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Weight Drives the Young to Adult Pills, Data Says

Saturday, July 26th, 2008
Published: July 26, 2008
A growing number of American children are taking drugs for a wide range of chronic conditions related to childhood obesity, according to prescription data from three large organizations. The numbers, from pharmacy plans Medco Health Solutions, Express Scripts and the marketing data collection company Verispan, indicate that hundreds of thousands of children are taking medication to treat Type 2 diabetes, high blood pressure, high cholesterol and acid reflux — all problems linked to obesity that were practically unheard-of in children two decades ago. The data, disclosed publicly in recent months or provided at the request of The New York Times, shows that concerns that children will be taking adult medications — heightened recently by a controversial recommendation by a national pediatricians group — are already a reality. This month, the American Academy of Pediatrics said that more children, as young as 8, should be given cholesterol-lowering drugs. The recommendation was quickly attacked by some experts as a license to put children on grown-up drugs. While the drugs do help treat the conditions, some doctors fear they are simply a shortcut fix for a problem better addressed by exercise and diet. Even so, some pharmaceutical companies are developing new versions, including flavored ones, of adult medications for children. While some of the percentage increases in the three analyses are significant, doctors empha-size that prescriptions of these drugs to children still represent less than 1 percent of their sales. Express Scripts and Medco developed estimates of how many children might be taking such drugs by extrapolating their data — involving a total of more than four million children — across the broader population. The companies use different assumptions to reach their estimates, but the data suggests that at least several hundred thousand children are on various obesity-related medications. The greatest increase occurred in drugs for Type 2 diabetes, with Medco’s data showing a 151 percent jump from 2001 to 2007. Medco’s data, released in May, showed that use of drugs to treat acid reflux problems in children, often aggravated by obesity, increased 137 percent over seven years. Its analysis also showed an 18 percent increase in drugs to treat high blood pressure and a 12 percent increase in cholesterol-lowering medications during the seven-year period. Express Scripts found a 15 percent increase over three years in drugs to treat cholesterol and other fats in the blood, a category that is primarily statins. “We were amazed at how quickly the rates of drugs used have climbed,” said Dr. Donna R. Halloran, an assistant professor at St. Louis University who worked on the Express Scripts analysis, presented at a meeting of the American Public Health Association in November. Verispan data recorded a 13 percent increase in high blood pressure prescriptions in the under 19 age group from 2005 to 2007. Its numbers show, however, a less than 1 percent increase during the period in cholesterol-lowering drugs in children. Doctors and some financial analysts have said that less pronounced increases in cholesterol drugs compared with some other medications — seen in all three analyses — reflect a wariness by some doctors about using those drugs in children. Some experts have expressed concern that the increases in many of these obesity-related drugs reflect a systemic failure, with doctors and parents turning to them because they find lifestyle changes too difficult to implement or enforce. “I think a lot of people in pediatrics, myself included, are struggling with what is the right management to do for these kids,” said Dr. Russell L. Rothman, an assistant professor at Vanderbilt University, who recently surveyed doctors and found wide variations in how children were being treated. “You see elevated blood pressure, or elevated sugars, or elevated cholesterol and you try exercise and diet and you don’t see any improvement,” Dr. Rothman said. “I worry that some providers and some families are looking for the quick fix, and are going to want to start medication immediately.” Some pediatricians say they have been treating children with statins for several years. Dr. David Collier, director of a pediatric weight management center at East Carolina University in Greenville, N.C., an area where 45 percent of the children are overweight, is among doctors who support the recent recommendations that statins may be warranted in some children as young as 8. “We have been using statins for two or three years now,” he said. One of his statin patients, he said, was a 6-year-old girl. Dr. Collier, who describes his location as “right smack dab in the middle of the stroke belt,” believes that aggressive therapy is needed to prevent a health crisis. “It’s hard to overstate the size of the problem,” he said. Dr. Francine R. Kaufman remembers a patient, a 13-year-old girl, whose weight had ballooned to 267 pounds. The teenager appeared destined for the same fate as her grandmother, who lost a leg to Type 2 diabetes. “To control her high blood sugar level, her high blood pressure, and her high cholesterol, this young girl left my office with five medications,” Dr. Kaufman, a pediatric endocrinologist in Los Angeles, told a Senate subcommittee last week during hearings on obesity in children. The girl stood out as unusual more than 10 years ago, but children with the same array of problems are increasingly seen in the diabetes center where she practices at Children’s Hospital Los Angeles, Dr. Kaufman said. Diet and exercise are tried first, but “lifestyle is really tough,” Dr. Kaufman said. Some of her patients live in neighborhoods without grocery stores and attend schools that do not offer physical education programs. “They deserve to be treated,” Dr. Kaufman said. “I think the slant from most of the media is that pediatricians are jumping to put kids on medications. That’s not true at all. Since lifestyle is so difficult, we have no other choice but to go to pharmacotherapy.” At Camp Pocono Trails, a weight loss camp in Reeders, Pa., that enrolls about 700 children each summer, owner Tony Sparber said that campers are arriving with medications, a pharmacopeia that include statins and diabetes medications. “You just look at these kids’ medical forms,” Mr. Sparber said. “You see kids with some very high-risk numbers. Cholesterol in the high 200s.” Experts say that the trend could balloon health care costs. As many as 30 percent of children nationwide are overweight. And children who start such medication often rely on the drugs for a lifetime and are prone to health problems as adults. Despite a push by the Food and Drug Administration to foster drug studies in children, many experts believe that many clinical studies in children have not been extensive enough. And adult doses are often not correct for children. The agency publishes a list of drugs for which pediatric versions are needed. So far, the size of the pediatric market is not big enough to make it profitable for companies to make special children’s formulas of drugs for disorders that commonly go along with obesity and high-fat diets. That appears to be changing. Madeira Therapeutics, based in Leawood, Kan., is formulating a liquid statin for children that will be sold in either grape, cherry or bubblegum flavor, according to the company’s chief executive, Peter R. Joiner. Madeira became interested in the drug to treat children with a genetic cholesterol condition, familial hypercholesterolemia, which strikes 1 in 500 children regardless of their diet. The recent American Academy of Pediatrics statement adds to the potential market, according to Mr. Joiner. The company, whose liquid statin may be available by late 2010, is also interested in a liquid oral diabetes medication. “Because of the obesity epidemic in the United States, we see diabetes as another important area for contribution,” Mr. Joiner said. A nonprofit group in Cambridge, Mass., the Institute for Pediatric Innovation, is working to encourage the reformulation of medications for children. Dr. Stephen P. Spielberg, the former dean of Dartmouth Medical School, is leading the effort. “What we’ve learned over the years is that the way in which the body handles medicines, the half life of a medicine, how it’s metabolized, how it’s excreted by the body, does vary, from babies all the way up to adolescents,” Dr. Spielberg said. Hypertension medications present a particular challenge in dosing for children. “Even in clinical trials where adult pills were crushed and such, you often can’t even demonstrate that the medication works,” he added. Medco cautioned that hypertension data can be misleading because some children with attention deficit disorder are treated with hypertension drugs. The most significant increase in the use of drugs for children has been in oral medication for Type 2 diabetes. And some doctors believe much of those prescriptions were “off-label” use of the drug, metformin, to treat prediabetes, which may affect two million children nationwide. But some doctors object to the use of metformin for that purpose in children, even though studies have shown it may prevent diabetes in young adults. “There are no studies like this in children,” said Dr. Tamara S. Hannon, a pediatric endocrinologist at the Children’s Hospital of Pittsburgh. “The argument may be that we know what happens in adults, so the same should happen in children. It’s been proven untrue in several cases in the history of medicine.”
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iPhone Users Plagued by Software Problems

