No solution for BlackBerry in India, 4 days to go

Efforts by Research In Motion Ltd., the maker of the BlackBerry, to broaden the debate over data encryption were dismissed by Indian industry groups as unnecessary Friday and appeared unlikely to break a logjam over government demands for access to users' e-mails by an Aug. 31 deadline.

India has threatened to cut off BlackBerry services for about 1 million Indian users if RIM does not find a way for security agencies to monitor encrypted data.

RIM's offer late Thursday to lead an industry forum on telecommunications security was widely seen as a last-ditch attempt to broaden the security debate to include other technology companies, such as competitors Nokia and Microsoft, as well as Google and Skype — which have both been singled out by Indian authorities for potential scrutiny.

RIM is facing widespread concern over its strong data encryption, which is beloved by corporate customers eager to guard secrets but troublesome for some governments in the Middle East and Asia, which worry it could be used by militants to avoid detection.

RIM shares slipped to $45.05 in Friday trading on the Nasdaq stock exchange, down 47 percent from a September high and their lowest since April 2009.

RIM officials met for talks with Indian authorities Thursday, but it remains unclear what solution, if any, they have reached ahead of Tuesday's deadline.

A top telecom official said Friday he's hopeful of reaching an agreement but that India will not compromise on national security.

"These concerns have been addressed in other parts of the world, I see no reason why the Indian government and agencies should take any risk at all as far technology is concerned," Sachin Pilot, minister of state for communications and information technology, told reporters in New Delhi.

Pilot said discussions with RIM are continuing and that he is "hopeful" of finding a solution.

"We are not in the business of shutting down services," he said.

RIM says it maintains a consistent global standard for data access and does not do special deals with individual countries.

Saudi Arabian officials said this month that they would not ban BlackBerry services after reaching a preliminary agreement with RIM to place a server in the country to facilitate monitoring.

The United Arab Emirates has also threatened a ban, while Indonesia and Lebanon have voiced security concerns.

In India, RIM's offer to lead a security forum revealed tensions between the Canadian company and local players, with one powerful industry group accusing the company of adopting an unhelpful, unilateral approach to negotiations.

"It need not have escalated to this level," said Rajan Mathews, director general of the Cellular Operators Association of India. "Folks like RIM have to understand business is done differently here."

He and others said such a forum would be redundant.

In July, India's Department of Telecommunications laid out strict new security guidelines for telecom equipment makers and service providers. Among them was a call to create a voluntary forum, jointly funded by the government and industry, to strengthen security rules and solve problems, according to a copy of a July notice seen by The Associated Press.

Mathews said his group — whose members include top mobile operators Bharti Airtel and Vodafone Essar — is already working with government officials, equipment manufacturers and service providers to do just that.

"We will participate in the forum that we are creating. Whether RIM is a part of that or not is a different issue," Mathews said. "We have our mandate from the government and will proceed on that mandate."

Pankaj Mohindroo, president of the Indian Cellular Association, whose members include handset makers Nokia, Sony Ericsson and Motorola, said mechanisms are already in place to work with the government on security.

"It's quite already taken care of," he said. "But if there's a new initiative we'd be happy to participate."

In 2008, when security concerns first flared between the government and RIM, the Cellular Operators Association of India was part of talks. In July, the Department of Telecommunications asked the group to reach out to RIM, but RIM preferred to negotiate directly with the government, Mathews said.

He believes that was a bad move.

"Folks come in from Canada and the U.S. and Europe and they get stymied and act surprised that things are going the way they are," he said. "They need to use local talent and intelligence and understanding of the nuances of the government and bureaucracy. Unfortunately, they rush in and say rationality should prevail. It doesn't always do that here."

Mathews, who said he has been briefed on the talks, said RIM has offered to give the government access to messenger services — an instant messaging application for the BlackBerry — but that corporate e-mail access remains a sticking point.

RIM has long maintained that the government can access corporate e-mails by going through corporate e-mail servers, but Mathews said that process doesn't afford the government enough secrecy.

"The government is saying we don't want to be in a situation where we find out it's XYZ corporation responsible for this, and then find out where XYZ corporation has its server, then get in touch with the enterprise. The secrecy of the event vanishes," he said. "If they're monitoring someone, they want to keep it confidential."

