NSA secretly hacks, intercepts Google, Yahoo daily

The United States’ National Security Agency has secretly broken into the main communications links that connect Yahoo and Google data centers worldwide. That’s according to documents released by former NSA contractor, Edward Snowden, The Washington Post reports.

Video: NSA intercepts Google, Yahoo traffic overseas report | The Nationalhttp://www.thenational.ae/article/2013110
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According to the documents, the agency and its British counterpart GCHQ, through a project called MUSCULAR, collected data stored on Google and Yahoo servers. That allowed both governments access to hundreds of millions of user accounts from individuals worldwide.

“From undisclosed interception points, the NSA and GCHQ are copying entire data flows across fiber-optic cables that carry information between the data centers of the Silicon Valley giants,” RT cites the Post’s Barton Gellman and Ashkan Soltani.

A January 9th document says that in the preceding 30 days, collectors had processed over 181 million pieces of information, including both metadata and the actual contents of communications.

The government can already request information from phone or data through the FISA Amendments Act but this data collection would ostensibly take place without Google and Yahoo even being aware of it.

When you send email or store files with an internet company, that data is regularly shared among servers around the world, in order to ensure quick access to your information from wherever you happen to be. Google and Yahoo run customized private networks to shuttle that information around, passing between and within countries, as the Post indicates in a graphic. To move that information, the companies use fiber optic connections, light-speed networks running over thin glass cables. According to the Post, it’s those connections that the NSA is able to monitor. None of Yahoo’s inter-server traffic is encrypted. Not all of Google’s is either.

The MUSCULAR program, according to Wednesday’s leak, involves a process in which the NSA and GCHQ intercept communications overseas, where lax restrictions and oversight allow the agencies access to intelligence with ease.

“NSA documents about the effort refer directly to ‘full take,’ ‘bulk access’ and ‘high volume’ operations on Yahoo and Google networks,” the Post reported. “Such large-scale collection of Internet content would be illegal in the United States, but the operations take place overseas, where the NSA is allowed to presume that anyone using a foreign data link is a foreigner”.

The Post points out that company staffers were surprised and angry to hear that their their networks had been compromised. Google said that it was “troubled by allegations of the government intercepting traffic between our data centers”.

The report comes amid a storm of protest about NSA surveillance both at home and overseas of phone and Internet communications.

On Tuesday, US officials said reports that American spy agencies snooped on millions of Europeans were false.

Alexander told lawmakers that in many cases European spy agencies had turned over phone records and shared them with US intelligence.

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Google hit with $AUD200k defamation damages

Ad giant's own witness confessed removing dodgy search results is easy

An Australian man defamed by links on Google that associated his name with images of and articles about a criminal has been awarded $AUD200,000 damages.

Melbourne man Michael Trkulja argued that searches on his name, which brought up references to criminal Tony Mokbel, constituted defamation.

Trkulja asked for those references to be altered. Part of Google's defence suggested he had not properly completed forms that would have seen the ad giant alter its search results, but the end result was that Trkulja's name continued to appear alongside references to a nasty gangster called Tony Mokbel. A jury agreed that those results equated to defamation, and Supreme Court Justice David Beach today decided it was $AUD200,000 worth of defamation.

The judgment paints a fascinating picture of Google's response to the complaint, noting that a Google US employee, a 'Mr Madden-Woods', appeared on the stand but that the ad giant did not call anyone to the witness stand involved in handling the original complaint from Mr. Trkulja.

That became important because one piece of evidence offered by Mr. Trkulja was an email from help@google.com stating:

“At this time, Google has decided not to take action based on our policies concerning content removal. Please contact the webmaster of the page in question to have your client’s name removed from the page.”

But the existence of the mail from help@google.com, Justice Beach writes, means the jury could easily “... infer that … Google Inc was well aware of what was being requested of it” and that a more nuanced response was almost certainly a sensible option.

Making matters worse, Justice Beach writes that Madden-Woods “ … conceded the obvious (perhaps somewhat begrudgingly) that it would not take very much effort to work out, from the page of photographs supplied to Google Inc, the identity of the website that linked the plaintiff’s name to Mr Mokbel and Mr Tanner. All one had to do was click on one of the images (the text beneath each image showing that the one web page was involved). At that point it would have been open to Google Inc to block the URL of that page from Google Inc’s searches, in compliance with the plaintiff’s former solicitors’ request.”

The amount of damages awarded seems to have been calculated in two ways.

Trkulja had already succesfully sued Yahoo! over the same matter and been awarded $AUD225,000, but that search engine had published nasty links for longer and that those links stated he was “so involved with crime in Melbourne that his rivals had hired a hit man to murder him”. Google's results stated only that Trkulja “was such a significant figure in the Melbourne criminal underworld that events involving him were recorded on a website that chronicled crime in Melbourne”.

