Thursday, January 31, 2013

Facebook stock avoids steep drop as Street rethinks results

(Reuters) - Shares of Facebook Inc recovered from an 8 percent slide on Thursday, finishing the regular session down less than 1 percent, as Wall Street's initial alarm over mobile revenue results and spending plans subsided.

Facebook said on Wednesday that fourth-quarter mobile advertising revenue doubled from the third quarter, but the results failed to live up to some investors' high expectations. Chief Executive Mark Zuckerberg's comments about boosting spending in the coming year signaled that profit margins will be under pressure, adding to concerns.

'The initial fast money said earnings are going down, numbers are coming down, the stock is going to get hit,' said Macquarie Research analyst Ben Schachter.

'But the more people thought about it throughout the day, the momentum changed and longer-term investors won out, saying these are investments we think they should be making,' he said.

Facebook has long established itself as one of the most popular websites with more than a billion users, but investors have worried that until the company's mobile advertising strategy takes off, revenue growth will remain shaky.

Three brokerages downgraded the stock, but most analysts said investor expectations were too high and Facebook's mobile advertising business was a good long-term bet.

Pivotal Research Group analyst Brian Wieser upgraded Facebook to a 'buy' rating on Thursday, calling Wall Street's reaction to the results 'downright dazed.'

The stock market incorrectly interpreted Facebook's 'mobile revenue figures as a negative when in fact they are part of a story that we can see as qualitatively more favorable,' Wieser said.

Shares of the company finished regular trading on Thursday down 0.8 percent at $30.98 on the Nasdaq. Earlier in the session, the stock fell as low as $28.74. Facebook stock has lost more than a quarter of its value since its botched debut in May.

The company reported a better-than-expected fourth-quarter profit on Wednesday and said mobile advertising revenue doubled to $306 million, suggesting it was making inroads into handheld devices such as smartphones and tablets.

Investors were looking for at least $350 million in mobile advertising revenue, Piper Jaffray analyst Gene Munster said in a note to clients.

'While the trajectory of mobile growth may not be as steep as some investors were hoping, the theme of mobile as the future of Facebook remains intact,' Munster said.

BMO Capital Markets analyst Daniel Salmon, however, said Facebook's 2013 stock performance would not be dictated by its ability to generate mobile ad dollars. He downgraded the stock on Thursday to 'market perform' from 'outperform.'

Salmon said new catalysts were necessary to drive Facebook's stock price up.

(Reporting by Neha Alawadhi and Sayantani Ghosh in Bangalore and Alexei Oreskovic in San Francisco; editing by Saumyadeb Chakrabarty and Matthew Lewis)

Users increasingly use Internet to buy drugs: EU report

BRUSSELS (Reuters) - Virtually any kind of illegal drug can be bought on the Internet and delivered by post to users who no longer need to make direct contact with dealers, an EU study published on Thursday said.

It gave no statistics on online drug sales, which are normally conducted on so-called 'darknets', or anonymous computer networks.

The report, compiled by the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) and Europol, the pan-European police agency, said increased globalization and communication technology made it harder to track drug routes.

'Practically any type of drug can be bought on the Internet,' Europol director Rob Wainwright told a briefing. 'The consumers may feel that it is 'cleaner' to buy drugs without any direct contact with the drug dealer.'

These drugs are being moved through legitimate forms of commercial transportation - containers, aircraft and postal services, all making the drugs harder to intercept.

EMCDDA director Wolfgang Goetz said drug users' behavior was also changing.

'Patterns of drug use have become more fluid, with consumers often using multiple substances or substituting one drug for another,' Goetz said.

NORTHWEST EUROPE A MAJOR CONCERN

Europol's Wainwright said drug trafficking was the main activity of organized crime groups, providing funding for other criminal activity.

The report pinpointed northwest Europe -- Britain, the Netherlands, Belgium and northern France -- as an area where organized crime is high, partly because of its many transport hubs, and Wainwright said the region's status as a final destination for cocaine and heroin, as well as people trafficking and illegal immigration, made it a major concern.

The report recommended that the European Union work to target high-value crime groups, develop intelligence on the geographic relocation of potential criminals, interrupt money flows and create barriers to drug sales on the Internet.

EU Home Affairs Commissioner Cecilia Malmstrom said ministers from the 27 member states would study the report for possible policy changes and action across the European Union.

'We need to keep pace with these new developments and adapt our policies and responses to this reality,' Malmstrom said. 'National measures, however robust, will simply not be sufficient if implemented in isolation.'

The European Union is an increasingly important producer of synthetic drugs and cannabis, with mobile production units making it easy for synthetic drugs to be concealed during manufacturing.

'As with synthetic drugs, there has been a trend towards producing the drug near to its intended consumers,' Goetz said. 'This will be a growing trend in the future.'

The report estimated 2,500 metric tons (2,755.8 tons) of cannabis are consumed each year in the European Union and Norway, with a retail value of 18-30 billion euros.

Malmstrom said no European-wide legalization of cannabis is on the Commission's agenda.

(Editing by Stephen Powell)

Online bingo shows its worth at Rank

LONDON (Reuters) - It may lack the noisy camaraderie of a trip to the bingo hall, but the online version of the numbers game has proved more profitable for Britain's Rank Group than the original.

The merits of the online business were further emphasized when Rank said a snowy January had cost it 3 million pounds ($4.7 million) in revenue as Britons opted not to venture out to its bingo halls and casinos.

Operating profit from online bingo was 11.4 million pounds, just beating the 11.1 million earned from the venues themselves.

The company, majority owned by Malaysia's Guoco, reported a 4 percent decline in pretax profit to 31.3 million pounds in the six months to December, with its loss-making Blue Square betting business proving a drag.

Many parts of Britain have seen heavy snow over the last two weeks and there are fears that the bad weather will hit economic activity and push the country back into recession.

Pub groups Enterprise Inns and Mitchell & Butlers both said the recent cold snap had hit sales.

'Allowing for the slow start to the second half we remain confident in our prospects for the remainder of the year and in our longer-term growth strategy,' Rank Chief Executive Ian Burke said.

Rank's main activities are in Britain where it runs 35 Grosvenor Casinos and more than 100 Mecca bingo clubs.

Profits growth in its online bingo business mirrors that in the gambling industry as a whole where online betting is the fastest growing part of the market, helped by the popularity of smart phones and tablets.

However, Rank has said it is reviewing the future of its own struggling online betting business Blue Square, a relative minnow in a crowded sector.

'We felt the losses were not losses we could continue to sustain,' said Burke.

Blue Square reported an operating loss of 4.8 million pounds in the six months and Rank has now cut its spending on marketing the business.

'There were 11 or 12 competitors advertising and that spending just wasn't cutting through,' said Burke.

He declined to comment further on the future of the business pending completion of the review.

Rank is awaiting regulatory clearance for a planned 205 million pound deal to buy the casino business of Gala Coral.

A preliminary report by the Competition Commission said Rank could have to sell six casinos to get the deal approved.

($1 = 0.6332 British pounds)

(Editing by Louise Ireland and Brenda Goh)

Wednesday, January 30, 2013

Rape trial of teenaged football players to be open to public: Ohio judge

(Reuters) - The controversial trial of two high school football players accused of raping a classmate will remain open to the public and will not be relocated to another town, an Ohio judge ruled on Wednesday.

Prosecutors and an attorney representing the accuser had sought a closed trial, arguing that public access to the juvenile trial would subject the accuser to unwanted publicity and make potential witnesses reluctant to testify.

Visiting Hamilton County Judge Tom Lipps said the presence of the media would prevent inaccurate reporting and enhance public confidence in the juvenile justice system, according to his written ruling, a copy of which was seen by Reuters.

'An open hearing is especially valuable where rumors, mischaracterizations and opinions unsupported by facts have reportedly been repeated in social media postings and other published outlets,' Lipps wrote. 'An open hearing will diminish the influence of such postings and publications.'

Prosecutors have accused Ma'Lik Richmond and Trent Mays, both 16, of raping a classmate at a party attended by many teammates last August in Steubenville, a close-knit city of 19,000 near the Pennsylvania border.

The case attracted national attention after the hacker activist group Anonymous publicized a picture of two young men carrying a girl by her wrists and ankles and released a video showing other young men joking about the alleged assault.

Richmond's lawyer, Walter Madison, said previously on CNN that his client was one of the young men in the photograph - which he said was taken out of context - but does not appear in the video. A lawyer for Mays has not publicly commented on the postings.

Community leaders have accused authorities of protecting the school's popular football program by not charging more players who could have prevented the alleged attack.

Lipps also ruled on Wednesday that the trial will remain in Steubenville. He set a trial date for March 13.

Reuters generally does not identify people who say they have been victims of sex crimes.