He said if a workable solution for de-encrypting corporate e-mail in real time is presented by the Aug. 31 deadline, the government would likely extend the deadline for implementation and not ban services next week.

Asked for the government's response to RIM's offer to create an industry forum, Department of Telecommunications spokesman Satyendra Prakash said Friday that the government's position remains firm.

"It will have to allow full access," he said. "Otherwise their services will not be allowed."

RIM officials declined to comment.

Microsoft finally fueling Yahoo's search engine

Microsoft Corp.'s technology is now processing all the search requests on Yahoo Inc.'s website in the U.S. and Canada, completing a long-awaited leap that creates a more formidable challenger to Google Inc. in the most lucrative part of the online advertising market.

Tuesday's shift marks the biggest step yet in a partnership that Microsoft and Yahoo forged 13 months ago after spending years trying to catch up to Google on their own, only to fall further behind.

Microsoft eventually will fuel Yahoo's search engine throughout the world, but the transition in other countries won't occur until next year and 2012. The technology in the U.S. and Canada will only field requests made in English for now, with other languages expected to be added in the next few weeks. The deal doesn't affect Yahoo Japan Corp., a separately run company that plans to rely on Google's search technology.

Since regulators approved their alliance six months ago, Microsoft and Yahoo have been scrambling to get their systems to work cohesively in the U.S. so that they would be able to capitalize on the advertising blitz that heralds the holiday shopping season in November and December. Now that Bing is powering Yahoo's search requests, Microsoft's next challenge is getting its marketing service ready to serve up ads alongside Yahoo's search results before the holidays. Yahoo is providing the ads for now.

By leaning on Microsoft's Bing search engine, Yahoo plans to dramatically lower expenses and focus on other products as it tries to snap out of a financial funk that has depressed its stock price.

Yahoo will sell some ads initially and will use Microsoft's technology to display them. During the first half of the 10-year partnership, Yahoo will get 88 percent of the ad revenue from search requests on its website. After that, the commission could fall to as low as 83 percent or as high as 93 percent, depending on which company handles sales with the top search advertisers.

Microsoft tried to take advantage of Yahoo's problems in 2008 when it offered to buy its rival for $47.5 billion, only to withdraw the bid when the two sides kept quibbling over the price. That's a decision that Yahoo investors and even the company's current CEO, Carol Bartz, have lamented, with Yahoo's stock price trading far below Microsoft's last offer of $33 per share. Yahoo shares fell 18 cents to $13.47 in Tuesday's afternoon trading while Microsoft shares declined 14 cents to $24.14.

As it picks up more traffic from Yahoo, Microsoft hopes to get a better understanding of people's search requests and establish Bing as a more compelling alternative to Google. If it can pull that off, Microsoft will be in a better position to finally start making money in its online division, which has lost $4 billion combined in the company's last two fiscal years alone.

Combined, Microsoft and Yahoo hold a 28 percent share of the U.S. search market, still far behind Google's 66 percent, according to comScore Inc.

Even though Microsoft will be powering Yahoo's search engine, Yahoo says its search results won't look identical to those at Bing. That's because Yahoo's engineers can still tweak the results to serve up unique twists, such as different pictures or suggestions, developed by the company.

Recession hits smart-phone makers in the chips

The seemingly recession-proof smart phone is suffering from a side effect of the rough economy: Manufacturers simply can't build enough of the gadgets because chip-makers that rolled back production last year are now scrambling to play catch-up.

The chip shortage means Apple Inc.'s rivals are having trouble making enough phones to compete with the iPhone, a problem expected to persist through the holidays. It's also affecting wireless carriers, some of which are seeing delays in improving their networks, and it could even raise computer prices.

There isn't an across-the-board shortage of chips, but rather problems with certain components here and there. If just one of the 20 to 30 critical chips that go into a smart phone is unavailable, the whole production line screeches to a halt.

Sprint Nextel Corp., for instance, couldn't satisfy demand for HTC Corp.'s EVO 4G, the first phone to use a faster "4G" network, in parts of the country. Motorola Inc. said shortages of a wide range of chips, from memory to camera sensors to touch-screen controllers, are contributing to problems supplying enough of the new Droid X phones to Verizon Wireless. The carrier's online store reports a two-week wait for shipping orders.