Saturday, July 12th, 2008
Published: July 12, 2008
SAN FRANCISCO — For many people on Friday, the iPhone was the iCan’t. Apple suffered extensive network gridlock Friday morning, as many of the six million users of the original iPhone tried to upgrade to new software while the first buyers of the new iPhone 3G were trying to activate their purchases. The setback was a classic example of the problems that can follow when complex systems have single points of failure. In this case, the company appeared to almost invite the problems by having both existing and new iPhone owners try to get through to its systems at the same time. “There are certainly lessons in preparedness,” said Richard Doherty, a consumer electronics industry consultant who is president of the Envisioneering Group in Seaford, N.Y. He compared the day with Christmas morning, “the acid test for many years” for electronics companies because customers contact them in droves after opening presents and trying to get gadgets to work. The problems led to slow-moving lines of would-be iPhone 3G purchasers at Apple and AT&T stores, while current iPhone users found that their phones had stopped working when they tried to upgrade them to the latest software. The iPhone must connect to Apple servers through the iTunes program for authentication before it will function again after a software upgrade. Apple did not comment publicly on the problems, but privately executives acknowledged the missteps and said the combination of the software upgrades and new iPhone 3G owners trying to complete their activation swamped the company’s servers. At Apple and AT&T stores on Friday morning, employees began telling buyers to take their new iPhones home and activate them there. A year ago, when the original iPhone went on sale, customers performed the activation at home. But Apple and its cellphone partners changed the process this time, in part because the carriers are partially subsidizing the cost of the phones, so they are eager to make sure that phone buyers are locked into a contract. Many of the original iPhones were bought in the United States and then taken overseas for use on foreign carriers. A number of industry executives have said that the change in policy was intended to reduce the number of phones that were bought and then modified for use on unauthorized cellular networks. Early indications were that the company was facing strong demand for the new phones. In many cases the customers were existing iPhone users looking to upgrade to the iPhone 3G model. Apple’s stores opened at 8 a.m. At the store in downtown San Francisco at 11:30 a.m., there was still a line of more than 300 customers stretching down one block and around the corner waiting for iPhones. Some customers said they had hired placeholders to stand overnight in line. Mark Siegel, a spokesman for AT&T, Apple’s cellular partner in the United States, said the company had experienced extraordinary demand and that most of its stores nationwide were sold out of the iPhone during the day. He said he had heard reports that some customers were already camped out in front of stores waiting for the next shipment of iPhones on Saturday, but he could not identify a particular store. Mr. Siegel said the rush of customers and upgrades had overwhelmed Apple’s servers, and that he sympathized with the company’s predicament. “Apparently the iTunes system has just been overwhelmed by demand and Apple is working very hard to get this fixed,” he said. He acknowledged that part of the problem was the new policy of requiring authorization in the stores. In a related issue, customers had problems with Apple’s switchover from its .Mac Web service to a new service called MobileMe that is intended to seamlessly share information between Macintosh computers and the iPhone. Apple’s stumble was an unusual one for a company that has taken pains in recent years to become more customer-oriented. The technology blog Gizmodo dubbed it the iPocalypse. When the original iPhone was introduced, AT&T took the blame for most of the early service problems. Sergio Martinez, an editor at Teak Motion Visuals in San Francisco, said in an e-mail message that he had run into trouble with the software upgrade. “Like everyone else across the world, I have had no luck upgrading,” he wrote. “Bill Gates must be enjoying this one.”
Laurie J. Flynn contributed reporting.
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Google Told to Turn Over User Data of YouTube

