisfactory. She's now recovering in hospital and as soon as she's recovered she'll go home," Bell said.
Known as the "Iron Lady," Thatcher, who stepped down in 1990, embraced free market policies, challenged trade unions and privatised many state-owned companies during her 11 years in power, polarising British voters.
Britain's only woman prime minister, who led her country in a war with Argentina over the Falkland Islands in 1982 and was close to the late U.S. President Ronald Reagan, was forced to step down by her own party.
Thatcher suffered a series of mild strokes in late 2001 and 2002, after which she cut back on public appearances and later cancelled her speaking schedule.
She was hospitalised in 2010 for tests relating to a flu illness.

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Budget deficit worsens, credit rating at risk

LONDON (Reuters) - Britain's budget deficit worsened in November, data showed on Friday, increasing the risk it will lose its top-notch credit rating and overshoot this year's borrowing forecast.
The data - which showed public sector net borrowing, excluding financial sector interventions, hit 17.5 billion pounds last month - is gloomy news for Britain's coalition government.
Deficit reduction and preserving Britain's credit rating have been top goals for the coalition of Conservatives and Lib Dems, which came to power in June 2010, just after the country's budget deficit peaked at 11.2 percent of GDP.
Last year, the budget deficit totalled 8 percent of GDP, and the government's own budget watchdog forecasts it will take until 2017 before it falls below 3 percent and the government manages to run a surplus on cyclically-adjusted non-investment spending.
Chancellor George Osborne had originally planned to meet this goal by the next election in 2015, but far weaker than expected growth since 2010 now makes that look impossible.
While other official data released on Friday showed Britain's economy may avoid a forecast contraction in the last three months of 2012, analysts say the borrowing numbers could see the country's credit rating revised early next year.
"The disappointing November public finance data fuel mounting expectations that at least one of the credit rating agencies will strip the UK of its AAA rating in 2013," said Howard Archer, chief UK economist at IHS Global Insight.
Standard & Poor's last week joined Fitch and Moody's and put a negative outlook on its triple-A rating for Britain. The latter two agencies - which have had a negative outlook since early this year - will review their ratings in early 2013.
Last month's public sector net borrowing figure of 17.5 billion pounds exceeded economists' expectations. They had forecast it would come in just below the 16.3 billion pounds reached in November 2011.
Borrowing since the start of the tax year in April is now nearly 10 percent higher than at the same point in 2011.
This calls into question forecasts issued earlier this month by the government's budget watchdog which estimated borrowing will fall 11 percent to total 108.5 billion pounds in the 2012-13 tax year.
Some of the fall in borrowing forecast by the Office for Budget Responsibility (OBR) was due to money expected from the auction of next-generation mobile phone frequencies and a deal with the Bank of England to return interest paid on its bond holdings - cash that will not boot the public finances until early 2013.
But even disregarding this, some economists think Osborne, the finance minister, may struggle to hit the OBR's targets.
Archer expects an overshoot of some 14 billion pounds, while economists at Barclays see an overshoot of 6.5 billion pounds, assuming the radio spectrum auction brings in the 3.5 billion pounds pencilled in by the OBR.
WEAKER GROWTH
Britain's economy shrank for nine months between late 2011 and mid-2012, but revised figures from the Office for National Statistics showed on Friday that growth rebounded by 0.9 percent in the third quarter of 2012, a little less than the 1.0 percent first estimated.
There was slightly brighter news from Britain's dominant services sector, which grew 0.1 percent in October after a 0.6 percent decline in September.
This was better than many economists had expected, and raises the prospect that the economy will avoid a return to contraction that the OBR and the Bank of England have predicted.
"It's not a great number but it is positive," said Ross Walker, an economist at Royal Bank of Scotland. "On the basis of all the published data it looks like the fourth quarter will be broadly flat, rather than negative."
Another bright spot was third-quarter current account data, which showed Britain's deficit with the rest of the world narrowed more than expected to 12.8 billion pounds, equivalent to 3.3 percent of GDP, from 17.4 billion in the second quarter.
However, economic growth will need to translate into stronger tax revenues and lower spending on social benefits if the government is to meet its budget goals.
November's budget overshoot was driven by a 6.3 percent year-on-year rise in central government spending, while tax revenues grew just 0.6 percent.
The closure of a North Sea oil field earlier this year has done major damage to corporation tax revenues, but Barclays economist Blerina Uruci said she was more concerned about signs that spending by government departments was rising more than expected.
"It could suggest difficulties with delivering efficiency savings as austerity fatigue sets in," she said.
The OBR said it expected to see underspending by government departments towards the end of the fiscal year, as well as stronger future growth in income tax and sales tax revenues.
Business minister Vince Cable sought to play down worries about the state of public finances, saying more austerity than planned could tip the economy back into recession.
"The fact that there has been a temporary increase in borrowing I don't think is a matter for criticism," he told BBC radio. "The government ... have been flexible, just accepting that when the economy slows down you are going to get bigger deficits (and) the government has to borrow to cover them."
However, the Labour Party said Friday's data showed there had already been too much austerity.
"By squeezing families and businesses too hard, choking off the recovery and so pushing borrowing up, not down, (Prime Minister) David Cameron and George Osborne's economic plan has completely backfired," said Labour legislator Rachel Reeves.

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Instagram says no plans to put user photos in ads

Instagram, the popular photo-sharing service owned by Facebook Inc, said on Tuesday it has "no plans" to incorporate user photos into ads in response to a growing public outcry over new privacy policies unveiled this week. Instagram Chief Executive Kevin Systrom said in a blog post that users had incorrectly interpreted Instagram's revised terms of service, released on Monday, to mean that user photos would be sold to others without compensation. "This is not true and it is our mistake that this language is confusing," Systrom said. "To be clear: it is not our intention to sell your photos. We are working on updated language in the terms to make sure this is clear." But Systrom said Instagram may display users' profile pictures and information about who they follow as part of an ad - a social marketing technique similar to what Facebook uses in its "sponsored stories" ad product. He added that Instagram will not incorporate users' uploaded photos as ads because the service wants "to avoid things like advertising banners." Instagram, which is free to use, triggered an uproar this week when it revised its terms of service in order to begin carrying advertising. Facebook bought the fast-growing photo service - now with 100 million users - earlier this year in a cash-and-stock deal valued initially at $1 billion. The transaction closed in September at $715 million, reflecting a decline in the value of Facebook shares.

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Sberbank to buy Yandex online payments service: source

Sberbank, Russia's top lender, plans to buy Yandex.Dengi, an online payment service owned by Russian search engine Yandex, a source familiar with the matter said. Sberbank declined to comment. Yandex, which was not available to comment, was expected to hold a news conference on Wednesday. Sberbank, which accounts for a third of overall lending in Russia, has been expanding in the consumer credit market amid weak corporate loan portfolio growth. In recent years, it has launched its own credit card business and tied up with French bank BNP Paribas in a joint venture focusing on point-of-sale lending, a popular form of in-store consumer finance in Russia. Yandex, which raised $1.4 billion when it floated on the U.S. stock market in May 2011, came under scrutiny during election protests over the past year when it was reported that opposition leaders were raising funds via Yandex.Dengi.