The chips that go into smart phones compete for production capacity with other chips at the gigantic factories run by contract manufacturers such as Taiwan Semiconductor Manufacturing Co. and United Microelectronics Corp. Makers of a vast array of electronics, from TVs to data center switches, also depend on the factories.

The chip-making industry had a tough start to 2009. February sales were only $14.2 billion, down 30 percent from the year before, according to the Semiconductor Industry Association.

Although sales sprang back later in the year, manufacturers were spooked and reined in investment in chip factories. Capital spending plunged 41 percent to $25.9 billion in 2009, after dropping 31 percent the year before, according to research firm Gartner Inc. Total chip production capacity shrank.

Now the factories are having trouble scaling up production fast enough. The chip factories, or "foundries," are running at 96 percent capacity, up from 56 percent at the depth of the recession, according to the SIA.

"The semiconductor guys are really continuing to operate on all cylinders," said Linley Gwennap, president of research firm The Linley Group.

Gartner predicts worldwide investment in the chip industry zooming 84 percent this year to $47.5 billion. That forecast is up from March, when it looked for a 56 percent increase.

While investment is recovering, it takes months to set up new production lines and upgrade existing ones. That's why executives see shortages lasting until next year. Gwennap also sees caution in the industry because the global economic recovery is starting to look quite tentative.

"Even where companies are facing shortages, they're saying 'Nah, I'm not sure I want to invest right now, because demand could turn down any minute.' That makes for a very difficult environment," he said. "In normal times, companies would be hiring, investing in more equipment and factories and trying to increase supply, but these aren't normal times."

Though consumers may have to wait for new phones, they're unlikely to notice price increases. Phone prices are heavily subsidized by carriers, and competition in the industry means it's likely someone in the supply chain will absorb higher prices for the chips.

However, research firm iSuppli warns that prices for PCs could rise this year because of short supplies of memory chips. The prices for these commodity chips are highly volatile. Smaller memory-chip manufacturers need to replace factory equipment, and tool suppliers are struggling to keep up, iSuppli said.

Makers of computer and phone networking equipment were the first to report problems this spring. They continue to face constraints, which means trouble for U.S. wireless carriers that are struggling to increase network capacity to cope with data traffic from the iPhone and other smart phones.

Alcatel-Lucent and LM Ericsson AB, the two largest makers of equipment for U.S. phone companies, have both reported problems making deliveries. They're both suppliers to AT&T Inc., which has complained that it can't beef up its wireless data network as fast as it would like, as it's trying to deal with traffic from the iPhone.

Computer networking giant Cisco Systems Inc. is also feeling the pinch and expects problems to continue through the year.

"We continue to see challenges in procurement of components this quarter," Cisco CEO John Chambers said recently. "Supplier lead times now appear to have stabilized, but are still longer than we would like."

Apple is an exception. Although the company can't keep the iPad and iPhone 4 in stock, it blames that on demand outstripping assembly line capacity, not on problems procuring the right chips.

That may be partly "dumb luck" on Apple's part, Gwennap said, but it could also be a case of it being "good to be the king."

"As a chip supplier, you're going to service your best customers first," he said. "If my choice is to try to make Apple happy or some smaller customer of mine, I might take all of my supply and give it to Apple."

Facebook adds location-sharing feature

Facebook on Wednesday threw the switch on a new feature that lets US members of the social networking service share their whereabouts with friends while on the move.

Facebook Places marks the firm's hotly anticipated first step into "location-based" services that have been catching on with people who own smartphones equipped with satellite position tracking capabilities.

"Starting today, you can immediately tell people about that favorite spot with Facebook Places," said Places product manager Michael Eyal Sharon.

"You can share where you are and the friends you're with in real time from your mobile device."

Facebook members can "check-in" at restaurants, bars, or other social venues and let their friends at the social network instantly know where they are and with whom.

A Places application for iPhone handsets was released, and social network members with smartphones with Web browser software that supports geo-location and HTML5 could use Places at the mobile website touch.facebook.com.

"If you are not in the US you can still see if friends are using it here but you will not be able to check-in," Facebook founder Mark Zuckerberg said at a festive Places launch event at the firm's headquarters in Northern California.

Facebook said it plans to eventually extend the feature to all smartphones and to the social networks more than 500 million members worldwide.

As if anticipating backlash that seems to come with each change at Facebook, executives and engineers there stressed that privacy was being respected and that users control how location information is shared.

