Yang gets $1 in rocky final year as YAHOO's CEO

Yahoo Inc. limited co-founder Jerry Yang's 2008 compensation package to his customary $1 salary during his final year as chief executive, a tumultuous reign that unraveled after he rebuffed Microsoft Corp.'s $47.5 billion bid to buy the Internet company.




The Sunnyvale, Calif.-based company disclosed the pay of Yang and its other top executives in its proxy statement filed Wednesday.

The breakdown of Yahoo's top-paid executives in 2008 served as a reminder of the current shake-up at the company as its new leader, Carol Bartz, tries to end a three-year slump that has devastated Yahoo's stock price.

When Yang stepped down as CEO in January, Yahoo President Susan Decker left the company rather than work for the woman who beat her out for the top job. Blake Jorgensen, Yahoo's chief financial officer, also plans to leave as soon as Bartz can find his successor.

Even more employees will be leaving in the next few weeks as Bartz carries out her plan to lay off nearly 700 people, or about 5 percent Yahoo's work force.

Yang, 40, has settled for a token salary for years because he has gotten rich off of Yahoo's stock since he started the Web site with fellow Stanford University graduate student David Filo in 1994.

But like his fellow shareholders, Yang has suffered huge losses on paper as Yahoo shares lost nearly half their value last year. The plunge left Yang's 3.9 percent stake worth about $600 million less at the end of 2008.

The Associated Press calculates executive pay based on salary, bonuses, incentives, perquisites, above-market returns on deferred compensation and the value of stock options and other awards granted during the year.




Yahoo didn't pay Yang anything beyond the $1 salary last year. He wasn't the only Silicon Valley leader to settle for a buck last year. Apple Inc. CEO Steve Jobs and Google Inc. co-founders Larry Page and Sergey Brin also worked for $1 in 2008.

Bartz, 60, is getting paid more like CEOs at other high-profile companies. She is starting off with a $1 million salary and already has been guaranteed another $10 million in cash and stock this year to make up for the benefits and other awards she gave up at her former employer, Autodesk Inc.

On top of that, Bartz is eligible to receive several more million dollars in bonuses and stands to benefit from 5 million stock options granted to her when she was hired. Yahoo will value those stock options in next year's proxy statement.

The June 25 annual meeting covered in Yahoo's proxy statement this year is expected to be less fractious than last year's affair when Yang and the company's other board meetings were facing a shareholder uprising led by activist investor Carl Icahn.

Like many other shareholders, Icahn was outraged with the way Yang responded to Microsoft's offer to buy Yahoo for $33 per share last May.

Yang brokered the peace by giving a board seat to Icahn, who is one of 12 directors up for election in June. But some bitterness over the squandered opportunity to sell Yahoo to Microsoft may still linger, given that Yahoo shares ended Wednesday at $14.02.

McAfee Launches 'online 911' for Cybercrime Victims

McAfee has launched a new Web site designed to help cybercrime victims recover from hacker attacks.




The company bills its Cybercrime Response Unit as a kind of "online 911" where consumers and small-business owners can figure out whether they've been hacked, and to take the first steps to connect with law enforcement once they know a crime has been committed.

The site helps victims triage any common computer problems. For example, it can tell them what to do if they've opened an attachment that they now think may have been malicious, or if they're worried that their child may be talking to a predator online.

Complaints about Internet-related crime spiked 33 percent last year, according to the U.S. Federal Bureau of Investigation's (FBI's) Internet Crime Complaint Center.

In the U.S., online crimes can be prosecuted by state, local and federal authorities, including the FBI or the U.S. Secret Service, and victims are often unsure what to do after they've been victimized.

In fact, people who have been hacked often don't even know it, said Pamela Warren, a cybercrime strategist with McAfee.

To help with that problem, a visitor can try out an online scanning program that will check their computer for any signs that it has been misused by criminals. (It is available only for Internet Explorer on Windows.)

"If you're a victim and you just don't know where to go, this is really meant to consolidate [that information]," Warren said.The site includes resources for victims of cyber bullying, identity theft and online scams, she said. "Regardless of what the cybercrime is, you can come here and get help."