Justice Beach declares that a lesser imputation, but then tried to weigh the number of times each statement would have been read given the respective user bases of the two search engines.
His argument makes for interesting reading:

"While there was debate before me as to the relative popularity of Google and Yahoo search engines, neither side made any attempt to lead evidence of the precise number of publications brought about by a Yahoo search engine as compared to a Google search engine. That said, as was noted by counsel for the plaintiff, in support of a submission that I should find that there were more Google publications than Yahoo publications, while the word 'Googling' has entered the vernacular, there is no corresponding word in respect of Yahoo’s products.”

By Simon Sharwood, APAC Editor
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Facebook comments, ads don't sway most users: poll

(Reuters) - Four out of five Facebook Inc users have never bought a product or service as a result of advertising or comments on the social network site, a Reuters/Ipsos poll shows, in the latest sign that much more needs to be done to turn its 900 million customer base into advertising dollars.

The online poll also found that 34 percent of Facebook users surveyed were spending less time on the website than six months ago, whereas only 20 percent were spending more.

The findings underscore investors' worries about Facebook's money-making abilities that have pushed the stock down 29 percent since its initial public offering last month, reducing its market value by $30 billion to roughly $74 billion.

About 44 percent of respondents said the botched market debut has made them less favorable toward Facebook, according to the survey conducted from May 31 to June 4. The poll included 1,032 Americans, 21 percent of whom had no Facebook account.

Facebook's 900 million users make it among the most popular online destinations, challenging entrenched Internet players such as Google Inc and Yahoo Inc. But not everyone is convinced that the company has figured out how to translate that popularity into a business that can justify its lofty valuation.

Shares of Facebook closed Monday's regular trading session down 3 percent at $26.90. Facebook did not have an immediate comment on the survey.

While the survey did not ask how other forms of advertising affected purchasing behavior, a February study by research firm eMarketer suggests that Facebook fared worse than email or direct-mail marketing in terms of influencing consumers' purchasing decisions.

"It shows that Facebook has work to do in terms of making its advertising more effective and more relevant to people," eMarketer analyst Debra Williamson said.

Those concerns were exacerbated last month when General Motors Co, the third largest advertiser in the United States, said it would stop paid-advertising on Facebook.

Measuring the effectiveness of advertising can be tricky, particularly for brand marketing in which the goal is to influence future purchases rather than generate immediate sales.

And the success of an ad campaign must be considered in relation to the product, said Steve Hasker, president of Global Media Products and Advertiser Solutions at Nielsen.

"If you are advertising Porsche motor cars and you can get 20 percent of people to make a purchase that's an astonishingly high conversion rate," said Hasker.

"If you are selling instant noodles, maybe it's not," he

WANING ENGAGEMENT

About two out of five people polled by Reuters and Ipsos Public Affairs said they used Facebook every day. Nearly half of the Facebook users polled spent about the same amount of time on the social network as six months ago.

The survey provides a look at the trends considered vital to Facebook's future at a time when the company has faced a harsh reception on Wall Street.

Facebook's $16 billion IPO, one the world's largest, made the U.S. company founded by Mark Zuckerberg the first to debut on markets with a capitalization of more than $100 billion.

It's coming out-party, which culminated years of breakneck growth for the social and business phenomenon, was marred by trading glitches on the Nasdaq exchange. A decision to call certain financial analysts ahead of the IPO and caution them about weakness in its business during the second quarter has triggered several lawsuits against Facebook and its underwriters.

Forty-six percent of survey respondents said the Facebook IPO had made them less favorable towards investing in the stock market in general.

While Facebook generated $3.7 billion in revenue last year, mostly from ads on its website, sales growth is slowing.

Consumers' increasing use of smartphones to access Facebook has been a drag on the company's revenue. It offers only limited advertising on the mobile version of its site, and analysts say the company has yet to figure out the ideal way to make money from mobile users.

Facebook competes for online ads with Google, the world's No. 1 Web search engine, which generated roughly $38 billion in revenue last year. Google's search ads, which appear alongside the company's search results, are considered among the most effective means of marketing.

The most frequent Facebook users are aged 18 to 34, according to the Reuters/Ipsos survey, with 60 percent of that group being daily users. Among people aged 55 years and above, 29 percent said they were daily users.

Of the 34 percent spending less time on the social network, their chief reason was that the site was "boring," "not relevant" or "not useful," while privacy concerns ranked third.

The survey has a "credibility interval" of plus or minus 3.5 percentage points.

