DealBook: Icahn Calls Off Fight Over Dell’s Sale

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Bits: PayPal Refreshes Mobile App to Woo Shoppers and Fight Off Rivals

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Bits Blog: Microsoft Cuts Deal With Activist Shareholder to Avoid Fight

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No, Aquaman Will Not Fight a Shark Tornado

John Rood introduced the moderator – Bob Wayne – who then introduced the panelists. Geoff Johns took the stage and showed off the Trinity War video we premiered last week, which you can see below. Jeff Lemire came out next, and added, “The fun thing is seeing that team interact with the greater Justice League universe. If you see Superman, Batman, and Wonder Woman as the holy trinity of the DCU, I see Constantine, Zatanna, and Deadman as the unholy trinity.”

They showed off a page from Forever Evil and brought up Aquaman, where Johns answered the question we’ve all been asking. “People keep asking me if Arthur is going to fight Sharknado. He’s not, but he would win.”

Brian Buccellato came up next, wearing an appropriately fashioned Flash mask, and even showed off his fresh Flash tattoo. He couldn’t say much about Forever Evil: Rogues Rebellion, but did say,“They don’t have world domination or any crazy ideas of what they do. They’re about stealing; they’re about the job. They want to drink beer at the end of the day and know that they stole something really expensive.”

Johns added that the series was focused on how the Rogues deal with the villains taking over, and how they’re not necessarily okay with that. “If you guys have seen the movie The Warriors, it’s like that.”

Lemire called the Count Vertigo special for Villains Month the creepiest thing he’s ever written, so much so that he freaked himself out with it. As for Animal Man, Lemire said he was trying to focus on Buddy’s celebrity status to explore our current culture. He said he was excited to be working with new artist Rafael Albuquerque, and that they’d be sending Animal Man on a space adventure soon. They should some pages from Trillium, and Lemire said that they’d be doing some things special to the floppy editions, storytelling-wise, and that he enjoyed playing with format.

Mark Buckingham came out next and showed off the cover for Fables #134, which features Bigby Wolf and Boy Blue. He also debuted some new pages from the upcoming story arc “Camelot,” a tale primarily featuring Rose Red. They also touched on The Unwritten/Fables story, which Buckingham called a “very much a collaborative adventure between all of us.”

Gail Simone was the next creator to come out, who joked about Batman getting punched by Gordon in the last issue. She also said that the new art team was the best art team she’s every worked with. “Fernando [Pasarin] is so good at characterization that we can build so much tension and characterization on the page without having to add a whole lot of captions or anything.” She said that all of her characters are at their edges as Gordon hunts Batgirl for killing his son (she didn’t, really).

Simone spoke highly of her collaborator on The Movement, Freddie Williams II, saying that she was proud that the book didn’t really look like any other superhero comics being published today.

Adam Hughes joined the panel to talk a little bit about his work on Before Watchmen: Dr. Manhattan, joking “I aged President years working on that project.” The panel also showed off Hughes’ cover to The Fables Encyclopedia, which is a wrap around.

Sadly, I had to cut out of the panel at this point to head to another commitment! Comic-Con madness!

Joey is a Senior Editor at IGN and a comic book creator. Follow Joey on Twitter @JoeyEsposito, or find him on IGN at Joey-IGN. He often wonders whatever happened to Billy's RadBug.

In European Antitrust Fight, Google Needs to Appease Competitors

The European Commission on Wednesday formally said for the first time that Google’s proposal for addressing antitrust concerns did not go far enough, and demanded that it come up with more far-reaching remedies or potentially face a fine of up to $5 billion.

It was a significant setback for Google, which in April struck a deal with the commission to settle its three-year antitrust investigation by making certain changes in the way it displays answers to search inquiries. But the deal was contingent on feedback from Google’s rivals. The commission determined that the proposal was inadequate, and said the company needed to do more to address rivals’ concerns.

The about-face followed an outcry from Google competitors during the market testing phase of the inquiry, in which the commission asked for feedback on the proposal.

“What they discovered in the market test was that overwhelmingly, everyone said the settlement was inadequate and doesn’t solve the problem,” said a person with knowledge about the feedback competitors gave the commission, but who spoke anonymously because the filings were not public.

Joaquín Almunia, the European Union competition commissioner, said at a news conference, “I concluded that the proposals that Google sent to us months ago are not enough to overcome our concerns.” He said he had written to Eric E. Schmidt, Google’s executive chairman, “asking Google to present better proposals.”

A Google spokesman, Al Verney, said on Wednesday that it would “continue to work” with the commission to settle the case. He added that Google was confident that its earlier proposal “clearly addresses” the commission’s concerns.

Mr. Almunia did not give Google a deadline for presenting a new set of concessions, according to a person with direct knowledge of Mr. Almunia’s letter who spoke anonymously. So the case, which both sides had hoped to close this year, could continue for several months or more.

The main issue is the way Google, which, according to comScore, handles 86 percent of Web searches in Europe, orders its search results. Regulators have been investigating whether Google favors its own services — like travel, local business, mapping and shopping — over those of competitors. Regulators have also examined whether it disadvantaged competitors by including material from other Web sites in search results and whether its advertising business complied with European antitrust law.

Google managed to avoid antitrust charges in the United States, where it has two-thirds market share, after a two-year investigation of similar issues. Google has faced a more hard-line approach in Europe, where critics have accused the antitrust authorities of relying too much on outside complaints from competitors rather than on evidence of consumer harm. That is somewhat of a sore point for European officials, who insist they share the same goals as the Americans when it comes to consumers.

In April, Google proposed to change its search results to clearly label results from some of its own properties, like Google Plus Local, and in some cases to show links from rival search engines. It also proposed giving competitors more control over how it used information from their sites in its vertical search results and making it easier for small businesses to transport their ad campaigns to other search engines.

The proposal was the first time Google had agreed to legally binding changes to its search results, and went much further than the minor concessions it made to the Federal Trade Commission in its inquiry.

Still, the proposal would not have required Google to change the algorithm that produces its search results. Also, if it had been accepted, Google would have escaped a possible fine of about 10 percent of its annual global revenue of about $50 billion and a formal finding of wrongdoing that could limit its ability to expand in Europe.