(Editing by Paul Thomasch, Bernard Orr)

Dr. Phil says Manti Te'o hoaxer admits to love for linebacker

LOS ANGELES (Reuters) - A California man who has admitted to fabricating Notre Dame linebacker Manti Te'o's fake girlfriend in an elaborate hoax told talk show host Phil McGraw he felt a deep romantic love for the football player, McGraw said on Wednesday.

'Here we have a young man that fell deeply, romantically in love,' McGraw told the television morning show 'Today' to discuss his two part interview with Ronaiah Tuiasosopo, which will air on 'Dr. Phil' on Thursday and Friday.

'I asked him straight up, 'Was this a romantic relationship with you?,' and he says yes. I said, 'Are you then therefore gay?' And he said, 'When you put it that way, yes.' And then he caught himself and said, 'I am confused,'' McGraw told 'Today.'

Te'o has said in a previous media interview he is not gay.

The fake girlfriend hoax involving Te'o, who was a finalist for college football's highest individual honor the Heisman trophy, caused a sensation when it was revealed earlier this month on news website Deadspin.com.

Tuiasosopo says he played the part over the phone of Lennay Kekua, the fictitious woman who was Te'o's girlfriend in the hoax. Te'o, 22, had spoken about the woman in media interviews, and reports described her surviving a car accident and then dying of leukemia in September.

Te'o has said since the hoax was exposed that he was the victim of an elaborate prank, that he never met Kekua and that his acquaintance Tuiasosopo admitted to him that he was the one who played the part of Lennay.

Dr. Phil said in a segment on 'Today' on Wednesday that after an extensive interview with Tuiasosopo, he believes Te'o had no role in creating the hoax.

'Absolutely, unequivocally, no,' McGraw said, in pinning the blame for the scheme on Tuiasosopo.

The NBC morning program also showed some comments Tuiasosopo made in his interview for the 'Dr. Phil' daytime program.

'There are many times where Manti and Lennay had broken up,' Tuiasosopo told 'Dr. Phil.'

'But something would bring them back together, whether it was something going on in his life or in Lennay's life, in this case in my life,' Tuiasosopo said.

Tuiasosopo, 22, is from southern California and played high school football in 2005 at Antelope Valley High north of Los Angeles, according to media reports. Tuaisosopo's attorney had previously told reporters his client was behind the hoax.

Before the hoax was exposed, a photo of a woman who was described as Lennay Kekua was presented in media reports about Te'o and his struggles to overcome her death and that of his grandmother, who actually did pass away.

But the photo of Kekua was taken from a Facebook profile of a California woman who said she was unaware of the scheme, according to Deadspin.com.

Te'o told Katie Couric in a broadcast of her show 'Katie' last week that he received a telephone call from the person claiming to be Kekua on December 6 - two days before the Heisman presentation. But he said he was not really certain she never existed until Tuiasosopo's later confession to him.

The linebacker, during the Katie Couric interview, presented a voice mail he received from the person he said he thought was Kekua. 'Doesn't that sound like a girl?' Te'o told Couric.

Te'o also told Couric he is not gay. 'No, far from it,' he said.

(Reporting by Alex Dobuzinskis; Editing by Cynthia Johnston and Andrew Hay)

Yandex puts mobile app blocked by Facebook on hold

MOSCOW (Reuters) - Russian internet company Yandex has put an experimental application that allows users to search social networking sites from mobile devices on hold after it was blocked by Facebook.

Facebook, which launched its own search tool earlier this month, blocked the Wonder app three hours after its launch on January 24 for U.S. users.

The application allows users to look for recommendations on, for example, music or restaurants based on information from their friends on social network sites.

Facebook believes Wonder violates its policies, which state that no data obtained from Facebook can be used in any search engine without the company's written permission, Yandex said on Wednesday, adding access to Facebook would not be restored.

'Since this access was revoked, we decided to put our application on hold for the time being,' the Russian firm said, adding it would consider partnership with other social networks and services.

Existing Wonder users are still able to search in Instagram, Foursquare and Twitter, a Yandex spokeswoman said, but marketing and further development of the application is on hold.

(Reporting by Maria Kiselyova; Editing by Mark Potter)

California police probe stunts that shut down freeways

LOS ANGELES (Reuters) - The California Highway Patrol is investigating two apparently unrelated stunts that jammed freeways over the weekend, including one involving hundreds of motorcyclists celebrating a marriage proposal that inconvenienced motorists east of Los Angeles.

Both events created a flurry of viral Internet videos, fueling concerns about a repeat performance by copycats.

On Interstate 10 east of Los Angeles on Sunday, up to 300 bikers stopped traffic so that one of them could propose to his girlfriend, said Officer Vince Ramirez, a Los Angeles-area spokesman for the California Highway Patrol.

Video that surfaced online of the stunt showed some bikers creating a wall of smoke by spinning their tires against the concrete. In the middle of the gathering, pink smoke could be seen wafting into the air.

As they exited the freeway, several bikers were later ticketed for reckless riding unrelated to their possible role in the freeway shutdown, Ramirez said.

He said officers were working with the Los Angeles County District Attorney's office to prepare additional charges against some of the bikers.

The stunt did not cause any injuries or collisions, he said.

In Oakland on Saturday, traffic ground to a halt on Interstate 880 near the city's sports coliseum, as several sports cars did doughnuts, spinning around and filling the air with tire smoke, officials said. Stunned motorists exited their cars and watched.

Several motorists caught in the sudden traffic jam were frightened or angry, according to recordings of calls to authorities released on Tuesday.

'I can't believe this - I have three kids in the car,' one caller told an Oakland-area dispatcher. 'It scares the hell out of me.'

Authorities have not found or identified any of the drivers, said California Highway Patrol Sergeant Diana McDermott.

California Highway Patrol officers said they feared the weekend events' popularity on social media websites could start a dangerous trend. So far, such stunts have been rare, they said.

'That's why the investigation is expanding,' Ramirez said.

'If there are any criminal charges that can be filed as a result of this incident, they will be filed,' he said.

(Editing by Alex Dobuzinskis, Tom Brown and Eric Walsh)

Monday, January 28, 2013

Pentagon to boost cybersecurity force

WASHINGTON (Reuters) - The Pentagon plans to assign significantly more personnel in coming years to counter increasing threats against U.S. government computer networks and conduct offensive operations against foreign foes, a U.S. defense official said on Sunday.

The plan, which would increase both military and civilian staffing at U.S. Cyber Command, comes as the Pentagon moves toward elevating the new command and putting it on the same level as the major combatant commands.

The official said no formal decisions had been made on the expanding staffing levels or changing Cyber Command into a 'unified' command like U.S. Strategic Command, which currently oversees cyber command and the U.S. nuclear weapons arsenal.

Any changes to the combatant command structure would be made based on strategic and operational needs, and take into account the need for efficient use of taxpayer dollars, said the official, who was not authorized to speak publicly.

The Pentagon was working closely with U.S. Cyber Command and the major military commands to develop 'the optimum force structure for successfully operating in cyberspace,' the official said.

The Washington Post, quoting senior defense officials, reported late Sunday that the Pentagon had decided to expand Cyber Command's current staffing level of 900 to 4,900 in coming years.

The official confirmed that Cyber Command planned to expand its force significantly, but said the specific numbers cited by the Post were 'pre-decisional.'

The newspaper said senior Pentagon officials had agreed to increase the force late last year amid a string of attacks, including one that wiped out more than 30,000 computers at a Saudi Arabian state oil company. it said

The plan calls for creating three types of force under the Cyber Command, said the defense official.

'National mission forces,' would protect computer systems that undergird electrical grids and other kinds of infrastructure. 'Combat mission forces,' would help commanders abroad execute attacks or other offensive operations, while 'cyber protection forces,' would focus on protecting the Defense Department's own systems.

Details were still being worked out, the official said.

(Reporting by Sarah Lynch and Andrea Shalal-Esa; Editing by David Brunnstrom)

Sunday, January 27, 2013

Twitter launches advertising services in Middle East

DUBAI (Reuters) - Twitter Inc launched advertising services in the Middle East and North Africa on Sunday as the social media firm seeks to exploit a tripling of its regional subscriber base following its widespread use during the Arab Spring protests.

Digital advertising is relatively undeveloped in the region, accounting for an estimated 4 percent of its total advertising spending, but a young, tech-savvy population and rising Internet penetration points to significant potential for growth.

'The two are interconnected - the rapid growth of our user base with the timing of why we want to help brands connect with that audience,' said Shailesh Rao, Twitter vice-president for international operations.

Twitter does not provide a regional breakdown of its more than 200 million users worldwide, but Rao said its MENA subscriber base had tripled in the past 12 months.

