Verizon to buy out Vodafone's stake in mobile unit for $130B

Verizon Communications has reached an agreement to buy Vodafone Group's 45 percent stake in its Verizon Wireless subsidiary for US$130 billion.

Under the deal, Verizon will take 100 percent ownership of the wireless unit, the largest mobile operator in the U.S. This will enhance its ability to offer customers "seamless and integrated services," the carrier said in a press release.

Samsung Galaxy S4, Black (Verizon Wireless) The transaction has been unanimously approved by the boards of both companies and is expected to close in the first quarter of 2014, subject to customary regulatory approvals. Verizon will pay a combination of cash and stock for Vodafone's stake.

"As a wholly owned entity, Verizon Wireless will be better equipped to take advantage of the changing competitive dynamics in the market and capitalize on the continuing evolution of consumer demand for wireless, video and broadband services," Verizon Chairman and CEO Lowell McAdam said in the press release.

"This transaction allows both Vodafone and Verizon to execute on their long-term strategic objectives," Vodafone Group CEO Vittorio Colao said in the release. "Our two companies have had a long and successful partnership and have grown Verizon Wireless into a market leader with great momentum. We wish Lowell and the Verizon team continuing success over the years ahead."

Verizon has sought to buy out its wireless business, originally formed as a joint venture with Vodafone, for several years. The transaction is unlikely to have a significant impact on U.S. mobile consumers, industry analysts said last week. Vodafone may use the huge windfall to buy smaller carriers and further its pursuit of wireline operations, analysts said.

Salesforce.com mobile app developers gain security tools

Good Technology has integrated its Dynamics Secure Mobility Platform with Salesforce.com's Mobile SDK to help developers build mobile applications that are more secure and easily managed.

The growing popularity of smartphones and tablets combined with the BYOD (bring-your-own-device) trend presents several challenges to IT departments, including developing mobile applications and then efficiently managing and protecting them. Salesforce.com's Mobile SDK (software development kit) helps with the former and Good's Secure Mobility Platform offers the latter.

The goal with the integration is to make it easier for Salesforce.com developers to build apps compatible with Good's containerization technology, which offers features such as app-level encryption as well as compliance and jailbreak detection. Enterprises can also put in place data loss prevention and automated actions that lock and wipe applications without impacting a user's device or personal data, according to Good.

The Mobile SDK, which is available for Android and iOS, is a key part of Salesforce.com's accelerating mobile push. It lets developers choose between building applications directly for Apple and Google's OSes, web applications or so-called hydrid applications -- which make it possible to embed HTML5 apps inside a native container.

Recently, Salesforce.com announced version 2.0 of the SDK, which added the SmartSync data framework allowing developers to create applications that work with data both off and online.

Good isn't the only mobile management tool vendor that's working with Salesforce. On Tuesday, competitor MobileIron announced Anyware. The hosted enterprise mobility management service lets administrators distribute mobile apps to employees as well as manage their devices from the Salesforce administration console, MobileIron said.

Android mobile malware rebounds in Q2, reports McAfee

Android-based malware has grown by 35% in the second quarter, according to the latest threat report from security firm McAfee.

This represents a rebound, as this growth rate has not been seen since early 2012.

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McAfee said the rebound is marked by the continued proliferation of SMS text-stealing banking malware, fraudulent dating and entertainment apps, weaponised legitimate apps and malicious apps posing as useful tools.

McAfee Labs registered twice as many new ransomware samples in the second quarter as in the first quarter, raising the 2013 ransomware count higher than the total found in all previous periods combined.

The second quarter also saw a 16% increase in suspicious URLs, a 50% increase in digitally-signed malware samples, and notable events in the cyber attack and espionage areas.

These include multiple attacks on the global Bitcoin infrastructure and revelations around the Operation Troy network targeting US and South Korean military assets.

“The mobile cyber crime landscape is becoming more defined as cyber gangs determine which tactics are most effective and profitable,” said Vincent Weafer, senior vice-president at McAfee Labs.

“As in other mature areas of cyber crime, the profit motive of hacking bank accounts has eclipsed the technical challenges of bypassing digital trust,” he said.

According to Weafer, tactics such as the dating and entertainment app scams benefit from the lack of attention paid to such schemes.

Others, he said, simply target the mobile paradigm’s most popular currency: personal user information.

Facebook tests mobile payments tool

Facebook is planning to test a mobile payments feature which will automatically fill in payment details when purchasing on mobile apps.

The social networking giant will be able to take payment details from users who have added them to their Facebook account. These will then be automatically generated into forms when purchasing on a mobile device.

Facebook would not handle the payment processing – that service would remain with the application through services such as PayPal and Braintree.

Facebook said the service was to create a "simpler commerce experience" which would help customers filling in lengthy payment details on a small touchscreen device.

In June, the company admitted that a bug caused the phone numbers and email addresses of six million users to be shared unintentionally. While the bug was fixed in a day, it may lead users to be wary of storing payment details with the social network in the future.

At the moment, the mobile payments industry is very fragmented with no single system dominating the market.

A survey earlier this year stated that PayPal and mobile banking apps were the most dominant technology with 64% and 60% of users choosing these platforms to handle their transactions. Google wallet only attracts 11% of respondents, while 10% said they would use QR codes and 7% said they would use Paytags.

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More Android malware distributed through mobile ad networks

Mobile ad networks can provide a loophole to serve malware to Android devices, according to researchers from security firm Palo Alto Networks who have found new Android threats being distributed in this manner.

Most mobile developers embed advertising frameworks into their applications in order to generate revenue. Unlike ads displayed inside Web browsers, ads displayed within mobile apps are served by code that's actually part of those applications.

The embedding of code for the advertising network into a mobile application itself ensures that ads get tracked and the developers get paid, but at the same time this third-party code represents a backdoor into the device, said Wade Williamson, senior security analyst at Palo Alto Networks, in a Monday blog post.

"If the mobile ad network turns malicious, then a completely benign application could begin bringing down malicious content to the device," Williamson said. "What you have at that point is a ready-made botnet."