Privacy advocates have accused Facebook of failing to properly safeguard information members post to profiles, and adding people's location to the treasure trove of personal data is likely to intensify the debate.

With the rollout of Places, Facebook began making tools available to developers interested in crafting applications that take advantage of the new feature.

Users would have to grant an application maker permission before any data regarding their whereabouts was shared, according to Facebook engineer Ben Gertzfield.

Location-based social networking services Gowalla and Foursquare, which have been competing for dominance in the new but rapidly growing arena, were among the developers treated to early looks at Places.

Gowalla and Foursquare members that "check-in" places, letting their chosen circles of friends at the respective services see where they are, have been able to automatically update Facebook profiles with the information.

"This validates that we are onto something," Foursquare vice president of partnerships Holger Luedorf said at the Places launch event.

"We definitely want to help people connect their online and offline worlds."

Startup Yelp that has attracted millions of users that share opinions of hotels, restaurants and other establishments promised a Places application for iPhones and Android-based smartphones will be out on Thursday.

Yelp is working on "augmented reality" that would enable people to peer through camera lenses of smartphones and see graphics indicating where Facebook or Yelp friends are in areas, according to Yelp products director Eric Singley.

"We think this is a really good starting point," Zuckerberg said of the Places launch. "You can imagine a whole world of things that can be built."

He said Places was starting out with a focus on "making it so you can share where you are and who your are with and see who is around you" and that Facebook will build on it from there.

Zuckerberg said it was yet to be determined how revenue would be generated from Places, but location-based services have proven potential when it comes to targeting advertising or promotions that users happen to be near.

Mobile Apps Security: Apple iOS v. Google Android

The Apple iOS, which runs on its iPhone, iPod Touch, and iPad, has a flaw in how it reads PDF documents that makes it easier to hack. This flaw is exploited by JailbreakMe, a one-click site that makes it easy for anyone without any real tech skills to hack into their own iPhone.

The flaw lets JailbreakMe open up an Apple operating system, and enables the user to load non Apple-approved applications on to an Apple device. JailbreakMe brought the security risk to light, finally causing Apple to release security updates for iOS 4.0.2 for iPhone and iPod touch and iOS 3.2.2 for iPad this week. (By the way, doesn't this sound a lot like the same security flaw that Adobe learned about in late July?)

But the threat to the iOS is not the operating system itself but in its third-party software, such as the Safari browser, QuickTime, Java, or apps from Adobe. Nonetheless, it's Apple that bears the responsibility for monitoring security, since it's made the choice to use the software and package it for users. This is a weird conundrum since Apple believes in the "walled garden" approach to applications. Shouldn't it be patrolling the garden more?

Android has similar issues, such as an innocuous Jackeey wallpaper application that retrieved personal information from each phone that downloaded its application. Neither JailBreakMe nor Jackeey were hacking into anyone's phone; however, their code could be used for evil rather than good, which worries most security experts.

So how does Apple's security for its mobile operating system stack up against that of Google's Android, the biggest competitor?

1. Walled Garden v. the Wild Jungle

The biggest problem with Apple's security is its walled garden philosophy, which relies on the wisdom of Apple approving applications rather than by consensus or the individual user. While many Apple fans say this decreases iOS problems, others say that it actually contributes to them by closing a door on the application after it has gained entrance into the App Store. Apple's gatekeeping system on its walled garden is also virtually unknown, and it may also prove to give a false sense of security.

The Android Market, on the other hand, resembles a swap meet. The applications are available without restriction, and are monitored and reviewed by users themselves, including analyzing code--something not offered by Apple. While some worry that the free-for-all will be a security risk, at least one security research firm, Lookout, says Android's applications are less problematic than Apple's.

2. Pig-in-the-Poke v. the Test-Drive

Another way that app security for the Linux-based Android platform is better is that each application must disclose to the user what part of the device it plans to use and how. Google also publicly talks about operating a "honeypot," or a computer not hooked up to all parts of its system, which monitors Android applications for malicious programs. Such open discussion is not part of Apple's corporate climate, users frequently don't know what they are buying until damage is done--but if they're lucky, they found out about their vulnerability through JailbreakMe.

3. Freedom v. Establishment

With Google's new App Inventor, you don't have to be a software engineer to create an application for the anything-goes Android platform. Not so at Apple. It takes an experienced software developer to create anything on the iOS, and it's up to the corporate honchos at Apple to approve it. As for security in the "walled garden," there are no guarantees.