The company has recruited Egypt's Connect Ads, which is ultimately owned by Cairo-listed Orascom Telecom Media and Technology, to launch advertising initially in Egypt, Saudi Arabia, Pakistan, Kuwait and the United Arab Emirates.

Pepsi and Saudi telecom operator Etihad Etisalat (Mobily) are among its confirmed clients, the company said.

Twitter says the products it promotes typically have an audience response rate of 1 to 3 percent, significantly higher than traditional advertising rate of 0.1 to 0.5 percent.

'Social media advertising is totally different because it relies on what people say. It's about two-way, not one-way, communication,' said Mohamed El Mehairy, Connect Ads managing director.

(editing by Jane Baird)

Hackers claim attack on Justice Department website

WASHINGTON (Reuters) - Hackers sympathetic to the late computer prodigy Aaron Swartz claimed on Saturday to have infiltrated the website of the U.S. Justice Department's Sentencing Commission, and said they planned to release government data.

The Sentencing Commission site, www.ussc.gov , was shut down early Saturday.

Identifying themselves as Anonymous, a loosely organized group of unknown provenance associated with a range of recent online actions, the hackers voiced outrage over Swartz' suicide on January 11.

In a video posted online, the hackers criticized the government's prosecution of Swartz, who had been facing trial on charges that he used the Massachusetts Institute of Technology's computer networks to steal more than 4 million articles from JSTOR, an online archive and journal distribution service.

Swartz had faced a maximum sentence of 31 years in prison and fines of up to $1 million.

The FBI is investigating the attack, according to Richard McFeely, of the bureau's Criminal, Cyber, Response, and Services Branch.

'We were aware as soon as it happened and are handling it as a criminal investigation,' McFeely said in an emailed statement. 'We are always concerned when someone illegally accesses another person's or government agency's network.'

(Reporting by Deborah Zabarenko; Editing by Vicki Allen)



This article is sponsored by real estate news.

Friday, January 25, 2013

Yandex says new mobile app is blocked by Facebook

MOSCOW (Reuters) - Russian internet company Yandex said on Friday its new experimental application to search on social networking sites from mobile devices was blocked by Facebook.

The Wonder app is a recommendation tool for devices using Apple's iOS software that allows U.S. users of social networks to retrieve information from these sites by voice or by typing questions.

The application was released late on Thursday for users of Facebook, Instagram, Foursquare and Twitter but was blocked by Facebook three hours after the launch, a Yandex spokesman said.

He added that talks between Yandex and Facebook, aimed to establish the reason of the issue and resolve it, were to begin within hours. He gave no reason for the problem.

Facebook was not available for comment.

With the new app, Yandex wants to test the opportunities offered by social networks. If successful, the company will consider offering it to users in Russia and Turkey, he said.

Shares in Yandex, Russia's most popular search engine, gained 0.8 percent in early trade on Friday.

(Reporting by Maria Kiselyova; Editing by Mike Nesbit)

Al Shabaab says enemies closed its Twitter account

MOGADISHU (Reuters) - Al Shabaab on Friday said its Christian enemies had closed its Twitter account, which the Somali militant group used to parade hostages, mock rivals and claim responsibility for bombings and assassinations.

The group's official Twitter account, which has thousands of followers, was offline on Friday with a message saying 'Sorry, that user is suspended'.

It was not immediately clear why the account, which was created in 2011 under the HSM PRESS Twitter handle, was suspended. The account was still unavailable as of 1233 GMT.

On Wednesday the al Qaeda-aligned rebels used the social media site to threaten to kill several Kenyan hostages and on January 17 announced the execution of a captive French agent after a French commando mission to rescue him failed.

'The enemies have shut down our Twitter account,' al Shabaab's most senior media officer, who refused to be named, told Reuters.

'They shut it down because our account overpowered all the Christians' mass media and they could not tolerate the grief and the failure of the Christians we always displayed (online).'

Al Shabaab wants to impose their strict version of sharia, or Islamic law, across Somalia. However, it has lost significant territory in the southern and central parts of the country in the face of an offensive by African Union troops.

Twitter said it does not comment on individual accounts and the Kenyan government denied it had filed any request for the account to be taken down.

'It's an emphatic no. We would not try to negotiate or have anything to do with the Al Shabaab. We didn't even know the account was suspended,' said government spokesman Muthui Kariuki.

Al Shabaab posted on the account on Wednesday a link to a video of two Kenyan civil servants held hostage in Somalia, telling the Kenyan government their lives were in danger unless it released all Muslims held on 'so-called terrorism charges' in the country.

'Kenyan government has three weeks, starting midnight 24/01/2013 to respond to the demands of HSM if the prisoners are to remain alive,' the group said.

Despite the closure of the Twitter account, al Shabaab said it would continue to 'display the loss and grief of Christians no matter what means we use,' al Shabaab's spokesman said.

Thursday, January 24, 2013

Notre Dame's Te'o says had no part in forming hoax

Jan 24 (Reuters) - Notre Dame football player Manti Te'o said he was the victim of an elaborate online hoax and denied in an interview broadcast on Thursday having had any part in the construction of the dramatic story of his dying girlfriend.

'No, I did not,' Te'o said in the interview with Katie Couric broadcast on the daytime talk show 'Katie.' 'I think what people don't realize is that the same day that everybody else found out about this situation, I found out.'

The reported deaths of Te'o's grandmother and purported girlfriend, both on Sept. 12, and his response to the tragedies, were often repeated stories during Notre Dame's bid for a national championship last season. His grandmother did die that day.

Te'o, who was a finalist for college football's highest individual honor for helping drive Notre Dame to an undefeated regular season, admitted he maintained the public deception after he learned the truth that she had never existed, but he did not do so for personal gain.

Couric asked Te'o to respond to several theories people have raised since the hoax was revealed, including that he might be gay and created the relationship to hide his sexual orientation.

'No, far from it,' Te'o said when asked by Couric if he were gay. 'Far from that.'

Te'o sat with his hands often clasped and responded in a soft tone to Couric's questions, telling her he did not know if the Lennay Kekua story had supported his Heisman trophy candidacy.

It was his first on-camera interview since sports blog Deadspin.com broke the story on Jan. 16 that Kekua did not exist. Couric also interviewed his parents, Brian and Ottilia Te'o, who defended their son.

Notre Dame, one of the most powerful institutions in U.S. collegiate athletics, held a news conference within hours of the Deadspin.com story to say that Te'o had been duped.

Te'o had told sports network ESPN in an off-camera interview on Friday that an acquaintance, Ronaiah Tuiasosopo, had told him he was behind the hoax.

CONFESSED HOAX

Te'o said in the interview with Couric that Tuiasosopo, who he had spoken to twice before and had believed was Kekua's cousin, confessed the hoax to him on Jan. 16.

Te'o said he received a telephone call from the person claiming to be Kekua on Dec. 6 - two days before the Heisman presentation - and he wasn't really certain she never existed until Tuiasosopo's confession to him.

'My whole reality was she was dead, and now all of the sudden she's alive. At that time I didn't know that it was just somebody's prank.'

He went along with the Kekua story the day of the Heisman presentation, though he knew at a minimum that she was alive, and did not tell his parents until Christmas, he said.

'Part of me was saying that if you say she is alive what would everybody think? What are you going to tell everybody who follows you, who you inspire? What are you going to say? At that time, on Dec. 8, two days after I just found out she was alive, as a 21-year-old, I wasn't ready for that.'

Te'o said he 'wasn't forthcoming' about the extent of his relationship with Kekua, that they had never met in person, but reporters did not ask him directly if they had met in person.

He said he was most sorry for having told his father he had seen Kekua in person when he was in Hawaii, a story that his father repeated to media when asked.

When asked why he wouldn't simply want a girlfriend he could spend time with on campus, Te'o said he was drawn to Kekua because her background appeared similar to his own.

'What I went through was real,' Te'o said. 'The feelings, the pain, the sorrow, that was all real. That is something I can't fake.'

Te'o said he did not know how the hoax would affect his position in the National Football League draft.

'As far as my draft status, I hope and pray that good happens obviously, but as long as my family is OK, I can live with whatever happens,' he said. (Reporting by David Bailey; Editing by Cynthia Johnston and Tim Dobbyn)

U.S. researchers tracking flu through Twitter

NEW YORK (Reuters) - Researchers and computer scientists at Johns Hopkins University have devised a way to track cases of influenza across the United States using the microblogging site Twitter.

Twitter is full of tweets about the flu, which has been severe and reached epidemic proportions this year, but it has been difficult to separate tweets about the flu from actual cases.

'We wanted to separate hype about the flu from messages from people who truly become ill,' said Mark Dredze, an assistant research professor in Johns Hopkins' department of computer science, who monitors public health trends by looking at tweets.