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Tubular raises $2.5 million to serve burgeoning YouTube industry

Tubular, a small San Francisco start-up that provides analytics for YouTube content creators, has raised $2.5 million in venture capital in the latest sign of how far the business ecosystem has evolved around the Google-owned video repository. YouTube was once known as Wild West of online video, but over the past two years Google has focused on raising the quality of YouTube content through a series of direct investments and the cultivation of third-party "networks". The result is a cluster of small studios, mostly based in Los Angeles, that acts like a digital Hollywood, pumping out slick YouTube hits. With the ultimate goal of hosting enough high-quality content to lure big-spending advertisers to YouTube, Google doled out more than $100 million last year in grants to its networks and bedroom stars. In May Google led a group of investors who poured $35 million into Machinima, a leading network, to stoke growth in the YouTube industry. That market has now grown to the point that it can support its own start-ups, says Tubular's founder Rob Gabel. COMPETITION As more semi-professional and professional YouTube creators enter the sector, with increasing competition among them, there is a growing need for analytical services. Tubular is one such service, allowing customers to monitor and measure when videos get the most views and comments, or the sources of referred traffic. The software includes a dashboard that displays the real-time analytics, which are generated by tapping into a stream of data provided by YouTube. "If YouTube is a multibillion-dollar market, then that's billions of dollars going out to content creators who can then invest that again," said Gabel, a former Machinima employee. "On every platform, from Google to Facebook to Twitter, people have turned to third parties' helpful tools." At a high level, the pie is large and continuing to grow rapidly. Former Citi analyst Mark Mahaney estimates that YouTube will bring Google a total of $3.6 billion in 2012. Rich Heitzmann, a co-founder of FirstMark Capital, which led Tubular's latest funding round, said that Google is far from wringing out all of the potential revenue from YouTube. "We think the ecosystem is at least the size of Facebook's, considering it has a billion users and if you consider the time spent on YouTube," Heitzmann said. "The advertising opportunities are there, and yet the ecosystem hasn't evolved technologically." SUSTAINABLE BUSINESS Other investors in Tubular's first tranche of equity financing included High Line Venture Partners, SV Angel, Lerer Ventures and Bedrocket Media Ventures. Still, Gabel is betting that he can create a long-term, sustainable business on YouTube's platform at a time when some Silicon Valley companies are wary of building on the backs of larger companies. Twitter, for instance, courted controversy this year when it made a business decision to shut off its firehose of data for a number of popular third-party developers to drive more visitors to its own site. Allen DeBevoise, the CEO of Machinima who is also a Tubular investor, said that YouTube has reason to foster its independent developers rather than squash them. "It's a thriving and fast-moving ecosystem now," he said. "But a lot of players are needed to make it all work." Though Gabel acknowledges that the YouTube industry's rapid expansion is no guarantee of success, he has high hopes.

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Instagram tests new limits in user privacy

Instagram, which spurred suspicions this week that it would sell user photos after revising its terms of service, has sparked renewed debate about how much control over personal data users must give up to live and participate in a world steeped in social media. In forcefully establishing a new set of usage terms, Instagram, the massively popular photo-sharing service owned by Facebook Inc, has claimed some rights that have been practically unheard of among its prominent social media peers, legal experts and consumer advocates say. Users who decline to accept Instagram's new privacy policy have one month to delete their accounts, or they will be bound by the new terms. Another clause appears to waive the rights of minors on the service. And in the wake of a class-action settlement involving Facebook and privacy issues, Instagram has added terms to shield itself from similar litigation. All told, the revised terms reflect a new, draconian grip over user rights, experts say. "This is all uncharted territory," said Jay Edelson, a partner at the Chicago law firm Edelson McGuire. "If Instagram is to encourage as many lawsuits as possible and as much backlash as possible then they succeeded." Instagram's new policies, which go into effect January 16, lay the groundwork for the company to begin generating advertising revenue by giving marketers the right to display profile pictures and other personal information such as who users follow in advertisements. The new terms, which allow an advertiser to pay Instagram "to display your username, likeness, photos (along with any associated metadata)" without compensation, triggered an outburst of complaints on the Web on Tuesday from users upset that Instagram would make money from their uploaded content. The uproar prompted a lengthy blog post from the company to "clarify" the changes, with CEO Kevin Systrom saying the company had no current plans to incorporate photos taken by users into ads. Instagram declined comment beyond its blog post, which failed to appease critics including National Geographic, which suspended new posts to Instagram. "We are very concerned with the direction of the proposed new terms of service and if they remain as presented we may close our account," said National Geographic, an early Instagram adopter. PUSHING BOUNDARIES Consumer advocates said Facebook was using Instagram's aggressive new terms to push the boundaries of how social media sites can make money while its own hands were tied by recent agreements with regulators and class action plaintiffs. Under the terms of a 2011 settlement with the Federal Trade Commission, Facebook is required to get user consent before personal information is shared beyond their privacy settings. A preliminary class action lawsuit settlement with Facebook allows users to opt-out of being included in the "sponsored stories" ads that use their personal information. Under Instagram's new terms, users who want to opt-out must simply quit using the service. "Instagram has given people a pretty stark choice: Take it or leave, and if you leave it you've got to leave the service," said Kurt Opsahl, a senior staff attorney with the Electronic Frontier Foundation, a Internet user right's group. What's more, he said, if a user initially agrees to the new terms but then has a change of mind, their information could still be used for commercial purposes. In a post on its official blog on Tuesday, Instagram did not address another controversial provision that states that if a child under the age of 18 uses the service, then it is implied that his or her parent has tacitly agreed to Instagram's terms. "The notion is that minors can't be bound to a contract. And that also means they can't be bound to a provision that says they agree to waive the rights," said the EFF's Opsahl. BLOCKING CLASS ACTION SUITS While Facebook continues to be bogged in its own class action suit, Instagram took preventive steps to avoid a similar legal morass. Its new terms of service require users with a legal complaint to enter arbitration, rather than take the company to court. It prohibits users from joining a class action lawsuit unless they mail a written "opt-out" statement to Facebook's headquarters in Menlo Park within 30 days of joining Instagram. That provision is not included in terms of service for other leading social media companies like Twitter, Google, YouTube or even Facebook itself, and it immunizes Instagram from many forms of legal liability, said Michael Rustad, a professor at Suffolk University Law School. Rustad, who has studied the terms of services for 157 social media services, said just 10 contained provisions prohibiting class action lawsuits. The clause effectively cripples users who want to legally challenge the company because lawyers will not likely represent an individual plaintiff, Rustad argued. "No lawyers will take these cases," Rustad said. "In consumer arbitration cases, everything is stacked against the consumer. It's a pretense, it's a legal fiction, that there are remedies." Instagram, which has 100 million users, allows consumers to tweak the photos they take on their smartphones and share the images with friends. Facebook acquired Instagram in September for $715 million. Instagram's take-it-or-leave-it policy pushes the envelope for how social networking companies treat user privacy issues, said Marc Rotenberg, the executive director of the Electronic Privacy Information Center. "I think Facebook is probably using Instagram to see how far it can press this advertising model," said Rotenberg. "If they can keep a lot of users, then all those users have agreed to have their images as part of advertising."

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FTC tightens rules protecting children's online privacy