By Alexei Oreskovic SAN FRANCISCO  Newscribe : get free news in real time 

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The Facebook Fallacy

For all its valuation, the social network is just another ad-supported site. Without an earth-changing idea, it will collapse and take down the Web.

Flickr Creative Commons Tanaka Juuyoh and Cambodia4kids.org Beth Kanter

Facebook is not only on course to go bust, but will take the rest of the ad-supported Web with it.

Given its vast cash reserves and the glacial pace of business reckonings, that will sound hyperbolic. But that doesn't mean it isn't true.

At the heart of the Internet business is one of the great business fallacies of our time: that the Web, with all its targeting abilities, can be a more efficient, and hence more profitable, advertising medium than traditional media. Facebook, with its 900 million users, valuation of around $100 billion, and the bulk of its business in traditional display advertising, is now at the heart of the heart of the fallacy.

The daily and stubborn reality for everybody building businesses on the strength of Web advertising is that the value of digital ads decreases every quarter, a consequence of their simultaneous ineffectiveness and efficiency. The nature of people's behavior on the Web and of how they interact with advertising, as well as the character of those ads themselves and their inability to command real attention, has meant a marked decline in advertising's impact.

At the same time, network technology allows advertisers to more precisely locate and assemble audiences outside of branded channels. Instead of having to go to CNN for your audience, a generic CNN-like audience can be assembled outside CNN's walls and without the CNN-brand markup. This has resulted in the now famous and cruelly accurate formulation that $10 of offline advertising becomes $1 online.

I don't know anyone in the ad-Web business who isn't engaged in a relentless, demoralizing, no-exit operation to realign costs with falling per-user revenues, or who isn't manically inflating traffic to compensate for ever-lower per-user value.

Facebook, however, has convinced large numbers of otherwise intelligent people that the magic of the medium will reinvent advertising in a heretofore unimaginably profitable way, or that the company will create something new that isn't advertising, which will produce even more wonderful profits. But at a forward profit-to-earnings ratio of 56 (as of the close of trading on May 21), these innovations will have to be something like alchemy to make the company worth its sticker price. For comparison, Google trades at a forward P/E ratio of 12. (To gauge how much faith investors have that Google, Facebook, and other Web companies will extract value from their users, see our recent chart.)

Facebook currently derives 82 percent of its revenue from advertising. Most of that is the desultory ticky-tacky kind that litters the right side of people's Facebook profiles. Some is the kind of sponsorship that promises users further social relationships with companies: a kind of marketing that General Motors just announced it would no longer buy.

Facebook's answer to its critics is: pay no attention to the carping. Sure, grunt-like advertising produces the overwhelming portion of our $4 billion in revenues; and, yes, on a per-user basis, these revenues are in pretty constant decline, but this stuff is really not what we have in mind. Just wait.

It's quite a juxtaposition of realities. On the one hand, Facebook is mired in the same relentless downward pressure of falling per-user revenues as the rest of Web-based media. The company makes a pitiful and shrinking $5 per customer per year, which puts it somewhat ahead of the Huffington Post and somewhat behind the New York Times' digital business. (Here's the heartbreaking truth about the difference between new media and old: even in the New York Times' declining traditional business, a subscriber is still worth more than $1,000 a year.) Facebook's business only grows on the unsustainable basis that it can add new customers at a faster rate than the value of individual customers declines. It is peddling as fast as it can. And the present scenario gets much worse as its users increasingly interact with the social service on mobile devices, because it is vastly harder, on a small screen, to sell ads and profitably monetize users.

On the other hand, Facebook is, everyone has come to agree, profoundly different from the Web. First of all, it exerts a new level of hegemonic control over users' experiences. And it has its vast scale: 900 million, soon a billion, eventually two billion (one of the problems with the logic of constant growth at this scale and speed, of course, is that eventually it runs out of humans with computers or smart phones). And then it is social. Facebook has, in some yet-to-be-defined way, redefined something. Relationships? Media? Communications? Communities? Something big, anyway.

The subtext—an overt subtext—of the popular account of Facebook is that the network has a proprietary claim and special insight into social behavior. For enterprises and advertising agencies, it is therefore the bridge to new modes of human connection.

Expressed so baldly, this account is hardly different from what was claimed for the most aggressively boosted companies during the dot-com boom. But there is, in fact, one company that created and harnessed a transformation in behavior and business: Google. Facebook could be, or in many people's eyes should be, something similar. Lost in such analysis is the failure to describe the application that will drive revenues.