To solve the problem, Dredze and his colleagues developed a screening method based on human language-processing technologies that only delivers real-time information on actual flu cases and filters out the rest of the chatter on the public tweets in the United States.

The researchers at the Baltimore university tested the system by comparing their results with data from the U.S. Centers for Disease Control and Prevention.

'In late December,' Dredze said on Thursday, 'the news media picked up on the flu epidemic, causing a somewhat spurious rise in the rate produced by our Twitter system. But our new algorithm handles this effect much better than other systems, ignoring the spurious spike in tweets.'

The scientists, whose research was funded partly by the National Institutes of Health's Models of Infectious Disease Agent Study, have also produced maps of the United States that show the impact of the flu on each state.

Dredze said he hoped the system could be used to track the other illnesses.

(Reporting by Patricia Reaney,; Editing by Jill Serjeant and Peter Cooney)

Facebook founder to host fundraiser for New Jersey Governor Christie

(Reuters) - Facebook CEO Mark Zuckerberg and his wife, Priscilla, will host a fundraiser for New Jersey Republican Governor Chris Christie at their California home on February 13, the social networking site said on Thursday.

Zuckerberg and Christie, a potential presidential contender in 2016, have teamed up before, when the tech guru donated $100 million to the struggling public schools in Newark, New Jersey, in 2010.

'Mark and Priscilla ... admire his leadership on education reform and other issues and look forward to continuing their important work together on behalf of Newark's school children,' Facebook said in a statement.

The blunt-spoken Christie is seeking re-election in November to a second term as governor. He took office in 2010.

Right now, he doesn't seem to need much help as his approval rating skyrocketed after Superstorm Sandy hit the state last October. A Quinnipiac University poll released on Wednesday found that three-quarters of New Jersey voters approved of Christie's performance and nearly seven in 10 say he deserves to be re-elected.

New Jersey Democrats also have not rallied behind a single challenger. State Senate President Stephen Sweeney has said he is considering running, but the poll found that Christie would easily defeat Sweeney.

Christie would also trounce Barbara Buono - who has said she will run against the governor - and possible challenger Richard Codey, the poll found. Both are Democratic state senators.

(Reporting by Alexei Oreskovic in San Francisco and Hilary Russ in New York; Editing by Eric Beech)

Ohio rape trial of football players should be closed: prosecutor

(Reuters) - The trial of two Ohio high school football players charged with raping a 16-year-old girl should be closed to the public to protect the accuser in a case that has received national attention, the state's attorney general said on Thursday,

The case caused a national sensation earlier this month when the hacker activist group Anonymous publicized a picture of two young men carrying the girl by her wrists and ankles and released a video showing other young men joking about the alleged assault.

A defense attorney has also requested that the trial be closed. Both the office of Ohio Attorney General Mike DeWine and the defense have said that the accuser has also made the request.

A hearing on the motions before visiting Hamilton County Judge Tom Lipps is set for Friday in Jefferson County Common Pleas Court. In Ohio, it is easier to close juvenile hearings than adult trials.

Ma'Lik Richmond and Trent Mays, both 16, are to face trial as juveniles next month in Steubenville, a city of 19,000 near the Pennsylvania border. Prosecutors say the two members of the high school football team there had raped a classmate at a party attended by many teammates last August.

Community leaders have criticized authorities, voicing suspicion they have avoided charging more players who could have been involved in order to protect the school's beloved football program.

Reuters is not identifying the accuser because she is a purported victim of sexual assault.

In his filing last week, Richmond's lawyer, Walter Madison, said closing the trial to the public would be the only way to protect witnesses from Anonymous, which has threatened to expose private information of anyone who helps protect his client from prosecution.

Also on Thursday, students from Ohio State University delivered a petition with 70,000 signatures to DeWine's office, demanding that everyone present at the party be charged to the fullest extent of the law.

DeWine met with three of the students in his office, where they discussed the judicial process, spokesman Dan Tierney told Reuters.

Days before testifying against Richmond and Mays, at least three teammates who attended the party received commitments from prosecutors that they would not be prosecuted for any crimes, according to documents Reuters received from a source directly involved in the case.

In letters from DeWine's office addressed to each student's lawyer, the state committed to not prosecuting Evan Westlake, Anthony Craig and Mark Cole, three witnesses for the prosecution.

But DeWine has said that his office had made no deal with any of the witnesses involved in the case. The office has said the investigation is continuing, and that a lack of evidence has prevented prosecutors from bringing more charges.

(Reporting By Drew Singer; Editing by Mary Wisniewski, Greg McCune and Lisa Von Ahn)

Wednesday, January 23, 2013

Appeals court strikes down Indiana sex offender law

INDIANAPOLIS (Reuters) - An Indiana law prohibiting registered sex offenders from using social networking sites such as Facebook is too broad and violates U.S. constitutional protections for free speech, a federal appeals court panel ruled on Wednesday.

The Indiana law that banned most sex offenders from using social networking websites, instant messaging services and chat programs was 'not narrowly tailored to serve the state's interest,' the U.S. 7th Circuit Court of Appeals said.

'It broadly prohibits substantial protected speech rather than specifically targeting the evil of improper communications to minors,' the panel said, adding that Indiana had alternatives to a blanket ban including restrictions on supervised release.

Indiana Attorney General Greg Zoeller said his office would review the decision before determining its next move.

A federal judge had upheld the law after a challenge by a man who was convicted in 2000 of two counts of child exploitation and was required to register as a sex offender after his release from prison in 2003.

The American Civil Liberties Union of Indiana, which pursued the court challenge, said the state has a paramount interest in protecting children, but the law was so broad as to even prevent people from posting resumes to social media sites.

The law was 'so broad that it prevents someone convicted of an offense years, or even decades ago, from engaging in a host of innocent communication via social media,' Ken Falk, legal director of ACLU of Indiana, said in a statement.

(Reporting by Susan Guyett in Indianapolis; Editing by David Bailey and Cynthia Johnston)

Tuesday, January 22, 2013

FTC study taking aim at online marketing of booze

LOS ANGELES (Reuters) - The Federal Trade Commission (FTC) plans this summer to recommend ways that the alcoholic beverage industry can better protect underage viewers from seeing its advertisements online.

Distillers, brewers and wineries pour millions of dollars into brand promotion on Twitter, Facebook and other social media, and industry critics contend they are not doing enough to prevent young consumers from receiving these messages.

'We're doing a deep dive on how they're using the Internet and social media,' said Janet Evans, a lawyer with the FTC, which is conducting a year-long study due to be released by early summer. 'We're focusing on underage exposure.'

She would not elaborate on any potential recommendations that might come out of the study, which began in April 2012.

The FTC is reviewing data from 14 big producers, Evans said, including Beam Inc, the maker of Jim Beam, Diageo Plc, home to Johnnie Walker, and Constellation Brands Inc, which makes Robert Mondavi and Ravenswood wines.

The FTC report 'is something we take seriously and place at high priority,' said Karena Breslin, director for digital marketing at Constellation.

The FTC has made two requests for information since the study began, she said.

The regulatory agency has not said it intends to impose restrictions on liquor company social media advertising but it can make recommendations to the industry.

The FTC is empowered to file suit to ensure consumers are protected from deceptive marketing practices, Evans said, but she stressed that studies of this nature are meant to promote better self-regulation, not provide a basis for a case.

Industry executives say alcohol makers and distributors voluntarily adhere to the same industry-set standard for marketing to underage viewers on social media sites that the industry set for its ads on TV and other media. That requires that at least 71.6 percent of an audience consists of adults 21 and older.

'No one in their right mind would want to advertise to people who can't legally buy their product,' said Frank Coleman, senior vice president for Distilled Spirits Council of the United States (DISCUS), the trade group that sets the industry's advertising codes.

Coleman also cited recent data showing the audiences for Facebook and Twitter are skewed heavily towards viewers who are above the legal drinking age.

'According to Nielsen's latest data, the demographic audience for Facebook is 83.5 percent 21 years and older, and for Twitter it is 85 percent,' Coleman said.

In June 2011, DISCUS revised its code upwards to 71.6 percent from 70 percent, after the FTC recommended it review the standard to better reflect U.S. Census population data.

Industry critics, including David Jernigen, director of the Center on Alcohol Marketing and Youth at Johns Hopkins University, and Sarah Mart, research director of the advocacy group Alcohol Justice, contend the industry didn't go far enough and should raise the standard further.

Jernigen said it needs to be at least 85 percent to effectively protect youth, so there would be no more than 15 percent exposure to the underage drinking population.

'The industry says its self-regulating but it's ineffective and social media opens up a whole new set of problems because their ads are everywhere,' said Mart.

