Apple pushes back shipping of new iPad pre-orders

Apple Inc.'s iPad tablet computer hits U.S. shelves on Saturday, but fans who want the new touch-screen gadget shipped directly to them must wait a week.

The company began taking preorders for the iPad on March 12, promising to get the device to eager buyers by its store launch date of April 3rd. Customers who placed pre-orders by March 27 will receive the device by that date, where Saturday delivery is available, but Apple said Sunday that new pre-orders won't be shipped out until April 12.

The Cupertino, Calif., company declined to give a reason for the shipping delay, but said would-be customers can still pre-order the iPad for in-store pickup on April 3, or purchase the device in stores that day.

The iPads going on sale will connect to Wi-Fi networks only and cost $499, $599 or $699, depending on the data storage capacity.

Versions that also can connect to "3G" cellular networks are expected to go on sale in late April for $629, $729 or $829. International releases also are planned for later in April.

`Smart' meters have security holes

Computer-security researchers say new "smart" meters that are designed to help deliver electricity more efficiently also have flaws that could let hackers tamper with the power grid in previously impossible ways.

At the very least, the vulnerabilities open the door for attackers to jack up strangers' power bills. These flaws also could get hackers a key step closer to exploiting one of the most dangerous capabilities of the new technology, which is the ability to remotely turn someone else's power on and off.

The attacks could be pulled off by stealing meters — which can be situated outside of a home — and reprogramming them. Or an attacker could sit near a home or business and wirelessly hack the meter from a laptop, according to Joshua Wright, a senior security analyst with InGuardians Inc. The firm was hired by three utilities to study their smart meters' resistance to attack.

These utilities, which he would not name, have already done small deployments of smart meters and plan to roll the technology out to hundreds of thousands of power customers, Wright told The Associated Press.

There is no evidence the security flaws have been exploited, although Wright said a utility could have been hacked without knowing it. InGuardians said it is working with the utilities to fix the problems.

Power companies are aggressively rolling out the new meters. In the U.S. alone, more than 8 million smart meters have been deployed by electric utilities and nearly 60 million should be in place by 2020, according to a list of publicly announced projects kept by The Edison Foundation, an organization focused on the electric industry.

Unlike traditional electric meters that merely record power use — and then must be read in person once a month by a meter reader — smart meters measure consumption in real time. By being networked to computers in electric utilities, the new meters can signal people or their appliances to take certain actions, such as reducing power usage when electricity prices spike.

But the very interactivity that makes smart meters so attractive also makes them vulnerable to hackers, because each meter essentially is a computer connected to a vast network.

There are few public studies on the meters' resistance to attack, in part because the technology is new. However, last summer, Mike Davis, a researcher from IOActive Inc., showed how a computer worm could hop between meters in a power grid with smart meters, giving criminals control over those meters.

Alan Paller, director of research for the SANS Institute, a security research and training organization that was not involved in Wright's work with InGuardians, said it proved that hacking smart meters is a serious concern.

"We weren't sure it was possible," Paller said. "He actually verified it's possible. ... If the Department of Energy is going to make sure the meters are safe, then Josh's work is really important."

SANS has invited Wright to present his research Tuesday at a conference it is sponsoring on the security of utilities and other "critical infrastructure."

Industry representatives say utilities are doing rigorous security testing that will make new power grids more secure than the patchwork system we have now, which is already under hacking attacks from adversaries believed to be working overseas.

"We know that automation will bring new vulnerabilities, and our task — which we tackle on a daily basis — is making sure the system is secure," said Ed Legge, spokesman for Edison Electric Institute, a trade organization for shareholder-owned electric companies.

But many security researchers say the technology is being deployed without enough security probing.

Wright said his firm found "egregious" errors, such as flaws in the meters and the technologies that utilities use to manage data from meters. "Even though these protocols were designed recently, they exhibit security failures we've known about for the past 10 years," Wright said.

He said InGuardians found vulnerabilities in products from all five of the meter makers the firm studied. He would not disclose those manufacturers.

One of the most alarming findings involved a weakness in a communications standard used by the new meters to talk to utilities' computers.

Wright found that hackers could exploit the weakness to break into meters remotely, which would be a key step for shutting down someone's power. Or someone could impersonate meters to the power company, to inflate victims' bills or lower his own. A criminal could even sneak into the utilities' computer networks to steal data or stage bigger attacks on the grid.

Wright said similar vulnerabilities used to be common in wireless Internet networking equipment, but have vanished with an emphasis on better security.

For instance, the meters encrypt their data — scrambling the information to hide it from outsiders. But the digital "keys" needed to unlock the encryption were stored on data-routing equipment known as access points that many meters relay data to. Stealing the keys lets an attacker eavesdrop on all communication between meters and that access point, so the keys instead should be kept on computers deep inside the utilities' networks, where they would be safer.

Internet firm in China stops using Google services

An Internet company run by one of Asia's richest men said Tuesday it has ended its affiliation with Google Inc. as the American search giant stopped censoring the Internet in violation of Chinese regulations.

Making good on threats made more than two months ago, Google began shifting its Chinese-based search functions to Hong Kong, a Chinese territory where companies are not legally required to censor Internet search results.