Facebook plans to give developers more access: source

Internet social media company Facebook plans to allow outside developers access to core parts of the website so they can build new services, a person familiar with the situation said.




The person said the company is expected to announce the plans on Monday. The new capabilities would let third-party developers build services that access content uploaded by Facebook users such as pictures and videos with the users' permission.

Facebook, which has more than 200 million active users worldwide, does not plan to charge for the service.

The company is expected to brief developers on the plan, first reported by the Wall Street Journal on Sunday, at an event it is hosting for developers at its Palo Alto, California headquarters on Monday.

Facebook would not comment on the plans to open its service to outside developers, but the company said it was preparing an announcement on Monday related to developer opportunities.

Yahoo to close GeoCities, other services in revamp

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Yahoo Inc. said Thursday it plans to close GeoCities, a Web site publishing and hosting service it bought in May 1999 at the height of the dot-com boom for around $3 billion in stock.

The service will be shut down later this year. Visitors to the site now see a message that says new GeoCities accounts will not be available and gives them the option to sign up for Yahoo's Web hosting service for $5.98 a month.

It is not clear when Yahoo made the move, but a spokesman said in an e-mailed statement that the decision was recent.

GeoCities is not the only Yahoo service to get the ax — Yahoo Briefcase, Farechase, My Web, RSS ads, Yahoo Pets, Yahoo Live, Kickstart and Yahoo For Teachers all are being eliminated as well. The search giant also recently outsourced Launchcast radio to CBS Corp.

"As part of Yahoo's ongoing effort to build products and services that deliver the best possible experiences for consumers and results for advertisers, we are increasing investment in some areas while scaling back in others," the statement said.

The trimming is part of a process that started in 2007 while Jerry Yang was still chief executive, to close down services that aren't profitable or don't fit into company's long-term vision.

The revamp has accelerated under new CEO Carol Bartz, who was hired in January.

In a sign of its ongoing troubles, Yahoo said Tuesday that it will lay off nearly 700 workers, the company's third round of job cuts during the past 14 months.

Yahoo earned $118 million, or 8 cents per share, during the first three months of the year. That represents a 78 percent drop from net income of $537 million, or 37 cents per share, in the year-ago period.

Revenue fell 13 percent to $1.58 billion.

Yahoo shares rose 7 cents Thursday to close at $14.55.

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Apple pulls plug on 'Baby Shaker' iPhone program

Apple Inc. pulled a 99-cent iPhone game called "Baby Shaker" from its iTunes store Wednesday after its premise — quiet a crying baby with a vigorous shake — prompted outrage.




According to screen shots posted on several Web sites, "Baby Shaker" displayed black-and-white line drawings of a baby. The iTunes description included the line, "See how long you can endure his or her adorable cries before you just have to find a way to quiet the baby down!" Once the iPhone owner finishes shaking the device, the on-screen baby is depicted with large red X's over its eyes.

Public outcry ensued, with organizations including the National Center on Shaken Baby Syndrome and the Sarah Jane Brain Foundation condemning Apple for approving the game's sale.

The application was designed by Sikalosoft, which also makes a 99-cent "Dice Mosaic" iPhone program that converts digital photos into black and white mosaics made from dice.

Sikalosoft did not respond to an e-mail seeking comment, but "Baby Shaker" was deleted from its Web site Wednesday afternoon.

Apple spokeswoman Natalie Kerris said "Baby Shaker" went on sale Monday, and confirmed that Apple removed it Wednesday. She would not comment on why the program was initially approved for sale nor about how many people downloaded the game. Apple itself screens each iPhone application, a process some prospective iPhone application developers have complained can take weeks or months. Others have said Apple gives little feedback when it accepts or rejects a program.

The Cupertino, Calif.-based company has rejected apps that let iPhone users throw virtual shoes at President George W. Bush or watch clips from the "South Park" cartoon. It has accepted numerous programs that simulate flatulence.

Yahoo to cut nearly 700 jobs after 1Q results fall

Yahoo Inc. will lay off nearly 700 workers after getting off to a bumpy start under a tough-talking new boss who has promised to engineer a long-awaited turnaround at one of the Internet's best-known franchises.