James Kanter reported from Brussels, and Claire Cain Miller from San Francisco.

Bits Blog: Secret Court Declassifies Yahoo’s Role in Disclosure Fight

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Archivists in France Fight a Privacy Initiative

One of the European Union’s measures would grant Internet users a “right to be forgotten,” letting them delete damaging references to themselves in search engines, or drunken party photos from social networks. But a group of French archivists, the people whose job it is to keep society’s records, is asking: What about our collective right to keep a record even of some things that others might prefer to forget?

The archivists and their counteroffensive might seem out of step, as concern grows about American surveillance of Internet traffic around the world. But the archivists say the right to be forgotten, as it has become known, could complicate the collection and digitization of mundane public documents — birth reports, death notices, real estate transactions and the like — that form a first draft of history.

“Today, e-mail, Facebook, Twitter — this is the correspondence of the 21st century,” said Jean-Philippe Legois, president of the Association of French Archivists, which has around 1,700 members. “If we want to understand the society of today in the future, we have to keep certain traces.”

The group represents a wide swath of professionals who specialize in preserving and cataloging documents from institutions as diverse as town halls or museums. Still, supporters of the French campaign acknowledged the growing concern about digital privacy, after the disclosure of the extensive United States intelligence project known as Prism to mine data from Internet companies for security purposes.

To try to persuade European Union lawmakers to drop or soften the proposed rules on digital privacy, the French archivists introduced a petition, circulated to their counterparts in other countries. The group says the petition has received almost 50,000 signatures, which it will present to the European Parliament.

The group also commissioned advertising posters underlining the threat it sees. One shows a metaphorical image of demonstrators marching through Paris, their faces hidden by digitally appended clown masks. It asks: “Without a name, does individual commitment still have the same meaning?”

The archivists know that their influence is limited as the Parliament is lobbied by myriad Internet companies, governments and other organizations, which have submitted about 4,000 amendments to the proposed law for the European Union’s 27 member states. This month, several proposals were softened, including the plan to require companies to obtain “explicit” consent from users to collect and process their data, though the United States surveillance revelations could renew the push for tougher rules.

The right to be forgotten is one of the most contentious items.

The European Commission has drawn support from consumer organizations and privacy advocates, but the archivists have received backing from other European professionals who rely on record-keeping, including genealogists and history professors.

Advocates of the right to be forgotten say it is unrealistic to expect Internet companies like Google and Facebook, which collect huge amounts of data on their users in order to direct relevant advertising to them, to put safeguards in place without stricter regulations.

European Union lawmakers want to establish two separate, but related, digital privacy rules. One would guarantee Internet users the right to delete pictures, writings and other data on social networks and other online forums. In theory, this is already permitted, but regulators say removal can be cumbersome and deleted material often lingers in search engines and elsewhere.

Under the proposal, search engines would have to remove the material immediately. Internet companies balk at that. They say that they generally favor giving people control over material they have posted themselves, but oppose letting Internet users demand that search engines and other sites remove information about them that has been posted by others, perhaps including official documents.

The principle of a right to be forgotten is being tested under existing laws in Spain, where the government has ordered Google to remove unflattering references to dozens of individuals who filed complaints with the Spanish Data Protection Agency. Google has refused, insisting that only publishers or courts, not individuals or search engines, should have the power to remove information, assuming that it was legally published.

Administration Says Mining of Data Is Crucial to Fight Terror

WASHINGTON — In early September 2009, an e-mail passed through an Internet address in Peshawar, Pakistan, that was being monitored by the vast computers controlled by American intelligence analysts. It set off alarms. The address, linked to senior Qaeda operatives, had been dormant for months.

Investigators worked their way backward and traced the e-mail to an address in Aurora, Colo., outside Denver. It took them to Najibullah Zazi, a 24-year-old former coffee cart operator, who was asking a Qaeda facilitator about how to mix ingredients for a flour-based explosive, according to law enforcement officials. A later e-mail read: “The marriage is ready” — code that a major attack was planned.

What followed in the next few days was a cross-country pursuit in which the police stopped Mr. Zazi on the George Washington Bridge, let him go, and after several false starts, arrested him in New York. He eventually pleaded guilty to plotting to carry out backpack bombings in the city’s subway system.

It is that kind of success that President Obama seemed to be referring to on Friday in California when he defended the National Security Agency’s stockpiling of telephone call logs of Americans and gaining access to foreigners’ e-mail and other data from Microsoft, Google, Yahoo and other companies.

He argued that “modest encroachments on privacy” — including keeping records of phone numbers called and the length of calls that can be used to track terrorists, though not listening in to calls — were “worth us doing” to protect the country. The programs, he said, were authorized by Congress and regularly reviewed by federal courts.

But privacy advocates questioned the portrayal of the program’s intrusion on Americans’ communications as modest. When Americans communicate with a targeted person overseas, the program can vacuum up and store for later searching — without a warrant — their calls and e-mails, too.

Mr. Obama acknowledged that he had hesitations when he inherited the program from George W. Bush, but told reporters that he soon became convinced of its necessity. “You can’t have 100 percent security and also then have 100 percent privacy and zero inconvenience,” he said. “We’re going to have to make some choices as a society.”

To defenders of the N.S.A., the Zazi case underscores how the agency’s Internet surveillance system, called Prism, which was set up over the past decade to collect data from online providers of e-mail and chat services, has yielded concrete results.

“We were able to glean critical information,” said a senior intelligence official, who spoke on the condition of anonymity. “It was through an e-mail correspondence that we had access to only through Prism.”

John Miller, a former senior intelligence official who now works for CBS News, said on “CBS This Morning,” “That’s how a program like this is supposed to work.”

Veterans of the Obama intelligence agencies say the large collections of digital data are vital in the search for terrorists. “If you’re looking for a needle in the haystack, you need a haystack,” Jeremy Bash, chief of staff to Leon E. Panetta, the former C.I.A. director and defense secretary, said on MSNBC on Friday.