There are precedents for this type of attack. In April, mobile security firm Lookout identified 32 apps hosted on Google Play that were using a rogue ad network later dubbed BadNews. The apps were benign, but the malicious ad network was designed to push toll fraud malware targeting Russian-speaking users through those apps. The malware masqueraded as updates for other popular applications.

According to Williamson, researchers from Palo Alto Networks recently came across a similar attack in Asia that involved using a rogue ad network to push malicious code through other apps without being detected by mobile antivirus vendors.

The malicious payload pushed by the ad network runs quietly in the device memory and waits for users to initiate the installation of any other application, Williamson said. At that point, it prompts users to also install and grant permissions to the malware, appearing as if it's part of the new application's installation process, he said.

"This is a very elegant approach that doesn't really require the end-user to do anything 'wrong'," the researcher said.

Once installed, the malware has the ability to intercept and hide received text messages, as well as to send text messages in order to sign up users for premium-rate mobile services, Palo Alto Networks said in a description of the attack sent via email.

Such attacks are probably specific to certain geographic regions, said Bogdan Botezatu, a senior e-threat analyst at antivirus vendor Bitdefender, Tuesday via email.

Botezatu expects the distribution of malware through mobile ad networks to become more common, especially in countries where mobile devices can't access the official Google Play store or where users have difficulties in purchasing applications in a legitimate manner, causing most Android devices to be configured to accept APKs (Android application packages) from unknown sources.

That doesn't mean that apps that deliver malware through ad networks can't make it into Google Play, as the BadNews incident has shown.

Google Play checks APKs for malware before approving them, so getting an infected APK uploaded there can be very hard, Botezatu said. However, a malicious ad server could lay dormant until after the application is approved and then start delivering malware, he said.

Botezatu believes that users are more likely to fall victim to "malvertising" -- malicious advertising -- attacks launched through mobile apps than Web browsers. That's because there have been many incidents of ad-based malware infections on computers and users are probably more careful about what they click on inside their browsers, he said.

Android users should make sure that their devices are not configured to allow the installation of apps from unknown sources and should run a mobile antivirus product, which might be able to detect malicious apps delivered through ad networks, he said.

DCMS reveals locations for mobile signal project

The rural areas of the UK set to get mobile signal from a government-funded scheme were today revealed by the Department for Culture, Media and Sport (DCMS).

The mobile infrastructure project – or MIP – is seeing central government invest £150m into bringing mobile connectivity to the areas of the country currently without signal.

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The scheme was announced in February 2013 but today is the first time a map detailing which areas were set to benefit has been released. These include some of the most rural spots in Scotland, Wales, Northern Ireland and England.

“This project will see mobile phone coverage extended to many of the people who currently live and work in areas where there is none,” said communications minister Ed Vaizey. “The project will provide a significant boost to local economies across the UK and will be instrumental in helping Britain win the global race.”

The government funding will be given to Arqiva to build mobile sites in the rural locations and be responsible for gaining planning permission from local authorities. However, the responsibility for operating the sites will then pass to the UK’s four major mobile networks – Vodafone, O2, EE and 3 – which will pay for any costs over the next 20 years.

MIP rollout

John Cresswell, CEO of Arqiva, said: “We are delighted to be working with the government and mobile network operators to improve mobile phone coverage in the areas announced today. Investing in mobile infrastructure will support the economy, reduce the technological divide and benefit the social fabric of our regions and villages.

“We are proud to be part of this initiative and committed to its success.”

Although the overall goal is to have all the sites equipped and live by the end of 2015, DCMS has promised some areas will get signal by the end of this year.

However, the department did warn this project would not bring signal to every area of the UK currently lacking it, and would focus on the number of premises it could benefit to decide on which areas would be prioritised.

Behind the Wheel | 2014 Nissan Versa Note: Upwardly Mobile, but Not in Any Hurry to Get There

That partly explains why so many cars at the bottom of the price ladder now offer leather interiors, fancy navigation systems and turbocharged engines. Even denuded of options, most economy cars on the dealer’s lot will give you air-conditioning, power windows and power locks — features that, in many parts of the world, would qualify a car as a luxury model.

The 2014 Nissan Versa Note, the four-door hatchback version of the second-generation Versa, offers options like heated seats, keyless ignition and Around View, a monitor that uses four wide-angle cameras to stitch together a bird’s-eye view of the car — all items you’d find on a $50,000 Infiniti. The Versa Note’s base price is $14,780.

With the makeover for the Versa’s new generation, Nissan decided to call the hatchback version the Versa Note, which is what it’s called in the rest of the world. Here’s a simple way to remember the difference: If you’re comparing the Versa Note versus the Versa sedan, note that the first Versa is more versatile.

This Versa hatchback is, to my eyes, much better looking than the angular first-generation car.

Nissan, champion of the creatively tortured styling explanation (describing the original Infiniti FX as a “bionic cheetah” is still tops in my book), now bequeaths us the term “squash line.” That refers not to a row of gourds, but to the plunging crease stamped into the side of the Versa Note’s body panels.

Nissan says that the shape of this line is inspired by the trajectory of a squash ball hitting a wall, bouncing on the floor and returning to the player. Hey, sure! I think it would be fun to sit in a field someday with Nissan designers and look at clouds.

Among a number of thoughtful interior touches that the Note can be ordered with is Divide-N-Hide, which is not a combat tactic but a clever multiposition rear floor setup with hidden cargo compartments. There seems to be a trend here: the Dodge Dart has a passenger-seat hidey-hole, and behind certain Chevy navigation screens are covert dashboard cubbies. I want to know what everyone has taken to stashing in their cars.

On the in-car electronics front, the Note offers Pandora radio capability (which works only with iPhones) and hands-free text messaging (which works only with non-iPhones). Then there’s Google Send-to-Car, which lets you beam an address to the navigation system straight from your home computer. At last, a way to program a GPS that involves extra steps.

I drove a Versa with an automatic transmission, which in a Nissan usually means a continuously variable transmission, or C.V.T. The C.V.T. does not have conventional fixed gear ratios, instead using a belt and pulley system to constantly vary the drive ratio according to the demands of your right foot.

If you’re not in a rush, C.V.T.’s are smooth and can keep the engine from ever reaching high r.p.m. C.V.T.’s also tend to deliver great fuel economy, which in the case of the Note is an E.P.A.-rated 31 miles per gallon in the city and 40 on the highway.