Neither the lackluster first-quarter results nor the job cuts announced Tuesday came as a surprise.

Analysts had already predicted Yahoo's three-year slump would worsen during the first three months of the year, and hints about the payroll purge were leaked to the media last week.

Investors drove up Yahoo's stock, extending a recent rally propelled largely by media reports that the company is getting closer to forging an Internet advertising partnership with Microsoft Corp. as the two rivals try to counter online search leader Google Inc.'s domination of the advertising market.

In a Tuesday conference call with analysts, Yahoo Chief Executive Carol Bartz declined to comment on the status of the Microsoft discussions.

This marks Yahoo's third round of mass layoffs in little over a year, but the first batch since the Sunnyvale-based company hired Bartz in January. The cuts will affect about 5 percent of Yahoo's 13,500 workers. The estimated 675 people people losing their jobs will be notified during the next two weeks.

Yahoo dumped about 1,000 jobs in February 2008 and another 1,500 or so late last year while co-founder Jerry Yang was still running the company. Yang stepped down, largely because he wasn't able to snap the company out of its financial funk during his 18-month tenure as CEO.

Although it remains one of the most popular destinations on the Internet, Yahoo's fortunes have been declining since 2005 as Internet search leader Google Inc. sucked up more advertising revenue and trendy new online hangouts like Facebook and MySpace lured away younger Web surfers.

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Yahoo earned $118 million, or 8 cents per share, during the first three months of the year. That represents a 78 percent drop from net income of $537 million, or 37 cents per share, in the year-ago period.

Last year's results included a non-cash gain of $401 million. But Yahoo's profit this year still would have been lower even after subtracting last year's one-time boost.

The latest earnings matched the modest expectations among analysts surveyed by Thomson Reuters.

Revenue fell 13 percent to $1.58 billion. If not for the stronger dollar, the sale of an e-commerce site in Europe and the loss of some fees, Yahoo said its revenue would have been down by just 3 percent.

After subtracting commissions paid to its ad partners, Yahoo's revenue stood at $1.16 billion — about $50 million below analyst estimates.

Management indicated that Yahoo's results will erode again the second quarter, with total revenue expected to range from $1.42 billion and $1.63 billion. Yahoo's revenue totaled $1.8 billion in last year's second quarter.

Yahoo shares still surged 79 cents, or 5.5 percent, in Tuesday's extended trading after rising 72 cents to finish the regular session at $14.38.

In remarks elaborating on the layoffs, Bartz indicated she is trying to focus Yahoo more on its strengths in online news, finance, sports, e-mail and Internet search, where it ranks a distant second to Google.

In the process, she thinks Yahoo can free up more money to expand those products around the world and possibly hire more workers in those areas.

Yahoo product managers, in particular, appear to be among the most likely to receive pink slips, based on Bartz's blunt comments.

"We sort of had one product management person for every three engineers, so we had a lot of people running around and telling people what to do, but nobody was doing anything," Bartz said.

Google refines searches for pictures and news

Google on Monday unveiled software tools that let people search the Internet using pictures or chronologically organize results of queries for news.




Fledgling versions of Similar Images and News Timeline made their way out of Google Labs, a place where engineers at the California-based Internet giant get to spend time tinkering with promising innovations.

A Similar Images feature added to Google's Image Search tool lets people scour the Internet for like photographs with a single computer mouse click. Examples provided by Google include refining a search for "jaguar" to provide only images of the jungle cat or the luxury automobile.

"So if you see an image you like, but you're stumped on how to describe it, just click the 'Similar images' link to see more like it," reads an online posting by 'Googlers' Chuck Rosenberg, Andy Hertzfeld, and Michael Cohen.

Google News Timeline amasses stories from newspapers, magazines, blogs and other sources and presents search results in chronological graphs that can be zoomed in on or navigated by dates.

You Tube boost full online movie

Google Inc.'s YouTube said Thursday it is vastly expanding its library of full-length movies and TV shows it offers online, while also launching a new advertising service and adding about a dozen new content partners.