Google is an incredibly efficient system for placing ads. In a disintermediated advertising market, the company has turned itself into the last and ultimate middleman. On its own site, it controls the space where a buyer searches for a thing and where a seller hawks that thing (its keywords AdWords network). Google is also the cheapest, most efficient way to place ads anywhere on the Web (the AdSense network). It's not a media company in any traditional sense; it's a facilitator. It can forget the whole laborious, numbing process of selling advertising space: if a marketer wants to place an ad (that is, if it is already convinced it must advertise), the company calls Mr. Google.

And that's Facebook's hope, too: like Google, it wants to be a facilitator, the inevitable conduit at the center of the world's commerce.

Facebook has the scale, the platform, and the brand to be the new Google. It only lacks the big idea. Right now, it doesn't actually know how to embed its usefulness into world commerce (or even, really, what its usefulness is).

But Google didn't have the big idea at the company's founding, either. The search engine borrowed the concept of AdWords from Yahoo's Overture network (with a lawsuit for patent infringement and settlement following). Now Google has all the money in the world to buy or license all the ideas that could makes its scale, platform, and brand pay off.

What might Facebook's big idea look like? Well, it does have all this data. The company knows so much about so many people that its executives are sure that the knowledge must have value (see "You Are the Ad," by Robert D. Hof, May/June 2011).

If you're inside the Facebook galaxy (a constellation that includes an ever-expanding cloud of associated ventures) there is endless chatter about a near-utopian (but often quasi-legal or demi-ethical) new medium of marketing. "If we just ... if only ... when we will ..." goes the conversation. If, for instance, frequent-flyer programs and travel destinations actually knew when you were thinking about planning a trip. Really we know what people are thinking about—sometimes before they know! If a marketer could identify the person who has the most influence on you ... If a marketer could introduce you to someone who would relay the marketer's message ... get it? No ads, just friends! My God!

But so far, the sweeping, basic, transformative, and simple way to connect buyer to seller and then get out of the way eludes Facebook.

So the social network is left in the same position as all other media companies. Instead of being inevitable and unavoidable, it has to sell the one-off virtue of its audience like every other humper on Madison Avenue.

Here's another worrisome point: Facebook is a company of technologists, not marketers. If you wanted to bet on someone succeeding in the marketing business, you'd bet on technologists only if they could invent some new way to sell; you wouldn't bet on them to sell the way marketers have always sold.

But that's what Facebook is doing, selling individual ads. From a revenue perspective, it's an ad-sales business, not a technology company. To meet expectations—the expectations that took it public at $100 billion, the ever-more-vigilant expectations needed to sustain it at that price—it has to sell at near hyperspeed.

The growth of its user base and its ever-expanding  page views means an almost infinite inventory to sell. But the expanding supply, together with an equivocal demand, means ever-lowering costs. The math is sickeningly inevitable. Absent an earth-shaking idea, Facebook will look forward to slowing or declining growth in a tapped-out market, and ever-falling ad rates, both on the Web and (especially) in mobile. Facebook isn't Google; it's Yahoo or AOL.

Oh, yes ... In its Herculean efforts to maintain its overall growth, Facebook will continue to lower its per-user revenues, which, given its vast inventory, will force the rest of the ad-driven Web to lower its costs. The low-level panic the owners of every mass-traffic website feel about the ever-downward movement of the cost of a thousand ad impressions (or CPM) is turning to dread, as some big sites observed as much as a 25 percent decrease in the last quarter, following Facebook's own attempt to book more revenue.

You see where this is going. As Facebook gluts an already glutted market, the fallacy of the Web as a profitable ad medium can no longer be overlooked. The crash will come. And Facebook—that putative transformer of worlds, which is, in reality, only an ad-driven site—will fall with everybody else.

By Michael Wolff
Michael Wolff writes a column on media for the Guardian; is a contributing editor to Vanity Fair; founded Newser; and was, until October of last year, the editor of AdWeek
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Display Ads, Facebook Beating Google In The 'Battle For Eyeballs'

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Image by Getty Images via @daylife By Agustino Fontevecchia, Forbes Staff

Facebook’s Zuckerberg and Google’s Schmidt meet Merkel and Sarkozy >>

Facebook is “winning the battle for eyeballs and advertising in the internet display arena,” according to a report by Enders Analysis.  While Google is still “the king of internet advertising” with greater global reach than the social network, Facebook’s more dynamic growth, and rising rates of engagement and usage, suggest it will continue to dominate the display ad market going forward.

  Google Taking Over 40% Of Total U.S.Online  Ad Spend

Google’s net display ad revenues totaled $1.5 billion in 2010, according to Enders Analysis, and will rise to $2.5 billion in 2012.  Facebook, on the other hand, will report 2011 display revenues at about $3.5 billion, and can expect those to rise to about $5.3 billion in 2012.

