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Judge to issue injunction on Vonage
Venture Business News | 2007/03/23 15:12


A federal judge said on Friday he would issue an injunction barring Vonage Holdings Corp. from using Internet phone call technology patented by Verizon Communications Inc., but delayed signing the order for two weeks.

Vonage shares fell sharply after the ruling, falling 16.8 percent, or 68 cents, to $3.37 in afternoon trading on the New York Stock Exchange.

The two-week period gives Vonage time to try and convince U.S. District Judge Claude Hilton to stay his injunction while it appeals the entire case. "I will sign the injunction at the time I rule on the stay," he said.

Hilton agreed with Verizon that it would suffer irreparable harm if he allowed continued infringement of the voice-over-Internet Protocol (VoIP) technologies that allow consumers to make calls over the Internet.

He rejected arguments by Vonage that the harm to Verizon was outweighed by other factors, including the public interest.

A jury on March 8 found Vonage had infringed three patents owned by Verizon. The jury said Vonage must pay $58 million plus 5.5 percent royalties on future sales.

"They could not have been commercially successful if they had not taken these patents we have and put them into their technologies," Dan Webb, an attorney for Verizon, said at Friday's hearing on the injunction request.

Webb also cited documents Vonage filed with the court under seal, saying an injunction would cause "enormous business difficulties" for Vonage. Webb said the Vonage filings suggested that "they can't live with an injunction because of the way their technology is designed."

However, Vonage's chief lawyer, Sharon O'Leary, told Reuters that Vonage customers would not be affected by the case. She declined to comment on the sealed, or secret, documents the company filed with the court.

O'Leary also she was pleased that the judge gave the company two weeks to try and stop the injunction.

"We will get the stay, either through the district court or the federal circuit court of appeals," O'Leary said. She said Judge Hilton himself raised the possibility that he could be overturned on appeal during arguments on Friday.

O'Leary said she was optimistic the company could get an appeals court to overturn both the injunction and the jury's verdict.



Disney digital plans hit by Liberty lawsuit
Venture Business News | 2007/03/23 08:09

Walt Disney's plans to distribute its content over new digital platforms came under pressure on Thursday when Liberty Media sued the company, saying lucrative licensing contracts had been violated by the sale of Disney films over the internet.

Starz Entertainment, a pay-TV service owned by Liberty, which is controlled by John Malone, licenses Disney films for broadcast.

But Starz alleged in a suit filed in California that the sale of Disney films over the internet on Apple's iTunes platform and via Walmart.com breached its licensing deals with Disney.

Recent Disney films to have been sold on iTunes include Pirates of the Caribbean: Dead Man's Chest and Cars. Starz contends these films should have not been made available for digital download until they had appeared on the company's own services.

Starz filed the suit against Buena Vista Television, a subsidiary of Disney. In the court papers, Starz claims to have paid more than $1bn over last 10 years for exclusive rights to Disney content.

Robert Clasen, chief executive and chairman of Starz Entertainment, said talks had ended in failure, and the the company had been left with "no choice".

"Our agreements clearly prohibit them from selling their movies by electronic download over the internet while they are exclusive to Starz. If Disney is permitted to violate our contract in this manner, it will undermine the integrity of copyright in general which is a cornerstone of our industry."

Mr Clasen said Hollywood studios had aggressively moved to protect the copyright of their content on the internet. "Starz must be equally aggressive in protecting the value of the deal it made."

The suit seeks to prevent Buena Vista Television "from continuing to infringe on Starz's rights".

Buena Vista said: "We believe Starz misreads the agreement with Buena Vista Television and that its claim is without merit. Buena Vista Television retained and has the right to distribute its motion pictures in a wide range of mediums."

Digital distribution of content has become a central part of Disney's growth strategy under Bob Iger, the media group's chief executive. The group has led its peers, signing the first distribution deal between a Hollywood studio and Apple's iTunes platform.



Hackers selling IDs for $14, Symantec says
Venture Business News | 2007/03/20 01:17

Identity thieves are offering a person’s credit-card number, date of birth and other sensitive information for as little as US$14 over the Internet, said a new report on online threats released Monday.

The data is sold on so-called “underground economy servers,” used by criminal organizations to hawk information they’ve captured through hacking, Symantec said in its Internet Security Threat Report, which tracked online trends from June to December 2006. The information can then be used for identity scams such as opening a bank account in a false name.

“U.S.-based credit cards with a card verification number were available for between US$1 to $6, while an identity — including a U.S. bank account, credit card, date of birth and government-issued identification number — was available for between $14 to $18,” the report said.

Some 51 percent of the servers hosting the information were in the U.S., in part because the growth in broadband Internet access in the U.S. has created new opportunities for criminals, Symantec said. About 86 percent of the credit and debit card numbers available on those servers were issued by U.S. banks, it said.