Friday, July 4th, 2008
Published: July 4, 2008
SAN FRANCISCO — A federal judge has ordered Google to turn over to Viacom its records of which users watched which videos on YouTube, the Web’s largest video site by far. The order raised concerns among YouTube users and privacy advocates that the video viewing habits of tens of millions of people could be exposed. But Google and Viacom said they were hoping to come up with a way to protect the anonymity of the site’s visitors. Viacom also said that the information would be safeguarded by a protective order restricting access to the data to outside lawyers, who will use it solely to press Viacom’s $1 billion copyright suit against Google. Still, the judge’s order, which was made public late Wednesday, renewed concerns among privacy advocates that Internet companies like Google are collecting unprecedented amounts of private information that could be misused or fall unexpectedly into the hands of third parties. “These very large databases of transactional information become honey pots for law enforcement or for litigants,” said Chris Hoofnagle, a senior fellow at the Berkeley Center for Law and Technology. For every video on YouTube, the judge required Google to turn over to Viacom the login name of every user who had watched it, and the address of their computer, known as an I.P. or Internet protocol address. Both companies have argued that I.P. addresses alone cannot be used to unmask the identities of individuals with certainty. But in many cases, technology experts and others have been able to link I.P. addresses to individuals using other records of their online activities. The amount of data covered by the order is staggering, as it includes every video watched on YouTube since its founding in 2005. In April alone, 82 million people in the United States watched 4.1 billion clips there, according to comScore. Some experts say virtually every Internet user has visited YouTube. Google and Viacom said they had had discussions about ways to further protect users’ anonymity, but as of Thursday evening the two companies had yet to agree on how to do that. “We are investigating techniques, including anonymization, to enhance the security of information that will be produced,” said Michael D. Fricklas, Viacom’s general counsel. Mr. Fricklas said Viacom would not have direct access to the data, and that its use would be strictly limited by the court order. Viacom would not, for example, chase down users who had illegally posted clips from “The Colbert Report.” “The information that is produced by Google is going to be limited to outside advisers who can use it solely for the purpose of enforcing our rights against YouTube and Google,” Mr. Fricklas said. In a letter sent Thursday, Google’s lawyers pressed their counterparts at Viacom to accept a more limited set of data. “We request that plaintiffs agree that YouTube may redact user names and I.P. addresses from the viewing data in the interests of protecting user privacy,” wrote David H. Kramer, a partner at Wilson Sonsini Goodrich & Rosati. In a response, a Viacom lawyer wrote that Viacom was “committed to working with Google” on the privacy issue. Interestingly, Google has rejected demands by privacy groups for more stringent protections for I.P. address records, saying that in most cases the addresses cannot be used to identify users. Yet Google argued that YouTube viewing data should be kept from Viacom, in part, to protect the privacy of its users. Judge Louis L. Stanton of the Southern District of New York, who is presiding over Viacom’s lawsuit against Google and YouTube, referenced Google’s past statements on I.P. addresses to conclude that its “privacy concerns are speculative.” “It is an ‘I told you so’ moment,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center, an advocacy group in Washington. Other privacy advocates said they welcomed Viacom’s commitment to limit its use of the information, but they remained concerned about user rights. “Users should have the right to challenge and contest the production of this deeply private information,” said Kurt Opsahl, senior staff lawyer at the Electronic Frontier Foundation, an online civil liberties group. That right is protected by the federal Video Privacy Protection Act, Mr. Opsahl added. Congress passed that law in 1988 to protect video rental records, after a newspaper disclosed the rental habits of Robert H. Bork, then a Supreme Court nominee. Mr. Opsahl also said that even records that did not include a user’s login name and I.P. address might be able to be associated with specific people. In 2006, after AOL released for research purposes the search records of thousands of anonymous users, reporters from The New York Times were able to track down one person by analyzing her search queries. Mr. Opsahl said anonymous viewing habits may similarly yield clues about the identity of viewers. Viacom wants the viewing data in part to help it determine the extent to which YouTube’s success was built on the popularity of copyrighted clips that were illegally posted to the site. Outside experts say that without the data it would be virtually impossible to pin that down. Judge Stanton agreed that the information could help Viacom make its case. “A markedly higher proportion of infringing-video watching may bear on plaintiff’s vicarious liability claim, and defendants’ substantial noninfringing use defense,” he wrote. Tags:

Why Oil and Wages Don’t Mix

Sunday, June 29th, 2008
Published: June 29, 2008
Oh what a circus, oh what a show, America has gone to town, Over the death of a mineral called cheap gasoline. We’ve all gone crazy, Mourning all day and mourning all night, Falling over ourselves to get all of the misery right. … WITH great apologies for the above to the greatest librettists and musical show composers of all time, the guys who brought us “Evita,” let us sit down upon the ground and tell sad stories of the death of a beloved hydrocarbon. Now, what I am about to say may shock you. As of this spring in our country, before the immense climb in gasoline prices, the purchase of gasoline and oil amounted to barely 2 percent of national income. Barely 2 percent. Suppose the prices have risen by one-fourth since then. Now gasoline and oil would be roughly 2.5 percent of the total. Or look at it another way. As of this spring, gasoline and oil and heating oil together amounted to about 2.5 percent of total personal consumption expenditures in this great country. Considering the recent price increases, these goods might account for slightly more than 3 percent of such expenditures now. (All of these calculations come from numbers in the March report to Congress from the Council of Economic Advisers.) We are talking about several hundred billion dollars here. I could have a lot of fun with that money, rescuing lost dogs and cats, but it’s not enough to shake the foundations of the nation, at least not a nation of this size. Certainly, it’s not enough to affect even vaguely the incomes of upper-class or upper-middle-income people. The average driver travels about 12,000 miles a year, and if he or she gets 15 miles per gallon (not good mileage at all), the annual gasoline bill would have been about $3,200 a month ago and maybe $3,600 now (if the vehicle uses premium). For people who make a half-million dollars a year, that’s pennies. The increase from a year or two ago also means little to them. The problem comes in another, staggering set of government numbers. (Economists argue about the validity of using these numbers over long periods, but they capture the sorrow of the situation.) Get this, friends: from 1947 to about 1973 — from the days from the great Harry S. Truman to the great Richard M. Nixon — real hourly pay for nongovernment workers rose by about 40 percent. The peak year was the one before R.N. left for San Clemente in 1974. Since then, real wages both hourly and weekly for all nongovernment workers, on average, have fallen by about 5 percent, very roughly. There are all kinds of reasons for this, ranging from the larger size and different composition of the labor force to the devastating foreign competition in manufacturing, which tends to set a limit on other wages as well. But the trend is dismal. The average private worker now earns very roughly $600 a week, not counting fringe benefits. For this worker, gasoline might well account for close to one-tenth of his or her earnings. If the price of gas goes up 25 percent, the effect is serious. To put it mildly, people making $600 a week do not have a lot of leeway on spending. As I see it, the problem is not the price of oil generally. (I think that the price will decline somewhat before long, but the long-term trend is very much up.) The problem is the stagnation of wages. Please bear in mind that the numbers I gave are averages. Skilled workers make much more. Lawyers, doctors, investment bankers, accountants, dentists — they all make more. ( I just paid two dentists a total of more than $10,000 — I am not kidding — to have one poor old tooth get a root canal and a crown, and I’m not finished with that miserable tooth yet. I paid for 90 percent of it out of my own pocket. I do earn more than the ordinary citizen, but nothing by Wall Street standards.) But, obviously, a heck of a lot of workers make less. Imagine what it means to minimum-wage workers for gasoline to surge past $4 a gallon. What is to be done? The federal government can do little to make the price of oil fall in the short run, except, perhaps, for one basic thing: balance the budget. The world price of oil is denominated in dollars. The dollar is weak for many reasons, but a big one is the immense budget deficits run by our government. If President Bush and Senators John McCain and Barack Obama were to stand together in front of a camera and solemnly swear that they would balance the budget in four years, even if it required tax increases on people earning millions, the dollar would rise against the euro, and oil would fall in dollars. But that will not happen. So the only thing for workers to do is to drive less, buy fuel-efficient cars and trucks and, above all, whip their children into a frenzy to get more education. Not many doctors and lawyers are worried about the high price of gasoline. Not many people at hedge funds are worried about filling the tanks of their Bentleys. WE need more human capital in our labor force and more efficiency in fuel use. These will have to reverse the trend in real wages and the real cost of gasoline. Balancing the budget would be good, too, but I won’t hold my breath. Meanwhile, it’s all a bit discouraging — especially the trend for wages. But we will get through it, just as we get through everything else, one adaptive, smart American at a time.
Ben Stein is a lawyer, writer, actor and economist. E-mail: ebiz@nytimes.com.
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Microsoft Seeks Path Beyond the Gates Legacy