The government announced tighter rules on Wednesday to protect children's online privacy by restricting the collection of data, like the child's location, unless parents consent. The actions by the Federal Trade Commission mark an update to rules that were based on the 1998 Children's Online Privacy Protection Act, developed when most computers were big beige boxes sitting under office desks instead of smartphones in backpacks, and online social media was unheard of. "The Commission takes seriously its mandate to protect children's online privacy in this ever-changing technological landscape," FTC Chairman Jon Leibowitz said in a statement. Under the updated rule, IP addresses, which are unique to each computer, will be added to the list of personal information that cannot be collected from children without parental consent if the data will be used for behavioral advertising or tracking. Location, photos, videos and audio files were also added to the definition. Leibowitz said the commission struck "the right balance between protecting innovation that will provide rich and engaging content for children, and ensuring that parents are informed and involved in their children's online activities." But Senator John Rockefeller, a West Virginia Democrat and chair of the Senate Commerce, Science and Technology Committee, which oversees the FTC, said he had wanted legislation that went further. "There are groups that will complain about it (COPPA being too weak), and so will I, but we can't do anything more about it right now," he said. "Children's privacy as far as I am concerned is an absolutely top line issue." Privacy advocates and advertising companies had been watching closely to see if the agency would go through with a pledge made in August to add IP addresses to the restrictions. Advertisers had argued against the move since several people in a family - adults and children - could use the same computer. Privacy advocates said it was needed to protect children. Also under the updated rule, plug-ins and other third parties connected to children's websites and apps cannot allow third parties to collect information on children without parental consent. Big companies would be able to deal with the changes but the tighter regulators could be onerous for smaller firms, said John Feldman of the law firm Reed Smith LLP. "I represent companies who are trying to sell products and services," he said. "The bigger companies feel like they can deal with it. There are significant costs that will be associated with this." Privacy advocate Kathryn Montgomery, who teaches at American University, said the update was needed, given the growth of social networks and mobile computing. She urged the FTC to be tough about enforcing the rules. "The new rules should help ensure that companies targeting children throughout the rapidly expanding digital media landscape will be required to engage in fair marketing and data collection practices," she said. The proposal also specifies that family websites, which are websites aimed at children and adults, would be allowed to screen users to determine their ages and only provide protection to children under age 13. Currently, all visitors to the websites must be treated as if they are under age 13. The FTC's rule implementing COPPA became effective in 2000. The updated rule takes effect on July 1. It was approved by a vote of three to one with one commissioner abstaining.

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Pa. woman sues Google over Gmail privacy, ads

A Pennsylvania woman has accused Google Inc. of illegal wiretapping for "intercepting" emails she sent to Gmail accounts and publishing content-related ads.
Her lawsuit echoes others filed around the country by class-action lawyers who say the practice violates wiretap laws in some states. They represent email users who do not have Gmail accounts and have therefore not signed the company's acceptance terms.
"The terms are that Google can intercept your emails and use them for direct marketing purposes," said lawyer Richard M. Golomb, who has sued Google in Pennsylvania, Maryland and Florida. "They are also intercepting emails of the non-Gmail account holder, in violation of wiretap laws in some states."
In court filings in the Maryland case, Google acknowledged that it routinely scans emails for spam and computer viruses, but said that's permitted under similar federal wiretap laws.
Google argued that selling advertising based on the content of a received email is a routine business practice permitted under an exception written into the wiretap law. Google notes Yahoo and other email providers sell ads through similar methods.
"There can be little doubt that selling advertising in order to provide a free service to consumers is a 'legitimate business goal,'" Google lawyer Michael G. Rhodes and others wrote in a Nov. 9 motion to dismiss the Maryland case. "If it were not, then the entire model by which content is provided on the Internet would be illegitimate, as would the business model by which television programming has been provided for free for the last half century."
Courts reviewing email wiretap cases have repeatedly held that "parties expect and impliedly consent to having their communications intercepted and recorded whenever they use email," the Google lawyers wrote. Rhodes did not immediately return a call for comment Monday.
At least one electronic privacy expert called it "a bit of a stretch" for Google to compare a search for advertising leads to rooting out spyware.
"People think when you send a message, communications companies can filter out spam and malware, and that's correct. But filtering out spam and malware is not the same as looking at the content of the email to (find) keywords for advertising purposes," said Marc Rotenberg, executive director of the Electronic Privacy Information Center.
"(What) if you were making a call on your Verizon cellphone, and you were talking to an Italian restaurant trying to make reservations for Friday and a Verizon agent jumped on the line and said, 'Oh, how about this place?'" Rotenberg said. "You're not supposed to be listening to my communications to try to sell me stuff — even if it's a better restaurant."
The Philadelphia plaintiff, Kristen Brinkman, does not have a Gmail account and never signed the company's acceptance policy, according to her Nov. 30 lawsuit, which has been assigned to Senior U.S. District Judge Anita B. Brody.
Google wants the various legal disputes resolved in northern California, where the first such lawsuit was filed in June. The area is also home base for Google, which is headquartered in Mountain View, Calif.

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Huawei to double staff in European expansion

Chinese telecoms equipment maker Huawei Technologies plans a hiring spree in Europe, seeking growth outside the United States where its prospects have been clouded by spying concerns.
Huawei said on Monday it planned to double its workforce in Europe and would set up a research center to develop new smartphones in Finland, where former global leader Nokia Oyj is shedding thousands of workers.
"Europe has proven to be quite an open business environment for Huawei," company spokesman Roland Sladek said.
The expansion plans for Europe come two months since a U.S. congressional report alleged Huawei's equipment could be used for Chinese espionage. The company has also been barred in Australia from tendering in a $38 billion national high-speed broadband network project due to unspecified security concerns.
The group aims to employ over 14,000 in Europe within three to five years, doubling the current workforce of around 7,000, and also plans to spend 70 million euros ($91 million) over five years on the new R&D center in Finland.
It will be Huawei's 11th center in the region and will have a planned staff of around 100.
Underscoring its European expansion, Huawei also said it won a services deal with 3 UK, owned by Hutchison Whampoa, a contract previously held by rival Ericsson.
With Nokia cutting 3,700 jobs in the country, the Chinese group may face little difficulty finding recruits for its research center.
While Nokia has been losing market share to both high-end smartphone makers and cheaper handset rivals, Huawei has been expanding its mobile phones business with new handsets using Google Inc's Android software.
Mobile devices last year accounted for 22 percent of Huawei's business, which mostly focuses on routers and other telecoms equipment.
Huawei has said it wants to launch new smartphones including Windows Phone 8 devices, which would add to the competitive pressure on Nokia.
Huawei declined to give an estimated launch date for a new Windows Phone 8 device, but said its plans were "short term".

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Cyber attacks on Gulf infrastructure seen rising

The former chief of the United Arab Emirates' air force said his country's advanced cyber infrastructure made it a favorite target for hackers, especially when tension heightened in the Israeli-Palestinian conflict.
"The last war in Gaza led to a barrage of cyber attacks because UAE has advanced telecommunications infrastructure," retired Major General Khaled al-Buainnain said.
"The biggest attack was during the 2006 Israel-Lebanon war which was carried out by pro-Israeli hackers who did not understand the nature of the conflict and its parties."
His comments came a few months after a virus infected 30,000 computers at Saudi Arabia's national oil company, Saudi Aramco, which said on Sunday the attack was aimed at stopping oil and gas production at the world's biggest oil exporter.
The attack failed to disrupt production, but was one of the most destructive cyber strikes against a single business.
Cyber attacks on infrastructure by hostile governments, militant groups or private "hacktivists" have the potential to disrupt oil and gas supplies to power plants and desalination plants, on which the Gulf states are heavily reliant.
"There is an interest at the political level in cyber security which has prompted investments in protection systems to protect the interest of the people, the government and national security," Buainnain said, speaking on the sidelines of a cyber security conference in Dubai.
"All the evidence that we have confirms that the attacks will increase," said Robert Eastman, vice president for global solutions at Lockheed Martin.
Eastman said Lockheed Martin, the Pentagon's top supplier, was in discussions with officials in Qatar, Saudi Arabia and the United Arab Emirates about the company's training and vulnerability analysis systems.
A company official estimated last month that 5 to 8 percent of Lockheed's revenues in the information systems sector were related to cyber security. Lockheed generated $9.4 billion sales in that division in 2011.
CYBER RISKS
"All companies have to prepare response plans," said Hervi Meurie, general manager of C4 Advanced Solutions LLC, an Abu Dhabi-based technology and security firm. "What happens if the electricity network gets hit by a virus and goes down for three days?"
Iran, the target of international economic sanctions focused on its oil industry over its disputed nuclear program, has been hit by several cyber attacks in the last few years.
In April, a virus targeted Iranian oil ministry and national oil company networks, forcing Iran to disconnect the control systems of oil facilities including Kharg Island, which handles most of the country's crude exports.
Iran has blamed some of the attacks on the United States, Israel and Britain; current and former U.S. officials told Reuters this year that the United States built the complex Stuxnet computer worm to try to prevent Tehran from completing suspected nuclear weapons work.
Buainnain said he believed Iran would remain the target of cyber attacks rather than a source for them.
"I don't think Iran poses any threat," he said. "I think their activity is less aggressive and more focused on intelligence gathering, they are in fact subject to cyber attacks because of the nuclear program."
He said the UAE was in the process of creating a government body that will be responsible for handling cyber threats, adding that the National Electronic Security Authority was expected to be officially launched within the next few months.
While it is standard industry practice to shield plant operating networks from hackers by running them on separate systems, these have not been enough to fend off cyber attacks.
Qatar's natural gas firm Rasgas was hit by a cyber attack in September, although it has not said how much damage was caused or whether it was the same virus that hit Aramco.
Theodore Karasik, director of research at the Institute for Near East and Gulf Military Analysis which organized the conference, said governments and companies must stay on high alert.
"You're always in catch-up mode because the bad guys can out-think the good guys faster," he said. "The Gulf states need to stay as far ahead as possible given their enemies who may be more technically savvy.