The long-form videos will be housed on a unique page at http://www.youtube.com/shows and get a "Shows" tab on the main YouTube site.
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The offering, which went live late Thursday, marks a further departure from the fuzzy homemade clips that made the Web site popular and is the latest move in YouTube's attempt to boost sales and profits. Last week, YouTube announced it was teaming up with Universal Music Group to create an online music video venture.

"It's a first step in a long commitment," said Shiva Rajaraman, a YouTube senior product manager, in a conference call with reporters.

The company hopes to add to its movie and show content over time. The titles available at launch are mostly older fare that are already available elsewhere on the Web. It will offer for free hundreds of TV show titles including "Beverly Hillbillies" and "Married With Children," and hundreds of movies, including "Casino Royale" and "Cliffhanger."

The service expands on YouTube's existing partnership with several studios, whose parents include Sony Corp., Lions Gate Entertainment Corp., CBS Corp., Metro-Goldwyn-Mayer Inc. and Liberty Media Corp.

On Thursday it also announced new partnerships with 13 smaller companies such as Discovery Communications Inc., National Geographic and SnagFilms LLC.

Advertising revenue will be shared with the content providers.

The news came on the same day Mountain View-based Google said it earned $1.42 billion, or $4.49 per share, in the first quarter, up 9 percent from a year ago.

Google bought YouTube for $1.76 billion in late 2006 but it hasn't emerged as a major marketing vehicle and the company does not disclose its revenue figures. Analysts have estimated its revenue in 2008 at around $200 million.
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On Thursday, YouTube spokesman Chris Dale simply said a recent analyst estimate that said the site lost $500 million a year was "factually incorrect" and said its performance was better.

As a way to bolster its ad revenue, YouTube also announced it is launching Google TV Ads Online, which will help advertisers target viewers of online content with video ads.

Single video ads are planned to be inserted in scheduled breaks in shows and movies, Rajaraman said. Sometimes the ads will be sold by Google and sometimes by the content providers.

Certain content providers also provide their own video players, such as Sony's Crackle.com player, which will be embedded in the YouTube site.

Crackle.com has 60 movies on its site, but will be offering only 15 at time through the partnership. For example, "Groundhog Day," initially will not be shared, as Sony managers intend to use YouTube's large audience to help drive traffic to Crackle.com.

Australia to invest $31 billion in broadband

Australia's government will build a A$43 billion ($31 billion) high-speed broadband network, leading a new private-public company, after rejecting bids by companies that it said failed to offer value for money.




In a surprise move, Prime Minister Kevin Rudd said on Tuesday the government would ask private companies to join the country's biggest infrastructure project to build a network that would be up to 100 times faster than the current network.

Australia has slower and more expensive Internet services than many developed countries, raising concerns about competitiveness, but the project will be made more difficult by the country's vast distances and inhospitable terrain.

"It's time for us to bite the bullet on this. The initiative announced today is a historic nation-building investment focused on Australia's long-term national interest," Rudd told reporters at parliament.

The center-left government would sell its majority stake five years after the network, which still requires parliamentary approval, was fully operational.

The fibre-optic network, central to Rudd's winning election campaign in late 2007, will be Australia's biggest reliance yet on public-private partnerships and underscores Rudd's preference for government intervention amid a bruising global financial crisis.

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A consortium comprising wealthy Australian businessmen and telecoms industry veterans had been favorite to win the project ahead of Optus, which is owned by Singapore Telecommunications, and Canada's Axia NetMedia.

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The tender process was enveloped in controversy after the country's largest phone company, Telstra Corp, was dumped from the running in December, after the government panel overseeing bids said its proposal did not fit requirements.

Rudd said the new network would be built with money from a A$20 billion national infrastructure fund and the sale of bonds, following an initial government investment of A$4.7 billion. Private sector investment would be capped at 49 percent.

It adds to A$78 billion in economic stimulus measures announced by the government since September to help shield the stalling economy.

Rudd estimated building the network would take 7-8 years, presenting a risk that voters could be alienated by the long delay as the government faces re-election late next year.

"We've delivered an enhanced election commitment. We're actually delivering faster speeds to more people," Communications Minister Stephen Conroy told Reuters, shaking off concerns that the scrapped tender could anger voters and big telcos.