Friday, June 27th, 2008
Published: June 27, 2008
Bill Gates is retiring, sort of. He is still only 52, and he is going off to spend more time guiding the world’s richest philanthropy, the Bill and Melinda Gates Foundation. He will still be Microsoft’s chairman and largest shareholder, but Friday is his last day as a full-time worker at the software giant, marking the unofficial end of his career as a business leader. And what a career it has been. Mr. Gates has been an animating force behind the personal computer revolution, helping to build a huge global industry and engineer blockbuster products like Windows and Office, used every day in offices and homes around the world. The Harvard dropout was the wealthiest person on the planet for years — worth more than $100 billion in 1999 — though his fortune is now about half that because of the decline of Microsoft’s shares and his continued donations to his foundation, which is focused on global health and education. Despite his success, Mr. Gates is moving on as the company he co-founded in 1975 is struggling to find its way. The center of gravity in technology has shifted from PCs to the Internet, altering the old rules of competition that were so lucratively mastered by Microsoft. For millions of users, mobile devices like cellphones are beginning to edge out PCs as the tool of choice for many computing tasks. And Google, the front-runner in the current wave of Internet computing, has wrested the mantle of high-tech leadership from Microsoft. Although Mr. Gates will spend one day a week at the company, it will be up to his successors, led by Steven A. Ballmer, the chief executive, to master the challenges of the Internet or watch Microsoft’s wealth and stature in the industry steadily erode. “Bill’s legacy is Windows and Office, and that will be a rich franchise for years to come, but it’s not the future,” said David B. Yoffie, a professor at the Harvard Business School. Still, the Gates legacy is impressive. In addition to the software itself, Mr. Gates and his company have fundamentally shaped how people think about competition in many industries where technology plays a central role. Today, there are more than one billion copies of the Windows operating system on PCs around the world. Industry experts and economists say that Windows is not necessarily the best or most admired software for running the basic operations of a personal computer — Apple’s Macintosh can claim the most devout fan club. But Mr. Gates grasped and deployed two related concepts on a scale no one ever had in the past: the power of network effects and the value of establishing a technology platform. Put simply, the network effect describes a phenomenon in which the value of a product goes up as more people use it. E-mail messaging and telephones are classic examples. A technology platform is a set of tools or services that others can use to build their own products or services. The more people who use the tools, the more popular the platform can become. Mr. Gates took advantage of both notions and combined them to build Microsoft’s dominance in PCs, spreading its influence with computer makers and software developers. Today, there are many thousands of software applications that run on the Windows platform, not just word processing and spreadsheets but also the specialized programs in doctors’ offices, factory floors and retail stores — a very broad network on a nearly ubiquitous technology platform. “Gates saw software as a separate market from hardware before anyone else, but his great insight was recognizing the power of the network effects surrounding the software,” said Michael A. Cusumano, a professor at the Massachusetts Institute of Technology’s Sloan School of Management. That, Professor Cusumano added, was the essential difference in the paths of Microsoft and Apple, the early leader in personal computing. Apple, he said, focused on making outstanding products alone, while Microsoft nurtured a growing ecosystem of outside software developers who use, and are dependent on, Microsoft’s technology. The result, he added, is that, while Apple continues to make outstanding products, more than 90 percent of personal computers run Microsoft software. In the early years, it was unclear how much Mr. Gates was pursuing each opportunity as it came, as opposed to carrying out a grand strategy. He certainly had large ambitions. When he was a Harvard undergraduate, Mr. Gates lamented that so many of his fellow students pursued a “narrow track for success” instead of being willing to “take big risks to do big things,” recalled Michael Katz, a Harvard contemporary who is now a professor at New York University. In a Harvard Business School case study, published in 1994, Mr. Gates spoke of Microsoft’s strategy in terms of network effects and technology standards that, combined, enabled the company to command markets. “We look for businesses where we can garner large market shares, not just 30 or 35 percent,” he said. In the past, Microsoft has beaten back challenges and vanquished rivals, even when it came late to markets, as it did in the first wave of Internet technology. Mr. Gates’s shrewd 1995 decision to embrace Internet browsing technology and attack the early leader, Netscape Communications, started a pitched antitrust battle with the government. “But he extended Microsoft’s hegemony for a decade,” said Mitchell Kapor, a longtime rival. However, Microsoft is lagging badly in current round of Internet competition and, analysts say, is facing more formidable challengers this time — notably Google. Microsoft’s share of Internet search in the United States is less than 10 percent, while Google holds more than 60 percent and Yahoo has about 20 percent. And search is only part of the new platform on the Web, which includes social networks like Facebook and MySpace and Internet-based alternatives to traditional desktop software, including e-mail messaging, word processors and spreadsheets. Traditional desktop software — and the technology standards Microsoft controls there — matter far less when more software is accessed with a Web browser and delivered over the Internet from vast data centers run by Google and others. The new approach is known as “cloud computing,” and the business model behind it is typically to sell online advertising and software services. At Microsoft, there is scant sign of panic, despite its trailing position and its failed bid to buy Yahoo for $47.5 billion as a catch-up strategy. Microsoft sees an evolution in computing, not a disruptive revolution that will imperil the company, said Craig Mundie, Microsoft’s chief research and strategy officer. Mr. Mundie said Microsoft is preparing for a widening world of both cloud computing and “client” machines, not only personal computers but also cellphones, cars, game consoles and televisions, all running Microsoft software. “The next big platform is the union of the clients and the cloud,” he said. Tags:

What’s Obscene? Google Could Have an Answer

Tuesday, June 24th, 2008
What’s Obscene? Google Could Have an Answer
Published: June 24, 2008
 Judges and jurors who must decide whether sexually explicit material is obscene are asked to use a local yardstick: does the material violate community standards?
 That is often a tricky question because there is no simple, concrete way to gauge a community’s tastes and values. The Internet may be changing that. In a novel approach, the defense in an obscenity trial in Florida plans to use publicly accessible Google search data to try to persuade jurors that their neighbors have broader interests than they might have thought. In the trial of a pornographic Web site operator, the defense plans to show that residents of Pensacola are more likely to use Google to search for terms like “orgy” than for “apple pie” or “watermelon.” The publicly accessible data is vague in that it does not specify how many people are searching for the terms, just their relative popularity over time. But the defense lawyer, Lawrence Walters, is arguing that the evidence is sufficient to demonstrate that interest in the sexual subjects exceeds that of more mainstream topics — and that by extension, the sexual material distributed by his client is not outside the norm. It is not clear that the approach will succeed. The Florida state prosecutor in the case, which is scheduled for trial July 1, said the search data may not be relevant because the volume of Internet searches is not necessarily an indication of, or proxy for, a community’s values. But the tactic is another example of the value of data collected by Internet companies like Google, both from a commercial standpoint and as a window into the thoughts, interests and desires of their users. “Time and time again you’ll have jurors sitting on a jury panel who will condemn material that they routinely consume in private,” said Mr. Walters, the defense lawyer. Using the Internet data, “we can show how people really think and feel and act in their own homes, which, parenthetically, is where this material was intended to be viewed,” he added. Mr. Walters last week also served Google with a subpoena seeking more specific search data, including the number of searches for certain sexual topics done by local residents. A Google spokesman said the company was reviewing the subpoena. Mr. Walters is defending Clinton Raymond McCowen, who is facing charges that he created and distributed obscene material through a Web site based in Florida. The charges include racketeering and prostitution, but Mr. Walters said the prosecution’s case fundamentally relies on proving that the material on the site is obscene. Such cases are a relative rarity this decade. In the last eight years, the Justice Department has brought roughly 15 obscenity cases that have not involved child pornography, compared with 75 during the Reagan and first Bush administrations, according to Jeffrey J. Douglas, chairman emeritus of the First Amendment Lawyers Association. (There have been hundreds involving child pornography.) Prosecutions at the state level have followed a similar arc. The question of what constitutes obscenity relies on a three-part test established in a 1973 decision by the Supreme Court. Essential to the test has been whether the material in question is patently offensive or appeals to a prurient interest in sex — definitions that are based on “contemporary community standards.” Lawyers in obscenity cases have tried to demonstrate community standards by, for example, showing the range of sexually explicit magazines and movies available locally. A better barometer, Mr. Douglas said, would be mail-order statistics, because they show what people consume in private. But that information is hard to obtain. “All you had to go on is what was available for public consumption, and that was a very crude tool,” Mr. Douglas said. “The prospect of having measurement of Internet traffic brings a more objective component than we’ve ever seen before.” In a federal obscenity case heard this month, Mr. Douglas defended another Florida pornographer. In the trial, Mr. Douglas set up a computer in the courtroom and did Internet searches for sexually explicit terms to show the jury that there were millions of Web pages discussing such material. He then searched for other topics, like the University of Florida quarterback Tim Tebow, to demonstrate that there were not nearly as many related Web sites. The jury was evidently not swayed, as his client was convicted on all counts. The case Mr. Walters is defending takes the tactic to another level. Rather than showing broad availability of sex-related Web sites, he is trying to show both accessibility and interest in the material within the jurisdiction of the First Circuit Court for Santa Rosa County, where the trial is taking place. The search data he is using is available through a service called Google Trends (trends.google.com). It allows users to compare search trends in a given area, showing, for instance, that residents of Pensacola are more likely to search for sexual terms than some more wholesome ones. Mr. Walters chose Pensacola because it is the only city in the court’s jurisdiction that is large enough to be singled out in the service’s data. “We tried to come up with comparison search terms that would embody typical American values,” Mr. Walters said. “What is more American than apple pie?” But according to the search service, he said, “people are at least as interested in group sex and orgies as they are in apple pie.” The Google service does, however, show the relative strength of many mainstream queries in Pensacola: “Nascar,” “surfing” and “Nintendo” all beat “orgy.” Chris Hansen, a staff lawyer for the national office of the American Civil Liberties Union, called the tactic clever and novel, but said it underscored the power of the Internet to reveal personal preferences — something that raises concerns about the collection of personal information. “That’s why a lot of people are nervous about Google or Yahoo having all this data,” he said. One question is whether the judge in the case will admit the data as evidence; it was given only in a deposition this month. Mr. Walters said he was confident the information would be allowable given that there has been a growing reliance on such data. Russ Edgar, the Florida state prosecutor, said he was still assessing whether he would try to block the search data’s use in court. He declined to discuss the case’s specifics, but said that the popularity of sex-related Web sites had no bearing on whether Mr. Edgar was in violation of community standards. “How many times you do something doesn’t necessarily speak to standards and values,” he said.
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Trading Hurts Morgan Stanley Profits