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Android 4.2′s built-in antivirus software only detects 15% of malware

The latest version of the Android operating system has been called one of the most bug-ridden releases since Honeycomb, although it has also been recognized as the safest version yet. With Android 4.2, Google (GOOG) integrated a unique and high-powered security feature into the platform that scans for malicious or potentially harmful codes in apps that are loaded onto a user’s device. According to a study conducted by researchers at NC State University, however, the company’s malware protector was found to be less than satisfactory.
Google’s app verification service was found to identify malicious apps only 15.32% of the time, compared to various anti-virus programs that varied from 51% to 100% accuracy. The experiment used 1,260 samples of malware, to which the built-in feature in Android 4.2 only detected 193 of them.
“By introducing this new app verification service in Android 4.2, Google has shown its commitment to continuously improve security on Android,” Xuxian Jiang, an associate professor of computer science at NC State University, said. “Based on our evaluation results, we feel this service is still nascent and there exists room for improvement.”
It should be the noted that in real world situations a majority of users will not experience malware, which is generally found in pirated software.

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Russia backs down on proposals to regulate the Internet

A Russia-led coalition on Monday withdrew a proposal to give governments new powers over the Internet, a plan opposed by Western countries in talks on a new global telecom treaty.
Negotiations on the treaty mark the most sustained effort so far by governments from around the world to agree on how - or whether - to regulate cyberspace.
The United States, Europe, Canada and other advocates of a hands-off approach to Internet regulation want to limit the new treaty's scope to telecom companies.
But Russia, China and many Arab states, which want greater governmental control, have been pushing to expand the treaty beyond traditional telecom operators.
Representatives from about 150 countries - members of the International Telecommunication Union (ITU) - have been negotiating for the past eight days in Dubai on the new treaty, which was last revised in 1988, before the advent of the World Wide Web.
The Russia-led proposal could have allowed countries to block some Internet locations and take control of the allocation of Internet addresses currently overseen by ICANN, a self-governing organization under contract to the U.S. Department of Commerce.
An ITU spokesman said this plan had now been scrapped.
"It looks like the Russians and Chinese overplayed their hand," said American cyber security expert Jim Lewis of the Centre for Strategic and International Studies.
U.S. ambassador Terry Kramer welcomed the decision to withdraw the Russia-led plan. But he also said: "These issues will continue to be on the table for discussion in other forms during the remainder of the conference."
China, Saudi Arabia, Algeria, Sudan and the United Arab Emirates had co-signed the aborted proposal. The UAE insisted the document had not been withdrawn.
"It may come down to the wire," said a Western delegate on condition of anonymity. "There are a lot of other (similar) proposals so I don't think this represents a substantial conclusion and could be just maneuvering."
The ITU usually takes decisions by consensus, but the intransigence of both sides means it could come to a vote in which the United States and its allies might be in the minority.
The United States' position is that the Internet has flourished with minimal state interference. It wants this to continue, arguing that many of the proposed treaty changes could allow governments to stifle free speech, reduce online anonymity and censor Internet content.
Russia and its allies have insisted they need new powers to fight cyber crime and protect networks.
Countries can opt out of parts of the revised treaty when it is finalized or even refuse to sign it
The talks are due to end on Friday.

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UK prosecutors consider charges over royal hoax call

LONDON (Reuters) - British detectives investigating the death of a nurse found hanged after she took a prank phone call at a hospital treating Prince William's pregnant wife Kate have passed an evidence file to prosecutors, police said on Saturday.
Public prosecutors must decide whether the case is strong enough to bring charges over a stunt that was condemned around the world and fuelled concerns about media ethics.
Indian-born Jacintha Saldanha, 46, was found hanging in her hospital lodgings in London, days after she answered the hoax call from an Australian radio station, an inquest heard.
She put the call through to a colleague who disclosed details of the Duchess of Cambridge's condition during treatment for an extreme form of morning sickness in the early stages of pregnancy.
"Officers submitted a file to the Crown Prosecution Service (CPS) for them to consider whether any potential offences may have been committed by making the hoax call," London's Metropolitan Police said in a statement.
A CPS spokesman confirmed it had received the file, but declined to comment on the timing or nature of possible charges.
"That is what we will be considering," he said.
Prime Minister David Cameron has described the case as a "complete tragedy" and has said many lessons will have to be learned from the nurse's death.
Australia's media regulator has launched an investigation into the phone call. Southern Cross Austereo, parent company of radio station 2Day FM, has apologised for the stunt.
Britain's own media is already under pressure to agree a new system of self-regulation and avoid state intervention following a damning inquiry into reporting practices.
The presenters who made the call, Mel Greig and Michael Christian, have apologised for their actions.

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Prince William to spend Christmas with the in-laws

LONDON (AP) — Prince William will spend Christmas with his pregnant wife Kate and his in-laws in the southern England village of Bucklebury, royal officials said Saturday.
That means a family Christmas for the Duchess of Cambridge, who was recently hospitalized after suffering from severe morning sickness.
A statement from St. James' Palace, William's official residence, didn't go into much detail, saying only that the prince and Kate would spend their time in Bucklebury "privately." But a recent article penned by Kate's sister, Pippa Middleton, gave some insight into what a Bucklebury holiday might look like for the royal pair.
"The Middletons' Christmas should be blissfully calm. We're good at keeping each other's spirits up," Pippa wrote in the most recent edition of Britain's Spectator magazine. She added that her father, Michael, liked to surprise the family with bizarre costumes.
"He buys a new costume each year and typically gets a bit carried away — a couple of Christmases ago, he appeared in an inflatable sumo outfit," she wrote.
British royals traditionally spend the holidays at Sandringham, a vast estate in eastern England, and a spokesman for William said that royal couple would pay a visit at some point over the festive season. He noted that William's absence from Sandringham had been approved by his grandmother, Queen Elizabeth II, and her husband, Prince Philip.
He spoke on condition of anonymity because palace rules forbid his identification in the press.