The downside: C.V.T.’s are never very much fun.

Try to hustle the car and the poor little 4-cylinder under the hood is obliged to rev until you let off the gas — the engine just wails its anguished drone until you reach the desired speed or let off the throttle in an act of mercy.

The least expensive Versa Note, the S model, comes with a 5-speed manual transmission. Getting more fun for less money sounds like a good call to me, although the old-school transmission has a fuel-economy drawback: 30 m.p.g. on the E.P.A. combined cycle, down 5 m.p.g. from the C.V.T. models.

Whichever transmission you specify, the Versa Note accelerates with the urgency of a placid Pacific sunset, a limitation imposed by a 1.6-liter 4-cylinder engine that squeaks out 109 horsepower at 6,000 r.p.m. The second-generation Versa did drop about 300 pounds compared with its predecessor, but you still might wear a hole in the carpet under the gas pedal.

Perhaps Versa buyers aren’t out to set records at the local dragstrip, but the little Nissan’s rivals offer substantially more power for about the same money. The Note SV I drove included the $540 Convenience Package (backup camera, Divide-N-Hide floor and XM stereo), for a total of $17,320. So let’s say our price bogie is about $17,000.

A Hyundai Accent GS hatchback with a 6-speed automatic and 138 horsepower starts at $16,790. A Chevy Sonic hatch LS — also with 138 horses and a 6-speed automatic — goes for $16,690. With roughly a fourth more horsepower and conventional automatic transmissions, either car offers a significantly more satisfying driving experience. True, a C.V.T.-equipped Versa gets better mileage, but you’ll have to drive a long way to take advantage of the difference between the Versa’s 35 m.p.g. combined rating and the Accent’s 31.

Among all the other expectations — efficiency, spaciousness, comfort — should I also demand that a $17,000 car be moderately quick and entertaining to drive? Speaking for the spoiled American new-car buyer, I’m afraid so. 

Wall Street Beat: Mobile is key to tech earnings

Tech earnings this week highlighted the importance of mobile communications to IT, as companies including Apple, Samsung, Facebook, AT&T and Texas Instruments reported mixed results for the quarter ending in June.

Apple and Samsung earnings underscored competition in the mobile market. Reporting Tuesday, Apple said revenue was up 1 percent year over year to US$35.3 billion, while profit declined 22 percent to $6.9 billion.

The lack of a new hit product, competition from Android-based devices and sagging sales overseas, particularly in China, hampered earnings for the quarter. Apple sales in China declined 4 percent year over year. The overseas results indicated a problem other IT companies face.

"The continued recession in Europe and slowing growth in China will offset improvements in the US, Japan, and some emerging markets," according to Forrester analyst Andrew Bartels, in a recent forecast for IT sales this year.

While Apple had a soft quarter, however, a refresh of its mobile product lines should bolster growth, analysts said. "We maintain our belief that Apple has a strong product pipeline, including a refreshed iPhone 5S, mid-tier iPhone, and iPad lineup that should result in solid earnings growth," wrote Canaccord Genuity analyst T. Michael Walkley in a research note. The launch of a lower-cost iPhone should also help Apple in emerging markets, Walkley noted.

Meanwhile, Samsung Electronics, reporting Friday, said that even though revenue and net earnings rose significantly year over year, tough competition in the mobile phone market and the need to boost marketing costs cut into results.

The company generated a profit of 7.77 trillion won (US$6.89 billion), up a whopping 50 percent year over year, as sales rose 21 percent to 57.5 trillion won. However, marketing costs associated with, among other things, launching its Galaxy S4 during the quarter brought operating profit down for the mobile unit by 3 percent even though sales increased.

Samsung has been edging out Apple in the hard-fought mobile phone market. A report from Strategy Analytics on Friday said that Apple's share of the smartphone market declined in the second quarter to its lowest level in three years, slipping to 13.6 percent in the quarter from 16.6 percent year over year. During the same period Samsung's market share rose to 33 percent from 31 percent.

However, Apple and Samsung face a similar problem: Their success in high-end smartphones means that mature markets are saturated. They face the tough task of getting users in developed markets to upgrade while coming up with devices tailored to emerging markets, some of which face slowing growth over the next few quarters.

The shift to mobile computing has implications for a wide variety of IT and Internet companies. Facebook on Wednesday said mobile ad sales helped fuel revenue, which skyrocketed 53 percent year over year to $1.81 billion, while profit totaled $333 million compared to a net loss of $157 million.

A year ago, the social networking giant had essentially no mobile revenue, but during the past quarter sales of mobile ads came out to 41 percent of total advertising revenue for the quarter.

Mobile communications also played an important part in AT&T's quarter. The company reported a rise in revenue as strength in its mobile business made up for flat-lining wireline sales.

The company Tuesday said it gained 632,000 wireless subscribers in the quarter, while mobile data sales increased almost 20 percent year over year. Total revenue increased 1.6 percent year over year to $32.1 billion. Excluding AT&T's former Advertising Solutions division, which was sold off, sales were up 2.6 percent. However, as operating expenses rose, profit declined to $3.82 billion, down from $3.9 billion.

Other tech companies reporting earnings this week included:

-- Texas Instruments. The chipmaker, noting weakness in the PC market, said revenue declined by 9 percent year over year to $3.1 billion. Net income, however, rose by 48 percent to $660 million as cost-cutting measures took effect.

-- Amazon, which reported that sales for the quarter rose 22 percent year over year to 15.7 billion. Operating income, however, declined 26 percent to $79 million. The good news was that its business in the U.S., which is expected to expand faster than overseas markets, increased and earnings in the region were up.

Some privacy advocates question mobile apps agreement

A proposed code of conduct for mobile app developers intended to make them explain how user data is collected and used does not have a clear enforcement mechanism,  one privacy advocate said.

The code was negotiated this week by several trade groups and the U.S. National Telecommunications and Information Administration (NTIA). While many participants in the NTIA's mobile privacy negotiations voiced support Thursday for the transparency code of conduct, Consumer Watchdog criticized the document and the NTIA process.