TOM Online, a mainland Chinese Internet firm controlled by Hong Kong tycoon Li Ka-shing, said Tuesday it was stopping use of Google's search services after "the expiry of agreement."

"TOM reiterated that as a Chinese company, we adhere to rules and regulations in China where we operate our businesses," the company's parent, Hong Kong-based TOM Group, said in a statement Tuesday.

TOM Online, which runs online and mobile Internet services in mainland China, did not say when it stopped using Google or provide any details of its agreement with the company.

TOM likely used Google's search box feature, allowing visitors to its Web site to search the Internet with the U.S. company's technology.

It's still unclear whether other Chinese companies that partner with Google will follow suit. Representatives for heavyweight Internet portal operator Sina Corp. did not answer calls seeking comment Tuesday.

Companies, however, are liable to think twice about maintaining a partnership with a company that has been condemned by Beijing for running afoul of its censorship rules. From a business perspective, there are also uncertainties and risks for mainland Internet users relying on a Hong Kong service that could end up blocked.

China Mobile, the world's largest phone company by subscribers, with more than 500 million accounts, could find its partnership with Google for mobile search services in danger, analysts at brokerage CLSA said in a recent report.

"Some of the Chinese companies may want to play it safe and look at other options," said Elinor Leung, CLSA's head of Asia Internet and telecommunications research in Hong Kong.

Google's action did not translate into unfiltered results for millions of Chinese, but shifted responsibility for restricting content to the central government and its formidable Web filters.

Hong Kong, a former British colony with a separate government and civil liberties denied mainland Chinese, maintains open Internet policies.

The territory's government "does not censor the content of Web sites hosted in Hong Kong" and "places no restrictions on access to Hong Kong based Web sites from anywhere in the world," the government said in a statement.

Google ends 4 years of censoring the Web for China

Google Inc. stopped censoring the Internet for China by shifting its search engine off the mainland Monday but said it will maintain other operations in the country. The maneuver attempts to balance Google's disdain for China's Internet rules with the company's desire to profit from an explosively growing market.

Google's decision comes after an impasse pitting the world's most powerful Internet company against the government of the world's most populous country. It's still not clear if Google's solution will resolve a standoff that began Jan. 12. That's when Google said it would no longer adhere to China's requirement that it omit some Internet results.

Visitors to Google's old service for China, Google.cn, are now being redirected to the Chinese-language service based in Hong Kong, where Google does not censor the search results. The Hong Kong page heralded the shift Monday with this announcement: "Welcome to Google Search in China's new home." The site also began displaying search results in the simplified Chinese characters that are used in mainland China.

However, the results can't all be accessed inside China, because government filters restrict the links that can be clicked by mainland audiences.

Google plans to retain its engineering and sales offices in China so it can keep a technological toehold in the country and continue to sell ads for the Chinese-language version of its search engine in the U.S. The company, based in Mountain View, also intends to keep its mapping and music services on Google.cn.

But the revolt against censorship threatens to crimp Google's growth, particularly if China retaliates by making it more difficult for the company to do business in the country. The Chinese government could react by blocking access to Google's services, much as it has completely shut off Facebook, Twitter and YouTube, which is owned by Google.

In remarks carried by Chinese state media, an unnamed official with the government's State Council Information Office said Beijing is "uncompromisingly opposed" to Google's move.

"This is totally wrong," the official told the official Xinhua News Agency.

The tensions in China already have prompted Google to delay plans to sell some new wireless phones running on its mobile software in the country. A store offering mobile phone applications for the Android software system also remains on hold.

"Figuring out how to make good on our promise to stop censoring search on Google.cn has been hard," David Drummond, Google's top lawyer, wrote in a Monday blog posting. "We want as many people in the world as possible to have access to our services, including users in mainland China, yet the Chinese government has been crystal clear throughout our discussions that self-censorship is a nonnegotiable legal requirement."

In a way, Monday's change harks back to how Google operated in China before 2006. Back then Chinese users could search through Google sites such as Google.com, although filters inside China kept people there from clicking through to links generated by queries such as "Tiananmen Square massacre."

Google tried to better reach Web users in China by setting up Google.cn, whose results would be tailored for them. That meant complying with rules requiring the omission of search results the government deemed subversive or pornographic. Google's pages for China noted that some results had been excluded. But the complicity sparked criticism by Google supporters, including some of its own employees, who believed the company was violating its "Don't Be Evil" motto.

On Jan. 12, the search company vowed to shake loose from government-imposed restraints on the Internet. It said it was no longer comfortable playing by the rules after it determined that Google and more than 20 other U.S. companies had been targeted in computer hacking attacks originating from China. The attackers also tried to pry into the e-mail of human rights activists, according to Google. That raised the specter that the Chinese government played a role in the espionage, although Google never made a direct accusation.

Even so, Google had hoped to persuade China to let it run a search engine that could deliver unrestricted results. Failing that, Google wanted to find enough common ground to maintain its research center and sales team in the country.

Drummond said Google might pull some of its sales force out of China if the government blocks access to the Hong Kong search engine entirely. About 700 of Google's 20,000 employees are in China.

