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Friday, April 26, 2013

For Zuckerberg, a Big Payout From Facebook Stock

Facebook shares may have been on a roller coaster ride in the year since they made their debut on Wall Street, but they haven’t been too shabby for its top executives. Mark Zuckerberg exercised stock options worth $2.3 billion, according to a proxy statement filed with the Securities and Exchange Commission late Friday â€" and sold about half, to cover his tax bill.

Sheryl Sandberg, the company’s chief operating officer, retained her spot as the company’s best-paid executive for two consecutive years. She received total compensation of about $26 million in 2012, down slightly from nearly $31 million the year before.

Mike Schroepfer, the engineering chief of the company, had almost $21 million in compensation, while Mr. Zuckerberg claimed a far more modest package of just under $2 million last year.

The proxy statement reported that Mr. Zuckerberg had spent $1.2 million on chartered aircraft for his personal travel.

Ms. Sandberg had vested stocks worth over $820 million, while David A. Ebersman, who as chief financial officer led the company’s public offering in May, had vested options worth just over $100 million.

Facebook came out of the box in May at $38 a share, and its value sank sharply over the next several months. It closed on Friday at $26.85.

The company also announced that Jim Breyer of Accel Partners, an early investor who personally made more than $100 million from his sale of Facebook stock, was leaving the board. He was one of the most prescient venture capitalists to back Facebook and had served as a director since 2005. He was recently elected a fellow of the Harvard Corporation, a governing board of the university.

Google Search Terms Can Predict Stock Market, Study Finds

The terms people search for on Google have been used to forecast how many Americans have the flu, travel plans and the price for which cars sell. Now a scientific study shows that Google search can be used to predict the stock market.

Using Google Trends, a service that shows the popularity of search terms, researchers from Warwick Business School in England and Boston University’s department of physics found that the type of terms people search Google for on a given week can predict whether the Dow Jones industrial average will rise or fall the following week.

The study, titled “Quantifying Trading Behavior in Financial Markets Using Google Trends,” was published Thursday in Nature’s Scientific Reports.

The researchers tracked 98 search terms from Google Trends between 2004 and 2011. These included investment-related words, like debt, stocks, portfolio, unemployment and markets, and non-investment terms, including lifestyle, arts, happy, war, conflict and politics.

One of the leading search terms used to predict the markets was the word “debt” â€" an increase in such searches heralded a sell-off of stocks. A decrease in searches found the market rose slightly the following week.

But the results do not take into account volatile markets where a big sell-off can force investors to abandon ship sooner than they anticipated.

And sometimes Google Trends can give scientists inaccurate information when the proper context is not applied. For example, earlier this year Google Flu Trends said it believed that nearly 11 percent of the United States population had influenza. Yet the Centers for Disease Control and Prevention put the coughing and sniffling peak at 6 percent of the population. It turns out Google didn’t anticipate how outside influences, like media coverage of the flu and the rise in discussions on social media, would affect its data and statistics.

In 2010, researchers at Indiana University-Bloomington performed a similar study and found that people’s emotions on Twitter could help predict the stock market.

Living Social Hack Exposes Data for 50 Million Customers

Living Social told employees Friday that it had been breached, and that data for 50 million users might have been accessed.

In a memo to employees, the company, based in Washington, said online criminals had accessed usernames, e-mail addresses and dates of births for some users and encrypted passwords for some 50 million people. The company’s databases that store user and merchant credit card and banking information were not compromised in the attack, it said.

“We recently experienced a cyberattack on our computer systems that resulted in unauthorized access to some customer data from our servers,” the company told employees. “We are actively working with law enforcement to investigate this issue.”

Andrew Weinstein, a spokesman for Living Social, confirmed that the attack might have compromised 50 million of its users, and said the company was resetting passwords and would be alerting customers by e-mail. Mr. Weinstein said it would get in touch with customers in all of the countries LivingSocial operates with the exception of Thailand, Korea, Indonesia and the Phillippines, where its systems were not compromised.

The attack on Living Social is just the latest in a string of attacks on consumer Internet companies in recent months. Twitter, Facebook and Apple all stepped forward in February to say they had all been the victims of a what they described as a “sophisticated attack.” Evernote, the online notetaking app, said last month that it had reset passwords for 50 million users after it was compromised by hackers.