Wednesday, June 18th, 2008
Published: June 19, 2008
The investment bank Morgan Stanley, with its core securities trading business continuing to feel the tight credit market, reported a 58 percent decrease in net profit on Wednesday.

The results were broadly in line with analyst’s expectations, although disappointing to a firm that has traditionally held itself up to be a standard bearer on Wall Street, especially in light of the strong results reported Tuesday by its rival Goldman Sachs.

But during a stretch of time that has seen the demise of one firm, Bear Stearns, and persistent speculation about another, Lehman Brothers, Morgan’s ability to generate a billion dollar profit, escape large write downs and not have to raise capital represents a small step forward.

Profits were bolstered by a non-recurring $700 million gain from the sale of its wealth management arm in Spain. Without that gain, the pretax profit would have been significantly lower.

Net profit of $1 billion, or 95 cents a share, was down 58 percent, from $2.58 billion, or $2.45 a share, in the period a year ago and 34 percent from the first quarter.

Revenue fell to $6.51 billion from $10.52 billion a year ago. Analysts had expected a profit of 92 cents a share and revenue of $7.05 billion, according to analysts surveyed by Thomson Financial.Morgan’s shares were down more than 5 percent in mid-morning trading.

“Given the turbulent environment this quarter, we stayed close to shore and continued strengthening the firm’s capital and liquidity positions,” the chief executive, John J. Mack, in a statement.

Dragging the results down was a poor showing for the firm’s institutional securities unit, traditionally a profit engine, which houses its best traders and investment bankers. Profit in the unit was down 77 percent compared with a year ago, on across the board declines in underwriting, advice given to corporate clients and most starkly, fixed income sales and trading, which was down 85 percent compared with a year ago.

The unit had close to $800 million in losses from trading and leveraged loans. Even a strong result from the firm’s derivatives outfit and its hedge fund servicing areas in the equity division was harmed by trading losses.

With a diverse stream of revenues, and its large retail brokerage and asset management businesses, Morgan Stanley remains less exposed to the troubled mortgage business than rivals like Bear Stearns and Lehman Brothers.

Still, under Mr. Mack, Morgan Stanley has had more than $12 billion in write-offs from various forms of exposure to subprime securities and leveraged loans, a result of a more risk-friendly approach he adopted when taking the reigns in 2005.

Chastened by the experience, one that caused some investors to question his ability to navigate the tight credit market, Mr. Mack and his top executives have aggressively trimmed the size of their balance sheet, raising capital and adopted a more cautious investment outlook.

Morgan shrunk its assets another 5 percent in the quarter and its leverage ratio, a crucial gauge of financial health, was lowered to 25 times down from 32 last summer as Morgan raised cash and built up its equity base. Exposure to troubled commercial real estate decreased from $23.5 billion to $22.1 billion.

Perhaps as troubling for Mr. Mack has been the continuing weakness of the firm’s asset management business, an area that he focused on from the very beginning as crucial to Morgan’s future.

For the second consecutive quarter, asset management recorded a loss — $227 million this period compared with $161 million in the first quarter, mostly from private equity and real estate. The unit was also hit by continued withdrawals from its large equity funds division which is experiencing a bad stretch of underperformance. Only 35 percent of the firm’s long-term assets were in the top half of Lipper rankings over the last year, a poor showing by any measure.

Firefox thrives, Netscape fades

Monday, March 3rd, 2008
Firefox, the open-source Web browser, has claimed that it crossed half a billion downloads worldwide last week. The browser that was born from Mozilla, the free cross-platform open source Web browser framework, turned out to be the most popular of the “open” alternatives to Microsoft’s Internet Explorer. It acquired new users at a steady 20 million-a-month during 2007. However, its overall share among leading browsers in use is estimated to hover around 17 per cent. Firefox 1.0 was released in November 2004 as an experiment within the Mozilla Project and the currently available free download is version 2.0.0.12 — a 5.7 MB tool. However, version 3 is already in the beta or testing stage and has incorporated some 1,300 changes. An edition optimised for portable phones called Mozilla Firefox for Mobiles will be available later this year, to start with for the Windows Mobile and Linux platforms. AOL’s recommendation