"We very much hope that the Chinese government respects our decision, though we are well aware that it could at any time block access to our services," Drummond wrote. Google said he was unavailable to elaborate.

Although Hong Kong is part of China, the former British colony was granted a degree of autonomy when it returned to Chinese rule 13 years ago. Its legal and political freedoms were largely preserved. That has made Hong Kong an appealing home base for companies operating in mainland China, which has troubled Beijing, said Nicholas Bequelin, Human Rights Watch's senior Asia researcher.

"China may also read this as a challenge to its sovereignty of Hong Kong," Bequelin said. Google's move "is probably going to put the heat on the Hong Kong authorities, (whose) leadership is hand-picked by Beijing."

The friction with Google also could affect China's relationship with the Obama administration, which has joined in the call for Internet censorship. China's officials have responded indignantly, insisting all companies must obey the country's laws and accused Google of coordinating its protest with the U.S. government.

A spokesman for the White House's National Security Council, Mike Hammer, expressed disappointment that Google and China weren't able to work out their differences.

"The U.S.-China relationship is mature enough to sustain differences and while we seek to expand cooperation on issues of mutual interest with China, we will candidly and frankly address areas of disagreement," Hammer said.

Many analysts believed China didn't want to lose Google completely, possibly because it might be interpreted as a setback in the government's efforts to foster innovation. Some Web surfers in China also fretted about the possible loss of Google, even going so far as to place flowers outside the company's offices.

For its part, Google wanted to stay in China so it could keep hiring computer programmers and peddling ads in the country. Google also believes its presence in China could lead to looser rules on censorship.

China accounted for a small fraction of Google's $24 billion in annual revenue. Analysts estimate Google brought in $250 million to $600 million from China. It's unclear how much of that amount flowed exclusively from Google.cn.

Investment analysts have been more worried about the long-term consequences of Google's actions in China. Opportunities there figure to grow faster than in the U.S. or Europe. Even if Google remained a distant second in search behind the homegrown Baidu.com Inc. in China, Google could still prosper as more Internet ads are served up in the country.

Google shares have slipped 5 percent since its Jan. 12 warning about a possible shutdown in China. The technology-driven Nasdaq index has climbed about 5 percent during the same span. Google shares fell slightly after the announcement and closed Monday at $557.50, down $2.50 for the day. Baidu's U.S. shares, which have soared about 50 percent since Google raised the possibility of leaving China, closed Monday at $579.72, up 1.8 percent.

China's financial promise is the main reason other technology companies, including Microsoft Corp., seem intent on staying there. If Google exited the country completely, Microsoft and other technology companies might have had an easier time recruiting China's best engineers.

The director of the China Internet Project at the University of California, Berkeley, applauded Google for its stand but predicted China will look for ways to undercut the company.

"The Chinese government will respond in their typically heavy-handed way," said Xiao Qiang, director of the project. "It's inevitable."

Facebook News Readers More Loyal Than Googlers

First, Facebook dethroned Google as the most trafficked web site in the United States, and now the social networking community has proven to have an extremely loyal following among news readers, potentially threatening the dominant position held by Google News. So says a recent Hitwise survey.

"A few weeks ago when I posted my blog entry about Facebook being the largest news reader, I received a few comments and emails noting that visitors aren't as valuable if they don't come back," said Heather Hopkins, a senior online market analyst for Hitwise. "Advertisers and retailers need some assurance that visitors will return again and again."

Loyal Facebook Users

Well, Hitwise data might provide that assurance. Hopkins' latest revelation shows that visitors from Facebook.com are more loyal to news and media web sites than visitors from Google News.

Hopkins points to a specific example she discovered based on Hitwise data: Among the top five print media web sites for the week ending March 6, 2010, 78 percent of Facebook users returned to that site to consume more news, versus only 67 percent of Google News users making return visits.

How does that compare to broadcast media? The numbers are fairly similar. Hitwise shows that 77 percent Facebook users return to broadcast news sites compared to a 64 percent repeat-visitor rate for Google News users.

Getting more granular, Hitwise data show 81 percent of visits to CNN.com in the week of March 6, 2010 were returning visitors. While 84 percent of visitors to CNN.com that came from Facebook.com were returning visitors, only 72 percent from Google News were returning.

"I've been encouraged by some readers to include Google.com in this series. In most cases, Google.com is the number one source of traffic to these sites. Interestingly, visitors from Google are less likely to be returning visitors than average for either Google News or Facebook," Hopkins said. "This reinforces the long term value to News and Media organizations of working with the likes of Google News and Facebook."

Media Focus on Facebook

With recent Pew Research showing that newspapers have seen ad revenue fall 26 percent during the year and 43 percent over the past three years, Hopkins said, understanding where to find loyal readers is becoming increasingly important. What does this mean for the media? Given this information and the Hitwise data about Facebook's traffic dominance, perhaps a greater focus on Facebook.

For the first time, U.S. visits to Facebook exceeded those to the former top site, Google earlier this month. While the difference was relatively small for the week ending March 13 -- 7.07 percent of all visits for Facebook, compared to 7.03 percent for Google -- the trend could point to the growing strength of the social Internet.