Under the program, intelligence officials must present Internet companies with specific requests for information on a case-by-case basis, showing that the target is a foreigner and located outside the United States, a senior law enforcement official said Friday. If the N.S.A. comes across information about an American citizen during the search, it turns over that material to the F.B.I. for an assessment, the official said.

An administration official said Friday that agencies were evaluating whether they could publicly identify particular terrorism cases that came to the government’s attention through the telephone or Internet programs.

Representative Mike Rogers, the Michigan Republican who is chairman of the House intelligence committee, said Thursday that the phone program “was used to stop a terrorist attack.” He did not identify the plot, or explain whether the call logs in the case would have been unavailable by ordinary subpoenas.

Two Democratic senators on the Intelligence Committee who have been warning about the bulk collection of records under the Patriot Act, Ron Wyden of Oregon and Mark Udall of Colorado, said Friday that their study of the calling log program has convinced them that it was not worth its cost to privacy.

Mark Mazzetti and Michael S. Schmidt contributed reporting.

DealBook: In Letter, Icahn Pledges to Fight Dell Over Sale

Jeff Zelevansky/ReutersCarl C. Icahn has suggested a  so-called leveraged recapitalization of Dell.

A special committee of Dell’s board disclosed on Thursday that it had received a letter from Carl C. Icahn, who hinted at “years of litigation” if Dell did not back away from its $24.4 billion deal to sell the company to its founder.

The confirmation of Mr. Icahn’s intent to oppose the bid illustrates the growing pressure on Dell not to pursue the buyout by Michael S. Dell and his partner, the private equity firm Silver Lake. Mr. Icahn is joining a growing chorus that already includes the beleaguered computer company’s two biggest shareholders outside of Mr. Dell himself.

Mr. Icahn did not disclose the exact size of his stake, describing his hedge fund’s holdings only as “substantial.” CNBC reported on Wednesday that he held a stake of roughly 6 percent, acquired in recent weeks.

In the letter, sent to the committee on Tuesday, Mr. Icahn proposed that Dell instead issue a special dividend of $9 a share. Such a payout would be financed from the company’s cash on hand and new debt.

He estimated that the publicly traded company was worth about $13.81 a share, making his suggested transaction – a so-called leveraged recapitalization – worth about $22.81 a share.

“We believe, as apparently does Michael Dell and his partner Silver Lake, that the future of Dell is bright,” Mr. Icahn wrote in the letter. “We see no reason that the future value of Dell should not accrue to all the existing Dell shareholders – not just Michael Dell.”

If Dell fails to comply, Mr. Icahn said he would call on the board to combine a vote on the deal with a vote on re-electing the company’s directors. He said he planned to nominate an alternate slate of nominees.

He also wrote that the $24.4 billion management buyout would be subject to lengthy litigation from shareholders, who will claim it was negotiated to give maximum advantage to Mr. Dell, who is also the company’s chairman and chief executive.

Dell’s special committee, made up of independent directors, has argued that it reached the deal in good faith, having bargained hard for the current price and secured a number of concessions from Mr. Dell aimed at facilitating a higher alternative bid.

Potential bidders have signed nondisclosure agreements to take a look at the company’s books, including Hewlett-Packard, Lenovo and the Blackstone Group, according to a person briefed on the matter.

It is unclear that any of those companies will ultimately make an offer.

In a statement on Thursday, the committee reiterated that it was seeking higher offers through March 22, and invited Mr. Icahn to participate in that process. So far, he has declined, the person briefed on the matter said.

“Our goal is to secure the best result for Dell’s public shareholders — whether that is the announced transaction or an alternative,” the committee said.

Here is the text of Mr. Icahn’s letter to the special committee of Dell’s board:

We are substantial holders of Dell Inc. shares. Having reviewed the Going Private Transaction, we believe that it is not in the best interests of Dell shareholders and substantially undervalues the company.

Rather than engage in the Going Private Transaction, we propose that Dell announce that in the event that the Going Private Transaction is voted down by shareholders, Dell will immediately declare and pay a special dividend of $9 per share comprised of proceeds from the following sources: (1) $4.26 per share, or $7.4 Billion, from available cash as proposed in the Going Private Transaction, (2) $1.73 per share, or $3 Billion, from factoring existing commercial and consumer receivables as proposed in the Going Private Transaction, and (3) $4.26, or $5.25 Billion in new debt.

We believe that such a transaction is superior to the Going Private Transaction because we value the pro forma “stub” at $13.81 per share using a discounted cash flow valuation methodology based on a consensus of analyst forecasts. The “stub” value of $13.81 combined with our proposed $9.00 special dividend gives Dell shareholders a total value of $22.81 per share, representing a 67% premium to the $13.65 per share price proposed in the Going Private Transaction. We have spent a great deal of time and effort in determining the $22.81 per share value and would be pleased to meet with you to share our analysis and to understand why you disagree, if you do.

We hope that this Board will agree to adopt our proposal by publicly announcing that the Board is committed to implement our proposal if the Going Private Transaction is voted down by Dell shareholders. This would avoid a proxy fight.

However, if this Board will not promise to implement our proposal in the event that the Dell shareholders vote down the Going Private Transaction, then we request that the Board announce that it will combine the vote on the Going Private Transaction with an annual meeting to elect a new board of directors. We then intend to run a slate of directors that, if elected, will implement our proposal for a leveraged recapitalization and $9 per share dividend at Dell, as set forth above. In that way shareholders will have a real choice between the Going Private Transaction and our proposal. To assure shareholders of the availability of sufficient funds for the prompt payment of the dividend, if our slate of directors is elected, Icahn Enterprises would provide a $2 billion bridge loan and I would personally provide a $3.25 billion bridge loan to Dell, each on commercially reasonable terms, if that bridge financing is necessary.

Like the “go shop” period provided in the Going Private Transaction, your fiduciary duties as directors require you to call the annual meeting as contemplated above in order to provide shareholders with a true alternative to the Going Private Transaction. As you know, last year’s annual meeting was held on July 13, 2012 (and indeed for the past 20 years Dell’s annual meetings have been held in this time frame) and so it would be appropriate to hold the 2013 annual meeting together with the meeting for the Going Private Transaction, which you have disclosed will be held in June or early July.