One way that criminals have gained access to computers is by exploiting zero-day vulnerabilities, or software flaws that are being exploited as soon as they are revealed and before a patch has been released.

Symantec documented 12 zero-day vulnerabilities in the period from June to December 2006. Only one was found in its two prior six-month reporting periods, the company said.

Hackers have exploited some of those vulnerabilities by creating malicious documents in Microsoft Office and other software, said Ollie Whitehouse, a security architect at Symantec.

A malicious Word or Excel document, when attached to a spam e-mail, has a greater chance of being opened by someone since it may appear legitimate and be targeted at an employee of a specific company.

While security software programs will often block executable programs attached to e-mail, common Office documents are allowed to go through, Whitehouse said.

“A business isn’t going to say ‘We will no longer accept Office documents received via email,’” Whitehouse said. “I think productivity would go through the floor at that point. Unfortunately, this is where the security requirement and the business requirement do really clash.”

A video posted on Symantec’s blog, shows a sophisticated attack where a malicious document is opened that puts a harmful executable onto the system and then opens a regular Word document. The attack is almost invisible to the user, apart from a flicker on the screen before the Word document opens.

“Office documents — PowerPoint presentations, Excel spreadsheets — and graphics like JPEGs aren’t necessarily considered malicious file formats, so the user is more inclined to open them,” Whitehouse said.



Google Mum About Swirling 'Gphone' Rumors
Venture Business News | 2007/03/19 11:15

Rumors abound that Google plans to launch a mobile phone, reportedly code-named "Switch," with the look and feel of a BlackBerry but with better Internet capabilities.

But in all the commentary from news agencies, blogs, gadget sites, analysts, investors, and reportedly Google's own operation's chief for Spain and Portugal, there haven't been many compelling reasons given as to why Google would enter the mobile phone market. It's a highly cutthroat business.


Just ask Taiwan's BenQ. The company tried to revitalize Siemens' mobile phone operations, but one year and $1 billion later it gave up. It's not hard to see why Nokia and Motorola gained market share against most of their rivals last year. But even their stock prices have suffered, because fierce price competition for handsets hurt their profitability.


Still, the idea of a Google phone is compelling, and great fun to read about. There are even pictures of the rumored device, including one at gadget site Gizmodo.com. The picture shows a flat-screen mobile phone, purportedly designed to work like a BlackBerry.

Another, altogether different design can be found at Engadget.com, but authors on the site cast doubts about whether the photo--or the phone--is real.

The Engadget picture comes from a forum member on Mobileburn.com, who goes by the online name of Madnezz and claims he filled out an online survey about a Google phone developed by Samsung Electronics.

If you click that link, note that beside Madnezz's name is a picture of his online persona, or avatar: a boy covering his mouth and laughing as if he's done something naughty. Could that be all this really is, some rumor and speculation, thrown together with a few tall tales to stoke the flames?

If nothing else it's excellent publicity for Google, especially if the company is coming out with some new mobile phone applications soon. Rumors of a Google phone have been around at least since last December, when it supposedly planned to team up with Taiwan's High Tech Computer to make the device.

But the commentaries have been mostly about rumors, and they lack a good motive for such a move. Google makes software, not hardware, and rumors that it was developing a PC a few years back turned out to be wrong--it was simply making software for PCs.

Some say Google wants to make something like Apple's iPhone, but called the gPhone instead. The easy answer to that theory is that almost everyone wants to make something like Apple's iPhone, so Google would be entering a crowded copycat business. That doesn't sound like Google. Sure, Apple jumped in the phone business, but it already made hardware, and it had to defend its music player business as those functions moved onto phones.

Even worse, if Google makes its own handset it will become a competitor to companies like Samsung, which are preloading Google software on their own phones. These companies have other choices for mobile search, including Yahoo and Microsoft, and Google would risk losing some valuable preloading partners.

Another theory says that Google wants to make a low-cost device to increase Internet usage around the world. But it is already part of one such group, the One Laptop Per Child Project. Besides, mobile phone makers are already slashing the cost of Internet-ready phones with developing markets in mind.

Google has said only that mobile applications are important to the company, and declined further comment on the speculation. The head of its operations in Spain and Portugal, Isabel Aguilera, told the Spanish news site Noticias.com last week that Google has been exploring the idea of a phone and that some of its engineers have spent time working on one. It's not exactly a smoking gun; Google is famous for encouraging its engineers to spend a portion of their time on experimental projects, many of which never see the light of day.

The company also posted a job advertisement recently, saying it was "experimenting with a few wireless communications systems." But in the end the evidence for a Google phone is thin at best. Indeed, the Wall Street Journal reported Saturday that all the phone talk is misguided, and that Google is really developing new software for mobile phones, albeit more sophisticated than what it has developed before.