One social platform Hopkins didn't mention is Twitter. Twitter has been making its push onto the broader web and announced its @anywhere service last week. The service gives sites like Amazon.com, AdAge, Bing, Citysearch, eBay, The Huffington Post, Meebo, MSNBC, The New York Times, Yahoo and YouTube the ability to stream the millions of daily tweets Twitter users send every day.

Viacom, YouTube air dirty laundry in legal battle

Viacom Inc. and Google Inc.'s YouTube site began airing each other's dirty laundry Thursday, providing a tantalizing peek at the wheeling and dealing that triggered a bitter battle over the copyright laws governing the Internet.

The previously confidential information came out as part of the evidence in a copyright lawsuit that Viacom filed against YouTube in 2007 for alleged copyright infringement of "The Colbert Report," "The Daily Show" and other shows.

The sensitive documents were unsealed because Viacom and YouTube are both trying to persuade U.S. District Judge Louis Stanton to decide the case without a trial.

Both YouTube and Viacom are getting muddied in the process.

Internal YouTube e-mails depict at least one of the company's founders as a video pirate and suggest the Web site's employees were more interested in getting rich quick than adhering to copyright laws.

Other records show Viacom wanted to buy YouTube at least seven months before it filed its lawsuit and often used the Web site to promote the shows on its cable TV programming.

Google bought YouTube for $1.76 billion in November 2006, but not before Viacom made a last-ditch effort to persuade Google to team up in a joint bid for the Web's leading video site, according to the court documents. A few months later, Google offered to pay Viacom $590 million for licensing rights to video, according to the records.

Viacom, the owner of Paramount Pictures and cable TV channels that include Comedy Central, instead sued Google and YouTube in a complaint seeking more than $1 billion in damages.

The media company alleges that YouTube allowed copyright-protected clips to appear on its Web site in its early days to attract a bigger audience. YouTube maintains it has always obeyed online copyright laws, which generally protect service providers from copyright claims as long as they didn't post the infringing material themselves and promptly remove it when notified about a violation.

But an e-mail exchange among YouTube co-founders Chad Hurley, Steve Chen and Jawed Karim showed there were in-house copyright abuses.

"Jawed, please stop putting stolen videos on the site," Chen wrote in the July 19, 2005, e-mail. "We're going to have a tough time defending the fact that we're not liable for the copyrighted material on the site because we didn't put it up when one of the co-founders is blatantly stealing content from other sites and trying to get everyone to see it."

In a statement after the documents were unsealed, YouTube said Chen's e-mail was referring to some aviation videos that had been making the rounds on the Web. "The exchange has nothing to do with supposed piracy of media content," YouTube said.

Karim left YouTube before Google bought it in 2006. But he kept YouTube e-mail on his personal computer, enabling Viacom to obtain correspondence that Hurley had said he lost, according to court documents.

In a July 29, 2005 e-mail, Chen advised Hurley and Karim to "steal it!" in an apparent reference to an unidentified video clip, according to the court documents. After Hurley asked if he wanted to steal movies, Chen replied, "haha ya. Or something."

Hurley, though, brushed off the suggestion, saying he had bigger ambitions than other sites that depended unauthorized video for traffic. "I would like to build something more valuable and more useful ... actually build something that people will talk about and changes the way people use video on the Internet," Hurley wrote.

YouTube was still in a testing, or "beta," phase at the time Chen and Hurley wrote their e-mails. The site didn't drop the beta tag until December 2005 when the YouTube was processing about 6,000 video clips per day. It now accepts about 24 hours of video per minute and hosts more than 500 million videos, according to the court documents.

Google had its own copyright reservations about YouTube before it struck a deal. Internal documents obtained by Viacom quote Google executives describing YouTube as "a 'rogue enabler' of content theft" and warning the site "is completely sustained by pirated content."

Viacom was sizing up YouTube as a takeover target before it launched its legal attack against YouTube.

MTV Networks, the division overseeing Viacom's cable TV operations, made the case for a YouTube bid in a July 2006 presentation.

"We believe YouTube would make a transformative acquisition for MTV Networks/Viacom that would immediately make us the leading deliverer of video online," Viacom's review said.

Viacom also hailed YouTube as "the dominant platform" for Web video and worried that the site would end up being sold to News Corp.'s MySpace. The documents didn't mention how much Viacom might have been willing to pay for YouTube.

The presentation was drawn up by Adam Cahan, an MTV Networks executive vice president. Cahan had left Google earlier in 2006 to work for Viacom.

Just a few days before Google announced its YouTube deal, Cahan tried to persuade his old employer to make a joint bid. "The idea would be: Viacom and Google buy YouTube," Cahan wrote in an Oct. 6, 2006, e-mail to Susan Wojcicki, Google's vice president of product management and the sister-in-law of Google co-founder Sergey Brin.

After Google announced it had struck a deal with YouTube on its own, Viacom employees continued to post a "boatload" of clips to the video site, according to a Viacom e-mail released Thursday.

Since Google's takeover, YouTube has struck licensing deals with many media companies, which now get a cut of revenue from ads shown on the video site.

YouTube won over much of the professional media by developing technology that automatically detects video and audio claimed by its copyright owners. It worked with another Silicon Valley firm, Audible Magic, on the audio detection.