If you fail to agree promptly to combine the vote on the Going Private Transaction with the vote on the annual meeting, we anticipate years of litigation will follow challenging the transaction and the actions of those directors that participated in it. The Going Private Transaction is a related party transaction with the largest shareholder of the company and advantaging existing management as well, and as such it will be subject to intense judicial review and potential challenges by shareholders and strike suitors. But you have the opportunity to avoid this situation by following the fair and reasonable path set forth in this letter.

Our proposal provides Dell shareholders with substantial cash of $9 per share and the ability to continue as owners of Dell, a stock that we expect to be worth approximately $13.81 per share following the dividend. We believe, as apparently does Michael Dell and his partner Silver Lake, that the future of Dell is bright. We see no reason that the future value of Dell should not accrue to ALL the existing Dell shareholders – not just Michael Dell.

As mentioned in today’s phone call, we look forward to hearing from you tomorrow to discuss this matter without the need for us to bring this to the public arena.

Very truly yours,
Icahn Enterprises L.P.

By:
Carl C. Icahn
Chairman of the Board

Online-Only TV Shows Join Fight for Attention

When Amazon sizes up the television marketplace, it sees opportunity. Internet-delivered TV, which until recently was unready for prime time, is the new front in the war for Americans’ attention spans. Netflix is following up on the $100 million drama “House of Cards” with four more series this year. Microsoft is producing programming for the Xbox video game console with the help of a former CBS president. Other companies, from AOL to Sony to Twitter, are likely to follow.

The companies are, in effect, creating new networks for television through broadband pipes and also giving rise to new rivalries — among one another, as between Amazon and Netflix, and with the big but vulnerable broadcast networks as well.

“These are the very first lab tests in a very grand experiment,” said Jeff Berman, the president of BermanBraun, a media company that makes programming for NBC, HGTV, AOL and YouTube, among others.

As he suggested, the competition has only just begun. Amazon is making pilot episodes for at least six comedies and five children’s shows, with more to be announced soon. Sometime this spring it will put the episodes on its Amazon Prime Instant Video service and ask its customers which ones they like, then order full seasons of some of them.

Netflix has been ordering entire seasons of its shows without seeing pilots first. Reed Hastings, Netflix’s chief executive, said last week that “House of Cards,” the political thriller starring Kevin Spacey and Robin Wright, had been a “great success” for the company. Its next program, a horror series called “Hemlock Grove” from the film director Eli Roth, premieres in April.

Microsoft has said comparatively little about its plans. But all three companies are commissioning TV shows because they have millions of subscribers on monthly or yearly subscription plans. Though the shows may be loss leaders, executives say that having exclusive content — something that cannot be seen anywhere else — increases the likelihood that existing subscribers will keep paying and that new ones will sign up.

The proliferation of shows is generally seen as a good thing for viewers, who have more choices about what to watch and when, and for producers and actors, who have more places to be seen and heard. But the trend may inflame cable companies’ concerns about cord-cutting by subscribers who decide there’s enough to watch online. At the same time, the rise of Internet-only shows may make viewers more dependent on the broadband cord. In many cases, though, both cable and broadband are supplied by the same company.

Unlike the early stabs at Internet television, these shows look and feel like traditional TV. That is partly because more viewers are watching Internet content on big-screen TV sets, but it is mostly because the companies involved are throwing money at the screens: each of the Amazon comedy pilots cost the company upward of $1 million, according to people involved in their production, which is less than the $2 million invested in a broadcast comedy pilot, but more than is typically invested in cable pilots.

Not only are the budgets comparable, so are the perks for actors and creators — like trailers and car-service pickups. The writers are guild members. The actors have what the people involved say are standard television contracts, with options for several seasons if shows succeed.

“There’s absolutely no difference” between TV and these new productions, said Jeffrey Tambor, who starred in HBO’s “Larry Sanders Show,” then Fox’s “Arrested Development.” Now, at 68, he is an online pioneer: earlier this year he reprised his character for Netflix’s new season of “Arrested,” which will make its premiere in May. While taping that show, he read the script for “The Onion Presents: The News,” an Amazon pilot. He signed up, and played the older rival to Cheyenne Jackson.

The “Onion” producers took over half of the newsroom of NY1, a New York news channel, in mid-February and reimagined it as the headquarters of an unscrupulous news corporation. (In the pilot episode, a reporter kidnaps a child to increase ratings.) NY1 had rented out its space to the producers of “Gossip Girl,” “Damages” and “The Good Wife” before — but never to a show being made for the Web. For most of the actors there, like Mr. Jackson, a Broadway star whose TV credits include “30 Rock” and “Glee,” the taping was their one pilot of the season — and thus represented a bet on Amazon over the broadcasters.

Mr. Jackson recalled that his manager called about “The Onion” with a note of apprehension in her voice. “It’s online,” she said. “We have to talk about this.” But when he read the script, he said, he felt confident — the tone of it reminded him of “30 Rock.”

“This is kind of a leap of faith,” he said between tapings. “We’re all taking a leap together.”

Analysts say they expect more TV investment to come, including from companies that do not have monthly subscribers to please. YouTube, for instance, the biggest video Web site of all, makes its money from ads, not from subscriptions. But it has paid dozens of outside producers to start channels so that it has original, professional content. And its owner, Google, can afford to pay many more.

Similar logic is spurring cable channels, which each receive a small piece of cable subscribers’ monthly payments, to come up with more dramas and sitcoms that they can call their own. This brings up a conundrum, of course: too much great TV to watch, and not enough time.

“Viewers find organizing and managing all of their beloved TV options to be a bit stressful,” said Christy Tanner, the chief executive of TVGuide.com, which conducted research that found respondents who said “it feels like work” and “I’m afraid of missing something.”

Nonetheless, the number of companies trying to elbow into the TV space is only going up — further proving the nearly 20-year-old adage that “content is king.” Witness DirecTV, the biggest satellite distributor in the country, which is planning to introduce its first homegrown show, a thriller called “Rogue,” next month. Christopher Long, who runs DirecTV’s original programming, said he wanted to buy several more shows: “Our opinion is, if we build good enough television, people will find it.”