Coleman said the group now requires members to install age-checking tools via instant messaging as a gateway to Twitter feeds and other branded Web platforms that ask the user for a birth date before admitting them.

In the first nine months of 2012, beer, wine and spirits manufacturers spent an estimated $35 million for paid Web display advertising, but industry executives estimate many millions more were spent on website creation, video production for platforms like Google's YouTube and social media marketing efforts.

'We've significantly adjusted more money to digital for online video, websites, Facebook and Twitter content,' said Kevin George, global chief marketing officer for Jim Beam, which spends 30 percent of its media spend for online outlets, up from 10 percent in 2008, he said.

Many companies are expanding their digital staff. Wine maker Constellation hired Breslin three years ago to initiate digital marketing and now has a team of five reporting to her.

Many alcoholic beverage companies flocked to Facebook because it requires users to post their birth dates when signing up.

Last year Twitter partnered with Buddy Media to offer a screening tool that sends a direct message to fans who click on an alcoholic brand. The message sends the fan a link to a site that asks for date of birth.

Salesforce.com bought Buddy Media last June, which is now folding the platform into its marketing cloud portfolio.

Health advocates and industry critics are crying foul. 'Facebook and other interactive platforms are poorly monitored and not well age-protected,' said Jernigen of Johns Hopkins University. 'Anyone can say they're 21 and click yes.'

(Reporting by Susan Zeidler; Editing by Ron Grover, Alden Bentley and Phil Berlowitz)

FTC study taking aim at online marketing of booze and kids

LOS ANGELES (Reuters) - The Federal Trade Commission (FTC) plans this summer to recommend ways that the alcoholic beverage industry can better protect underage viewers from seeing its advertisements online.

Distillers, brewers and wineries pour millions of dollars into brand promotion on Twitter, Facebook and other social media, and industry critics contend they are not doing enough to prevent young consumers from receiving these messages.

'We're doing a deep dive on how they're using the Internet and social media,' said Janet Evans, a lawyer with the FTC, which is conducting a year-long study due to be released by early summer. 'We're focusing on underage exposure.'

She would not elaborate on any potential recommendations that might come out of the study, which began in April 2012.

The FTC is reviewing data from 14 big producers, Evans said, including Beam Inc, the maker of Jim Beam, Diageo Plc, home to Johnnie Walker, and Constellation Brands Inc, which makes Robert Mondavi and Ravenswood wines.

The FTC report 'is something we take seriously and place at high priority,' said Karena Breslin, director for digital marketing at Constellation.

The FTC has made two requests for information since the study began, she said.

The regulatory agency has not said it intends to impose restrictions on liquor company social media advertising but it can make recommendations to the industry.

The FTC is empowered to file suit to ensure consumers are protected from deceptive marketing practices, Evans said, but she stressed that studies of this nature are meant to promote better self-regulation, not provide a basis for a case.

Executives say alcohol makers and distributors voluntarily adhere to the same industry-set standard for marketing to underage viewers on social media sites that the industry set for its ads on TV and other medium. That requires that at least 71.6 percent of an audience consists of adults 21 and older.

'No one in their right mind would want to advertise to people who can't legally buy their product,' said Frank Coleman, senior vice president for Distilled Spirits Council of the United States (DISCUS), the trade group that sets the industry's advertising codes.

In June 2011, DISCUS revised its code upwards to 71.6 percent from 70 percent, after the FTC recommended it review the standard to better reflect U.S. Census population data.

Industry critics, including David Jernigen, director of the Center on Alcohol Marketing and Youth at Johns Hopkins University, and Sarah Mart, research director of the advocacy group Alcohol Justice, contend the industry didn't go far enough and should raise the standard further.

Jernigen says it needs to be at least 85 percent to effectively protect youth, so there would be no more than 15 percent exposure to the underage drinking population.

'The industry says its self-regulating but it's ineffective and social media opens up a whole new set of problems because their ads are everywhere,' said Sarah Mart, research director for the San Rafael, Calif.-based group Alcohol Justice.

The industry group's Coleman said the group now requires members to install age-checking tools via instant-messaging as a gateway to Twitter feeds and other branded Web platforms that ask the user for a birth date before admitting them.

In the first nine months of 2012, beer, wine and spirits manufacturers' spent an estimated $35 million for paid Web display advertising, but industry executives estimate many millions more were spent on Web site creation, video production for platforms like Google's YouTube and social media marketing efforts.

'We've significantly adjusted more money to digital for online video, Web sites, Facebook and Twitter content,' said Kevin George, global chief marketing officer for Jim Beam, which he says spends 30 percent of its media spend for online outlets, up from 10 percent in 2008.

Many companies are expanding their digital staff. Wine maker Constellation hired Breslin three years ago to initiate digital marketing and now has a team of five reporting to her.

Many alcoholic beverage companies flocked to Facebook because it requires users to post their birth dates when signing up. Last year Twitter partnered with Buddy Media to offer a more effective screening tool that sends a direct message to fans who click on a brand. The message sends the fan a link to a site that asks for date of birth, which has allowed Twitter to grab some more of the sector marketing. Salesforce.com bought Buddy Media last June, which is now folding the platform into its marketing cloud portfolio.

Health advocates and industry critics are crying foul. 'Facebook and other interactive platforms are poorly monitored and not well age protected,' said Jernigen of Johns Hopkins University. 'Anyone can say they're 21 and click yes.'

(Reporting By Susan Zeidler; Editing by Ron Grover and Alden Bentley)

Racy Victorian divorces online at genealogy website

LONDON (Reuters) - The original Mrs Robinson's diary and scandalous suggestions about a former heir to the British throne are all part of the latest ancestral revelations to go online.

British genealogical website Ancestry.co.uk said on Tuesday it has put the transcripts of thousands of Victorian divorce proceedings online, which reveal the racy details of an era that most modern Britons consider to have been dominated by imperial duty, a stiff upper lip and formal familial relations.

The UK Civil Divorce Records, 1858-1911 date from the year when the Matrimonial Causes Act removed the jurisdiction of divorce from the church and made it a civil matter.

Before this, a full divorce required intervention by Parliament, which had only granted around 300 since 1668. The records also include civil court records on separation, custody battles, legitimacy claims and nullification of marriages, according to the website.

Primarily due to their high cost, divorces were relatively rare in the 19th century, with around 1,200 applications made a year, compared to approximately 120,000 each year today, and not all requests were successful due to the strength of evidence required.

The rarity of such cases, combined with the fact that it was wealthy, often well-known nobility involved, made the divorce proceedings huge public scandals, played out in the press as real life soap operas.

Famously high-profile divorces included that of Henry and Isabella Robinson, the inspiration for the novel 'Mrs Robinson's Disgrace', by Kate Summerscale.

Henry Robinson sued for divorce after reading his wife Isabella's diary, which included in-depth details of her affair with a younger married man.

The diary was used as court evidence and when reported by the media became a huge scandal, partly because of the language used within the journal. Isabella, however, claimed the diary was a work of fiction, which led to her victory in court.

Conservative MP and baronet, Charles Mordaunt, filed for divorce in 1869 from his wife Harriet who stood accused of adultery with multiple men.

The case became national news when the Prince of Wales was rumored to be among the men who had had an affair with her. This rumor was never proven and Lady Mordaunt was eventually declared mad and spent the rest of her life in an asylum.

'At the time, such tales often developed into national news stories, but now they're more likely to tell us something about the double standards of the Victorian divorce system or help us learn more about the lives of our sometimes naughty ancestors,' Ancestry.co.uk UK Content Manager Miriam Silverman said in a statement on Tuesday.

When the divorce laws first came into effect, men could divorce for adultery alone, while women had to supplement evidence of cheating with solid proof of mistreatment, such as battery or desertion.

Despite this double standard, roughly half of the records are accounts of proceedings initiated by the wife. Many of the nullifications of marriages fall into this category, with failure to consummate the nuptials a common reason.

One such example in the records shows a Frances Smith filing for divorce in 1893 under such grounds.

In the court ledgers it is noted that the marriage was never consummated, with the husband incapable 'by reason of the frigidity and impotency or other defect of the parts of generation' and 'such incapacity is incurable by art or skill' following inspection.

(Reporting by Paul Casciato; editing by Patricia Reaney)

Is Facebook envy making you miserable?

LONDON (Reuters) - Witnessing friends' vacations, love lives and work successes on Facebook can cause envy and trigger feelings of misery and loneliness, according to German researchers.

A study conducted jointly by two German universities found rampant envy on Facebook, the world's largest social network that now has over one billion users and has produced an unprecedented platform for social comparison.

The researchers found that one in three people felt worse after visiting the site and more dissatisfied with their lives, while people who browsed without contributing were affected the most.