While Facebook is clearly the market leader in display, Google remains the internet’s largest advertising player.  In 2012, its revenues will hit $35 billion, 90% of which come from Google’s search operations.
 Jeff Bezos Eyeing Apple's Lunch? Amazon Smartphone

 

Bringing all these numbers together is the fast-growing display ad market.  The company founded by Sergey Brin and Larry Page has proven its capacity in transforming the search ad market, becoming practically a monopolistic force.  But display remains underdeveloped.  According to former Google CEO, and current Chairman Eric Schmidt, the display market could grow to $200 billion in coming years.  “Despite Google’s and Facebook’s growing strength, the online display market remains highly fragmented, [Enders Analysis] project[s] their aggregate share of global spend will be just over 25% in 2012.” 

Don't Worry About Google's Rising Costs And Tighter  

  There are four major players in the display ad world: Facebook, Google, Microsoft, and Yahoo. Google and Facebook exert their dominance via reach and consumption. In terms of monthly unique visitors, Google beats its competitors with 1.1 billion users, about 75% of the global audience. Facebook counts with 770 billion, but is growing at an impressive pace, accounting for 18% of the net increase in internet usage in Q3, compared with a combined 1% for Google, Microsoft, and Yahoo combined.

 Mark Zuckerberg's Private Photos Exposed Thanks To Facebook 

 

Mark Zuckerberg’s social network derives its strength from engagement.  Users spend an average 12 minutes per day on Facebook, a figure that is up 40% over the last 12 months.  That’s about 15% of total time spent online, compared with something like 10% for Google (which ranks second among the big display players).

Facebook’s “expanding reach and rising time spent on the site” are the keys to its display ad success.  Revenues will continue to grow faster than over at Google, particularly given the rise of the social media ad format and the surge in programmatic ad buying (through the use of exchanges, networks, demand side platforms, etc) which will make it easier to “programme [sic] and optimize large-scale ad campaigns.”



Also playing to Facebook’s favor is Google’s weakness in the social sphere.  “At this stage, Google’ late entrant look-alike social network, Google+, looks set to remain niche,” explained the analysts.

Facebook has slowly opened up its display ad platform to outer players, and will continue to improve it through the addition of new products, such as the “rumored rollout of ads on its highly popular mobile apps” (which run on Apple’s iPhones and Google’s Android OS).  But these don’t necessarily play against Google.  As mentioned above, the market is fragmented and small, and still has room to grow.  “Rising advertiser demand for both scale and performance will make many publishers increasingly reliant on one or both of the internet giants for traffic and revenue growth,” explained the analysts.

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CEO, the Least Popular Job in Silicon Valley

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Potential CEOs are opting for quicker dollars at startups and investment firms

 

Illustration by Sophia Martineck

By Peter Burrows

Dave DeWalt is known within Silicon Valley for his technical chops, his charisma, and his business accomplishments, which include reinvigorating security software maker McAfee and selling it to Intel (INTC) in 2010 for $7.7 billion. At 47, he now has bigger ambitions. “Running a big-cap company is considered the crowning achievement in many people’s careers, and I feel that way as well,” says DeWalt.

Such talk makes DeWalt an anomaly. In tech circles, the C-suite at a publicly traded company is no longer the be-all and end-all. Just look at the troubles Yahoo! (YHOO) and Hewlett-Packard (HPQ) have recently had finding new leaders. HP canned former SAP (SAP) Chief Executive Officer Léo Apotheker after just 11 months—then faced a barrage of criticism for replacing him with HP director and former EBay (EBAY) CEO Meg Whitman without bothering to look beyond its own boardroom.

Industry consolidation has created a small number of very large technology companies such as HP, Cisco (CSCO), and Microsoft (MSFT). They’ve stumbled in recent years as disruptive developments like the mobile revolution and the dash to the cloud shake the entire sector. As the job of leading these companies gets tougher, there are fewer talented leaders with the skills—and inclination—to do it. Rather than wait for high-profile CEOs such as Cisco’s John Chambers, Microsoft’s Steve Ballmer, and Research In Motion’s (RIMM) Mike Lazaridis and Jim Balsillie to step down, many potential replacements have decamped for more exciting, and potentially more lucrative, gigs at startups or as investors. “This is the first time in tech history that you have this many companies with CEOs approaching 60 that don’t have any obvious successors,” says John Thompson, vice-chairman of recruiting firm Heidrick & Struggles (HSII).