DealBook: In Apple Fight, Einhorn Unveils ‘iPrefs’

4:30 p.m. | Updated Apple Inc. has introduced more innovative consumer products than perhaps any other company has in the last decade: the iPod, the iPhone, the iPad.

Eduardo Munoz/ReutersDavid Einhorn, president

Now the hedge fund manager David Einhorn wants the company to roll out what he calls iPrefs, which he says could produce $61 a share in additional benefits for investors.

It’s a cutesy name for the class of perpetual preferred shares that Mr. Einhorn has called on the technology giant to roll out as a way to deliver more cash to its shareholders. And for over an hour on Thursday, Mr. Einhorn, the president of the hedge fund Greenlight Capital, patiently walked listeners through his argument about why those securities made the most sense for returning the company’s $137 billion cash hoard to what he said were its rightful owners.

Flipping through a voluminous PowerPoint presentation, Mr. Einhorn argued that his idea bore merit and deserved shareholder support. He also explained how iPrefs work: Apple would issue one preferred share, carrying a quarterly dividend of 50 cents each, for each outstanding common share.

He conceded that the idea was unusual. But he argued that it was a fresh way to reward shareholders while letting Apple hold on to a still-substantial “rainy day” fund.

“We know they embrace innovation and can recognize it when they see it, even if it isn’t the kind of innovation people usually think of when they think of Apple,” Mr. Einhorn said.

“We hope Apple agrees with us when we say that iPrefs are an innovative idea whose time has come,” he added

The conference call came after several current investors in Apple and a former one in Greenlight called on Mr. Einhorn to halt his fight, which has included suing Apple for what the hedge fund manager called an improper bundling of several shareholder initiatives. The proposal on Apple’s proxy includes the elimination of the company’s ability to issue preferred shares without shareholder consent.

The California Public Employees’ Retirement System, the big pension fund, has urged shareholders to support the so-called Proposal 2, arguing that it actually promotes good corporate governance.

“I came off the call deeply puzzled,” Anne Simpson, the pension fund’s director of global governance, told DealBook in an interview after the call. “He finished off by saying you should vote against Proposal 2 to send a message, but he’s in court trying to prevent Proposal 2 from going ahead.

Calpers had been actively soliciting shareholder support for the corporate governance changes since before Mr. Einhorn filed his suit and believes the proposal will pass handily.

Ms. Simpson is undecided about the merits of the hedge fund manager’s idea, but she took issue with the idea of a big, distracting fight with a company that has already said publicly that it was considering the concept.

“This is really about proper conduct,” she said. “I don’t feel happy that activist funds can use disruptive tactics when the company says that they’re listening and willing to meet.”

And Richard Clayton, the research director of the CtW Investment Group, which represents several unions’ pension funds, added, “What we heard on the call was David Einhorn acknowledge that Proposal 2 does advance shareholder rights.”

A Federal District Court judge is weighing issuing a preliminary injunction on Apple’s shareholder vote on Feb. 27, as he prepares a ruling on whether Apple violated securities rules. The judge, Richard J. Sullivan, has indicated that Mr. Einhorn’s lawsuit appears likely to succeed as a matter of law.

David Einhorns Apple Inc. iPrefs Presentation by

Diddy And Kid Cudi Fight Over Cassie

Early this year, there was a rumor circulating that Kid Cudi and Cassie had a secret rendezvous behind Diddy’s back. From what we heard, Kid Cudi and Cassie were good friends, and Cassie confided in him regarding her issues with being Diddy’s side piece. The source says that Cudi took advantage of Cassie while she was emotionally weak and seduced her.

Related: Hip-Hop Rumors: Did Kid Cudi Hook Up With Cassie Behind Diddy’s Back?

According to Bossip, Diddy was furious with Cudi and even allegedly threatened to have him killed! Well, ish hit the fan on Tuesday night when all three went out to Club Trousdale in Hollywood. Check out how Bossip reports it below:

Tuesday night Diddy and Cudi got into a nice little fight at Club Trousdale in Hollywood.

“The club owner didn’t know that the two had beef over Cassie and decided to sit Diddy down next to Cudi,” the spy tells BOSSIP. “The two then exchanged some heated words to the point where the entire club was watching – creating a huge scene.”

Well at least nobody got hurt. Except Cudi’s ego most likely.

Maybe Kid Cudi should stop partying so hard and sober up and avoid the club scene. Because it seems Diddy has made it clear he runs NY and LA.

That ish Cray!

Side note: Kid Cudi must really be going through something right now, because we hear that he has given up some of his parental rights for his daughter. According to TMZ, Kid Cudi agreed to give up custody of his daughter in exchange for visitation rights. According to his daughter’s mother, Cudi has violent tendencies and a “long history of consistent drug and alcohol abuse.”

It sounds like Kid Cudi needs an intervention.

Lindsay Lohan and Dina in Huge Domestic Fight — 911 Called

Lindsay Lohan, Dina
HUGE FIGHT
911 CALLED
7:08 AM PDT  Sources close to Lindsay tell TMZ ... Dina was "wasted" at the nightclub.  We're told the fight started when Lindsay wanted to take her limo to her NYC hotel, but Dina wanted to take it to her home in Long Island, to avoid paying for a taxi.  Somehow Dina prevailed, over the intense protests of her daughter.   We're told Dina scratched Lindsay's leg in the process.

6:26 AM PDT -- Law enforcement sources tell TMZ ... cops took a Domestic Incident Report but no arrests were made.

6:11AM PDT --  We're told the 911 call was a domestic violence call.  Sources say in one of the 911 calls to cops ... the caller said Lindsay was being held against her will by Dina and the driver.


Lindsay Lohan and mama Dina were in a blowout, violent fight early this morning, that ended in a 911 call with cops rushing to the scene ... TMZ has learned.

It started last night when the duo went to a nightclub in New York City.  Our photog says they left the club at around 4 AM and headed back to Dina's home in Long Island.