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Pope pardons ex-butler who stole, leaked documents

VATICAN CITY (AP) — Pope Benedict XVI granted his former butler a Christmas pardon Saturday, forgiving him in person during a jailhouse meeting for stealing and leaking his private papers in one of the gravest Vatican security breaches in recent times.
After the 15-minute meeting, Paolo Gabriele was freed and returned to his Vatican City apartment where he lives with his wife and three children. The Vatican said he couldn't continue living or working in the Vatican, but said it would find him housing and a job elsewhere soon.
"This is a paternal gesture toward someone with whom the pope for many years shared daily life," according to a statement from the Vatican secretariat of state.
The pardon closes a painful and embarrassing chapter for the Vatican, capping a sensational, Hollywood-like scandal that exposed power struggles, intrigue and allegations of corruption and homosexual liaisons in the highest levels of the Catholic Church.
Gabriele, 46, was arrested May 23 after Vatican police found what they called an "enormous" stash of papal documents in his Vatican City apartment. He was convicted of aggravated theft by a Vatican tribunal on Oct. 6 and has been serving his 18-month sentence in the Vatican police barracks.
He told Vatican investigators he gave the documents to Italian journalist Gianluigi Nuzzi because he thought the 85-year-old pope wasn't being informed of the "evil and corruption" in the Vatican and thought that exposing it publicly would put the church back on the right track.
During the trial, Gabriele testified that he loved the pope "as a son loves his father" and said he never meant to hurt the pontiff or the church. A photograph taken during the meeting Saturday — the first between Benedict and his once trusted butler since his arrest — showed Gabriele dressed in his typical dark gray suit, smiling.
The publication of the leaked documents, first on Italian television then in Nuzzi's book "His Holiness: Pope Benedict XVI's Secret Papers" convulsed the Vatican all year, a devastating betrayal of the pope from within his papal family that exposed the unseemly side of the Catholic Church's governance.
The papal pardon had been widely expected before Christmas, and the jailhouse meeting Benedict used to personally deliver it recalled the image of Pope John Paul II visiting Mehmet Ali Agca, the Turkish gunman who shot him in 1981, while he served his sentence in an Italian prison.
The Vatican spokesman, the Rev. Federico Lombardi, said the meeting was "intense" and "personal" and said that during it Benedict "communicated to him in person that he had accepted his request for pardon, commuting his sentence."
Lombardi said the Vatican hoped the Benedict's pardon and Gabriele's freedom would allow the Holy See to return to work "in an atmosphere of serenity."
None of the leaked documents threatened the papacy. Most were of interest only to Italians, as they concerned relations between Italy and the Vatican and a few local scandals and personalities. Their main aim appeared to be to discredit Benedict's trusted No. 2, the secretary of state, Cardinal Tarcisio Bertone.
Vatican officials have said the theft, though, shattered the confidentiality that typically governs correspondence with the pope. Cardinals, bishops and everyday laymen write to him about spiritual and practical matters assuming that their words will be treated with the discretion for which the Holy See is known.
As a result, the leaks prompted a remarkable reaction, with the pope naming a commission of three cardinals to investigate alongside Vatican prosecutors. Italian news reports have said new security measures and personnel checks have been put in place to prevent a repeat offense.
Gabriele insisted he acted alone, with no accomplices, but it remains an open question whether any other heads will roll. Technically the criminal investigation remains open, and few in the Vatican believe Gabriele could have construed such a plot without at least the endorsement if not the outright help of others. But Lombardi said he had no new information to release about any new investigative leads, saying the pardon "closed a sad and painful chapter" for the Holy See.
Nuzzi, who has supported Gabriele as a hero for having exposed corruption in the Vatican, tweeted Saturday that it appeared the butler was thrilled to speak with the pope and go home. "Unending joy for him, but the problems of the curia and power remain," he wrote, referring to the Vatican bureaucracy.
A Vatican computer expert, Claudio Sciarpelletti, was convicted Nov. 10 of aiding and abetting Gabriele by changing his testimony to Vatican investigators about the origins of an envelope with Gabriele's name on it that was found in his desk. His two-month sentence was suspended. Lombardi said a pardon was expected for him as well. He recently returned to work in the Vatican.
Benedict met this past week with the cardinals who investigated the origins of the leaks, but it wasn't known if they provided him with any further updates or were merely meeting ahead of the expected pardon for Gabriele.
As supreme executive, legislator and judge in Vatican City, the pope had the power to pardon Gabriele at any time. The only question was when.

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Abducted German aid worker seen alive in video

BERLIN (AP) — A German aid worker abducted in Pakistan 11 months ago was seen alive in a video broadcast Saturday urging authorities to fully meet his captors' demands, warning that otherwise they could kill him within days.
The undated video — probably recorded under duress by his captors — was broadcast Saturday by Pakistan's Dunya TV. The German Foreign Ministry in Berlin said it "knows the case" and is aware of the video. A duty spokeswoman declined to elaborate.
Aid organization German Agro Action declined to confirm whether the video indeed showed one of its two staffers abducted in the central Pakistan city of Multan in January. Spokeswoman Simone Pott only acknowledged "we know the video."
The aid worker, identifying himself in the video as 59-year-old Bernd Muehlenbeck, said he was captured by mujahedeen — a generic term for militant Islamic extremists — but didn't specify who they were or what their demands were.
In the message — whose content is likely to have been dictated by the captors — he said he was kidnapped "by mujahedeen because of the bad policies of the German government."
In January, gunmen seized the two foreign aid workers, Muehlenbeck and an Italian colleague, from just outside their office in Multan and bundled them into a car, according to Pakistan security officials. The men were working for a development project helping victims of the 2010 floods, the officials said.
Muehlenbeck did not name or explicitly mention his Italian colleague, but repeatedly used the plural when speaking about his situation.
He appealed to authorities not to attempt freeing them by force. "I would like to live and I would like to see back my family alive," he said, speaking in English with a slight German accent.
In the video lasting just less than a minute, Muehlenbeck is heard speaking calmly in front of a white wall, wearing glasses and a dark hoody.
He said he could be killed by his captors at any time. "We don't know when. Maybe today, maybe tomorrow, maybe in three days."
Pakistan, a poor predominantly Muslim nation of about 180 million, is struggling to fend off an insurgency fueled by Islamic extremists, many of whom are believed to hide in the lawless provinces bordering Afghanistan.
Kidnappings for ransom are common in Pakistan. Islamist militants have also abducted people. Several aid workers have been targeted over the past years.
This week saw a gruesome series of deadly attacks on Pakistanis working on a polio vaccination campaign. Six of the aid workers gunned down were women, three of whom were teenagers. Two other workers were critically wounded.

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Russia says it won't host Assad but others welcome

MOSCOW (AP) — Russia's foreign minister says Moscow would welcome any country's offer of a safe haven to Syrian President Bashar Assad, but underlined that Moscow itself has no intention of giving him shelter if he steps down.
Russia has repeatedly used its veto right along with China at the U.N. Security Council to protect its old ally from international sanctions, but it has increasingly sought to distance itself from Assad.
Foreign Minister Sergei Lavrov told reporters late Friday that countries in the region he wouldn't name publicly had asked Russia to convey their offer of a safe passage to Assad. He said that Russia responded by telling them to go directly to Assad: "We replied: 'What do we have to do with it? If you have such plans, you go straight to him.'"
Asked if Moscow could offer a refuge to Assad, Lavrov responded that "Russia has publicly said that it doesn't invite President Assad."
"If there is anyone willing to provide him guarantees, they are welcome!" Lavrov told reporters on board a plane returning from Brussels where he attended a Russia-EU summit. "We would be the first to cross ourselves and say: "Thank God, the carnage is over! If it indeed ends the carnage, which is far from certain."
Lavrov also said the Syrian government has pulled its chemical weapons together to one or two locations from several arsenals across the country to keep them safe amid the rebel onslaught.
"According to the information we have, as well as the data of the U.S. and European special services, the government is doing everything to secure it," he said. "The Syrian government has concentrated the stockpiles in one or two centers, unlike the past when they were scattered across the country."
U.S. intelligence says the regime may be readying chemical weapons and could be desperate enough to use them. Both Israel and the U.S. have also expressed concerns they could fall into militant hands if the regime crumbles.
Lavrov gave no indication that Moscow could change its opposition to sanctions against Assad. He assailed the West for failing to persuade the opposition to sit down for peace talks with the government, saying that "the Syrian president's head is more important for them than saving human lives."
Lavrov added that U.N. peace envoy for Syria, Lakhdar Brahimi, would visit Moscow for talks before the year's end.
He said that Moscow has also invited the revamped Syrian opposition leadership to visit.
"We are ready to honestly explain that the emphasis on a military solution and the dismantling of the state institutions is disastrous for the country," he said. "Listen, there will be no winner in this war."