Just two participants voted to fully endorse the code, while 20 supported it, 17 voted for further consideration and one objected. Participants voicing support had no obligation to adopt the code, the NTIA said.

"This is absurd Orwellian doublespeak," John Simpson, Consumer Watchdog's Privacy Project director, said in an email.  "A company can put out a press release saying it supports the transparency code, boosting its public image and then do absolutely nothing."

Several consumer and privacy groups voted to support the code, including the American Civil Liberties Union, Consumers Union, the Center for Democracy and Technology and the Electronic Frontier Foundation.

The code defines a short notice to provide consumers with information about the data collection and sharing practices of the mobile apps they use. The short notices tell consumers if the apps are collecting biometrics, browser history, contacts, financial information, health information, location, and other information.

NTIA Administrator Lawrence Strickling, called Thursday's vote a "seminal milestone in the efforts to enhance consumer privacy on mobile devices. "

Several software trade groups also praised the transparency code. The short notice will quickly and easily inform consumers about the personal information apps collect, said Jon Potter, president of the Application Developers Alliance.

"App developers know that consumer trust is critical to our industry's continuing success," Potter said in a statement. The agreement that "the model notices are ready for introduction and consumer testing is a win for both consumers and app developers."

But Jeffrey Chester, executive director of the Center for Digital Democracy, criticized the NTIA's negotiation process. Chester, who abstained from the vote, had asked the NTIA to review existing mobile and app practices to determine the extent and range of data collection, but the agency didn't do that, he said.

"The NTIA process is seriously flawed," he said in an email. "It's as if a surgeon was allowed to operate without first examining the patient. [The agency] refused to make the industry discuss all the ways mobile apps use data and target users."

The code approved Thursday "is just words on a very small screen," Chester added.

Samsung posts record profit, but mobile slips despite Galaxy S4 launch

Samsung Electronics said sales and profits soared in the second quarter from a year ago, but increasing competition in smartphones hurt performance in its core mobile division.

The company said it booked a net profit of 7.77 trillion won (US$6.89 billion) during the April-June period, up 50 percent from a year earlier. Sales were up 21 percent to 57.5 trillion won.

The strong showings were marked by strong quarterly gains in every division except its core mobile business. Samsung launched its flagship Galaxy S4 in April with a massive global marketing campaign, after introducing it at an event in New York City's Radio City Music Hall. The company said increased marketing costs and competition hurt its profitability during the period, pulling operating profit down 3 percent even as its sales increased.

Executives hinted in an earnings conference call that new high-end phones are on the way, noting that the product cycle of smartphones is now about a year and its component business expected a boost from new advanced handsets in the second half of the year. Jeeho Baek, an executive in Samsung's semiconductor business, said he expected more demand due to the company's "planned launch of a flagship smartphone model."

The company said that the recent explosive growth of smartphones is due to cool off in the near future.

"Although we expect the smartphone market to sustain growth in the third quarter, it is possible the pace of growth may slow down slightly," said Hyunjoon Kim, an executive in Samsung's mobile division.

Samsung is a dominant manufacturer of display panels, NAND flash memory and other components, but the vast majority of its sales and profit now comes from its mobile division. The company said the Galaxy S4 sold more than 10 million units less than a month after launch, but has been quiet about the phone's performance since. In some markets, such as Japan, the phone has been sharply outsold by rivals.

Samsung's earnings reported Friday were in line with the forecast it made earlier this month. Investors have been disappointed with the company despite the strong showing, and the company's shares are down nearly 15 percent over the last two months. A survey of analysts by Bloomberg taken before the earnings report predicted second-quarter net profit to be about 6 percent higher than reported.

Earlier this week, main rival Apple said profits were down 22 percent during the quarter, but analysts expected the decline as the company did not have a major product launch during the period. Apple CEO Tim Cook said new products will be released later this year.

The company said it booked strong sales in its chip business, and expects demand for DRAMs used in graphics to spike over the second half of the year due to demand from new gaming consoles. Both Microsoft and Sony are gearing up to release new game versions of their consoles.

Facebook Is Erasing Doubts on Mobile

The social networking company said Wednesday that it had revved up its mobile advertising from virtually nothing a year ago to 41 percent of its total ad revenue of $1.6 billion in the second quarter.

“Soon we’ll have more revenue on mobile than desktop,” Mark Zuckerberg, Facebook’s founder and chief executive, said in a conference call with analysts.

Facebook’s results elated investors, who sent the company’s stock up nearly 17 percent, to $30.94, in after-hours trading.

Analysts said the strong performance dissipated lingering worries that the company could not adapt to the current Internet environment, in which users are relying more on mobile devices instead of personal computers to access the information they want.

Those concerns have dogged the company since its disappointing initial public offering in May 2012, in which it sold shares at $38 and then saw them fall by half.

“One of the biggest overhangs from their I.P.O. is that this company had been blindsided by mobile,” said Mark Mahaney, an analyst with RBC Capital Markets. “They caught up. Instead of being behind the curve on mobile, they are ahead of the curve.”

The company said it had net income of $333 million, or 13 cents a share, in the second quarter. Excluding stock-based compensation expenses, profits were $488 million or 19 cents a share, compared with $295 million, or 12 cents a share, in the second quarter a year ago.

The company’s revenue soared 53 percent, to $1.81 billion.

Facebook had particularly strong demand for ads that appear in its users’ news feeds, the flow of updates from friends that they see when they log on. About 1 in 20 posts in the news feed is an ad, and advertisers cannot seem to get enough of them.

The company expects those ads to continue to grow in the second half, its chief financial officer, David Ebersman, said in a conference call with analysts.

One concern for the future is whether Facebook will annoy its users if it significantly increases the number of ads in news feeds, said Debra Aho Williamson, an analyst with eMarketer, a research firm.

“How many ads will people tolerate?” she asked.

Mr. Zuckerberg said Facebook’s studies had shown that users were noticing ads more, and the company was working to improve the quality and relevance of ads.

Facebook is also studying when and how to introduce video ads, which are expected to command at least several hundred thousand dollars each.