Viacom-YouTube secrets to be exposed in lawsuit

A legal tussle pitting media conglomerate Viacom Inc. against online video leader YouTube is about to get dirtier as a federal judge prepares to release documents that will expose their secrets and other confidential information.

The information expected to be unsealed Thursday will include some of the evidence that Viacom and Google-owned YouTube have collected to prove their respective points, but have kept under wraps so far during their 3-year-old dispute over copyright law.

The sensitive material is emerging now because Viacom and YouTube are citing some of the documents as they try to persuade U.S. District Judge Louis Stanton in New York to decide the case without a trial. Stanton isn't likely to decide on a so-called summary judgment for several more months.

Each side will likely be pointing to things that the other might find embarrassing.

The evidence is expected to provide insights into the early strategies of YouTube co-founders Chad Hurley and Steve Chen and how they responded to copyright complaints that quickly accumulated a few months after the Web site's 2005 debut. The documents also could reveal whether other media suitors tried to buy YouTube before Google acquired the site for $1.76 billion in 2006.

Viacom, the owner of Paramount Pictures and cable TV channels that include Comedy Central, sued YouTube in 2007 seeking more than $1 billion in damages.

Viacom alleges that YouTube built its early success by rampantly infringing on copyrights. YouTube maintains it follows the copyright laws governing the Internet.

Viacom seems particularly interested in sharing some of the documents that it gathered from YouTube and Google. The company, based in New York, argued for a quick release of the records shortly after it and YouTube filed their motions for summary judgments.

YouTube's lawyers unsuccessfully tried to persuade Stanton to keep the documents under seal until this summer.

One of the biggest disputes in the case is how YouTube monitored its site for copyright violations before Google bought it.

Viacom contends YouTube's employees realized copyright-protected video was being illegally posted on the Web site, but routinely looked the other way because they knew the professionally produced material would help attract a bigger audience and encourage return visits.

YouTube lawyers have contended there was no way to know whether copyright-protected video was coming from pirates or from movie and TV studios looking to use the Web site as a promotional tool. If a studio issued a notice of a copyright violation, YouTube says it promptly removed the specified clip as required under the Digital Millennium Copyright Act.

The 1998 federal law generally protects service providers such as YouTube from copyright claims as long as they promptly remove infringing material when notified about a violation. The outcome could hinge on whether Viacom can prove YouTube knew about the copyright abuses without formal notice from Viacom.

Although other content producers also initially complained about copyright abuse at YouTube, many media companies have since struck revenue-sharing deals with the Web site.

YouTube won over much of the professional media by developing technology that automatically detects video and audio claimed by its copyright owners.

Google says China talks continue, but pullout signs grow

Google said on Monday it remained in talks with the Chinese government about censorship of its Chinese-language search portal, despite mounting signs the company could soon shut the site.

Google Inc, the world's biggest search engine, has been in a two-month standoff with Beijing over restrictions on the Internet and Google's claims that it and other companies were hit by hacking from within China.

The company's chief executive, Eric Schmidt, said last week he hoped to announce soon an outcome from talks with Chinese officials on offering an uncensored search engine in that country of 384 million Internet users.

Many experts have doubted China's ruling Communist Party would compromise on censorship, and on the weekend the Financial Times reported the talks had reached an impasse and Google was "99.9 percent" certain to shut its Chinese search engine, Google.cn.

"Our forecast has always remained firm that once Google announced it would not accept censorship, then it was nearly impossible to imagine a scenario either where Google didn't act on that or the government accepted their position," Mark Natkin, managing director of Marbridge Consulting, told Reuters.

Marbridge Consulting is a Beijing-based company that advises on China's IT and telecommunications sectors.

A Google spokesperson said on Monday talks with Chinese authorities had not ended, but added that the company was adamant about not accepting self-censorship.

"We've been very clear that we are no longer going to self-censor our search results," the spokesperson told Reuters. The spokesperson commented on condition of anonymity, citing company policy.

"We are in active discussions with the Chinese government, but we are not going to engage in a running commentary about those conversations," said the spokesperson.

Foreign news reports and China's own state-run media, however, have reflected growing signs that Google could soon acknowledge that its effort to free up its Chinese website faces a deadlock and the company will prepare to shut it down.

A critical commentary on the website of the official Xinhua news agency appeared to assume that Google's pull-back was a certainty.

"The planet won't stop spinning because Google leaves, and Chinese Internet users will still remain online without Google," said the Chinese-language comment issued on Sunday.

"In the past, China's Internet developed very well without Google, and we can be sure that in the future, it will also develop in the same healthy way without Google."

The New York Times reported on Monday that Google's online partners in China had received a government notice on what to do if censoring stops, warning them not to follow the U.S. company's example.

China obliges Internet operators to block words and images the ruling Communist Party deems unacceptable.

Internationally popular websites Facebook, Twitter and YouTube are entirely blocked in China, which uses a filtering "firewall" to block Internet users from other overseas website content banned by authorities.

Google is likely to move in careful steps intended to minimize any risks and disruption to its staff and continued activities in China, said Natkin, the industry consultant.

"Google is very sensitive to protecting its people, and making decisions in a way that will limit the impact on them," he said.