'We were surprised by how many people have a negative experience from Facebook with envy leaving them feeling lonely, frustrated or angry,' researcher Hanna Krasnova from the Institute of Information Systems at Berlin's Humboldt University told Reuters.

'From our observations some of these people will then leave Facebook or at least reduce their use of the site,' said Krasnova, adding to speculation that Facebook could be reaching saturation point in some markets.

Researchers from Humboldt University and from Darmstadt's Technical University found vacation photos were the biggest cause of resentment with more than half of envy incidents triggered by holiday snaps on Facebook.

Social interaction was the second most common cause of envy as users could compare how many birthday greetings they received to those of their Facebook friends and how many 'likes' or comments were made on photos and postings.

'Passive following triggers invidious emotions, with users mainly envying happiness of others, the way others spend their vacations and socialize,' the researchers said in the report 'Envy on Facebook: A Hidden Threat to Users' Life Satisfaction?' released on Tuesday.

'The spread and ubiquitous presence of envy on Social Networking Sites is shown to undermine users' life satisfaction.'

They found people aged in their mid-30s were most likely to envy family happiness while women were more likely to envy physical attractiveness.

These feelings of envy were found to prompt some users to boast more about their achievements on the site run by Facebook Inc. to portray themselves in a better light.

Men were shown to post more self-promotional content on Facebook to let people know about their accomplishments while women stressed their good looks and social lives.

The researchers based their findings on two studies involving 600 people with the results to be presented at a conference on information systems in Germany in February.

The first study looked at the scale, scope and nature of envy incidents triggered by Facebook and the second at how envy was linked to passive use of Facebook and life satisfaction.

The researchers said the respondents in both studies were German but they expected the findings to hold internationally as envy is a universal feeling and possibly impact Facebook usage.

'From a provider's perspective, our findings signal that users frequently perceive Facebook as a stressful environment, which may, in the long-run, endanger platform sustainability,' the researchers concluded.

(Reporting by Belinda Goldsmith, editing by Paul Casciato)

Monday, January 21, 2013

Putin orders Russian computers to be protected after spy attacks

MOSCOW (Reuters) - President Vladimir Putin has ordered Russian authorities to protect state computers from hacking attacks, the Kremlin said on Monday, after an Internet security firm said a spy network had infiltrated government and embassy computers across the former Soviet bloc.

Dubbed Red October, the network used phishing attacks - or unsolicited emails to intended targets - to infect the computers of embassies and other state institutions with a program designed to harvest intelligence and send it back to a server.

Putin signed a decree on January 15 empowering the Federal Security Service (FSB) to 'create a state system for the detection, prevention and liquidation of the effects of computer attacks on the information resources of the Russian Federation'.

State computer and telecommunications networks protected by the cyber security system should include those inside Russia and at its embassies and consulates abroad, according to the decree, which was published on a Kremlin website on Monday.

The Russian Internet security firm Kaspersky Labs said last week that the computer espionage network, discovered last October, had been seeking intelligence from Eastern European and ex-Soviet states including Russia since 2007. (http://r.reuters.com/mag45t )

Many of the systems infected belonged to diplomatic missions, Vitaly Kamluk, an expert in computer viruses at Kaspersky Labs, said last week. He declined to name specific countries.

Kamluk said last week that the network was still active, and that law enforcement agencies in several European countries were investigating it.

Kaspersky Labs said the infiltrators had created more than 60 domain names, mostly in Russia and Germany, that worked as proxies to hide the location of their real server.

The FSB declined immediate comment last week when asked whether Russia had taken action to bring any suspected members of the espionage network to justice, or acted to improve Internet security in light of the discovery.

The FSB - the main successor agency of the Soviet KGB - requested a written query, to which it has not yet responded. The Kremlin declined immediate comment on Monday when asked whether Putin's decree was linked to Red October.

(Reporting by Steve Gutterman and Thomas Grove; Editing by Kevin Liffey)

Sunday, January 20, 2013

Hundreds attend NYC memorial for Internet activist Aaron Swartz

NEW YORK (Reuters) - Supporters of Aaron Swartz, the 26-year-old Internet activist who committed suicide last week, gathered in New York to remember the computer prodigy on Saturday, with some calling for changes in the criminal justice system they blame for his death.

Swartz, who at 14 helped create an early version of the Web feed system RSS and believed the fruits of academic research and other information should be freely available to all, was found dead a week ago in his Brooklyn apartment.

The city's chief medical examiner ruled the death a suicide by hanging.

He had been facing trial on federal charges he used the Massachusetts Institute of Technology's computer networks to steal more than 4 million articles from JSTOR, an online archive and journal distribution service.

Swartz, who had also worked on the popular website Reddit, had faced a maximum sentence of 31 years in prison and fines of up to $1 million.

'He told me about the 4.5 million downloads of scholarly articles, and my first thought was why isn't MIT celebrating this?' Edward Tufte, an emeritus professor of computer science at Yale University and a friend of Swartz, said to applause from the crowd gathered in The Cooper Union's Great Hall in Manhattan.

Taren Stinebrickner-Kauffman, Swartz's partner, criticized what she described as MIT's 'indifference' to the saga, saying the school could have acted to end his prosecution.

The president of MIT said this week the school was investigating its role in Swartz's case. JSTOR has said in a statement it settled any dispute with Swartz in 2011 and praised his 'important contributions to the development of the Internet.'

CALL FOR CHANGE

At the memorial, attended by hundreds of friends and supporters, the strongest criticisms were reserved for prosecutors in the office of Carmen Ortiz, the U.S. Attorney for Massachusetts.

Roy Singham, the chairman of ThoughtWorks, a software consultancy firm where Swartz worked, called the case against Swartz 'an abuse of state power' intended to intimidate Swartz. He called for the reform of the Computer Fraud and Abuse Act under which Swartz was prosecuted.

Swartz's partner said it all became too much for him to bear.

'He was so scared and so frustrated and more than anything so weary I just don't think he could take it another day,' Stinebrickner-Kauffman said, adding the pair had discussed getting married after the trial.

Ortiz has defended her office's actions, saying prosecutors 'took on the difficult task of enforcing a law they had taken an oath to uphold, and did so reasonably.'

She said they offered Swartz a deal to plead guilty to multiple counts of wire fraud and computer fraud and spend six months at a low-security facility.

Swartz was remembered as a precocious talent who began addressing technology conferences as a teenager and whose quirks included being loath to wash his dishes and preferring bland foods like crackers and white rice.

Many speakers said he was by far the smartest and most intellectually curious person they had known, and called on those in attendance to continue his work of trying to widen the public's access to information and communication channels.

Stinebrickner-Kauffman said Swartz disliked grand ceremonies and would have been uncomfortable with some aspects of his own memorial.

'But memorial services are for the living,' she said, repeating it several times like a mantra, 'and last Friday he forfeited his right to decide that.'

(Editing by Cynthia Johnston and Xavier Briand)

Saturday, January 19, 2013

Dotcom says new site legal, no revenge for Megaupload saga

AUCKLAND (Reuters) - Kim Dotcom, founder of outlawed file-sharing website Megaupload, said his new 'cyberlocker' was not revenge on U.S. authorities who planned a raid on his home, closed Megaupload and charged him with online piracy for which he faces jail if found guilty.

Dotcom said his new offering, Mega.co.nz, which will launch on Sunday even as he and three colleagues await extradition from New Zealand to the United States, complied with the law and warned that attempts to take it down would be futile.

'This is not some kind of finger to the U.S. government or to Hollywood,' Dotcom told Reuters at his sprawling estate in the bucolic hills of Coatesville, just outside Auckland, New Zealand, a country known more for sheep, rugby and the Hobbit than flamboyant tech tycoons.

'Legally, there's just nothing there that could be used to shut us down. This site is just as legitimate and has the right to exist as Dropbox, Boxnet and other competitors,' he said, referring to other popular cloud storage services.

His lawyer, Ira Rothken, added that launching the site was compliant with the terms of Dotcom's bail conditions. U.S. prosecutors argue that Dotcom in a statement said he had no intention of starting a new internet business until his extradition was resolved.

CODES AND KEYS

Dotcom said Mega was a different beast to Megaupload, as the new site enables users to control exactly which users can access uploaded files, in contrast to its predecessor, which allowed users to search files, some of which contained copyrighted content allegedly without permission.

A sophisticated encryption system will allow users to encode their files before they upload them on to the site's servers, which Dotcom said were located in New Zealand and overseas.

Each file will then be issued a unique, sophisticated decryption key which only the file holder will control, allowing them to share the file as they choose.

As a result, the site's operators would have no access to the files, which they say would strip them from any possible liability for knowingly enabling users to distribute copyright-infringing content, which Washington says is illegal.