“We have nothing to announce today,” Facebook’s chief operating officer, Sheryl Sandberg, said in an interview. But she said video was “tremendously important” for users as well as marketers. Videos made and shared through Facebook’s new video feature in Instagram are growing quickly.

The company’s results also show how its users are continuing to shift toward mobile phones and tablets to use the site instead of a computer’s Web browser. Although the company’s total number of active monthly users worldwide grew slightly from the first quarter, to 1.15 billion, the number of people who use its mobile versions at least once a month grew 9 percent, to 819 million in that time.

Total ad revenue, a crucial measure watched by Wall Street, was $1.6 billion, up 61 percent from the second quarter of 2012. Of total ad revenue, 41 percent came from mobile, up from 30 percent in the first quarter.

“I think this shows that all the questions that people might have had in the past about whether Facebook could monetize on mobile devices, they’ve settled definitively,” Ms. Williamson said.

Users’ preference for reading Facebook on the go has created special revenue opportunities, like ads that prompt users to install mobile apps like games. But advertisers are generally willing to pay much less for a mobile ad than they are for the desktop.

The company’s sharp revenue growth reflects increased competition among advertisers to reach Facebook’s large user base, said Rob Jewell, chief executive of Spruce Media, a firm that helps advertisers like McDonald’s and the insurer Progressive to buy ads on the social network and measure their effectiveness.

Facebook’s ad rates are generally set through a bidding process, and Mr. Jewell said that his clients paid about 10 percent more on average for ads in the second quarter than in the first quarter. Ads in the news feed, both on the desktop and mobile versions of Facebook, were in particularly high demand, with rates up about 75 percent from the first quarter for both categories, he said.

“Facebook is the best channel for mobile app advertisers to purchase advertising,” Mr. Jewell said.

In the second quarter of 2012, the company reported a net loss of $743 million, or 8 cents a share. But that figure included $1.3 billion in compensation expenses related to the company’s initial public offering. In the year ago quarter, Facebook’s revenue was $1.2 billion.

The company far exceeded Wall Street’s expectations. Analysts had predicted the company would report earnings of 14 cents a share, excluding stock compensation costs, on revenue of $1.62 billion, according to a survey by Thomson Reuters.

Facebook’s surprisingly strong second-quarter earnings contrasted with those of Google, which last week reported disappointing profits in mobile advertising.

While the two companies are not strictly comparable because Facebook is expanding its ads from a much a smaller base, Ronald Josey, an analyst at JMP Securities, said Facebook was doing extremely well in mobile categories like ads prompting users to install new mobile applications.

“This company is becoming more and more of a mobile company,” he said. 

Researcher finds major encryption flaw in older mobile SIM cards

Hundreds of millions of mobile handsets using older SIM cards are vulnerable to a flaw that allows attackers to gain complete control over affected handsets, German security expert Karsten Nohl has reported.

What Nohl has spent two years researching could turn out to be the most significant flaw in SIMs in many years when he reveals its full details at a presentation scheduled for the Black Hat security conference at the end of this month.

Nohl's briefings to the media and short website description have so far been light on detail, but the teasers he has been willing to put out sound alarming enough.

According to the Security Research Labs chief scientist, a quarter of 1,000 SIMs tested by his team had proved vulnerable to a weakness in the older DES (Data Encryption Standard) encryption used to secure them.

This made it possible to take control of a handset using a binary SMS text message to upload malware. This piggybacked on the carrier over-the-air (OTA) process through which SIMs are transparently updated via the JavaCard programming interface.

Attackers could use the method to eavesdrop on calls, sent premium text messages, and even in some circumstances, conduct payment fraud.

Only a proportion of the world's handsets used DES in its vulnerable form but this still amounted to 750 million, overwhelmingly older handsets, he said. Not all SIMs using DES seemed to have the flaw, but enough batches to cause major concern.

The size of the issue could define its seriousness with carriers unsure about Nohl's estimates. Most SIMs from recent years would use a different standard, Triple DES (3DES), and be immune to the attack.

The research had been sent to the GSM Association so it could be passed on to carriers, Nohl told media outlets.

"Cards need to use state-of-art cryptography with sufficiently long keys, should not disclose signed plaintexts to attackers, and must implement secure Java virtual machines," he wrote in a blog. "While some cards already come close to this objective, the years needed to replace vulnerable legacy cards warrant supplementary defenses."

Nohl has form when it comes to sniffing out mobile handset issues. Between 2009 and 2011 he publicised a number of security flaws in the GSM standard, most famously in its A5/1 encryption cipher, which could allow call interception between the handset and the network base station.

Pee harnessed for mobile phone power

 Generic picture of a toilet Scientists have developed a way of charging mobile phones using urine.

Dr Ioannis Ieropoulos, from the Bristol Robotics Laboratory, claimed harnessing power from "the ultimate waste product" was "a world first".

"One product that we can be sure of an unending supply is our own urine," he said.

"By harnessing this power as urine passes through a cascade of microbial fuel cells (MFCs), we have managed to charge a Samsung mobile phone."

The scientists believe the technology has the future potential to be installed in bathrooms to harness the urine and produce sufficient electricity to power showers, lighting or razors as well as mobile phones.

'Smart toilet'
Dr Ieropoulos said: "The beauty of this fuel source is that we are not relying on the erratic nature of the wind or the sun, we are actually re-using waste to create energy.

"So far the microbial fuel power stack that we have developed generates enough power to enable SMS messaging, web browsing and to make a brief phone call.

"Making a call on a mobile phone takes up the most energy, but we will get to the place where we can charge a battery for longer periods.

"The concept has been tested and it works - it's now for us to develop and refine the process so that we can develop MFCs to fully charge a battery."

The MFC is an energy converter which turns organic matter directly into electricity via the metabolism of live micro-organisms.

The electricity is a by-product of the microbes' natural life cycle, so the more they eat things like urine the more energy they generate and for longer periods of time.

Dr Ieropoulos said: "We are currently bidding for funding to work alongside partners in the US and South Africa to develop a smart toilet. Watch this space."

The robotics laboratory is a collaboration between the University of the West of England and the University of Bristol.

Banks hold the key to mobile payments

Smartphone users would be more likely to engage with mobile commerce if their bank provided the service, according to a report conducted by mobile money services company Monitise.