The head of a research firm in Beijing, whose company is working with Google on a project, told Reuters it is likely a Google research and development team will stay in China.

"Google and our staff had communications on product development, so the R&D side is going okay," he said.

Report finds online censorship more sophisticated

Repressive regimes have stepped up efforts to censor the Internet and jail dissidents, Reporters Without Borders said in a study out Thursday.


China, Iran and Tunisia, which are on the group's "Enemies of the Internet" list, got more sophisticated at censorship and overcoming dissidents' attempts to communicate online, said Reporters Without Borders' Washington director, Clothilde Le Coz.

Meanwhile, Turkey and Russia found themselves on the group's "Under Surveillance" list of nations in danger of making the main enemies list.

Although Zimbabwe and Yemen dropped from the surveillance list, that was primarily because the Internet isn't used much in either country, rather than because of changes by the governments, Le Coz said.

Reporters Without Borders issued the third annual report ahead of Friday's World Day Against Cyber Censorship, an awareness campaign organized by the Paris-based media advocacy group.

Le Coz said repressive regimes seemed to be winning a technological tussle with dissidents who try to circumvent online restrictions. She said some U.S. technology companies have been aiding the regimes by selling products that could be used for such censorship, or by cooperating with authorities and requests for censorship.

Companies she cited include Cisco Systems Inc., which has been criticized by activists who say that it sells networking equipment that could be used in official efforts to monitor and control Internet use. In a statement Thursday, the company reiterated that it does not provide any government with any special capabilities, and said products sold in China are the same ones sold elsewhere.

Reporters Without Borders said it was optimistic about Google Inc.'s public threats to leave China if the Silicon Valley powerhouse cannot reach a deal that lets the company offer search results there free of censorship.

"A year from now, I would be happy to tell you that Google opened the path," Le Coz said. "That's a bit idealistic."


In fact, she worries that more democratic nations would be joining the list.

Australia is among the countries under the group's surveillance for its efforts to require Internet service providers to block sites that the government deems inappropriate, including child pornography and instructions in crime or drug use. Critics are worried that the list of sites to be blocked and the reasons for doing so would be kept secret, opening the possibility that legitimate sites might be censored.

In Russia, newly added to the watch list, politically active bloggers have been increasingly arrested, Reporters Without Borders said. In Turkey, several sites, including the video-sharing service YouTube, have been blocked.

China and Tunisia, meanwhile, have employed increasingly sophisticated filtering, while Iran stepped up its Internet crackdown and surveillance amid a disputed presidential election last summer. Countries such as China have defended their Internet practices and accused critics in the U.S. in particular of "information imperialism."

Joining those three countries on the main enemies list are Cuba, Egypt, Myanmar, North Korea, Saudi Arabia, Syria, Turkmenistan, Uzbekistan and Vietnam.

Palm Inc. teeters in crowded smart phone market

Last year, Palm thought it had all the pieces for a turnaround in the market it pioneered: A new CEO known for making the iPod a household name, a sleek new smart phone called the Pre and fresh, intuitive operating software.


Instead, the company is in danger of going the way of its 1990s Palm Pilot, making it the latest innovator to learn that great technology and an accomplished leader don't guarantee success.

Several analysts say Palm Inc. might not remain an independent phone maker for more than a year or two. It just could be too late to stop the momentum enjoyed by Apple Inc.'s iPhone and Research In Motion Ltd.'s BlackBerrys — not to mention a growing crop of phones running Google Inc.'s Android software.

Palm spokesman Derick Mains said the company had no comment.

Consumers have gravitated toward smart phones for their versatile features, such as Internet access and applications that can be downloaded. One out of six U.S. adults had a smart phone last year, according to Forrester Research.

But Palm — a leader in the early days of handheld computing — was slow to adapt. It began fighting back in earnest in January 2009 at the International Consumer Electronics Show. It unveiled the stylish touch-screen Pre and webOS, software that allows Palm phones to do something the iPhone can't — run multiple apps simultaneously.

Ed Colligan, who was then Palm's CEO, said at the time that the new products somewhat marked a relaunching of Palm itself. But it hasn't gone as smoothly as Palm hoped.

Palm released the Pre last June, for use on Sprint Nextel Corp.'s wireless network, and followed it in November with a cheaper model, the Pixi. Verizon Wireless started selling upgraded models of these phones in January, and AT&T Inc. plans to offer webOS phones later this year.

Despite widespread availability and positive reviews, consumers haven't really embraced the products. Palm sold 810,000 phones in the quarter that ended Aug. 28. In the next quarter, sales fell to 573,000. And Palm's latest report, due March 18, is not expected to be bright. Palm recently cut its forecast for that period, citing sluggish sales.

Discouraged investors have sliced the company's stock price by more than half since the Pre hit stores. In that same time, shares of Apple have risen nearly 50 percent to all-time highs, while RIM shares have fallen 11 percent.

One big problem for Palm is standing out in a crowded market dominated by Apple and RIM. Many analysts believe Palm's latest products are good, but the company simply hasn't been able to make potential customers realize this.


Not for a lack of trying: Palm spent $74.1 million on sales and marketing in its last reported quarter, up 64 percent from the previous year.