While the iPhone has some important security features, like sophisticated memory protection and a required digitally signed code requirement, security analysts say Android's protection is stronger because of its source openness and the way it isolates applications which causes less harm to users. While business owners should block or limit access to applications to company machines to protect their data, the Android platform may prove just a little safer.

Netflix to stream Paramount, Lionsgate, MGM movies

Netflix Inc. will pay nearly $1 billion during the next five years for the online streaming rights to movies from Paramount, Lionsgate and MGM in a deal that could help convert even more people to the idea of getting their entertainment piped over high-speed Internet connections.

The agreement announced Tuesday marks another breakthrough in Netflix's bid to stock its online streaming library with more compelling material, so it can keep its subscription service relevant as on-demand video systems supplant its core business of renting DVDs through the mail. The online streaming push also helps the company reduce its postage bill for mailing DVDs.

The deal also makes the three studios' joint pay TV venture, Epix, immediately profitable.

Streaming movies provide more instant gratification than renting DVDs through the mail or from a store because the video can be delivered within 30 seconds over a high-speed connection. The video isn't stored on the computer hard drives owned by subscribers; it's just shown on a connected device, such as video game consoles. The concept has become more popular as more households have gotten high-speed Internet access and Netflix has obtained the streaming rights to more recent movies and TV shows.

Analysts believe the influx of newer movies available for Internet streaming will enable Netflix to maintain its rapid growth of the past two years, lifting its earnings even higher despite the hefty licensing fees. That expectation helped lift Netflix shares $8.11, or nearly 7 percent, to close at $125.01.

Netflix's stock price has quadrupled during the last two years as the number of the company's subscribers has nearly doubled to 15 million. Meanwhile, traditional video stores have been closing, a trend reflected by the collapse of Movie Gallery Inc. and the struggles of Blockbuster Inc., whose shares are worth so little now that they were recently de-listed from the New York Stock Exchange.

Epix, a pay TV channel launched last October by Viacom Inc.'s Paramount, Metro-Goldwyn-Mayer Inc. and Lions Gate Entertainment Corp., holds subscription pay TV rights to new releases and movies from its partners' libraries. The pay TV rights typically start about a year after a movie's theatrical release. Netflix is getting the rights to stream movies 90 days after they appear on Epix, which is offered through subscription TV providers such as Dish Network Corp. and Cox Communications Inc.

The first crop of movies to be released in Netflix's streaming library on Sept. 1 include "G.I. Joe: The Rise of Cobra," "The Pink Panther 2" "The Curious Case of Benjamin Button" and all of "The Godfather" movies. Over the next few months, "Iron Man 2" and "Star Trek" will also be available for streaming.

The movies will be available for streaming on Netflix for 16 or 17 months, after which the rights will shift to basic cable channels.

Netflix now has streaming rights that cover about 46 percent of the movies that have be shown in U.S. theaters this year, said Ted Sarandos, Netflix's chief content officer. He says that's comparable to what Time Warner Inc.'s HBO gets for its pay TV channel, although HBO appears to still hold the edge in the number of movies that made the most money in theaters.

"We are giving people more and more reason to stream instead of waiting to get their DVDs through the mail," Sarandos said.

Just over 60 percent of Netflix's subscribers streamed at least 15 minutes of video in the April-June period, up from 36 percent at the end of last year.

Mark Greenberg, the president of Epix, told The Associated Press that the channel had discussed a digital distribution deal with many potential partners including the online video site Hulu, Amazon.com Inc., and Google Inc.'s YouTube, but the Netflix deal made the most sense because it had healthy subscriber revenues.

"We're putting our bet on Netflix. They've done a great job and they're a great brand," Greenberg said.

Mailing DVDs remains Netflix's bread and butter, so the Internet isn't in immediate danger of choking from Netflix' expanded online streaming. Still, it represents the company's growth engine. Netflix management believes the streaming service is the main reason Netflix has added more than 6.5 million subscribers in the past two years.

Netflix, which is based in Los Gatos, Calif., offers unlimited Internet streaming along with DVD mailing for as little as $9 per month, a price that has held steady even as the company has substantially increased its spending to expand its online library beyond 20,000 titles, up from 2,000 just a few years ago.