More than 50% of UK smartphone users are buying items with their devices, but almost 60% would feel more confident doing so if they could use an app provided by their bank.

The Future Foundation report conducted by Monitise, also found that PayPal was the most trusted company to handle mobile payments (60%), followed by banks (48%), Mastercard, Visa or another card (46%), retailers (34%) and mobile network operators (12%).

“I have a very clear view [of the roadmap], but I have no idea if I’m right,” said Ben Green, head of mobile at Santander at a Monitise event. “What I’ve seen is nudging through the phases,”

He also said that banks need to build up trust slowly - customers need to be able to bank anywhere with instant access to their balance and transactions before they get into payments.

The Monitise research stated that checking a bank balance (59%) was ranked as the most important service banks provided for mobiles, this was followed by checking statements (45%).
Green also said that payment models need to be made as simple as possible for small businesses to utilise.
“Big corporations are more experimental, opposed to smaller traders who see it as a better cash flow opportunity,” said Green.

But he said that there is potential for SMEs to “mix things up” and play around with their retail footprint by offering services such as easy check-out options for customers who regularly visit a store and want to pay quickly and seamlessly.

Visa are counting on contactless payments to push mobile payment adoption, but near field communication (NFC) is still far from becoming a ubiquitous technology.

“Contactless is straightforward. We know consumers like it and the key is by getting contactless cards out of the door so that consumers can get familiar with it, and then getting it onto the mobile,” said Sandra Alzetta, head of mobile at Visa Europe. “It can be very overwhelming.”

Transport for London (TfL) began accepting contactless payments on buses in December 2012 and intends to roll this out to the entire TfL network by early 2014.

Visa said by the end of 2013, Europeans will be exceeding 52 million contactless transactions every month.
But technologies like NFC, peer-to-peer payments, apps like Barclays’ PingIt, QR codes and wallets are all making ground in the developing mobile payments market. Counting on one technology to catalyse the market would be “very dangerous” said Simon Andrews, CEO of digital mobile agency Addictive.

With the arrival of its first mobile app, IFTTT is ready for small business

Keeping up with the growing list of social networks, essential apps, and incoming data streams that have become part of modern online life is difficult for even a Web dabbler. Getting them talking to one another is even tougher, which is where tools like “If This Then That,” or simply “IFTTT,” have become invaluable.
This hacker’s dream of a Web service was developed to help ease the translation of data from one network to another, and now IFTTT has released its first mobile app, for the iPhone platform. The mobile app enhances the utility of IFTTT for all of its users, but its release is also a good time to take a hard look at whether IFTTT can now be put to use in the business world.

IFTTT is so valuable because certain networks, like Facebook, are famously closed off, so doing something that should be simple—like saving your photos to your hard drive or republishing videos on YouTube—can be extremely tedious and time-consuming.

Some of the site’s most popular recipes are mostly personal in structure. (If my Facebook profile picture changes, change my Twitter profile picture to match. If I take a photo on my iPhone, send me a copy of it via email.)

IFTTT remedies this by revolving around a simple design conceit. Using an abbreviated scripting language, users develop “recipes,” each of which takes a single data input and does one single action to or with it. For example: If I like a photo on Instagram, then save that photo to my Dropbox folder. That’s it. It sounds simple, and it is, but it saves you the hassle of doing it for yourself. You don’t even have to write these recipes from scratch. Tens of thousands are available for download from the site’s database. (You can get the Instagram to Dropbox recipe here.)
But an increasing number of recipes have a serious business bent. Want to
back up your mobile device contacts to a Google Docs spreadsheet? Auto-send starred Gmail to Evernote? Link a Blogger account to a Facebook Business Page? There’s, to borrow a phrase, a recipe for that.

And of course, you can always script your own recipes to do more. Savvy businesses might use IFTTT to send a text message to the customer support team if the company receives a mention on Twitter. Or IFTTT can be used to simplify the hassles of keeping various networks up to date. Tumblr, Instagram, Flickr, and more can all be synced up—one at a time, of course.

The iOS version of the IFTTT app doesn’t really do anything the Web version of the system doesn’t do already, but it does make recipe creation and management a more flexible, do-it-anywhere activity. One of the curious things about digging into IFTTT is that you never know where the idea for a killer recipe will strike. But as more and more of both our social and business lives becomes mobile, that serendipity is less and less likely to occur when you’re sitting at your desk. 

Google Results Show Struggle With Mobile

Despite a range of efforts by Google, the riddle remains unsolved, its financial report Thursday revealed.

Google reported second-quarter results that missed analysts’ expectations for revenue and profit. They showed that its desktop search business continues to slow and ad prices continue to fall as it struggles to make as much money on mobile devices.

 The report was particularly incongruous given how Google’s share price climbed 27 percent this year.
It is a vexing problem for every company that has generated revenue through advertising, be it a century-old magazine with a mobile app or a new Web site aggregating the news. Mobile ads do not command the premium that Web advertising does (and Web ads do not make as much as print ads)

Colin W. Gillis, a technology analyst at BGC Partners, wrote a haiku before the earnings announcement: “The results should be/ pretty as a picture to/ justify the stock.”

 
They were not. Shares, which fell 1 percent ahead of the report on Thursday, fell another 4 percent in after-hours trading.
“One of the reasons why people like Google is you can look forward and see what they’re doing with Glass and laying fiber and driverless cars and Chrome, chasing after new revenue streams,” Mr. Gillis said. “But those are still pretty far away. Google’s core business is all about advertising and clicks, and the core business is absolutely maturing.”

 
Mobile ads, he added, are inexpensive yet “overpriced because the conversion rates are so low.”
“It’s still too hard to transact on a phone,” Mr. Gillis said.
Google had seemed to have finally found a solution to the riddle, by making the biggest-ever change to its AdWords advertising product. The new program, called enhanced campaigns, which was introduced in February and will be mandatory for all advertisers on Monday, gives advertisers less choice about advertising on mobile devices by automatically including desktop, tablet and cellphone ads for all campaigns. Advertisers can choose not to buy cellphone ads but are required to buy tablet ads.