"The global financial crisis impacted right in the middle of the process. The crisis landed right on top of (telcos), the money dried up for everyone," Conroy said, adding Telstra would now be invited back into the process.

The network would operate on a wholesale-only, open access basis, separating retail operations and allowing Optus, Telstra and other companies to build services into the system.

The fibre-to-the-home scheme would support up to 37,000 jobs, Rudd said, as the country teeters on the edge of a recession that could push the jobless rate above 7 percent next year.

Around 90 percent of homes would be connected to a network with speeds of up to 100 megabits per second. The network would add A$37 billion to the national economy through added productivity, analysts said.

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Telstra shares closed up 4.4 percent, clawing back some of a 20 percent drop since mid-December, when the government bumped it from the initial network tender.

In a statement, Telstra said the new plan would have little short to-medium-term impact on its business as it would take years to build. Chairman Donald McGauchie said he looked forward to constructive talks with government.

Analysts said Telstra could work with the new plan, but the longer term outlook was cloudy as the former state monopoly would be up against a powerful new rival and would no longer enjoy lucrative control over lines to homes.

"It looks pretty clear that the government has been very persistent in getting a new network up and running, that will definitely be a competing network. It will be competing directly with the most profitable part of Telstra," said Theo Maas, an investment analyst at Fortis Investment Partners said.

The new network is aimed at reaching end users directly, without relying on Telstra's local copper cable network.

"This could mean Telstra's copper network would eventually become obsolete anyway," said Lucinda Chan, a division director with Macquarie Equities.

On new cell phones, QWERTY eases out 1-2-3

Goodbye, numeric cell phone keypads. You're going the way of the rotary dial. Touch screens and QWERTY keyboards will take over from here, thank you.

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At North America's largest cell phone trade show, running this week in Las Vegas, there were few new phones for the U.S. market that had a numerical keypad instead of an alphabetic keyboard. Touch screens also were out in force.

These changes are a recognition of the popularity of text messaging and wireless Internet use. Industry organization CTIA Wireless, which hosts the show, said U.S. subscribers sent 1 trillion text messages last year, three times the 2007 volume. Meanwhile, the same people used 2.2 trillion minutes of voice calls, an increase of less than 5 percent.

This shift in how people use their mobile devices has overturned cell phone design. According to NPD Group, 31 percent of phones sold in U.S. stores in the fourth quarter of 2008 had full-alphabet keyboards, up from 5 percent two years earlier.

AT&T Inc., the second-largest wireless carrier after Verizon Wireless, introduced six phones this week, all of which had either a touch screen, a typewriter-style keyboard, or both. At the booth of Samsung Electronics Co., the largest seller of phones in the U.S., there were no new keypad phones.

Motorola Inc., the largest domestic maker of phones, was showing off one low-end handset with a keypad. It went on sale through AT&T two weeks ago. But Motorola's big news was a model called the Evoke, which has a touch screen. It's designed for the U.S. market, though it doesn't have a carrier distribution agreement yet.

LG Electronics Inc. displayed a new handset, the GD900, that seemed to both emphasize a numeric keypad and make it vanish. A pad slides out from the GD900's body, but it's made of transparent plastic, so you can see right through it. You don't need to use keypad at all, since the screen is touch-sensitive. Other new LG phones were also dominated by touch screens.

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Even at the low end of the market, keyboards for text messaging are becoming common and affordable. AT&T expects to sell two of the keyboard-equipped phones it introduced, the Samsung Magnet and LG Neon, for about $20 to $30.

Old-fashioned numeric keypads still will have a prominent place — but largely overseas. In a twist of market dynamics, the demand for QWERTY phones is mainly a North American phenomenon, said Ross Rubin, an analyst at NPD.

Although touch screens are gaining in popularity all over the world, people in other countries got into text messaging much earlier and "became acclimated to texting with a keypad," Rubin said. Meanwhile, the U.S. market has been influenced by high-end smart phones like the Treo and the BlackBerry that pioneered small versions of typewriter-style keyboards.

As a result, numeric keypads were still dominant at the CTIA booth of Nokia Corp., the world's largest maker of cell phones, which has a relatively minor presence in the U.S. The same was the case at the booth of Japanese-Swedish manufacturer Sony Ericsson.