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Top UBS shareholder pins rebound hopes on private wealth

LONDON (Reuters) - UBS's wealth management business will help it bounce back from a $1.5 billion rap for rigging interest rates, one of its largest investors said, although fears of costly civil lawsuits could cast a pall over its shares for some time.
Paras Anand, European equities head at Fidelity Worldwide Investment, said legal action sparked by the Libor scandal posed an unpredictable threat to the bank's near-term earnings, even if its core private banking franchise escaped permanent harm.
"The big unknown factor is the civil litigation that could follow on as a result of this...That is one thing at the back of our minds that we have to be cognizant of," Anand said in an interview with Reuters.
"The issue for shareholders is the challenge of pricing that risk in. The potential costs are too unquantifiable and indeed, it's unclear as to whether they will actually manifest or not."
Switzerland's largest bank was hit with the fine on Wednesday after admitting to fraud, paying bribes to brokers and "pervasive" manipulation of global benchmark interest rates by dozens of its staff.
UBS shares were trading 1.3 percent higher at 9:01 a.m. ET, as investors looked forward to the end of a scandal-filled chapter in the bank's history and a renewed focus on managing cash on behalf of rich clients, rather than so-called 'casino' investment banking.
"There's clearly been a backlash against big faceless financial entities but a private bank has big personal relationships with its customers ... These kinds of institutions are surprisingly resilient," Anand said.
"We have seen some awful scandals in businesses much weaker than UBS and they manage to survive," he added.
Fidelity owns around 45 million shares in UBS, equivalent to around 1.2 percent of the bank, and is its fifth largest institutional owner excluding sovereign wealth funds, according to Thomson Reuters data.

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Top UBS shareholder pins rebound hopes on private wealth

LONDON (Reuters) - UBS's wealth management business will help it bounce back from a $1.5 billion rap for rigging interest rates, one of its largest investors said, although fears of costly civil lawsuits could cast a pall over its shares for some time.
Paras Anand, European equities head at Fidelity Worldwide Investment, said legal action sparked by the Libor scandal posed an unpredictable threat to the bank's near-term earnings, even if its core private banking franchise escaped permanent harm.
"The big unknown factor is the civil litigation that could follow on as a result of this...That is one thing at the back of our minds that we have to be cognizant of," Anand said in an interview with Reuters.
"The issue for shareholders is the challenge of pricing that risk in. The potential costs are too unquantifiable and indeed, it's unclear as to whether they will actually manifest or not."
Switzerland's largest bank was hit with the fine on Wednesday after admitting to fraud, paying bribes to brokers and "pervasive" manipulation of global benchmark interest rates by dozens of its staff.
UBS shares were trading 1.3 percent higher at 9:01 a.m. ET, as investors looked forward to the end of a scandal-filled chapter in the bank's history and a renewed focus on managing cash on behalf of rich clients, rather than so-called 'casino' investment banking.
"There's clearly been a backlash against big faceless financial entities but a private bank has big personal relationships with its customers ... These kinds of institutions are surprisingly resilient," Anand said.
"We have seen some awful scandals in businesses much weaker than UBS and they manage to survive," he added.
Fidelity owns around 45 million shares in UBS, equivalent to around 1.2 percent of the bank, and is its fifth largest institutional owner excluding sovereign wealth funds, according to Thomson Reuters data.

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Drugs group Lundbeck's shares hit by profit warning

COPENHAGEN (Reuters) - Shares in Danish drugs firm Lundbeck fell to their lowest level in over 12 years on Wednesday after it cut its profits forecast for the next two years as European sales slow and spending on new products rise to combat generic competition.
The company has already warned that earnings would stall until 2015 due to cheap generic competition for its existing drugs, meaning new products will be vital for future earnings.
But Chief Executive Ulf Wiinberg said on Wednesday that the negative impact on revenue from healthcare reforms in Europe had also been bigger than expected in the last two years and that slowing European sales and generic competition were hurting.
As a result the company said operating profits would fall further than previously forecast in 2014 as it increases investments in its late-stage drugs development pipeline and product launches.
Lundbeck is working to find new drugs to replace lost revenue from products coming off patent protection such as its antidepressant Cipralex, which is sold as Lexapro in the United States and Japan, and Alzheimer's drug Ebixa.
Wiinberg said 2014 would be the company's peak investment year for the new products pipeline, offering it a solid foundation for growth starting in 2015.
"You only get one chance to launch a product and we have to do it well," Wiinberg said at a briefing for investors.
He was commenting after the company warned in a statement that it now expects revenue in 2014 of about 14 billion Danish crowns ($2.5 billion) and an operating profit of between just 0.5 billion and 1 billion crowns.
Analysts have on average been forecasting a profit of over 2.5 billion crowns for 2014 on turnover of over 14.7 billion crowns, according to Thomson Reuters I/B/E/S Estimates.
Two years ago Lundbeck predicted its annual revenues over the period 2012-2014 would exceed 14 billion crowns a year while earnings before interest and tax (EBIT) would exceed 2 billion crowns a year.
Next years' revenue is now forecast to be in the range of 14.1 billion and 14.7 billion crowns to produce an operating profit of 1.6 billion to 2.1 billion crowns, with no change to the company's forecast for 2012.
Analysts' forecasts for this year are for operating profit to drop 41 percent to 1.99 billion crowns on revenue down 8 percent at 14.7 billion crowns, while for 2013 they predict a profit of 2.26 billion crowns on revenue of 14.5 billion crowns.
Lundbeck's shares were trading down 17 percent at 79.90 crowns at 12.44 p.m. British time, dropping below 80 crowns for the first time since April 2000.
"In the short term, earnings are under pressure," Sydbank analyst Soren Hansen said.
Lundbeck said that it expects a dividend payout ratio of about 35 percent of net profits in the 2012-14 period. Last year it paid 3.49 crowns on basic earnings per share of 11.64 crowns, a payout ratio of 30 percent.
Analysts have been predicting a 27-30 percent cut this year to 2.53-2.28 crowns, according to Thomson Reuters StarMine data.
But a number of analysts doubt that revenue from new products will be enough to secure revenue growth in 2015, compensating for lost revenue from Cipralex, Lexapro and Ebixa which together accounted for about 70 percent of group revenue in 2011.
Lundbeck is working on new products such as antidepressant Brintellix in Europe and the United States for launch at the end of next year or start of 2014, as well as alcohol dependency treatment Selincro in Europe in mid 2013.
"It is difficult to see revenue from the smaller products compensating for the large products," said Hansen.

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New Mauritius Hotels posts 25 pct drop in full-year profit

PORT LOUIS (Reuters) - Luxury hotels group New Mauritius Hotels (NMH) reported a 25 percent fall in full-year pretax profit, citing higher finance costs and fewer tourists, and forecast a 15 percent drop in first-quarter earnings.
Ranked among the Indian Ocean island's most-traded stocks, NMH said on Wednesday that pretax profit for the year to September 30 fell to 603 million Indian rupees, with earnings per share down 20 percent at 3.60 rupees.
The hotels group said that it won't pay a dividend this year, given the difficult conditions in the local tourism industry. Last year it paid a dividend of 2.50 rupees per share.
Shares in the group, which owns eight hotels in Mauritius and one in the Seychelles, closed unchanged at 52 rupees before its results were released.
Tourism, a traditional cornerstone of the Mauritius economy, has been forecast to account for 7.9 percent of domestic product in 2012, down from 8.4 percent last year. The downturn in tourism has been caused largely by economic turmoil in the euro zone - the sector's key source market.