 
Google says that this simplifies the process for advertisers and makes it easier to reach customers who use devices indiscriminately. More important than the type of device, the company says, is whether someone is at a desk or on the sofa, in the mood to shop or eat.

 
But it also means that the price of mobile ads, which has been about half that of desktop ads, will most likely increase. Google’s ads are sold at auction, and one reason mobile prices have been low is that there has been less demand. Enhanced campaigns should change that.

 
For example, the cost per ad click, known as C.P.C., for clients of the Search Agency, a search ad firm, rose 22 percent in the quarter, largely because of Google’s ad-buying changes. It was the first time that tablet ads cost more than those on desktops, and advertisers increased spending on smartphones 25 percent, the most of any device category.

 
“There used to be a discount you would get for going after traffic on tablets instead of desktops,” said Keith Wilson, vice president for agency products at the Search Agency. “Now that is disappearing. That is what is going to drive up C.P.C.’s in the mobile space. This has been a catalyst for prioritizing mobile.”

 
But it was too early for the results of the new ad program to show up in Google’s financial report, company executives said Thursday. The price that advertisers pay when Google users click on their ads decreased 6 percent from last year and 2 percent from the previous quarter, declining for the seventh quarter in a row and at a steeper annual rate than in the previous quarter.

 
Mobile ad pricing is “one of the many factors at work” affecting click prices, said Nikesh Arora, Google’s chief business officer. Google is in the early stages of enhanced campaigns and it will most likely take a year for the results to become apparent, he said. He added that another important metric at Google, the number of clicks on ads, is up 23 percent over last year, partly because of increased mobile use.

 
Larry Page, Google’s chief executive, said that six million advertisers had already switched to enhanced campaigns. American Apparel, according to Google, doubled its mobile conversion rate with the new ads, and M&Ms, the Mars candy brand, increased it by 41 percent.

 
In addition to enhanced campaigns, Google is doing other things to improve its mobile offerings and its profits from mobile ads. It has been encouraging Web sites to improve their mobile versions, and last month it said Web sites without easy-to-use mobile versions could fall in search rankings. And it introduced its product listing ads, for shopping, to mobile devices.

 
Google reported second-quarter revenue of $14.11 billion, up 19 percent from $11.8 billion a year ago. Net revenue, which excludes payments to ad partners, was $11.1 billion, up from $9.2 billion. Net income rose to $3.23 billion, or $9.54 a share, from $2.79 billion, or $8.42 a share. Excluding the cost of stock options, Google’s second-quarter profit was $9.56 a share.

 
Analysts had expected net revenue of $11.33 billion and earnings, excluding the cost of stock options, of $10.78 a share.

 
Adding to the disappointing results was a $342 million operating loss at Motorola Mobility, which is expected to introduce a new phone, the Moto X, this summer.

 
As shareholders and analysts wait for Google to find the next product to reignite revenue growth as the core search business slows, Mr. Page acknowledged the challenges of building new products that reach people on the same scale as search.

 
“It’s pretty easy to come up with ideas,” he said. “It’s pretty hard to make them real and get them to billions of people. And that’s to me what’s so exciting.” 

Consumer shift to mobile devices boosts Google's revenue

Aided by consumers’ shift to mobile devices, Google’s second-quarter revenue increased by 19 percent to about $14 billion, the company announced Thursday.

The Internet company generated sales of $14.11 billion for the quarter, which ended June 30. The revenue excludes the commissions and fees that Google pays to other sites that run its ads. Taking those into account, the company’s second-quarter revenue was $11.1 billion.

The company’s second-quarter rise in revenue constitutes a moderate slowdown in revenue gains of 31 percent that Google reported in April, but is up 19 percent compared to the year-ago quarter.

Larry Page
Google also posted net income of $3.23 billion, or $9.54 a share, up roughly 16 percent from $2.79 billion, or $8.42 a share, in the second quarter of 2012. But net income dipped slightly from the $3.35 billion reported in the first quarter of this fiscal year.

Still, it was “a great quarter,” Google CEO Larry Page said in the company’s earnings announcement. “The shift from one screen to multiple screens and mobility creates tremendous opportunity for Google,” he said.
“With more devices, more information, and more activity online than ever, the potential to improve people’s lives even more is immense,” he added.

Google saw more mixed results within its advertising business. Paid clicks, or the clicks on search ads that advertisers pay for, increased approximately 23 percent over 2012’s second quarter.

However, the cost of paid clicks, or the money Google charges when someone clicks on an ad, fell by 6 percent compared to the same period last year.

Google-owned sites generated 68 percent of the company’s total revenue in the quarter, at $8.87 billion, Google reported, representing an 18 percent increase over 2012’s second quarter. Partner sites contributed revenue of $3.19 billion, or 24 percent of total company sales. “Other” revenue from Google was $1.05 billion, representing a 138 percent increase, the company said. It did not provide information about sources for that revenue.

Meanwhile, Google’s Motorola mobile revenue, which includes hardware, was $998 million, representing 7 percent of consolidated revenue for the quarter, the company reported, up from $843 million in the year-ago period.

Google bought Motorola Mobility last year for more than $12 billion; the closely watched Moto X smartphone is expected to launch this summer. 

Verizon's mobile and Fios drive revenue growth

Verizon Communications has reported a revenue increase of 4.3 percent for the second quarter of 2013, compared to a year ago, with mobile and Fios broadband customers additions driving the growth.
Verizon on Tuesday reported a net increase of 1 million mobile customers and 161,000 Fios broadband customers during the quarter.

The company reported revenue of $29.8 billion in the second quarter. Net income for the quarter was $5.2 billion, up 21 percent from the $4.3 billion Verizon reported in the second quarter of 2012.
Adjusted earnings per share were $0.73, beating analyst estimates by one cent.

Verizon pointed to mobile and broadband growth as a cause for a strong quarter. “We are executing well in these key areas,” Fran Shammo, Verizon’s CFO, said during a conference call.

Mobile revenue was $20 billion in the second quarter of 2013, up 7.5 percent from $18.6 billion during the second quarter of 2012. At the end of the second quarter, the company had 100.1 million wireless retail customers, a 6.3 percent increase in the past year.