The company spent $117 million on streaming rights during the first half of this year, up from $31 million during the first six months of 2009.

The new deal adds roughly $200 million a year to that tab. That's on top of the more than $100 million annually that Netflix will pay Relativity Media LLC for the streaming rights to 12 to 15 movies annually starting in 2011. Netflix finalized that exclusive deal last month. The price for streaming rights has been escalating as more people sign up for Netflix.

Susquehanna Financial Group analyst Marianne Wolk estimates Netflix will spend $360 million on Internet streaming rights next year. But Sarandos said his company can afford those costs because more streaming means fewer DVDs to mail out, thereby reducing the company's postage costs, which now run about $600 million a year.

Viacom owns about a 50 percent stake in Epix, while Lions Gate holds about 31 percent and MGM has about 19 percent. Epix lost $90 million in the first half of the year. Lions Gate CEO Jon Feltheimer told analysts Tuesday that combined with other distribution deals, the Netflix licensing fees will make Epix profitable.

Barclays Capital analyst Anthony DiClemente estimated the deal is worth about 75 cents per share to Viacom. Shares of Viacom rose 29 cents to close Tuesday at $33.96 while Lions Gate's stock edged up 2 cents to $6.60.

Swedish Web hosting firm confirms WikiLeaks link

A Swedish Internet company linked to file-sharing hub The Pirate Bay says it's helping online whistle-blower WikiLeaks release classified documents from servers located in a Stockholm suburb.

Mikael Viborg, the owner of the Web hosting company PRQ, on Friday showed The Associated Press the site — the basement of a drab office building — in Solna on the condition that the exact location was not revealed.

"This is the office. The server room is further inside," the 28-year-old Viborg said, with the door to the office cracked open. Desks with computers, documents, and empty pastry boxes and soda cans could be seen inside before he closed the door.

WikiLeaks posted more than 76,900 classified military and other documents, mostly raw intelligence reports from Afghanistan, on its website July 25. The White House angrily denounced the leaks, saying they put the lives of Afghan informants and U.S. troops at risk.

The secretive website gives few details about its setup, but says its "servers are distributed over multiple international jurisdictions and do not keep logs. Hence these logs cannot be seized."

Viborg said WikiLeaks has servers outside Sweden, too.

"There are backups," he said. "If one goes down, there are others that take over."

Viborg said he was comfortable revealing the location in Solna because Swedish authorities already know where it is and have not tried to shut down the servers.

"Not so far," Viborg said. "First I thought it was a bit surprising. But when you look at the legal situation it's hard to see that Swedish authorities can tell us to do anything, legally.

"They can ask us to do it out of goodwill, but I can tell you right now that we won't oblige."

Swedish Foreign Ministry spokesman Anders Jorle said the government had not been contacted by the United States about the WikiLeaks servers and had no plans to get involved in the matter. Any decision to intervene would have to be taken by Sweden's justice system, he said.

Sweden's staunch protection of the freedom of expression has made it a sanctuary for websites carrying politically sensitive information.

PRQ, in particular, has eagerly offered its services to controversial websites, citing its "boundless commitment to free speech." The company has come under fire for hosting a Chechen rebel site and the Pirate Bay. The founders of that site, popular among file-swappers, were sentenced to one year in prison by a Swedish court in 2009 after being convicted of helping users violate copyright laws.

WikiLeaks recently posted a huge encrypted file named "Insurance" to its website, sparking speculation that those behind the organization may be prepared to release more classified information if authorities interfere with them.

Viborg, a goatee-sporting Swede with a law degree and self-taught computer skills, said he didn't know for sure whether that file was hosted on the servers in Solna, though he added that "I assume it is."

He said PRQ had worked with WikiLeaks since 2008, but always through a Swedish middleman instead of direct contacts. PRQ doesn't own the WikiLeaks servers in Solna, but provides the Internet service, electricity and other services, including restarting the servers when needed, he added.

PRQ treats Wikileaks like any other client, Viborg said, but admitted he has personal sympathies for the website.

"The freedom of expression and the transparency that is required in a democratic society, I think they are important," he said.

A third of U.S. online time spent being social, playing games

We sure do spend a lot of time complaining about our privacy — or lack thereof — when it comes to social networking sites like Facebook, but a recent survey claims that Web surfers in the U.S. spend far more time being social on Facebook, Twitter and MySpace than doing any other single activity online, including e-mail.