CBS shoots the NCAA to YouTube
Venture Business News | 2007/03/17 01:05

Though CBS already has an official channel on YouTube, today it unveiled a new channel, under the username "cbsncaatourney". Game clips and highlights will be uploaded "in near real time" according to a press release.

"This year, CBS Sports and YouTube will expand on the success of March Madness on Demand reaching sports fans everywhere, on all levels across all media, making the fan the real winner as we enter this Tournament," said CBS News and Sports president Sean McManus.


To monetize the move, CBS has struck a specific advertising deal with Pontiac. Video ads from the car maker will appear in the YouTube clips and in addition, Pontiac's name will appear in connection with the channel's features.

Clips will include press conferences, game highlights, and original programming from CBS Sports. Additionally, CBS will use the channel to add more interaction with viewers, by letting them vote on their favorite "game changing performances".

CBS uploaded 36 videos to coincide with the launch of the new YouTube channel, including this perfect three-pointer from Davidson guard Stephen Curry.



Cisco to pay $3.2B for WebEx
Venture Business News | 2007/03/15 09:05

Cisco Systems Inc. said Thursday that it has agreed to acquire the online meeting company WebEx Communications Inc. for about $3.2 billion in cash.

Cisco, the leading maker of routers and switches that direct data over computer networks, said it will pay $57 per share of WebEx. That represents a 23 percent premium over WebEx's closing price of $46.20 Wednesday on the Nasdaq Stock Market.

Shares of WebEx soared $10.53, or more than 22 percent, to $56.73 in early trading on the Nasdaq Stock Market. Cisco shares lost 6 cents to $25.79 on the same exchange.

Cisco said the acquisition has been approved by both boards and is expected to close in the fourth quarter of fiscal 2007. Cisco said it expects transaction to have an immaterial effect on its fiscal year 2008 earnings after one-time charges are subtracted. The total purchase price will be about $2.9 billion when factoring in WebEx's $300 million in cash on hand.

The San Jose-based company has recently made a number of acquisitions branching out from its core business of supplying networking gear and into communications, social networking and other areas that help drive traffic over the network and increase demand for its core equipment.

Santa Clara-based WebEx makes applications that enable online conferences and secure instant messaging. The company says it commands 64 percent of the online meeting market, with more than 3.5 million people using WebEx services every month for online communications.

Cisco said the acquisition will allow it to tap into the increasingly lucrative market for business communications over the Internet.

"As collaboration in the workplace becomes increasingly important, companies are looking for rich communications tools to help them work more effectively and efficiently," Charles H. Giancarlo, Cisco's chief development officer, said in a statement. "The combination of Cisco and WebEx will deliver compelling solutions accelerating this next wave of business communications."

Some analysts expressed concern on a conference call about the price of the deal, considering WebEx had just $380 million in revenue last year and just under $49 million in net income. Some also suggested that Cisco could have snagged the company at a much cheaper price had it acted sooner. WebEx's stock price rose more than 56 percent since last year, based on the company's closing price before the deal was announced.

However, some industry observers said the deal is a perfect fit for Cisco's Linksys division, beefing up its offerings for small businesses. The deal also will also give WebEx access to larger business customers and the opportunity for expanded growth worldwide, said Roger Kay, president of Endpoint Technologies Associates Inc.

"From Cisco's point of view, it makes some sense: You're beefing up Linksys, you're grabbing a player that can help increase the value of the Linksys franchise, and you're a grabbing a player that's already well established in markets you've assessed will have high growth rates," Kay said.



Turkish Court Lifts YouTube Ban After Two Days
Venture Business News | 2007/03/12 11:51

Turkey lifted its ban on YouTube Friday, an official for the country's largest telecommunications firm said, two days after a court ordered the Web site blocked because of videos that allegedly insulted the founder of modern Turkey.

Ahter Kutadgu, head of corporate communications for Turk Telekom, told the Anatolia news agency his company had been notified of a court decision to lift the ban.

Kutadgu did not elaborate on the court's reasoning.

"As soon as the court decision lifting the ban reached us, we immediately opened YouTube," he said.

The Istanbul court that ordered the site blocked on Wednesday had said it would lift the ban as soon as it ascertained that videos insulting Turkey's founding father, Mustafa Kemal Ataturk, were removed.

The ban had been condemned by the press freedom group Reporters Without Borders and drew attention to Turkey's shaky record on permitting free expression.

It is illegal in Turkey to insult Ataturk, a revered figure whose image graces every denomination of currency and whose portrait hangs in nearly all government offices.

Several prominent Turkish journalists and writers have been tried for allegedly insulting Ataturk or for the crime of insulting "Turkishness."



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