Living Social did say it “hashed” passwords â€" which involves mashing up users’ passwords with a mathematical algorithm â€" and “salted” them, meaning it appended random digits to the end of each hashed password to make it more difficult, but not impossible, for hackers to crack. Once cracked, passwords can be valuable on auctionlike black market sites where a single password can fetch $20.

What Is Different About This Explosion?

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Do you notice anything peculiar about the explosion that destroys this Honda Civic?

Watch this very brief video clip of a Honda Civic hatchback being destroyed by an explosion from within. Does something seem odd about the blast? (No, the answer is not that the skin of the passenger-side door almost destroyed my camera.)

In a moment, we’ll provide a clue, and then the real answer.

First, the background. Last week the staff and students in the United States military’s Advanced Improvised Explosive Device Disposal course participated in a bomb-disposal drill at Northwest Florida Regional Airport, on the Florida Panhandle. An account of the drill, held just days after the terrorist attack at the Boston Marathon, appeared in The New York Times on Friday.

A soldier inspected a car after a detonation.Michael Spooneybarger for The New York Times A soldier inspected a car after a detonation.

That drill brought together military and civilian law enforcement and safety organizations - an explicit acknowledgment that in the fight to thwart makeshift bombs, the public is best served when knowledge, skills and equipment are pooled. And it is a irrefutable, if sad, fact that there is no pool of experience like the military’s veterans of explosive ordnance disposal teams in Afghanistan and Iraq, two countries where improvised bombs became the primary causes of wounds to service members, and where the bombs have been used extensively against civilians.

Almost all of the Advanced Improvised Explosive Device Disposal course, which is part of the United States Navy’s school for explosive ordnance disposal technicians, takes place in classrooms and training ranges on Eglin Air Force Base. The video at the top of this post was filmed at one of those ranges last week.

Look at the video again. Here’s the clue: Do you notice what is missing? Watch closely, because once you notice what is not present, the game is given away.

What is missing is the flame. Clearly there is a sizable blast originating somewhere near the back seat. But there is no flash and no fire. The car is blown open by pressure.

So what is happening? This explosion was a demonstration of what bomb-disposal technicians call a disrupter charge - an explosive encased within another substance. The purpose of such charges is to instantly separate the components of a bomb without causing the bomb’s main charge to explode.

There are many forms of disrupter charges, including off-the-shelf products like the BootBanger, an explosive paired to narrow drums of water, which can be placed under the trunk of a parked car, and will project the water and force upward when the charge is detonated.

One of the ideas behind such charges is that they can minimize property damage around a suspected car bomb. A comparatively small disrupter charge will destroy the suspected vehicle, but its effects on the surrounding area will be far less than if a car bomb were to explode.

In the case of the video above, the explosion was caused by a recently fielded form of disrupter charge known as a VMODS, the military’s acronym for Vehicle Modular Overpressure Disrupter System. A photograph of one of the modules is below.

A Vehicle Modular Overpressure Disrupter System.C.J. Chivers/The New York Times A Vehicle Modular Overpressure Disrupter System.

The VMODS does not rely on water. It is a multidirectional charge of plastic explosive encased in a squat plastic cylinder of ABC fire-extinguisher powder. The modules can be fitted together, so that a disposal team can select the size of the blast they seek, depending on the size and composition of the area or the vehicle the technicians hope to disrupt. In this case, three modules were fitted together, for a total of a little less than two pounds of net explosive weight.

For the purposes of this demonstration, the charge was emplaced by a Marine technician, Gunnery Sergeant Pierre Anthony. But the VMODS was designed to be carried and emplaced by a Talon robot, which can shatter a car window with its robotic arm, then drop the charge into place. The VMODS is then detonated remotely, by an operator at a safe distance back.

Back to the quiz. On Thursday, I posted this video on my personal blog, and asked readers if they could spot what was peculiar about the explosion. In-house, one editor guessed it right - Greg Winter of the Foreign desk. And outside The Times, Matt Egleston, a reader, tweeted the correct answer, too. “No flame/fire?” he wrote.

That’s exactly right, and by design - an explosive tool that can provide a safer and lighter touch when faced with one of the most treacherous problems presented by terrorism and unconventional war.