So says a recent snapshot of U.S. online life by Nielsen, which finds that Americans spend an average of 22.7 percent of their time poring over social networking sites. That's a big jump from last year, when the figure was 15.8 percent.

Coming in second, according to Nielsen: playing online games, which accounted for a little over 10 percent of our time (up from 9.3 percent in June 2009).

Another online pastime that’s growing in popularity is watching Web-based video like YouTube and Hulu, which U.S. surfers are doing about 3.9 percent of the time.

Meanwhile, one of the biggest losers in the survey is our old friend e-mail. It accounted for only about 8.3 percent of our average online time — still good enough for third place behind social networking and online gaming, but a drop of 28 percent compared with 2009.

Also losing ground in the survey: online portals like Yahoo! (uh-oh), as well as instant messaging. Portals saw their share of U.S. online time fall to just 4.4 percent of the overall online pie — a decline of 19 percent from their share last year, when they claimed 5.5 percent of the pie. Instant messaging claimed 4 percent of our time, down 15 percent compared with last year.

Time spent searching and on "software manufacturer" sites (like Microsoft, most likely) held relatively steady at 3.5 and 3.3 percent, respectively.

The catchall "other" category (which includes a hodgepodge of about 74 other online activities) grabbed a collective 34.3 percent of the total.

While the utter dominance of social networking doesn’t come as much of a surprise (the raging debate about privacy notwithstanding), it’s still somewhat of an eye-popper to me that as a nation, we’re spending almost three times as much time on Facebook and Twitter as we are on e-mail — which was, after all, the original killer app.

Then again, given how easy (and, yes, fun) it is to write on a Facebook wall or tweet your thoughts to the world, the slow fade of e-mail (not to mention instant messaging) as we know it probably shouldn’t be that much of a shock.

Still, Nielsen cautions that social networks like Facebook and Twitter haven’t "pushed e-mail and instant messaging into obscurity yet."

And what’s with all the online gaming? I’m pointing the finger of blame at social games like FarmVille, the perennial time-waster and scourge of Facebook walls everywhere. (All right, I admit: I’ve never played FarmVille. For now, I’m stubbornly opposed. But if you want to set me straight in the comments, feel free.)

UAE to ban BlackBerry services, Saudi follows suit

The United Arab Emirates outlined plans Sunday to block BlackBerry e-mail, messaging and Web browsing services in a crackdown that could jeopardize efforts to establish the country as an international business hub.

The government cited a potential security threat because encrypted data sent on the devices is moved abroad, where it cannot be monitored for illegal activity. But the decision — quickly followed by a similar move in Saudi Arabia — raises questions about whether the conservative Gulf nations are trying to further control content they deem politically or morally objectionable.

BlackBerry phones have a strong following in the region, not only among foreign professionals in commercial centers such as Dubai and Abu Dhabi, but also among youth who see their relatively secure communication channels as a way to avoid unwanted government attention.

"The authorities have used a variety of arguments, like it can be used by terrorists" to justify the crackdown, said Christopher Davidson, a professor at the University of Durham in Britain, who has written extensively about the region. "Yes that's true, but it can also be used by civil society campaigners and activists."

The UAE's decision will prevent hundreds of thousands of BlackBerry users from accessing e-mail and the Web on their handsets starting in October. It's unclear whether the ban will extend to foreign visitors with roaming services, including the roughly 100,000 passengers who pass through the region's busiest airport in Dubai each day.

The ban risks further damaging the UAE's reputation as a relatively easy place to do business.

Dubai, one of seven hereditary sheikdoms in the federation, in particular has sought to turn itself into a global finance, trade and tourism hub. But its reputation has been tarnished by a credit crisis that has left the emirate more than $100 billion in debt.

Residents say the BlackBerry crackdown will only do more harm, making foreign businesses think twice before setting up shop in the country.

"They'll think now they've banned the BlackBerry, maybe next time it'll be the Internet," said Shakir Mahmood, a Dubai-based debt collector and BlackBerry user originally from Iraq.

This isn't the first time BlackBerry and Emirati officials have had run-ins over security and the popular handsets, a fixture in professionals' pockets and purses the world over.