Other notable wireless devices at the show (prices are with two-year contracts):

• The Samsung Impression is the first phone on the U.S. market with a screen that uses organic light-emitting diodes rather than liquid crystals. Since OLEDs emit their own light, rather than filtering a fluorescent backlight like LCDs, they can save on battery life and provide better image quality. The Impression has a 3.2-inch touch screen capable of showing very saturated colors and dark blacks, and a slide-out QWERTY keyboard. AT&T will sell the phone for $200 starting Tuesday. OLEDs have shown up before in camera displays, and Sony sells a small, expensive OLED TV.

• AT&T will sell the Nokia E71x, which is billed as the thinnest smart phone in the country, less than half an inch thick. The layout is similar to that of a BlackBerry or BlackJack, and includes a keyboard. Nokia has had a hard time penetrating the U.S. smart phone market, and previous, similar Nokia models sold by AT&T haven't made much of dent on the dominant market share of Research In Motion Ltd.'s BlackBerry. Despite being so thin, the E71x has a 3.2 megapixel camera with autofocus. The phone will cost $100. AT&T has no firm launch date.

• Sprint Nextel Corp. trotted out the Samsung Instinct s30, a follow-up to the first Instinct, which it introduced last year as a touch-screen competitor to the iPhone. The s30 has a thinner, more rounded body and includes a more fully featured Web browser. The s30 will be available April 19 for $130.

• Samsung is making a Web tablet for Clearwire Corp.'s wireless broadband network, which uses a technology known as WiMax. There are laptops and modems for the network, which is live in Portland, Ore., and Baltimore, but there hasn't been a standalone portable device for Clearwire since Nokia discontinued its WiMax tablet in January. Samsung's Mondi will go on sale in the next three months. No price was announced. It doesn't work as a phone, but it could run teleconferencing applications like Skype. The underlying software is Windows Mobile. Naturally, the Mondi has a keyboard and a touch screen, with a 4.3-inch diagonal.

Conficker worm reaches go time, to no effect

The Conficker Internet worm's feared April Fools' Day throwdown for control of millions of infected PCs stirred lots of panic but came and went with a whimper.




Security experts say some Conficker-infected computers — those poisoned with the latest version of the worm — started "phoning home" for instructions more aggressively Wednesday, trying 50,000 Internet addresses instead of 250. However, security companies monitoring the worm remained successful at blocking the communications.

"We didn't see anything that wasn't expected," said Paul Ferguson, a security researcher at antivirus software maker Trend Micro Inc. "I'm glad April 1 happened to be a nonevent. People got a little too caught up in the hype on that. (The infected computers) didn't go into attack mode, planes didn't fall out of the sky or anything like that."

The worm can take control of unsuspecting PCs running Microsoft's Windows operating system. Tied together into a "botnet," these PCs can be directed to send spam, carry out identity-theft scams and bring down Web sites by flooding them with traffic.

That's why the April 1 change in Conficker's programming was a small twist — and not the end of the story. The network of Conficker-infected machines could still spring to life and be used for nefarious deeds.

One scary element is that Conficker's authors have given the infected PCs peer-to-peer abilities, which allows them to update each other and share malicious commands through encrypted channels. That ability means the computers don't have to contact a Web site at all, and the communications are protected.

And the criminals behind Conficker are likely taking their time.

"The people who are pulling the strings on this are very slow and determined and measured in making modifications to this botnet," Ferguson said. "Basically, they're building a layer of survivability."

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Conficker spreads without human involvement, moving from PC to PC by exploiting a security hole in Microsoft Corp.'s Windows operating system. In October, Microsoft issued a software update, called a "patch," to protect PCs from the vulnerability, but not everyone applied the patch.

In one telltale sign of an infected machine, Conficker blocks Microsoft's site as well as those of most antivirus companies. Computer owners can work around that obstacle by having someone else e-mail them a Conficker removal tool.

Security researchers don't have a firm estimate of the number of Conficker-infected machines. There appear to be at least 3 million infected PCs, and possibly as many as 12 million, but tallies vary because some machines may have been counted multiple times, and the number fluctuates as PCs are scrubbed clean of the infection while other machines are compromised.