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FedEx: cost plan can counter sluggish growth

NEW YORK (AP) — FedEx is more pessimistic about the U.S. economy than it was three months ago, but more assured of its own ability to grow earnings.
The world's second-largest package delivery company lowered its economic forecast for the U.S., saying that there remains a lot of uncertainty for the company and the country.
Its forecast for the current quarter, which incorporates the critical holiday season, falls short of Wall Street expectations.
But FedEx maintained its forecast for the full fiscal year ending in May, counting on a massive cost reduction plan and a slightly more optimistic view of growth overseas. Shares rose 2.6 percent in afternoon trading.
FedEx Corp. posted earnings of $438 million, or $1.39 per share for the quarter that ending in November, compared with $497 million, or $1.57 per share, a year ago. That was below the $1.41 per share that Wall Street was expecting, according to a poll of analysts by FactSet.
Revenue rose to $11.1 billion from $10.6 billion previously, as the company scaled back its operation to better match demand and some of its raised rates. Analysts forecast revenue of $10.84 billion.
Growth in the company's freight and ground operations boosted results, but FedEx reported "persistent weakness" in its core express network. Operating income in that segment fell 33 percent. FedEx and its larger rival UPS Inc. have both seen consumers and businesses opt for slower shipping options to cut costs.
FedEx said on Wednesday that it expects earnings will be between $1.25 and $1.45 per share in the third quarter. Analysts that follow the company were predicting per-share earnings of $1.45.
The company, based in Memphis, Tenn., also said it expects to earn between $6.20 and $6.60 per share for the year ending in May, excluding any charges from the company's buyout plan. Wall Street is looking for $6.34.
Earlier this month FedEx said it will offer some employees up to two years pay to leave, starting next year. The voluntary program is part of an effort to cut annual costs by $1.7 billion within three years. The plan also includes cutting aircraft and underused assets.

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Participant Media plans cable TV network targeting millenials

LOS ANGELES (Reuters) - Entertainment company Participant Media, one of the backers of the hit historical drama "Lincoln", will launch a cable TV network next summer with programming that focuses on social issues of interest to the millenials generation of teens and young adults.

The channel's original programming, films and documentaries will be aimed at viewers age 18 to 34 in the large demographic group known as millenials, Participant Media CEO Jim Berk said in an interview on Monday.

Millenials are particularly interested in the type of content that Participant produces about social issues, Berk said. The studio's credits include the current release "Lincoln", about President Abraham Lincoln's push to ban slavery, last year's civil rights drama "The Help" and Al Gore climate change documentary "An Inconvenient Truth".

Participant Media is creating the new network by purchasing two existing cable channels, The Documentary Channel and Halogen TV. After those networks are combined and rebranded, the new channel will reach an estimated 40 million of the more than 100 million U.S. pay-TV subscribers.

The company, founded by billionaire and former eBay Inc President Jeff Skoll with the aim of producing entertaining content that inspires social change, interacts regularly with more than 2.5 million people through social media, local movie screenings and its Takepart.com website, Berk said.

The challenge for Participant will be to sign up additional pay-TV distributors and win viewership in a crowded media landscape. The company is privately held and is not part of a large media conglomerate.

"We have the funding necessary to take a very long-term view, and to spend what we need to spend in terms of programming," Berk said.

The mainstay of the network's lineup will be original programming from a variety of genres, said Evan Shapiro, a Participant executive who will run the new network.

The company is developing programming with established Hollywood names including former MTV President Brian Graden, "Inconvenient Truth" director Davis Guggenheim and documentary filmmaker Morgan Spurlock.

Participant also hopes to work with pay-TV distributors to make the channel's content available on mobile devices such as smartphones and tablets, to meet the viewing patterns of younger audiences, Shapiro said.

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Participant Media starts cable network for millenials

NEW YORK (TheWrap.com) - Participant Media, the company behind films including "Lincoln" and "The Help," is starting a new cable network targeting millenial viewers, with content from Davis Guggenheim and The Jim Henson Company, among others.

It will be led by Evan Shapiro, who joined Participant in May after serving as President of IFC and Sundance Channel.

Participant has bought The Documentary Channel and entered into an agreement to acquire the distribution assets of Halogen TV from The Inspiration Networks. No terms were disclosed.

The combined and rebranded properties are expected to reach more than 40 million subscribers once the yet-to-be-named network launches in the summer.

"The goal of Participant is to tell stories that serve as catalysts for social change. With our television channel, we can bring those stories into the homes of our viewers every day," said Participant chairman and founder Jeff Skoll.

Those producing content for the new network also include producer Brian Graden, The Jim Henson Company's Brian Henson, columnist and blogger Meghan McCain, Morgan Spurlock, Gotham Chopra, filmmaker Mary Harron, writer/director Timothy Scott Bogart, and Cineflix Media, a TV producer and distributor in which Participant Media controls an equity interest.

Guggenheim directed the Oscar winning documentary "An Inconvenient Truth" for Participant.

"Our content will be specifically designed for the viewers that the pay TV eco-system is most at risk of losing," said Shapiro. "We all know that Millennials are changing how media is consumed. However, they also have the strong desire and inimitable capacity to help change the world. Our research shows that there is a whitespace in the television landscape and we believe that a destination for ‘the next greatest generation' will be a win for our affiliate partners, advertisers and the creative community."

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Amazon adds episodes of alt-comedy show "UnCabaret"

LOS ANGELES (TheWrap.com) - Amazon Instant Video has added four exclusive episodes of "UnCabaret," an alt-comedy showcase for the likes of Margaret Cho and Andy Dick, to its Prime Instant Video service.

The show was created and hosted by comedian and entertainer Beth Lapides and features performances by such comedy stars as Sandra Bernhard, Garfunkle and Oates, Greg Fitzsimmons and Rob Delaney. Instead of punch-line driven sets, performers are encouraged to show off story-based stream-of-consciousness acts.

Amazon Prime members will get free access to the titles. The episodes will be available for rental or purchase for Amazon Instant Video customers on an a la carte basis.

Amazon Prime costs $79 annually and gives members free two-day shipping as well as streaming access to movies and shows from the likes of Paramount and Disney-ABC. The catalog of titles grew a little larger Monday. In addition to "UnCabaret," Amazon announced an exclusive content licensing agreement with Turner Broadcasting System and Warner Bros. TV to add two TNT shows, "Falling Skies" and "The Closer" to its service.

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Family Guy," "Haven" episodes pulled due to Newtown shootings rescheduled

LOS ANGELES (TheWrap.com) - In a possible sign that the nation - or at least network programmers are beginning to regain their composure after Friday's horrific school shootings in Newtown, Conn., episodes of Fox's "Family Guy" and Syfy's "Haven" have been rescheduled.

The "Family Guy" episode "Jesus, Mary and Joseph," which was initially scheduled to run on Sunday before being pulled from the schedule following the massacre, will now air this upcoming Sunday.

While the episode isn't particularly violent, the holiday parody episode does poke fun at religion - something that might not have sat well in the days following the killings.

An episode of "American Dad" that also was pulled last Sunday has not yet been rescheduled.

The "Reunion" episode of Syfy's "Haven," which was due to air Friday night - the same day of the shootings - will now run on January 17, along with the show's season finale. That episode features fictional gun violence.

In addition to the "Family Guy" and "Haven" postponements, the TLC special "Best Funeral Ever" had its December 26 premiere date pushed back to January, while a recent episode of the ABC drama "Scandal," which depicted the killing of a family of four, was removed from the network's website Monday.