Verizon and Sprint have advertised the Pre and Pixi, too, but now probably aren't doing it as aggressively as they would if they had the phones exclusively.

On Palm's end, at least, the marketing push is likely to last for several more quarters as it tries to connect with consumers, said Deutsche Bank analyst Jonathan Goldberg.

For a larger phone maker such as Motorola Inc., in the midst of its own comeback attempt, an advertising blitz might not be such a big deal. But Palm is much tinier than its key competitors. It takes Palm an entire quarter to sell as many phones as Apple sells in a less than a week. RIM spent six times as much on a category it calls selling, marketing and administrative expenses in its last quarter as Palm spent on sales and marketing.

One thing Palm has: a CEO who helped make Apple what it is.

Right before the Pre launch, Colligan was replaced by Jon Rubinstein, 53, who spent a decade at Apple during its own comeback run. He started in 1997 and was a pivotal figure behind the brightly colored iMac computers and the iPod.

He came to Palm in 2007 as executive chairman under a deal in which Palm sold nearly a third of the company to private equity firm Elevation Partners.

Still, even the most astute leadership isn't enough in such a competitive market, Canaccord Adams analyst Peter Misek said.

"It takes distribution, it takes cash, it takes luck. It takes a lot of things, and if all those things don't click your probability of success is low," he said.

It also takes time. And Palm wasted it during many years of corporate restructuring, according to Donna Dubinsky, a former Palm CEO and board member.

Dubinsky and Jeff Hawkins founded Palm in 1992, and in 1995 it was bought by U.S. Robotics, a modem maker that was acquired by 3Com Corp. in 1997. Palm spun off as its own company in 2000, two years after Dubinsky and Hawkins left to form a rival startup, Handspring, that made influential early smart phones. In 2003, Palm acquired Handspring and spun off PalmSource, which made the PalmOS handheld computing software, as an independently traded company. PalmSource was bought by Japan's Access Co. in 2005.

Dubinsky said all the shuffling took "critical resources and attention from product development." And even though it happened years ago, she called the decision to spin off PalmOS a "huge strategic error."


"As RIM, Apple and Palm all have demonstrated, these devices need to be highly integrated hardware and software developments in order to optimize the user experience," Dubinsky wrote in an e-mail to The Associated Press. "When Palm no longer could advance the OS, and had to create a new one, it lost several years."

So what will happen to Palm now?

Misek thinks the company could keep spending its cash — it had $590 million at the end of its most recently reported quarter — and run out of gas in a year or two. Or, it could try to conserve funds and angle to be bought out. But Misek thinks a buyer could be dissuaded by the year or two it might take to get webOS working on new phones.

Kaufman Bros. analyst Shaw Wu thinks Palm could be purchased in the next year by a company such as Motorola or Dell Inc. That would give those companies their own smart-phone software rather than making them rely on software found on many kinds of devices.

In fact, Wu said, Palm's best asset is its intellectual property. Palm has patents on its own style of the touch-screen technology that Apple popularized and is now suing phone maker HTC Corp. over.

Ultimately, Wu thinks the smart phone market will look like the PC market, which was crowded with competition early on but eventually produced a short list of winners and a bevy of losers.

Videogame makers racing to develop iPad games

As an electronic reader, Apple's iPad has been touted as a possible "Kindle killer" but what has videogame makers buzzing is the potential of the touchscreen tablet computer as a gaming platform.


"It's going to be a really powerful handheld game console," said Asbjoern Soendergaard, founder and chief executive officer of Tactile Entertainment. "It's going to be an awesome gaming experience."

Soendergaard's Denmark-based company is building a pet simulation game for the iPhone called "Pocket Creatures" and he said the iPad will allow the game developers to add "features that we only thought we could a year ago."

The iPad's larger screen, rich graphics and processing power has videogame and application developers around the world racing to put the final touches on programs for the iPad in time for when it hits the stores next month.

Free and paid applications for the iPhone -- more than 150,000 to date -- helped make the smartphone a smash hit and developers are hoping for similar success with the iPad, which goes on sale in the United States on April 3 and in nine other countries at the end of the month.

"We're very excited about the iPad because it gives us more room to play," said Brian Meehan, the head of worldwide product development at Sourcebits, a company focused on mobile applications and gaming with offices in Atlanta and Bangalore, India.

"It's got a larger screen obviously and more CPU," Meehan said of the iPad's central processing unit, what Tactile's Soendergaard described as the "power under the hood."

Besides games, one of Sourcebits most successful products is "Knocking Live Video," which allows iPhone owners to share live video with each other and has attracted over 750,000 users in just three months.

"We'll ultimately build that out for the iPad," Meehan said.

"For gaming, the iPad's going to be kind of in a bit of a world of its own," he added.

"If you look at Sony's PSP and all the other portable gaming devices they may be a little bit bigger than the iPod Touch or the iPhone but they're all in that same size area.


"Now you have this device that's also going to be able to connect to (the Internet)," he said. "That in itself is a big playing field for everybody in the gaming world."

Soendergaard said the iPad is "different from the iPhone where you have your personal apps" and predicted it will be "a family device, a shared device.

"On the multi-player side it's going to be really exciting," he said. "Maybe you can play board games on it."