'Even if we wanted to, we can't go into your file and snoop and see what you have in there,' the burly Dotcom said.

Dotcom said Mega would comply with orders from copyright holders to remove infringing material, which will afford it the 'safe harbor' legal provision, which minimizes liability on the condition that a party acted in good faith to comply.

But some legal experts say it may be difficult to claim the protection if they do not know what users have stored.

The Motion Pictures Association of America said encrypting files alone would not protect Dotcom from liability.

'We'll reserve final judgment until we have a chance to analyze the new project,' a spokesman told Reuters. 'But given Kim Dotcom's history, count us as skeptical.'

The German national, who also goes by Kim Schmitz, expects huge interest in its first month of operation, which would be a far cry from when Megaupload went live in 2005.

'I would be surprised if we had less than one million users,' Dotcom said.

A YEAR ON

Mega's launch starts the next chapter of the Dotcom narrative, dotted with previous cyber crime-related arrests and whose twists and turns have been scrutinized by all facets of the entertainment industry, from film studios and record labels to internet service companies and teenage gamers.

The copyright infringement case, billed as the largest to date given that Megaupload in its heyday commanded around four percent of global online traffic, could set a precedent for internet liability laws and depending on its outcome, may force entertainment companies to rethink their distribution methods.

A year on, the extradition hearing has been delayed until August, complicated by illegal arrest warrants and the New Zealand government's admission that it had illegally spied on Dotcom, who has residency status in the country.

Last January, New Zealand's elite special tactics forces landed by helicopter at dawn in the grounds of Dotcom's mansion, worth roughly NZ$30 million ($25.05 million) and featuring a servants' wing, hedge maze and life-size statues of giraffes and a rhinoceros, to arrest him and his colleagues at the request of the FBI.

Police armed with semi-automatic weapons found Dotcom cowering alone in a panic room in the attic, while outside, a convoy of police cars and vans pulled up in the driveway. Around 70 officers took part in the raid.

They left with computers, files and some of Dotcom's fleet of Rolls-Royces, Mercedes and a vintage pink Cadillac tricked with personalized license plates screaming 'HACKER', 'EVIL', and 'MAFIA'.

'Every time you hear a helicopter, you automatically think, 'Oh, another raid', so it's something that stays with you for a long time,' said Dotcom, who says he and his wife still panic when they hear sudden, loud noises in the house.

Dotcom was coy about the details of the launch party as builders put the finishing touches to a festival-sized concert stage in the mansion's grounds, while two helicopters circled overhead.

But if the impromptu, Willy Wonka-styled ice cream social he threw in Auckland earlier in the week is any indication, the party could be a more wholesome affair compared with the well-documented soirees of Dotcom's past, where nightclubs, hot tubs and scantily clad women were a common fixture.

'I had to grow up, you know, I was a big baby,' he said. 'Big baby with too much money usually leads to baby craziness.

'I am going to be more of a person that wants to help to make things better and help internet innovation to take off without all these restrictions by governments. That is going to be my primary goal if this business is successful.'

($1 = NZ$1.2)

(Editing by Daniel Magnowski and Nick Macfie)

Friday, January 18, 2013

With an air kiss or empty hug, Te'oing is Twitter craze

NEW YORK, Jan 18 (Reuters) - Manti Te'o, the Notre Dame linebacker entangled in a girlfriend hoax that gives a whole new meaning to the term 'air kiss,' is inspiring a new fad racing through social media: Te'oing.

An avalanche of pictures of people hugging empty chairs or puckering up to an otherwise empty room were posted to Twitter with the hashtag #Te'oing days after the college football star's story about his girlfriend's cancer death was exposed as a fraud. Not only did she never have leukemia, she never existed.

Notre Dame officials said Te'o told them he had been duped into believing he had an online relationship with the fictitious woman.

'Te'oing - Mile High Club edition' read one tweet with a photo of a man hugging the air in an airplane bathroom, an apparent reference to the whispered practice of having sex in mid-flight.

Clint Eastwood was hailed in several tweets as a 'Te'oing' pioneer for the actor's interlude with an empty chair at the 2012 Republican Convention. Other tweets showed Ronald McDonald Te'oing on his cozy bench and President Barack Obama spending quality time Te'oing with a vacant seat.

'Just some afternoon bubbly with my baby' said one Te'oing tweet with a photo of a man clinking his champagne flute against another that appeared to be suspended in mid-air.

The snarky social media frenzy recalled another similar trend called the 'Tebowing,' named for New York Jets quarterback Tim Tebow, who frequently kneeled for on-field prayers and inspired copy-cat poses by people whose pictures flooded social media last year.

In its own riff on emptiness and romance, a Kentucky minor league baseball team, the Florence Freedom, has announced it will give away Manti Te'o Girlfriend Bobblehead dolls - actually empty boxes - to the first 1,000 fans at the May 23 game.

One section of the Florence, Kentucky, stadium has been reserved 'for fans to sit with their imaginary friends, girlfriends/boyfriends or spouses' who may be caught on the 'pretend kiss cam' and are invited to compete in an air guitar contest or an imaginary food fight. (Writing by Barbara Goldberg; Editing by Paul Thomasch and Vicki Allen)

Morrisons to launch online kitchenware business

LONDON (Reuters) - Britain's fourth largest supermarket group Wm Morrison said on Friday it would extend its online presence in the spring with the launch of a kitchenware website in partnership with specialist Lakeland.

The joint venture will be Morrisons' third fully transactional website following the launch of wine website MorrisonsCellar.com in November and the purchase of baby care retailer Kiddicare.com in 2011.

'We believe the future for retailing many non-food products is online rather than in supermarkets,' said Chief Executive Dalton Philips.

Unlike the other grocers that make up Britain's so called 'big four' - market leader Tesco, Wal-Mart's Asda and J Sainsbury - Morrisons does not have a website for the home delivery of food.

Earlier this month Morrisons posted a weak Christmas trading update that it partly attributed to its lack of an online food offer.

The firm is researching the possibility and plans to say more when it publishes full year results in March. Most analysts expect it to launch a trial this year.

(Reporting by James Davey; editing by Kate Holton)

Thursday, January 17, 2013

Notre Dame hoax tip was emailed: Deadspin.com editor

CHICAGO (Reuters) - The tip that led to the revelation that one of the most widely recounted U.S. sports narratives of the past year was a hoax came to the editors of an online sports blog as many of their news tips do: an unsolicited email.

That email led Deadspin.com assignment editor Timothy Burke on the hunt of a story that exposed the heart-wrenching tale of standout Notre Dame linebacker Manti Te'o's dead girlfriend as a fabrication, Burke said on CNN on Thursday.

Te'o sprang to national prominence last fall when the senior co-captain was seen heroically leading the Fighting Irish to an underdog victory against the Michigan State Spartans within days of learning his grandmother had died. Moreover, it was widely reported, Te'o's girlfriend had died of leukemia just hours after his grandmother's death.

From that point, Te'o's narrative was a prominent feature in coverage of the team, which has a dedicated following and whose games are televised nationally each week.

Notre Dame went on to an undefeated regular season, culminating in a berth in the national championship game, which the Fighting Irish lost to the Alabama Crimson Tide on January 7.

'We got an email last week at Deadspin.com that said 'Hey, there's something real weird about Lennay Kekua, Manti Te'o's allegedly dead girlfriend. You guys should check it out,'' Burke said.

The email prompted Burke and co-author Jack Dickey to begin searching online for background on Kekua. 'So we start Googling the name Lennay Kekua. We can't find any evidence of this person that wasn't attached to stories about her being Manti Te'o's dead girlfriend.'

Their investigation led about a week later to a 4,000-word expose, published Wednesday under the headline 'Blarney,' that painstakingly debunked the story of Kekua's existence. The story went viral online.

Within hours of its publication, officials at Notre Dame, one of the most powerful institutions in college football and U.S. collegiate athletics overall, held a hastily organized press conference to assert that Te'o had been duped in a hoax perpetrated by a friend of his.

The girlfriend, who called herself Kekua and claimed to be a Stanford University graduate, was merely an online persona who 'ingratiated herself with Manti and then conspired with others to lead him to believe she had tragically died of leukemia,' university spokesman Dennis Brown said in a statement.

Notre Dame Athletic Director Jack Swarbrick said the university learned of the hoax from Te'o on December 26. Te'o answered questions forthrightly and private investigators uncovered several things that pointed to Te'o being a victim in the case, Swarbrick said.

Deadspin's Burke said he remains skeptical of this being a hoax perpetrated on Te'o rather than by Te'o.

'Ask yourself why and what incentive a person would have to execute such a lengthy, time-consuming and expensive con that would involve multiple people and essentially consume his entire life just to screw around with a guy that he knows?' Burke said on CNN.

