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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