Mike Rasmussen of Durham, North Carolina-based Republic of Fun, publisher of "Slug Wars" and other iPhone titles, agreed, saying the iPad opens up all kinds of new possibilities for game makers.

"It's about the right size to place down on a table between four people," said Rasmussen, whose title at Republic of Fun is "el presidente" in keeping with the name of his company.

"We've really started thinking about it as kind of the ultimate board game device which can create really interactive, fun, multi-player experiences for groups of people that just are not possible on a device like the iPhone."

Game makers are not the only ones bullish about the iPad. So are financial analysts and application developers.

"We were able to demo the (iPad) at the launch event and were impressed by the gaming and e-book experience in particular," said Ben Reitzes, an analyst at Barclays Capital.

"We found the gaming experience to be far superior to the smaller screen platforms and wouldn't be surprised if gaming popularity turned out to be one of the gadget's big surprises," Reitzes said in a research note on Friday.

PointAbout, a Washington-based technology company which has built iPhone applications for the White House, the US Coast Guard and The Washington Post among others, is looking to adapt its popular AppMakr service to the iPad.

AppMakr can make iPhone applications for as little as 199 dollars and has been used to build 3,800 iPhone programs in just the six weeks since it was launched, said PointAbout co-founder and chief operating officer Daniel Odio.

"We will probably end up adding iPad into AppMakr so that people can build low-cost iPad apps," Odio said. "I imagine it's going to take us three to six months to do that but it is our goal."

Chinese Company Puts Android on Laptop

A Chinese company is tweaking Google's Android operating system to run on a laptop using homegrown Chinese microprocessors, which are backed by the government.


The move by Lemote Technology, based in China's Jiangsu province, is the first sign of interest in Android among backers of China's Loongson chips, which also go by the name Godson.

Google said in January it planned to stop censoring results on its China-based search engine, a move that would defy Chinese regulations and that raised concerns about potential harm to Android's reception in China. But Lemote's work is the latest sign of continued interest in Android by Chinese tech companies -- including some linked to the Chinese government.

Lemote already offers a demo version of Android that users can download for the YeeLoong8089 netbook, a mini-laptop with an 8.9 inch screen, an employee at the company said Wednesday. Lemote is now working on an optimized version of the OS that it hopes to release for the same netbook soon, the employee said.

Lemote was founded in 2006 with backing from investors including a branch of the state-controlled Chinese Academy of Sciences, which developed the Loongson chip line. The CPU line includes low-end chips as well as high-end chips planned to be used in a Chinese supercomputer. Like other government projects in areas such as mobile communications, the Loongson chips are part of a long-term bid to boost domestic innovation and reduce China's reliance on foreign technology.

Lemote declined to comment on whether it would start selling its netbook with Android pre-loaded, and on any other plans to use the OS. Google's row with the government has had no effect on Lemote's work with Android since the OS is open-source software, the Lemote employee said.


Other computer makers including Hewlett-Packard and Taiwan's Acer and have also announced laptops running Android.

The Lemote netbook, which has an 800MHz Loongson processor, also adds to the number of devices running Android on MIPS chip architecture. Loongson chips' use of the MIPS instruction set puts them apart from the x86 processors made by giants like Intel. It means the chips cannot run mainstream programs like Windows made for x86 processors. But MIPS Technologies last year said it had ported Android to the MIPS architecture and began promoting its use, largely on embedded devices such as home media players.

Bug plagues PlayStation 3, Sony warns of data loss

Sony Corp. said a glitch has knocked PlayStation 3 users off the game console's online network, and the company warned that data loss could occur if gamers continued using the machines.


Sony said in a blog post Monday that the problem was likely caused by a bug in the clock functionality incorporated in the system, reminiscent of the Y2K bug a decade ago. The problem is affecting older PlayStation 3 models, but not the newest slim version that went on sale in September.

The company urged customers not to use the older PlayStation 3 systems until the problem is resolved, warning that doing so could cause errors and make it impossible to record gaming achievements and restore some data.

Sony would not say how many users were affected by the problem, which comes just as PlayStation 3 sales are picking up. According to the NPD Group, 276,900 units of the system sold in January in the United States, up from 203,200 a year earlier. In December 2009, meanwhile, nearly 1.4 million PlayStation 3 consoles were sold in the U.S.

Errors that PS3 users started seeing Sunday include the date of the systems being reset to Jan. 1, 2000.

The problem was reminiscent of the Y2K bug, in which programming shortcuts caused some computers to malfunction in the new millennium because they interpreted "00" as the year 1900. Although a mass computer meltdown didn't result, as some people had feared, hiccups were reported around the world.

Other problems resulting from the Sony glitch can include an error message saying the user has been logged out of the online game network. Users' game trophies — their accomplishments — can also disappear.

Sony is not the first to deal with a Y2K-like bug years after 2000. At the end of 2008, thousands of Microsoft Corp.'s Zune media players unexpectedly crashed, prompting references to "Y2K for Zunes." Microsoft said at the time that the failures, which affected only the 30-gigabyte Zune models, were caused by a problem with their internal clock.

Sony said Monday that it hopes to resolve the problem within 24 hours.