In broadband, Verizon added 161,000 Fios Internet customers and 140,000 Fios TV customers in the second quarter. Verizon had 5.8 million Fios Internet and 5 million Fios TV customers at the end of the quarter, representing year-over-year increases of more than 12 percent for each service.

Verizon reported 8.9 million broadband customers at the end of the second quarter, a 1.9 percent increase from a year ago. With DSL losses partially offsetting Fios gains, Verizon added 45,000 broadband customers during the quarter.

Verizon’s wireline division posted revenue of $9.7 billion during the quarter, down from $9.9 billion in the second quarter of 2012.

Consumer revenue grew, however, with Verizon reporting $3.6 billion, an increase of 4.7 percent from the second quarter of 2012. Fios revenue grew 14.7 percent, to $2.7 billion. 

Yahoo buys Admovate to ramp up its mobile advertising

Yahoo has bought ad tech startup Admovate to grow its mobile advertising sales and provide a stronger channel for personalized display advertising.
Terms of the deal, yet another in a major buying spree for Yahoo this year, were not disclosed.
Four employees at Admovate, which has been headquartered in Mountain View, California, will be joining Yahoo’s display advertising team at Yahoo’s headquarters in Sunnyvale, California, a Yahoo spokeswoman said in an email.
Through its technology, Admovate claims to enable advertisers to create and deliver personalized, hyper-local targeted offers through the mobile channel. “This is especially important for mobile ad experiences that engage consumers on smaller screens,” said Scott Burke, senior VP of display advertising and advertising technology at Yahoo, in a Wednesday blog post.
Admovate’s services would provide a much-needed boost to Yahoo’s display ad revenue, which fell by 11 percent for the quarter ended June 30, Yahoo reported Tuesday.
Following Marissa Mayer’s appointment last July as CEO of Yahoo, the company has gobbled up more than a dozen small tech startups, but Admovate stands out as an advertising purchase, and one that is not focused on consumer products.
Yahoo, which has struggled to compete against Google and Facebook’s mammoth advertising operations in recent years, introduced two new ad formats in April: stream ads, a form of sponsored advertising incorporated into the company’s newly launched news stream; and the Yahoo.com Billboard, providing richer content like movie trailers that let users buy tickets from within the ad.
In February, Yahoo reached a global advertising deal with Google to place more ads across its Web properties like Yahoo Sports and Yahoo News.
The company also operates its Right Media Exchange, an ad-buying platform for digital advertising companies, which includes differentiated ad networks, direct advertisers, data providers and global agencies.
The acquisition is part of the company’s efforts to invest further in these types of ad tech platforms, Yahoo said, to “make buying easier for advertisers and agencies.” The deal could yield new ad products for Yahoo’s global advertisers and partners in the coming months, the company said.

“We are investing more deeply in programmatic buying and mobile advertising,” Yahoo’s Burke said, adding, “Admovate’s personalization technology accelerates our capabilities in mobile advertising, and we gain an exceptionally talented technical team.”

Yahoo’s smaller acquisitions this year, which also include Xobni, GoPollGo and Astrid, may indeed be geared more toward acquiring talent than the products themselves, Mayer and CFO Ken Goldman signaled Tuesday during the company’s second-quarter earnings call.

“In lieu of hiring, we’ve acquired these companies ... for talent and expertise,” Goldman said. And, “We’re going to continue the pace of doing these smaller deals,” Mayer said, which she referred to as tuck-in acquisitions.

In the past 12 months, Yahoo has grown its dedicated mobile team by a factor of six, Mayer said, going from dozens of engineers to hundreds of engineers.

Beefing up its ad technologies, particularly in display, will be a focus at Yahoo during the remainder of the year, Mayer also said during Tuesday’s call.

Few additional details about Admovate’s products or services, which may not even have launched yet, are given on the company’s website.

“We’d like to thank everyone who supported us along the way: Our partners, our advisors and our investors,” the landing page reads. Admovate was founded just last year. 

Security company to release testing tool for SAP mobile access

As SAP invests heavily in mobile, a security testing company will release a tool next month to ensure mobile-accessible SAP systems are not vulnerable to hackers.

Boston-based Onapsis will release a new module for its X1 security suite, a product that performs automated security assessments, penetration testing and compliance audits for SAP’s ERP (enterprise resource planning) software, said Mariano Nunez, Onapsis’ CEO.

The module will focus in part on the SAP Mobile Platform, formerly known as the Sybase Unwired Platform Developer Center, which helps developers build SAP mobile applications for different devices and platforms. It also looks at the NetWeaver Gateway, an SAP server that links devices to back-end systems, Nunez said.

Exposing those back-end systems is complicated, and companies can face a risk of hacking if the systems are misconfigured or do not have up-to-date patches.

“We see that companies may not be paying enough attention to that and forgetting the devices,” Nunez said. “Our empirical experience shows those systems are usually left insecure because of people not applying the latest patches or not following SAP’s best security practices.”

SAP is focused on mobile access, device management and security as more companies embrace bring-your-own-device policies. SAP supports iPhone, Android, and Blackberry devices.

Sanjay Poonen, head of SAP’s mobile division, said at the Sapphire Now conference in May that the company has more than 1,000 people working on mobile-related projects in areas such as retail, banking and consumer package goods.

Last year, SAP reported more than €222 million ($293 million) in license revenue from its mobile-related business, a revenue stream that didn’t exist two and half years prior, Poonen said.

“We think this market is really poised for an even bigger opportunity if you go even beyond devices,” Poonen said. “This world is going to require us to think of mobile security in a whole new way.”
Nunez said companies faces risks if, for example, a CRM (customer relationship management) system is incorrectly configured for access by mobile devices, opening a door for hackers using attack tools for Web services.

X1’s mobile security module looks at what functions and processes are exposed in the back-end systems and not on the mobile application itself, Nunez said. It alerts users to security vulnerabilities and tells users how to fix the issues. The module is scheduled to be released next month, and will be free to X1 subscribers.

Onapsis is also scheduled to present two SAP security workshops at the Black Hat security conference in Las Vegas, which kicks off on July 27. The workshops, which are not product focused, will look at SAP security from an academic perspective, Nunez said.