Consider Cisco. With 62-year-old Chambers now in his 16th year as CEO, many of his most capable lieutenants have given up waiting for their chance to succeed him. The list of departures since 2007 includes former Chief Development Officer Charles Giancarlo (now a private equity partner at Silver Lake), longtime general manager Tony Bates (who jumped to Skype just before it was purchased by Microsoft in May), and former head of the data center business Jayshree Ullal (now CEO of Arista Networks). While the accomplishments of Chambers and other longtime CEOs including Ballmer are undeniable, their long tenure has sapped the strength of the back bench, says Heidrick’s Thompson. Now a common belief is that both companies will need to go outside for their next CEO—not an easy task when the competition for talent includes hot pre-IPO companies such as Facebook. “The people who could possibly do these jobs realize it would be easier to create a new company rather than try to get an old stodgy one to adopt new ideas,” says Trip Hawkins, CEO of game developer Digital Chocolate.

Boards of directors get low marks on recruitment and retention, too. Few give much attention to succession planning until crisis hits, says Jeffrey A. Sonnenfeld, senior associate dean of the Yale University School of Management. New hires such as Bartz and Apotheker are set up for failure as boards prioritize near-term earnings over long-term risk-taking. “We’ve been weeding the qualified people out of the system for the past 15 years,” says Roger McNamee, a longtime technology investor and co-founder of private equity firm Elevation Partners.

Nor have tech companies excelled at developing CEOs. Once executives prove themselves in a given area—say, software engineering—they rarely go through General Electric (GE) -style development programs to get exposure to a business’s full breadth. There are exceptions: Intel and IBM (IBM) are both organized so that top executives get to run multibillion-dollar business units. IBM Senior Vice-President Michael E. Daniels, for instance, runs the $56 billion services business. At Intel, young executives have an apprentice system where they shadow top executives (current CEO Paul S. Otellini spent years carrying Andy Grove’s bags). As a result, both companies have succeeded at finding internal candidates for the top job. But this is not the norm in Silicon Valley, where most companies are organized along strictly functional lines such as marketing. “The tech industry is great at producing technology, but it’s not producing leaders,” says Rosabeth Moss Kanter, a professor of administration at Harvard.

To break the cycle, some tech industry veterans say it’s time for a new approach to choosing CEOs. Forget the old idea of finding an older, well-known operations or sales executive to maximize earnings and soothe nervous shareholders. Too often, those experiments—Dell’s (DELL) Kevin Rollins, Apple’s (AAPL) John Sculley, Yahoo’s Carol Bartz—have failed, says McNamee. Now Old Guard tech companies need to find risk-takers willing to bet big on new visions. That’s hard enough for entrepreneurs such as Amazon.com’s (AMZN) Jeff Bezos. It may be even harder at companies settling into middle age.“Somebody is going to have to take some risks, and bring in younger CEOs for a while,” says McNamee.

To find them, some boards are taking a larger role in succession planning. Egon Zehnder International has been testing a new approach for two years, in which board members use a number of techniques such as mentorship programs to groom internal candidates, says Karena Strella, managing director of the firm’s U.S. unit. The goal is to take some focus off past accomplishments and identify impassioned, adaptable people. Then it’s up to the board to back them, says Thompson. “People forget that it took Steve Jobs seven years to really move the needle at Apple,” he says. “If you used that standard today, he would have been fired long ago.”

The bottom line: Shortsighted boards and the long tenure of some CEOs have led to a succession crisis at big-cap tech companies.

Burrows is a senior writer for Bloomberg Businessweek, based in San Francisco.

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Yahoo fires chief executive Carol Bartz

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Yahoo CEO Carol Bartz has told staff in an email she was fired over the phone by the chairman of the board

Dominic Rushe in New York  

Carol Bartz has been fired as CEO of Yahoo. Photograph: HO/AFP/Getty Images

Carol Bartz, Yahoo's chief executive, was fired late on Tuesday ending a rocky tenure in which she tried and failed to revitalise the online giant.

In a statement the company announced Bartz had been "removed" from her post and would be replaced by chief financial officer Timothy Morse "effective immediately" on an interim basis as the firm began the search for a new, permanent CEO.

In an e-mail sent to employees from her iPad and titled "Goodbye," Bartz wrote: "I am very sad to tell you that I've just been fired over the phone by Yahoo's chairman of the board." She wrote, "It has been my pleasure to work with all of you and I wish you only the best going forward."

The combative chief executive had been under pressure to turnaround Yahoo from the day she was appointed. Yahoo remains one of the biggest destinations on the internet but has lost gound with advertisers and audience to Google, Facebook and services like Twitter.



According to research firm eMarketer Facebook is set to overtake Yahoo this year to collect the biggest slice of online display advertising dollars in the US.