Ironically, Firefox’s surge forward in the browser stakes comes in a week that also saw the passing into history of the iconic browser Netscape, which for millions of users provided their first feel of surfing the world wide web in the Internet’s dawn, the early 1990s. On Saturday AOL, which has owned Netscape since 1994, withdrew the browser’s life support system and recommended users to change over to Firefox or Flock, two browsers which like Netscape are also based on Mozilla. Netscape was not the Internet’s first browser — that honour goes to Mosaic — but it was crafted by American software engineer Marc Andreessen who created Mosaic when he was a student. The market share of Netscape dwindled after Microsoft entered the field with Internet Explorer. By 2006, Netscape was being used by just 1 per cent of surfers. As of today, it will still be operational. But AOL has stopped all active support, which will effectively kill it very soon… a sad day for those who recall, with fondness, its friendly look-and-feel. source: google news http://blogs.mindbodynsoul.com http://www.currentnewsaffairs.com Tags:

Repairs Complete on 2 Internet Cables

Tuesday, February 12th, 2008
Traffic has returned to normal on undersea Internet cables in the Mediterranean Sea and Persian Gulf that were cut last month, causing disruptions across the Middle East and parts of Asia, cable owner FLAG Telecom said Monday. Repair ships completed work over the weekend on both the FALCON cable in the Persian Gulf 35 miles north of Dubai and the FLAG Europe-Asia cable about 5 miles north off the Egyptian port city of Alexandria, U.K.-based FLAG said in a statement on its Web site. The Gulf cable carries Web traffic between Oman and the United Arab Emirates, and the Mediterranean cable carries it from Africa to Sicily. FLAG, which stands for Fiber-Optic Link Around the Globe, earlier said an abandoned anchor caused the Persian Gulf cut, but it provided no details. The other cut is still being investigated, the company said. It remained unclear Monday whether a third cable that parallels FLAG’s Mediterranean cable — it’s called South East Asia-Middle East-West Europe 4 cable and is owned by a consortium of 16 companies — has been repaired. The consortium could not be reached, and FLAG did not work on that cable. The cuts slowed businesses, hampered personal Internet usage and caused a flurry of speculation, including mentions of sabotage. Government authorities and FLAG refused to comment on the speculation. The incident underlined the threats that Internet disruptions could pose to organizations and businesses worldwide. Large-scale Internet disruptions are rare, but East Asia suffered nearly two months of outages and slow service after an earthquake damaged undersea cables near Taiwan in December 2006. source: google news http://www.currentnewsaffairs.com http://blogs.mindbodynsoul.com   Tags:

Cell phones quickly becoming portable entertainment devices

Monday, December 31st, 2007

All of the entertainment options that are hot on the PC—social networking, web video, user-generated content—are downright torrid on the smallest of screens, the cell phone. New research from Deloitte & Touche finds that 47 percent of 25-41 year olds use their cell phones for entertainment, a massive surge from the 29 percent who said they did so only eight short months ago. And where the eyeballs go, there go both the ad dollars and the aspirations of many businessmen.

The Hollywood Reporter has prerelease numbers from Deloitte’s “State of the Media Democracy” report, and those numbers show surging growth in using cell phones for more than chatting. 20 percent of those polled said that they watch video on their phone daily or almost daily. Since that’s an average, we have to assume that the number is far higher among 13-24 year olds, 62 percent of whom now say they use their cell phones as entertainment devices. That sort of growth naturally attracts entrepreneurs who want to capitalize on the popularity of Internet-enabled mobile devices. Money can be made either by selling content directly or by selling ads on content that consumers want to view (but not badly enough to pay for). So far, advertising on mobile devices has been hampered by consumer resistance and small screen sizes, but the Deloitte study makes clear that consumers are willing to endure even intrusive ads in return for content they want. Yea verily, we are a nation of cheap sods. Content owners have been accustomed to locking down the experience on mobile devices, but opening a full connection to the web (which the iPhone, for instance, does superbly) necessarily removes much of that control. Mobile operators that have been able to offer proprietary video and chatting services (among others) at premium prices will increasingly find themselves competing with free, ad-supported offerings delivered through a device’s Internet connection. The pressure will hopefully be enough to push back strongly against proprietary lock-in and DRMed offerings. But ad-supported services on cell phones have their drawbacks, too, and some companies are hesitant to jump in. A phone can still feel uniquely personal, making the most lucrative form of advertising (highly specific, even location-based targeting) feel intrusive. The Associated Press is running an article on that very problem, in fact. After all, no advertiser wants to annoy potential customers. “It’s proceed with caution,” said Burst Media’s CEO, Jarvis Coffin, in the piece. “Are consumers going to be spooked by the idea that suddenly their phone goes beep and it’s a Starbucks offer, and they are standing next to a Starbucks?” Short answer: yes. Still, like anything else in the world, people will probably get used to more invasive cell phone ads. Google, a supremely talented data aggregator and ad sales company, has been pushing hard to enter the mobile space, rolling out projects like Android and preparing to bid on wireless spectrum early next year. Other companies are following suit. How much privacy will users be willing to trade for cheap cell phone plans or free services? We’ll start to find out next year.   source: google news http://blogs.mindbodynsoul.com http://www.currentnewsaffairs.com  
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