Last year, BlackBerry maker Research in Motion Ltd. criticized a directive by the UAE state-owned mobile operator Etisalat telling the company's BlackBerry users to install software described as an "upgrade" required for "service enhancements."

RIM said tests showed it was in fact spy software that could allow outsiders to access private information stored on the phones. It strongly distanced itself from Etisalat's decision and told users how to remove the software.

Within hours of Sunday's UAE decision to block BlackBerry services, a telecommunications official in neighboring Saudi Arabia said the desert kingdom would do the same, starting later this month. The Saudi official, who spoke on condition of anonymity because he was not authorized to talk to the media, said the country's telecommunications regulator would issue a statement soon.

Ali Mohammed of Saudi Telecom, however, said the company had "not received any instructions about BlackBerry from the ministry."

Government censors in both Saudi Arabia and the UAE routinely block access to websites and other media deemed to carry content that runs contrary to the nations' conservative Islamic values or that could stoke political unrest.

Regulators in the UAE say BlackBerry devices operate outside a set of national security and safety laws enacted in 2007, the year after the BlackBerry debuted in the UAE. They say they are concerned some BlackBerry services "allow users to act without any legal accountability, causing judicial, social and national security concerns."

The government said it is singling out the BlackBerry, and not other smart phones such as Apple Inc.'s iPhone and Nokia Corp. handsets, because the Blackberry is the only one that automatically sends users' data to servers overseas.

Unlike other smart phones, BlackBerry devices use a system that updates a user's inbox by sending encrypted messages through company servers abroad, including RIM's home country of Canada.

Users like the system because it is seen as more secure, but it also makes BlackBerry messages far harder to monitor than ones sent through domestic servers that authorities can more easily tap into, analysts say.

"This is the irony, that it's the device with the highest security features. These same security features that corporations like have become an issue of national security for the government," said Simon Simonian, an analyst at Dubai-based investment bank Shuaa Capital. "The UAE doesn't want to take any chances and they want to monitor what is going on in the country."

The dispute highlights an ongoing tug-of-war between autocratic governments determined to control what information citizens consume online and share with others, and technology providers whose loyalties lie with their customers and shareholders.

Similar tensions erupted earlier this year between China and Google Inc. after the Internet company said it would stop censoring its search results in the country. After China warned it might not renew its license, Google agreed to obey local laws and stop automatically switching mainland users to its unfiltered Hong Kong site.

Emirati authorities are eager to portray an image of a safe and stable society free from the extremism found elsewhere in the region. They have taken steps to crack down on terror financing and efforts by neighboring Iran to sidestep international sanctions over its nuclear program.

Davidson cited alarm in the UAE and other Gulf nations over the role online organization played in helping to drive anti-government protests in Iran during the 2009 elections as a factor in their moves to tighten Internet controls.

Emirati regulators said in a statement they sought to reach a compromise with RIM on their concerns, but failed to come to an agreement.

"With no solution available and in the public interest ... BlackBerry Messenger, BlackBerry E-mail and BlackBerry Web-browsing services will be suspended until an acceptable solution can be developed and applied," said the director-general of the Telecommunications Regulatory Authority, Mohamed al-Ghanim.

"BlackBerry appears to be compliant in similar regulatory environments of other countries, which makes noncompliance in the UAE both disappointing and of great concern," he added in a statement carried on state news agency WAM.

A spokeswoman for RIM said the Canadian company had no immediate comment.

Other countries, including India and the Gulf state of Bahrain, have also raised concerns about BlackBerry messaging features, but have not blocked them outright.

RIM said in a statement last week it "respects both the regulatory requirements of government and the security and privacy needs of corporations and consumers."

The company declined to disclose details of talks it has had with regulators in the more than 175 countries where it operates, but defended its phones' security features as "widely accepted" by customers and governments.

Etisalat and Du, the UAE's two state-run telephone companies, said they are working on alternative services for their BlackBerry customers.

RIM does not disclose the number of BlackBerry users in the UAE. However, analyst Simonian estimated there are "hundreds of thousands" of BlackBerry users in the country.

None contacted by The Associated Press on Sunday said they supported the pending ban.

"I find it irritating, actually. It's a service everyone is using, and all of a sudden, they're just going to disconnect it?" said a 30-year-old manager at a Dubai mall who would give only his first name, Khalid, because he did not want to attract attention from the authorities.