An Uncertain Lure for Samsung’s Digital Store

With the release of Samsung’s Galaxy S4 smartphone this weekend, the company will open a digital store that offers music, video, games and books.

But even though Samsung is the biggest seller of phones in the world, it’s far from certain that its store will pose a serious challenge to those run by Apple, Amazon and Google.

Inside the store, called Samsung Hub, customers will be able to flip through content in a magazinelike format. For music, for example, users can find and download songs and upload their own music library to an online locker, where Samsung will scan and match the library with songs in its own catalog so users do not have to repurchase them. (That’s similar to Apple’s matching service, iTunes Match.)

Although Samsung has found success selling devices and accessories, it has little experience in e-commerce, and technology reviewers have said it is especially weak in designing software. It’s uncertain whether people will feel confident about buying digital content through a Samsung store.

“They are less strong than Apple or Google when it comes to content, media, applications, getting developers to write applications,” said Charles Golvin, a mobile analyst at Forrester Research.

Mr. Golvin said that Samsung was at a disadvantage because it was opening its store long after the competition. And its top rivals have particular strengths: Apple’s iTunes Store is extremely successful with music, Amazon dominates the e-book business and Google Play has become a vibrant destination for downloading Android apps.

Consumers make investments of time and money in ecosystems that make it harder for them to leave a company’s products, Mr. Golvin said. For example, people who bought a lot of books from Amazon for a Kindle device will be unlikely to want to buy e-books elsewhere.

“If you’re a glass-half-full person, it’s loyalty, and if you’re a glass-half-empty person, it’s lock-in,” Mr. Golvin said. “In order to secure the greatest possible loyalty or lock-in, you need all of those components working in your favor.”

Samsung’s relationship with Google in particular is growing more complicated by the day, Mr. Golvin said.

“Google is to some extent reliant on Samsung as the dominant seller of Android phones,” he said. “At the same time, Samsung is reliant on Google for the larger Android ecosystem, people building Android apps and delivering them through Play.”

Samsung Hub will be a direct competitor to Google Play. Mr. Golvin said either company’s next move could be equally competitive.  Samsung could strike out on its own, using a platform called Tizen instead of Android. Or Motorola, owned by Google, could make Android phones that rival Samsung’s.

‘Open’ Season in High Tech

Things must be getting really competitive in high technology. So many big competitive companies are striving to show how good they are at sharing.

In particular, they share the word “open.” In the world of cloud computing, we now have OpenFlow switching specification; the OpenStack cloud platform; Open Compute, dedicated to efficient computing infrastructure; the Open Virtualization Alliance, to create software that makes one computer server do the work of many; and OpenDaylight, to generate similar magic on computer networks.

For good measure, there is also the Open Grid Forum, which works on large-scale corporate and scientific computing, and the Open Cloud Consortium, which backs cloud computing for scientific and medical research.

That pattern you may have noticed in the names is no accident. By calling your group “open” in tech, you intimate that you believe in the free sharing of information to create superior products. It evokes the open source spirit that made the Linux operating system, as well as less-known Internet standards like the Apache Web server, so successful.

Just as important, for public relations purposes, it suggests that companies not in the group should be suspect, as they do not support that sharing, let-everything-be-free sensibility. If they are not outwardly open, they must be closed.

That is a useful message for a big incumbent player trying to combat an upstart that is threatening the incumbent’s business. Hewlett-Packard, Cisco Systems and Brocade, which for years made proprietary network switches, supported a recent meeting of OpenFlow. H.P. is also in the Open Virtualization, OpenStack and OpenDaylight groups. Cisco is also in OpenDaylight and the Open Cloud Consortium, while Intel is on the board of Open Compute and belongs to Open Virtualization and OpenDaylight.

There are many other such corporate affiliations throughout these groups. Among these many interests, it should be noted, the Open Cloud Initiative does not accept corporate sponsorship.

It may be, of course, that despite running large legal departments that vigilantly look after their company’s intellectual property, these multibillion-dollar companies have bought into the philosophy of open source â€" that all software should be free. If so, the shareholders should probably be told.

Or, more pragmatically, it may be that the big businesses’ products and services are threatened by new software-driven companies. In that case, it makes sense to donate some of the less valuable parts, collaborate together and try to swarm the upstarts with something better.