Bartz joined Yahoo in January 2009, replacing co-founder Jerry Yang who had returned to the helm of the company in an ill-fated bid to turn its fortunes around. When Bartz joined the firm its shares were trading for around $12. After news of her departure broke, the shares jumped more than 6% in after-hours trade to $13.72, from a close of $12.91 on the Nasdaq. In January 2000, near the end of the dot-com bubble, Yahoo's shares traded at more than $125 a piece.

Bartz had also fallen out of favour with Wall Street investors, unhappy with her turnaround strategy and her handling of the firm's strained relatonship with China's Alibaba Group, in which it holds a 40% stake.

In June Yahoo chairman Roy Bostock gave his public support to Bartz at the company's annual general meeting. "This board is very supportive of Carol and this management team," Bostock said in his opening remarks. "We are confident that Yahoo is headed in the right direction."

Bartz, had previously been chairman of software firm Autodesk. She arrived with a reputation as a tough talker and reinforced it early in her tenure by telling Michael Arrington, founder of the influential Techcrunch website to "f*** off" during a staged interview at an industry event.

Her management style came under fire after the company's apparent mishandling of its relationship with Alibaba. In May when it was revealed that Alibaba had handed Alipay - one of Alibaba's crown jewels - to a company controlled by Alibaba founder Jack Ma, apparently without Yahoo's knowledge. Alibaba said Yahoo was fully aware of the transaction and the two sides openly bickered about the deal.

Yahoo is conducting a strategic review of the company's options, including possible divestment of its Asian holdings. It cautioned that no decisions had yet been made.

Bostock said: "On behalf of the entire Board, I want to thank Carol for her service to Yahoo! during a critical time of transition in the Company's history, and against a very challenging macro-economic backdrop. I would also like to express the Board's appreciation to Tim and thank him for accepting this important role. We have great confidence in his abilities and in those of the other executives who have been named to the Executive Leadership Council."

The company also said its directors named five other senior Yahoo executives to an executive leadership council that is intended to help Morse, a former chief financial officer at Altera, a semiconductor makers, and at General Electric Plastics, manage the company.

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Yahoo boss Carol Bartz is fired by US internet company

Carol Bartz was brought on board to change the fortunes of the search and internet company

 

Yahoo's chief executive Carol Bartz has been fired by the internet company after two-and-a-half years in the top job. 

The company said in a statement that Ms Bartz was removed by the board of directors, effective immediately.

Tim Morse, Yahoo's chief financial officer, will take over from Ms Bartz.

Yahoo has been struggling to increase its market share as it faces increased competition from rivals such as Google and Facebook.

Yahoo shares jumped more than 6% in after-hours trading after news of the firing broke, indicating they would trade higher when Wall Street opens for business on Wednesday. Yahoo's stock price was up at $13.72, an increase of 81 cents.

Mr Morse will serve as interim chief executive and the board of directors will look for a new CEO, the company said.

No turnaround

Ms Bartz was hired to run Yahoo in early 2009, taking over from co-founder Jerry Yang.

She made significant changes to the management team and cut jobs to save on costs. She also shifted the focus of the traditionally search-oriented firm towards more personalized content.

Continue reading the main story

“Start Quote

I am very sad to tell you that I've just been fired over the phone by Yahoo's chairman of the board”

Carol Bartz Former CEO, Yahoo

 

However, Larry Magid, a technology analyst at C-net, said the company has not seen enough of a turn-around under Ms Bartz's leadership.

"She hasn't done anything to change the company's fortunes, and they are still anxious to find a leader who can move them up," he said.

Critics also claim that Yahoo has failed to make significant strides in two of the most lucrative segments of the market; search and social networking.

"Facebook is way ahead, and now even Google is way ahead of Yahoo in social networking," C-net's Mr Magid added.

"In terms of the potential for long-term revenue it's just not there. They've got some great sites, great information resources, news, stocks, sports, but that's not what bringing in the money."

Phone firing

The news first broke on the Wall Street Journal's All Things D website, which quoted an email from Ms Bartz to Yahoo staff. The email has since been reported by other news agencies including Bloomberg and Reuters.

"I am very sad to tell you that I've just been fired over the phone by Yahoo's chairman of the board," Ms Bartz said in the email to staff.

"It has been my pleasure to work with all of you and I wish you only the best going forward."

As news of the sacking spread across the internet, Yahoo released its own press statement in which it confirmed it was undergoing a "leadership reorganisation" and that Ms Bartz would be leaving the company.

Roy Bostock, chairman of Yahoo's board, said in the statement: "On behalf of the entire board, I want to thank Carol for her service to Yahoo during a critical time of transition in the company's history, and against a very challenging macro-economic backdrop."

He added that he saw "enormous growth opportunities" for the firm.