Lindsay and Dina started arguing in the car and it escalated when they got home.  We're told it became physical with Lindsay sustaining a cut on her leg.  We're also told there was property damage -- including a broken bracelet of Lindsay's -- that occurred during the scuffle.

Cops are still on scene. 

The pic below (Lindsay with a random clubgoer) was taken before the fight started ... at Electric Room, the nightclub inside the Dream Downtown -- the hotel where Lindsay allegedly hit a dude while pulling into the garage.

Rick Ross & Young Jeezy — Fight at BET Awards, Shots Fired

Rick Ross & Young Jeezy
Brawl at BET Awards
Shots Fired
A fight broke out backstage at the BET Hip Hop Awards tonight between Rick Ross and Young Jeezy that resulted in shots being fired .. sources at the awards tell TMZ. 

According to our sources, Ross and Jeezy exchanged words backstage and started pushing and shoving each other. We're told BET security and bodyguards for each of the rappers eventually separated the two.

Our sources on the scene say that after the fight had been broken up, a member of Rick Ross' entourage pulled out a gun while in the parking lot and shots were fired.

We're told Jeezy and Ross are still at the awards, which are being taped tonight in Atlanta and air next month.

A spokesperson for the Atlanta Police Department tells TMZ, "Shortly after 7:15 pm Saturday, a fight broke out in the parking lot at the Atlanta Civic Center (where the BET Awards were being taped) between two groups. Atlanta Police Department officers on scene responded to break up the fight and used OC spray in the process. Individuals fled the scene. There were no arrests or reports of serious injuries. Reports of shots fired appear to be untrue." Our sources maintain shots were fired.

We're also told that 50 Cent got into it with a rapper named Gunplay, a protégé of Rick Ross. 

Can't we all just get along?

Rick Ross & Young Jeezy Fight Backstage At 2012 BET Awards

Fight Breaks Out at Foxconn Plant in China

The Taiyuan plant, which employs about 79,000 workers, makes parts for automotive electronics and assembles various electronic devices, according to Foxconn spokesman Louis Woo.

"The fight is over now ... we're still investigating the cause of the fight and the number of workers involved," said Woo, adding that "involving a couple thousand workers is possible".

Woo said the fight happened in the workers' dormitory facilities and said the company would issue a statement later on Monday.

China's Xinhuanet.com, operated by the Xinhua News Agency, said about 10 people were hurt in the fighting, citing police.

Foxconn, the trading name of Hon Hai Precision Industry Co and the world's largest contract maker of electronic goods, has seen a few violent disputes at its sprawling plants in China, where it employs a total of about 1 million workers.

By late morning, Hon Hai shares were down 1.14 percent, lagging the broader market's decline of 0.28 percent.

In June, about 100 workers went on a rampage at a Chengdu plant in southwestern China. The company has faced allegations of poor conditions and mistreatment of workers at its China operations, and has been spending heavily in recent months to improve the work environment and to raise wages.

A staff member at the Taiyuan plant said he was told the plant could be closed up to two to three days for police investigations.

"There are a lot of police at the site now," the staff member, who asked not to be named because he is not authorized to speak to media, told Reuters by telephone.

He said the plant also makes parts and assemble Apple's iPhone 5.

Calls to the Taiyuan police were not immediately answered, while an official at the plant declined to comment when reached by telephone.

(Additional reporting by Sally Huang in Beijing; Editing by Jonathan Standing and Ken Wills)

Advertising: Samsung-Apple Fight Moves to the Marketing Arena

In a round of ads that began this week, Samsung takes direct aim at Apple, claiming its Galaxy phone is a better choice than the new iPhone 5.

While going after a competitor in an ad is not a new technique, the tone of the Samsung ads is decidedly sarcastic for a technology company emerging from a $1 billion defeat in the latest patent battle between the two companies.

One of the ads features the company’s new Galaxy S III alongside the iPhone 5. The ad, which began appearing in print publications over the weekend, features an image of an iPhone tilted to the right and a white Galaxy phone tilted to the left under the headline, “It doesn’t take a genius.” Below each phone is a list of its features.

“This is a marketing campaign; it’s not a legal campaign,” said Teri Daley, a Samsung representative. “As marketers we’re focused on educating consumers. We feel like they’ve somewhat been led down a blind path when truly that innovation has stopped a long time ago.”

The genius reference could be interpreted as a swipe at the Apple customer support employees, who work at the company’s “Genius Bars.” This summer, Apple started a television ad campaign featuring a Genius Bar employee. The campaign was short-lived.

Todd Pendleton, Samsung’s chief marketing officer, said the “It doesn’t take a genius” ad was not meant to insult iPhone owners. “Apple users or fanboys, or whatever you call them, they’re not the target of this work at all,” he said. “If you look at the core essence of the work, it really is showing an innovation story. A more innovative product in this case is the GS III.”

Innovation has been at the heart of the dispute between the companies. In August, a California jury ruled that Samsung had infringed upon a series of mobile technology patents and awarded Apple $1 billion in damages.

In a statement after the verdict, Samsung showed it was still in fighting spirit. “It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies,” the company said. It vowed that the defeat was “not the final word in this case or in battles being waged in courts and tribunals around the world, some of which have already rejected many of Apple’s claims.”

In an interview, Mr. Pendleton said Samsung’s new ads were part of a larger campaign for the Galaxy S III that began in June and included ads on television, online, in print and in outdoor areas, like posters at bus stations. Major markets for the company include Chicago, Dallas, Los Angeles, San Francisco and New York, he said.

A headline on a Samsung ad that ran in newspapers on Sept. 9, days before Apple introduced its iPhone, says, “The Next Big Thing Is Already Here.” Samsung used a similar tag line in 2011, “The Next Big Thing Is Here,” to promote its 4G service and the Galaxy S II. Television ads for that campaign showed people waiting in line for the latest Apple device while Samsung owners showed off the features of phones they already had.

Adding the word “already” to this latest iteration of the campaign signaled the brand’s focus on the iPhone 5 coming to market. The technology blog Gizmodo published a collection of homemade ads that Apple fans created in response to the latest Samsung ads. Headlines included “Don’t settle for cheap plastic” and “In high school, it doesn’t take a genius to understand who is just a bully.”