Deadspin.com said the woman whose photograph was frequently shown on TV and in news reports about Kekua was actually a young California woman who had never met or communicated with Te'o. The website declined to identify her by name.

On Thursday, TV newsmagazine 'Inside Edition' said the woman in the photograph was a 23-year-old marketing professional in Los Angeles named Diane O'Meara. Inside Edition, which is syndicated by CBS Television Distribution, said O'Meara was a former classmate of one of Te'o's friends. It Aredid not give the friend's name.

In the expose published Wednesday, Deadspin.com said a friend of Te'o's named Ronaiah Tuiasosopo was 'the man behind' the hoax.

Outside Tuiasosopo's home in Palmdale, California on Thursday, a member of his family who did not identify himself told reporters, 'Please, we have no comment. Please respect that.'

The Te'o hoax is the latest black eye Notre Dame's legendary football program has suffered in recent years.

In 2011, the school was fined $42,000 by an Indiana agency over the death of football videographer Declan Sullivan, 20, who died in October 2010 after a hydraulic lift he was using to record practice toppled over in high winds.

In 2010, Elizabeth 'Lizzy' Seeberg, a freshman at nearby St. Mary's College, killed herself ten days after accusing a Notre Dame football player of sexual battery. Her family began questioning the campus police department's reluctance to gather evidence and a 15-day delay in interviewing the accused.

After a federal investigation into the matter, the school agreed to revise its policies on sexual misconduct.

(Additional reporting by Dan Burns, Dana Feldman, David Bailey and Mary Wisniewski.; Editing by Vicki Allen, Greg McCune and Andrew Hay)

Prosecutor defends actions after Internet activist suicide

BOSTON (Reuters) - The prosecutor who pursued criminal charges against Aaron Swartz, the 26-year-old Internet activist and computer prodigy who killed himself last week, has defended her actions after facing several days of harsh criticism.

'There is little I can say to abate the anger felt by those who believe that this office's prosecution of Mr. Swartz was unwarranted and somehow led to the tragic result of him taking his own life,' U.S. Attorney Carmen Ortiz said in a statement Wednesday night, after extending her sympathies to the family.

'I must, however, make clear that this office's conduct was appropriate in bringing and handling this case,' she said, adding that prosecutors in her office 'took on the difficult task of enforcing a law they had taken an oath to uphold, and did so reasonably.'

Swartz, who at 14 helped create an early version of the Web feed system RSS and later worked on the popular website Reddit, was found dead Friday in his Brooklyn apartment.

He was accused of using MIT's computer networks to steal more than 4 million articles from JSTOR, an online archive and journal distribution service. He had faced a maximum sentence of 31 years in prison and fines of up to $1 million.

Prosecutors offered him a deal to plead guilty to multiple counts of wire fraud and computer fraud and spend six months at a low-security facility, Ortiz said.

In a statement Saturday, the family and partner of Swartz lashed out at what they said were decisions by prosecutors that contributed to his death.

'Aaron's death is not simply a personal tragedy. It is the product of a criminal justice system rife with intimidation and prosecutorial overreach,' the statement said.

'The U.S. Attorney's office pursued an exceptionally harsh array of charges, carrying potentially over 30 years in prison, to punish an alleged crime that had no victims,' it added.

Swartz, who pleaded not guilty to all counts, was released on bond. His trial was scheduled to start later this year.

The statement from Boston-based Ortiz was released after her husband, Tom Dolan, criticized the Swartz family via Twitter.

'Truly incredible that in their own son's obit they blame others for his death and make no mention of the 6-month offer,' he had written.

Dolan could not immediately be reached for comment.

(Reporting by Jim Finkle and Aaron Pressman)

Candy Crush Saga leads European charge on Facebook

LONDON (Reuters) - Despite global cuts and freezing temperatures, when it comes to gaming fun, it's Europe where most of the action is happening.

The continent's computer games developers are creating some of the most popular games on Facebook, with King.com's Candy Crush Saga leading the charge.

The puzzle game, which involves moving sweets to make a line of three the same color, is being played by more than 9.7 million people every day on the social network, making it the most popular game in terms of active daily users.

The top position on the chart, compiled by AppData, is more often occupied by a game from Zynga, like Farmville 2, which Candy Crush Saga unseated.

Facebook's head of European gaming, Julien Codorniou, said Candy Crush Saga was typical of the games coming from Europe that can be played on smartphones as well as on Facebook.

'The European gaming developers are really taking over,' he said on Thursday.

'If you look at the top 10 gaming companies on Facebook a year ago, you only had one company, which was Wooga in Germany. Today you have six out of the 10, so there's really something happening here.'

The most popular games were not revolutionary, he said, but they were social by design and they were fun because you played with your friends.

Alex Dale, King.com's chief marketing officer, said the games appealed to people, more and more of them women, who were not able to spend hours learning how to play console games.

'They want something that is going to deliver a burst of fun during the day, maybe during their commute,' he said.

The fact that the games could be started on an Android or Apple smartphone and picked up later on Facebook added to its appeal, he said.

Facebook's Codorniou said European operators, such as Angry Birds developer Rovio and Wooga as well as King.com, understood how to successfully develop games across platforms.

'The bigger you are on Facebook, the bigger you in mobile,' he said. 'Eighteen months ago King.com decided to embrace the Facebook platform and amazing things happened.'

The group said it had now generated more than 5 billion monthly game plays across all platforms.

King.com, which has main offices in London and Stockholm, has been profitable for seven years, and it has not had an investment round since 2005, when it raised 34 million euros ($45 million) from venture capital firms Apax Partners and Index Ventures.

(Editing by Mike Nesbit)

Football star Te'o's girlfriend and her death a hoax, U.S. college says

(Reuters) - Notre Dame football star Manti Te'o, whose on-field excellence after his grandmother and online girlfriend purportedly died made him a hero in the sports media, was the victim of a hoax because the girl never existed, the university said on Wednesday.

The girlfriend, who called herself Lennay Kekua and claimed to be a Stanford graduate, was merely an online persona who 'ingratiated herself with Manti and then conspired with others to lead him to believe she had tragically died of leukemia,' university spokesman Dennis Brown said in a statement.

Notre Dame Athletic Director Jack Swarbrick said the university learned of the hoax from Te'o on December 26. He answered questions forthrightly and private investigators uncovered several things that pointed to Te'o being a victim in the case.

'This was a very elaborate, very sophisticated hoax perpetrated for reasons we can't fully understand but had a certain cruelty at its core, based on the exchanges that we were able to see between some of the people who perpetrated it,' Swarbrick told a news conference.

Notre Dame's statements came after the website Deadspin.com published a long expose under the headline 'Blarney,' alleging that Kekua was a hoax dreamed up by a friend of Te'o's.

'Manti Te'o did lose his grandmother this past fall. Annette Santiago died on September 11, 2012, at the age of 72, according to Social Security Administration records in Nexis,' the website said.

'But there is no SSA record there of the death of Lennay Marie Kekua, that day or any other. Her passing, recounted so many times in the national media, produces no obituary or funeral announcement in Nexis, and no mention in the Stanford student newspaper.'

Deadspin said photographs identified as Kekua and shown in online tributes and on TV news reports belonged to a living 22-year-old California woman of a different name who is not a Stanford graduate, has never had leukemia and has not met Te'o.

Te'o, an All-American linebacker and finalist for the Heisman Trophy, college football's top individual honor, acknowledged in a statement carried by ESPN.com and the Honolulu Star-Advertiser, that he had never met Kekua in person.

But he said Wednesday he had developed an emotional relationship with her and 'maintained what I thought to be an authentic relationship by communicating frequently online and on the phone,' according to the statement.

'To realize that I was the victim of what was apparently someone's sick joke and constant lies was, and is, painful and humiliating,' Te'o said.

On September 15, Notre Dame upset Michigan State 20-3 in a lopsided game where Te'o racked up 12 tackles - a considerable number.

It was a remarkable performance by the senior. But Te'o told his coach his grandmother and girlfriend had died just a few days before the game. The coach told reporters and Te'o's excellence became even more celebrated by the media.

Notre Dame continued to win and was preparing to meet Alabama in the national collegiate championship game on January 7 when Te'o told the university that he might be a hoax victim.

'The thing I am most sad about is that the single most trusting human being I have ever met will never be able to trust in the same way again in his life,' Swarbrick said of Te'o. 'That is an incredible tragedy.'

The private investigators turned their final report over to the university on January 4. That report will not be made public, Swarbrick said.

Notre Dame lost to Alabama 42-14 three days later. Te'o is expected to be a first-round pick in the upcoming NFL draft.

(Reporting by James B. Kelleher and David Bailey; Editing by Cynthia Johnston, Philip Barbara and Lisa Shumaker)