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Leah Remini sued by former managers over "Family Tools" commissions

LOS ANGELES (TheWrap.com) - Leah Remini's new TV gig is already giving her a headache, months before it even starts. Former "King of Queens" star Remini is being sued by her former managers, the Collective Management Group, which claims that it's owed $67,000 in commissions relating to her upcoming ABC comedy "Family Tools," which debuts May 1.

In a complaint filed with Los Angeles Superior Court on Tuesday, the Collective says that it entered into an agreement with the actress in November 2011 that guaranteed the company 10 percent of the earnings that emerged from projects that Remini "discussed, negotiated, contemplated, or procured/booked during Plaintiff's representation of Remini," regardless of whether the income was earned after she and the Collective parted ways.

According to the lawsuit, that would include the $1 million that it says Remini will earn for the first season of "Family Tools." (The suit allows that it isn't owed commission on a $330,000 talent holding fee that Remini received from ABC prior to officially being booked on the show.)

Remini, pictured above wearing the self-satisfied smirk of someone who just might stiff her former managers out of their commission, terminated her agreement with the Collective "without warning or justification" in October, the suit says.

Alleging breach of oral contract among other charges, the suit is asking for an order stipulating that it's owed the $67,000, plus unspecified damages, interest and court costs.

Remini's agent has not yet responded to TheWrap's request for comment.

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Maintenance deals drive Micro Focus earnings beat

LONDON (Reuters) - Information technology company Micro Focus International  posted better-than-expected first-half core earnings after it moved towards more lucrative maintenance contracts, with fewer low-margin consultancy deals.

The British mainframe software specialist posted a 3 percent rise in adjusted core earnings of $92.2 million on Thursday, ahead of analysts' average forecasts of about $86 million.

Revenue at the business, which works on the large computers that crunch data for banks and retailers, slipped 5 percent to $207.3 million, broadly as expected by the market.

Executive Chairman Kevin Loosemore said it was a "solid" performance against a backdrop of weak demand in markets like Spain, Italy and Japan.

"We are cautious about the macro stuff, but not to the point where we think it will cause any great downturn," he said in an interview.

He said revenue in the second half would likely be similar to the first.

The target for the core earnings margin, however, was increased to 40-45 percent, from a previous range of 37-42 percent, reflecting the changed product mix.

Loosemore has repositioned the business to drive cash returns for shareholders rather than chasing high revenue growth.

A total $313.9 million was returned to shareholders in the previous 12 months, he said, and the board intended to return more cash in November next year and in 2014.

It also increased its interim dividend by 45 percent to 11.9 cents.

Shares in the group, which have risen by 29 percent in the last six months, were flat at 570.5 pence at 1010 GMT.

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Rona says looking to sell non-core assets

(Reuters) - Canadian home-improvement retailer Rona Inc , the target of a C$1.8 billion takeover proposal by U.S.-based Lowe's Cos Inc  earlier this year, said it expects to dispose of non-core assets and redeploy capital to leverage core assets.

The company wants to improve its retail EBITDA (earnings before interest, tax, depreciation and amortization) margin in line with industry standards under the leadership of acting Chief Executive Dominique Boies, who joined Rona in 2011, the company said in a statement.

Lowe's withdrew its unsolicited offer buy Montreal-based Rona in mid-September in the face of stiff opposition from Quebec province politicians and many of the company's independent dealers.

Rona's longtime chief executive, Robert Dutton, stepped down last month following disappointing results, prompting speculation that the company could be back in play.

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Exclusive: U.S. likely to extend Iran sanction waivers-sources

WASHINGTON (Reuters) - The United States is likely to exempt India, South Korea, Turkey and others from Iranian financial sanctions for another six months on Friday as a reward for reducing crude purchases from the Islamic republic, two U.S. government sources said.

Oil shipments by Iran have more than halved in 2012 in the face of U.S. and European Union sanctions aimed at cutting Tehran's foreign exchange earnings and funding for a nuclear program they suspect is designed for a military purpose. Iran denies that the program is for nuclear weapons.

The U.S. sanctions, which target financial transactions, have gradually tightened the noose on Iran's crude sales. But exports took a deep hit in July when EU sanctions kicked in, largely because they effectively, overnight, banned insurance cover on ships carrying Iranian crude.

The sanctions have sharply curtailed the market for Iranian crude, with Asian buyers and Turkey the only customers this month, according to shipping sources. EU sanctions included a ban on members from buying Iranian crude.
The International Energy Agency (IEA) estimates that Iranian oil exports dipped below 1 million barrels per day (bpd) over the summer as Western sanctions on Tehran tightened.

According to official Iranian government data available through the Joint Oil Data Initiative (JODI), Iran exported an average of just over 2 million bpd in 2011.

On June 11, a number of countries received their first round of reprieves from U.S. sanctions that President Barack Obama signed into law a year ago. The waivers are issued by the State Department.

Under the law, banks in countries that buy oil from Iran can be cut off from the U.S. financial system unless their purchases are reduced.

The architects of U.S. sanctions legislation, Democratic Senator Robert Menendez and Republican Senator Mark Kirk, have urged the White House to require oil importers to reduce purchases by 18 percent or more to qualify for further exemptions.

U.S. waivers for China, the top consumer of Iran's oil, and Singapore are due to expire on December 25, 180 days after they were issued. Both countries are expected to get waiver extensions because they have reduced oil purchases from Iran. Those waivers could also be issued on Friday, one of the government sources and an oil industry source said.

"There's nothing in the sanctions law that says the U.S. has to wait a full 180 days to announce exceptions for China," said the government source, who asked not to be named because of the sensitive nature of the matter.
Japan and 10 EU countries received six-month sanction reprieves from the United States in September.
SANCTIONS HIT
The West suspects that Iran's nuclear program is enriching uranium to levels that could be used in weapons. Tehran has said that the program is for the generation of electricity and medical purposes.
David Cohen, undersecretary for terrorism and financial intelligence at the U.S. Treasury Department, said this week the mix of sanctions was costing Iran up to $5 billion a month.

The United States and the EU say the sanctions are targeted at the government and not ordinary citizens, although the rial has dropped sharply in value and forced up food prices so that Iranians can not always afford even basic items.

Still, the West has been ramping up sanctions further as worries mount about Tehran's nuclear intentions and to try to calm concerns in Israel, which has threatened to attack Iranian nuclear installations if a peaceful solution is not found.
Shipping sources say Iran's crude exports are set to drop by about a quarter in December from November and to the lowest level since the sanctions were imposed this year, representing a loss of about $800 million at current prices.
EU sanctions mean that major buyers China, South Korea and India ask Iran to ship the oil to them because they are unable to secure insurance cover for vessels.
Delivery has often been delayed because the Iranian fleet is severely stretched, with an increasing number of its tankers being used as floating storage for unsold oil.
The sanction will leave Asia's 2012 Iranian crude imports at just over 1 million bpd, down roughly a quarter from a year ago, Reuters calculations show.

As Iran's biggest buyers of Iran crude, Asian countries lobbied hard for exemptions to the sanctions for fear that a loss of the crude would force prices higher and undermine economic growth. Many Asian refiners are also designed to handle Iranian crude, and would require costly reconfiguring if they were to give up the grade substantially.

China, the world's second-largest oil consumer, has also repeatedly voiced its opposition to unilateral sanctions, such as those imposed by the United States. It says measures should be multilateral and agreed through the United Nations.

Still, China's imports have fallen in recent months as Iranian tankers struggled to ship even the reduced volumes requested by importing countries. Earlier this year, China slashed imports by as much as half as the country wrangled over annual contract terms with Tehran.

China's imports from Iran are down 22 percent on the year to 426,000 bpd in January-October, the months for which official data is available.

South Korea has reduced purchases 39 percent to 148,000 bpd and Japan 41 percent to 188,000 bpd over the same period. In contrast, India has raised imports to 328,000 bpd, up 7 percent.

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