Apple, which declined to comment about the Samsung campaign, has undertaken its share of ad campaigns mocking the competition.

Ken Segall, the ad guru who worked on Apple’s “Think Different” marketing campaign and the author of “Insanely Simple,” a book about Apple, said that over the years, Apple learned to apply a light touch of humor when it mocked competitors in ads. For example, in its previous “Get a Mac” TV commercials, a PC, personified by a pudgy John Hodgman, exchanged comedic jabs with a Mac, played by a handsome Justin Long.

In 1985, Apple ran an unpopular TV commercial during the Super Bowl that depicted PC users as mindless lemmings leaping to their death from a cliff. “It was widely panned because they were insulting the ones they were trying to talk to,” said Mr. Segall, who worked at TBWA\Chiat\Day, the agency that produced the ad.

Samsung’s new ads are repeating the same mistake, he said, by making iPhone customers seem foolish. “It seems like an odd way to seduce them because you’re basically telling them they’re idiots,” he said.

While Apple has outspent Samsung on advertising wireless devices, both companies have increased their ad spending in that category over the last year, according to data from Kantar Media, part of WPP. From January to June, Apple spent $193.1 million on advertising mobile products, while Samsung spent $99.9 million. In 2011, Apple spent $104.1 million during the same period, while Samsung spent $6.95 million.

Tom Denari, the president and a principal at the advertising agency Young & Laramore, said the Samsung campaign was reminiscent of the Pepsi and Coke wars of the 1970s and ’80s.

“It’s a classic challenger strategy, where No. 2 throws stones at the leader, in order to attract attention to itself,” Mr. Denari said.

Any brand would like to have the kind of loyalty that Apple gets from its fans, Mr. Denari said, “because these fans identify themselves so closely to the brand that they feel that Samsung is not only attacking Apple, but they feel like they are being personally attacked as well.”

Bill Winchester, chief creative officer of Lindsay, Stone & Briggs, said Samsung should decide what its brand stands for instead of responding to whatever Apple does and competing with Apple based on the features of the phone. “At the end of the day, don’t you think these phones more or less do the same thing?” said Mr. Winchester, who uses an iPhone. “We carry these as a prop to tell people in the world what we are. As soon as you get down to features and starting to compare features, you’re not really going to convince me at that level.”

Advertising: Samsung-Apple Fight Moves to the Marketing Arena

In a round of ads that began this week, Samsung takes direct aim at Apple, claiming its Galaxy phone is a better choice than the new iPhone 5.

While going after a competitor in an ad is not a new technique, the tone of the Samsung ads is decidedly sarcastic for a technology company emerging from a $1 billion defeat in the latest patent battle between the two companies.

One of the ads features the company’s new Galaxy S III alongside the iPhone 5. The ad, which began appearing in print publications over the weekend, features an image of an iPhone tilted to the right and a white Galaxy phone tilted to the left under the headline, “It doesn’t take a genius.” Below each phone is a list of its features.

“This is a marketing campaign; it’s not a legal campaign,” said Teri Daley, a Samsung representative. “As marketers we’re focused on educating consumers. We feel like they’ve somewhat been led down a blind path when truly that innovation has stopped a long time ago.”

The genius reference could be interpreted as a swipe at the Apple customer support employees, who work at the company’s “Genius Bars.” This summer, Apple started a television ad campaign featuring a Genius Bar employee. The campaign was short-lived.

Todd Pendleton, Samsung’s chief marketing officer, said the “It doesn’t take a genius” ad was not meant to insult iPhone owners. “Apple users or fanboys, or whatever you call them, they’re not the target of this work at all,” he said. “If you look at the core essence of the work, it really is showing an innovation story. A more innovative product in this case is the GS III.”

Innovation has been at the heart of the dispute between the companies. In August, a California jury ruled that Samsung had infringed upon a series of mobile technology patents and awarded Apple $1 billion in damages.

In a statement after the verdict, Samsung showed it was still in fighting spirit. “It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies,” the company said. It vowed that the defeat was “not the final word in this case or in battles being waged in courts and tribunals around the world, some of which have already rejected many of Apple’s claims.”

In an interview, Mr. Pendleton said Samsung’s new ads were part of a larger campaign for the Galaxy S III that began in June and included ads on television, online, in print and in outdoor areas, like posters at bus stations. Major markets for the company include Chicago, Dallas, Los Angeles, San Francisco and New York, he said.

A headline on a Samsung ad that ran in newspapers on Sept. 9, days before Apple introduced its iPhone, says, “The Next Big Thing Is Already Here.” Samsung used a similar tag line in 2011, “The Next Big Thing Is Here,” to promote its 4G service and the Galaxy S II. Television ads for that campaign showed people waiting in line for the latest Apple device while Samsung owners showed off the features of phones they already had.

Adding the word “already” to this latest iteration of the campaign signaled the brand’s focus on the iPhone 5 coming to market. The technology blog Gizmodo published a collection of homemade ads that Apple fans created in response to the latest Samsung ads. Headlines included “Don’t settle for cheap plastic” and “In high school, it doesn’t take a genius to understand who is just a bully.”

Apple, which declined to comment about the Samsung campaign, has undertaken its share of ad campaigns mocking the competition.

Ken Segall, the ad guru who worked on Apple’s “Think Different” marketing campaign and the author of “Insanely Simple,” a book about Apple, said that over the years, Apple learned to apply a light touch of humor when it mocked competitors in ads. For example, in its previous “Get a Mac” TV commercials, a PC, personified by a pudgy John Hodgman, exchanged comedic jabs with a Mac, played by a handsome Justin Long.

In 1985, Apple ran an unpopular TV commercial during the Super Bowl that depicted PC users as mindless lemmings leaping to their death from a cliff. “It was widely panned because they were insulting the ones they were trying to talk to,” said Mr. Segall, who worked at TBWA\Chiat\Day, the agency that produced the ad.

Samsung’s new ads are repeating the same mistake, he said, by making iPhone customers seem foolish. “It seems like an odd way to seduce them because you’re basically telling them they’re idiots,” he said.