The fact that Amazon.com, the leader in public clouds, is not in any of the “open” cloud organizations points at who the real competition is. Likewise, VMware, which significantly lowered the value of an individual server by pioneering virtualization, does not belong to Open Virtualization.

The pragmatic reading â€" that the incumbents are motivated by expedience more than a desire to share â€" is perfectly fine. It is business, leveraging as many people as possible in an open source project to undermine what the competition is doing.

But it would be O.K. if they were open about that, too.

The Tale of the Tsarnaev Brothers’ Carjacking Victim

The Boston Globe published a harrowing interview with the man whose vehicle the Tsarnaev brothers commandeered on the night they were trying to flee the police.

It is the most extensive version of events yet of how the brothers forced their way into the Mercedes-Benz of the man, who The Globe’s reporter on the story, Eric Moskowitz, identifies as a 26-year old Chinese entrepreneur nicknamed Danny, and it provides a gripping narrative of the 90 minutes that he spent driving the brothers through neighborhoods just before the night ended in a shootout between the brothers and the police.

In the article, Danny describes how he was essentially at the wheel of his own kidnapping for a good part of the time; of how he controlled his fear during the “many moments in their mental chess match” and ultimately how he executed his own escape from the brothers.

The story of that night unfolds like a Tarantino movie, bursts of harrowing action laced with dark humor and dialogue absurd for its ordinariness, reminders of just how young the men in the car were. Girls, credit limits for students, the marvels of the Mercedes-Benz ML 350 and the iPhone­ 5, whether anyone still listens to CDs â€" all were discussed by the two 26-year-olds and the 19-year-old driving around on a Thursday night.

Danny described 90 harrowing minutes, first with the younger brother following in a second car, then with both brothers in the Mercedes, where they openly discussed driving to New York, though Danny could not make out if they were planning another attack. Throughout the ordeal, he did as they asked while silently analyzing every threatened command, every overheard snatch of dialogue for clues about where and when they might kill him.

A New Hampshire television station, WMUR-TV, also interviewed the man and published his story, earlier this week.

But The Globe’s interview goes into more detail, like the use by the police of Danny’s iPhone to track the car after he had escaped, and Tamerlan Tsarnaev’s use of an English-to-Chinese language translation app to intercept messages to Danny from a friend wondering where he was.

There were also poignant moments of insight into the state of mind of a captive contemplating that his death might come at any moment:

“Death is so close to me,” Danny recalled thinking. His life had until that moment seemed ascendant, from a province in Central China to graduate school at Northeastern University to a Kendall Square start-up.

“I don’t want to die,” he thought. “I have a lot of dreams that haven’t come true yet.”

Mr. Moskowitz, The Globe reporter, spoke to CNN about the story and described him as having “the perfect combination of innocence and poise and calm.”

Today’s Scuttlebot: Start-Up Hoax and Zynga Shuffle

The technology reporters and editors of The New York Times scour the Web for important and peculiar items. For Thursday, selections include a satirical look at Twitter's credibility, a man who says he faked a story about his start-up because publicity is so hard to get, and how we care about cute robots, verified with brain scans.

Yahoo’s Chairman Steps Down

Yahoo Chairman Fred Amoroso Resigns

(Reuters) - Yahoo Inc Chairman Fred Amoroso is resigning effective immediately, the struggling Internet company announced on Thursday.


Amoroso will be replaced in the chairman role by director Maynard Webb Jr. on an interim basis until the company's annual shareholder meeting on June 25.

Amoroso, a former IBM Corp executive, will remain on the board of directors until the meeting, Yahoo said.

In a statement on Thursday, Amoroso said he had informed the Yahoo board when he became chairman in May 2012 that he intended to serve only one year "in order to help Yahoo during a critical time of transformation."

Since that time, he noted that the company has hired former Google executive Marissa Mayer as its chief executive, revamped its management team and released new products.

Shares of Yahoo, which have surged roughly 60 percent since Mayer became CEO, were down 8 cents to $25.12 in afterhours trading on Thursday.

Yahoo, once one of the Web's most successful companies, has seen its revenue stall in recent years as consumers and advertisers favor rivals such as Google Inc and Facebook Inc.

Following the completion of Amoroso's term at the annual meeting, the Yahoo board will consist of 10 members, the company said.

(Reporting by Alexei Oreskovic; Editing by Phil Berlowitz)