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Top Websites in Malaysia

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Update  Friday October 28, 2011

The Star Online is still Malaysia’s top news portal

PETALING JAYA: The Star Online (thestar.com.my) is still Malaysia's favourite online news portal, according to a website ranking put out by the Malaysian Digital Association.

The latest list is based on both local and international websites visited by over 17 million Internet users in Malaysia.

Malaysiakini.com came in as the second most-visited news website, while the Harian Metro (hmetro.com.my) and Utusan Malaysia (utusan.com.my) online portals ranked seventh and tenth, respectively.

The Star Online came behind local buy-and-sell site Mudah.my as the second-most visited website by Malaysians, with more than two million unique browsers.

Mylaunchpad.com.my, Malaysiakini.com and Airasia.com followed, making up the top five most visited websites in Malaysia.

In the combined list of international and local websites most visited by Malaysians, social media site Facebook topped the ranking, followed by Google, Mudah and Yahoo!.

Among news portals, The Star Online ranked ninth in the combined list, followed by Harian Metro at 15th, Utusan Malaysia at 18th, Kosmo (kosmo.com.my) at 24th, The Malaysian Insider (themalaysianinsider.com) at 25th and Berita Harian (bharian.com.my) at 29th.

The report also said that over 115 million web pages are viewed by Malaysians using mobile devices.

This showed a 6% increase in mobile page views from the start of the year, and pointing to a more tech-savvy Malaysian audience.

The association is the representative body comprising digital publishers, advertising agencies, creative agencies and digital service providers.

KUALA LUMPUR: The Star Online (thestar.com.my) is the top news portal visited by Malaysians, according to a website rankings list released by the Malaysian Digital Association (MDA).

The latest list is based on both local and international websites visited by over 17 million Internet users in Malaysia.

According to the list, the second most visited news website in the country was malaysiakini.com, followed by hmetro.com.my, utusan.com.my and bharian.com.my.

Overall, The Star Online is the third most visited local website, behind mudah.my and lowyat.net.

The Star’s Malay news portal mstar.com.my, and biz.thestar.com.my were positioned in the top 25 of the most viewed local websites, ranking 18th and 22nd respectively.

In the combined list of international and local websites most visited by Malaysians, social media site Facebook topped the rankings, followed by Yahoo and Google.

The Star Online is ranked No. 9 in the combined list, malaysiakini.com (11th), hmetro.com.my (13th), utusan.com.my (14th) and themalaysianinsider.com (23rd).

The MDA report was compiled by Effective Measure (www.effectivemeasure.com) and serves as a guide to the surfing habits of Malaysian netizens.

The MDA is the representative body comprising digital publishers, advertising agencies, creative agencies and digital service providers

Star Online, FB are big favourite among digital media marketers

By IZATUN SHARI
newsdesk@thestar.com.my

PETALING JAYA: The Star Online is the most favoured digital media domain among marketers in Malaysia after Facebook.

According to the list of top 10 digital media portals released by the Advertising + Marketing Magazine’s (A+M), The Star Online is the closest rival to the social networking site with 11.4% of client marketer votes.

Facebook came first with 43.9% votes in the Digital Media Company of the Year 2010 survey, which asked where marketers would fork out their money for media space.

According to the list, Google was ranked third with 9.9% votes, while Yahoo!MY and MSN MY came fourth and fifth with 5% and 4.6% votes, respectively.

iProperty and Malaysiakini were ranked sixth and seventh with 2% and 1.7% votes, respectively, followed by Lowyat (1.3% votes), Twitter and YouTube (both 1.1%) and The Edge (1%).

Based on Google Analytics, the monthly unique visitors figure for all portals under The Star Online umbrella was 4.6 million (Aug 2010).

The bulk of this was from the www.thestar.com.my domain with about 2.6 million unique visitors.

The Star Online topped the Top Income Earners (RM40,000) ahead of Facebook and Google as well as the Insurance and Investment Buyers, CEOs and managing directors and CFOs and accountants categories.

Two key drivers for revenue in 2010 were sponsorship and print/online combination packages.

According to the A+M magazine, The Star has been aggressive in providing advertisers with unique packages such as branded content via sponsorship campaigns with Giant, Pemanis, ICI, Sime Darby and Maxis.

A major innovation was the release of its iPad application which went live in late September, the magazine said.

IStar vice-president Davin Arul said he believed tablets would represent a significant portion in the digital media-consuming audience in the coming year.

The Star Online was ranked third in last year’s survey, which was conducted under the name “Online Media of the Year 2009”.

In last year’s survey, Google was the top site among marketers, Yahoo second and Facebook fourth.