Doing the worm: Tweak in 'Conficker' sparks fears

Even if it's not an April Fools' joke, the latest moves by the dreaded Conficker worm are by no means an Internet Armageddon, either. The worm's alarming outbreak entered a new phase Wednesday as clocks around the world ticked into the first day of April, the day it was scheduled to change programming.




But security experts appeared correct in their predictions that the day was likely to come and go without any major disruptions, even though the worm has infected anywhere from 3 million to 12 million PCs running Microsoft Corp.'s Windows operating system.

Computer infections now are all about making money by stealing people's personal information. And Conficker's authors stand to make more money from renting out parts of their huge "botnet" to spammers or identity thieves than by destroying parts of the Internet.

"These guys have been pretty smart until now — the worm is unfortunately very well done," said Patrik Runald, chief security advisor for F-Secure Corp. "So far they haven't been stupid. So why should they start on April 1?"

But panic over the worm had reached a frenzy.

Lori Lynn Pavlovich, a mother of four from Racine, Wis., unplugged her PC and vowed to stay offline for a week after seeing a local TV news report about the worm.

"I get scared real easy when it comes to stuff like that," she said. Pavlovich, who says she keeps her antivirus software and security patches up to date, got back online 24 hours later after a relative assured her that her system was safe.

In the last six months, the worm has also caused sleepless nights for the technicians who maintain corporate and governmental computer systems. European media reported that the French military grounded some of its fighter planes after the Navy's network was infected over the winter.




Companies were on high alert to any change in Conficker's behavior that could affect their systems. But a lot of the heavy lifting for big corporations has already been done. Most large organizations hurried to fix the vulnerability that Conficker exploits long ago — Microsoft released a software "patch" for it in October. Many smaller businesses and consumers started worrying about the problem later, making them more vulnerable to infection.

"Consumers are very, very, very aware of this — more so than I've seen in years," said Alfred Huger, vice president of Symantec Security Response. "Enterprises are certainly aware of this, and they're treating this seriously, but no more so than other threats they're faced with."

Detecting a Conficker infection is actually very easy. One of the telltale signs is if you're able to navigate the Internet freely but can't access Microsoft's site or the sites for the major antivirus software vendors. Conficker's authors included that feature to prevent infected machines from downloading programs that remove the worm.

That makes it harder to get the Conficker removal programs, but not impossible. Security experts recommend that people with infected machines find a friend whose machine isn't infected, and have that person download the removal tool and e-mail it to them.

Many companies that have already protected their networks from Conficker have become concerned again because of the publicity the worm generated in recent weeks as the April 1 change to Conficker's programming approached.

Kaspersky Enterprise Space Security 6.0


Michael La Pilla, manager of the malicious code operations team at VeriSign Inc.'s iDefense division, said some of his company's customers were asking for immediate notification about changes to Conficker's behavior, instead of the hourly updates that many receive.

The bad guys behind Conficker haven't been able to reliably communicate with the computers the worm has infected. That means they haven't been able to program the PCs to send spam, carry out identify-theft scams, or perform any other kind of cybercrime.

That has likely started changing with the dawn of April 1. Now the programming on the latest version of Conficker tells those infected machines to generate 50,000 new Internet addresses each day that they can try and "phone home" for instructions. Previously, they had been looking for commands from just 250 sites each day. The point of the change is to make it harder for the security community to pre-register those addresses and keep them out of the bad guys' hands.

Microsoft has offered a $250,000 bounty for information leading to the arrest and conviction of the people responsible for Conficker.

The hoopla surrounding a very arcane change to Conficker's programming code was reminiscent of the doomsday fears about the Y2K bug, when the dawn of the millennium was thought to threaten computer networks by interpreting the new year as 1900 rather than 2000.

"There are a lot of people who are on standby waiting to see what happens," said George Kurtz, senior vice president of McAfee Inc.'s risk and compliance division. "Ultimately, it could be a big event or Y2009 — April 1 rolls around and nothing happens. But that doesn't mean it's the end of the story."