While Apple has outspent Samsung on advertising wireless devices, both companies have increased their ad spending in that category over the last year, according to data from Kantar Media, part of WPP. From January to June, Apple spent $193.1 million on advertising mobile products, while Samsung spent $99.9 million. In 2011, Apple spent $104.1 million during the same period, while Samsung spent $6.95 million.

Tom Denari, the president and a principal at the advertising agency Young & Laramore, said the Samsung campaign was reminiscent of the Pepsi and Coke wars of the 1970s and ’80s.

“It’s a classic challenger strategy, where No. 2 throws stones at the leader, in order to attract attention to itself,” Mr. Denari said.

Any brand would like to have the kind of loyalty that Apple gets from its fans, Mr. Denari said, “because these fans identify themselves so closely to the brand that they feel that Samsung is not only attacking Apple, but they feel like they are being personally attacked as well.”

Bill Winchester, chief creative officer of Lindsay, Stone & Briggs, said Samsung should decide what its brand stands for instead of responding to whatever Apple does and competing with Apple based on the features of the phone. “At the end of the day, don’t you think these phones more or less do the same thing?” said Mr. Winchester, who uses an iPhone. “We carry these as a prop to tell people in the world what we are. As soon as you get down to features and starting to compare features, you’re not really going to convince me at that level.”

Disruptions: Disruptions: Apple Patent Fight With Samsung Spills Some iPhone and iPad Secrets

APIC/Getty ImagesHorace Goldin sawing a woman in half. The magician’s secrets were revealed in the 1930s when he went to court to defend his signature illusion, much like Apple’s secrets are being brought to light in a patent lawsuit the company has brought against Samsung.

SAN JOSE, Calif. — Back in the early 1930s, a magician by the name of Horace Goldin went to court to defend his signature illusion: sawing a woman in half.

Mr. Goldin filed a lawsuit against the R. J. Reynolds Tobacco Company for using this magic trick in an advertisement and explaining how it worked. According to an article in The New York Times from March 1933, Mr. Goldin, who had won a patent for the illusion a decade earlier, asserted that the ad had adversely affected his ability to get people to see his shows. He asked for $50,000 in damages. (That’s about $865,000 in today’s dollars.)

I thought about Mr. Goldin last week as I sat in a federal courtroom here in the capital city of Silicon Valley. I listened to evidence presented in a patent lawsuit that Apple has brought against Samsung Electronics. Apple claims that Samsung copied its designs for the iPhone and the iPad.

You see, even just by filing his patent, and then using it to litigate, Mr. Goldin publicly drew attention to the secrets of his profession. Apple, by going to a jury trial to defend the patents of its most prized products, is also allowing competitors and the public to see inside one of the most secretive companies in the world.

Steven P. Jobs, the co-founder of Apple, was very much in the mold of a magician. People often spoke of being sucked into a “reality distortion field” as he pitched his new products. Anyone who closely watched those dramatic announcements may recall how he repeatedly used the word “magical” to describe his latest devices.

The way the audience oohed and aahed during his performance was as if Mr. Jobs was saying: “Step right up! Ladies and gentlemen. Boys and girls of all ages! See the latest magical Apple device. You can stretch your fingers on the flat screen and zoom into a photo or map!”

More oohs and aahs.

It was, after all, Arthur C. Clarke, the science fiction author, who once said, “Any sufficiently advanced technology is indistinguishable from magic.” And as Mr. Jobs knew so well, one thing that makes magic so, well, magical, is that you don’t know how it works. It’s also one reason Apple is so annoyingly tight-lipped.

Based on early depositions and courtroom documents that have been submitted for the Apple v. Samsung trial — including photos, e-mails and prototypes — we’re starting to learn just how Mr. Jobs pulled off his tricks.

On the first day of the trial, Christopher Stringer, a longtime industrial designer at Apple with a flair for the theatrical — he wore an ice-cream-white suit — explained the process the company goes through to create these prototypes.

For example, 15 or 16 designers worked together around a kitchen table. When it came time to plan the devices, the company tried almost everything. There are iPads of various exaggerated shapes and sizes. They are white, black or metallic. One iPad has a strange stand that protrudes from the back.

Some of the early prototypes of the iPhone are bizarre. One, a long black rectangle, looks as if it is twice the size it should be. Others have beautifully curved glass screens. Another resembles an old silver iPod that just happens to be a phone, too. And there’s the strangest of all: an iPhone that looks like a stretched hexagon made of cheap black plastic.

While in court on Friday, Philip W. Schiller, Apple’s senior vice president for worldwide product marketing, pulled the curtain further back when he divulged the company’s advertising budgets — often more than $100 million a year for the iPhone alone. Also at the hearing, Scott Forstall, senior vice president for iPhone software, explained that the early iPhone was called “Project Purple.” Mr. Forstall said it was built in a highly secure building on Apple’s campus. A sign on the back of the building read “Fight Club.” Behind the security cameras and locked doors, most employees on the project did not even know what they were working on.

This is just the beginning. There will be weeks of trials and other executive inquisitions that will explain how other magic tricks work inside Apple.

For its part, Samsung accuses Apple of copying from Sony — Sony! — and other electronics makers. It even sent out a news release containing evidence that the court would not allow to be presented before the jury that showed what it says is truly behind the magic.

It seems that even if Apple wins the patent case against Samsung, it may find itself in the same pickle that Mr. Goldin did 80 years ago.

Although the federal court threw out Mr. Goldin’s claim in 1938, the damage had already been done. Besides the large legal fees, the news media brought more attention to how the magic trick of sawing a woman in half actually worked — it was no longer magical. (The secret involved two women. The first woman’s feet protruded from the base of the box, the other’s head stuck out of the top.)

Years later, when Mr. Goldin developed a new illusion in which a giant buzz-saw blade appeared to cut through a woman who was not even enclosed in a box, he chose not to file a patent. He didn’t follow up with any litigation against people who tried to copy or use his trick. He had learned it didn’t pay to protect his secrets that way.

By showing the public how it designs products that twice radically changed the electronics industry, Apple could risk losing some of its magic.

E-mail: bilton@nytimes.com