DealBook: An Aggressive Fed Finds Critics on Wall Street

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DealBook: An Aggressive Fed Finds Critics on Wall Street

View the original article here

Bits Blog: Developing Countries Surge in Mobile Broadband, U.N. Finds

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Bits Blog: Google Search Terms Can Predict Stock Market, Study Finds

The terms people search for on Google have been used to forecast how many Americans have the flu, travel plans and the price for which cars sell. Now a scientific study shows that Google search can be used to predict the stock market.

Using Google Trends, a service that shows the popularity of search terms, researchers from Warwick Business School in England and Boston University’s department of physics found that the type of terms people search Google for on a given week can predict whether the Dow Jones industrial average will rise or fall the following week.

The study, titled “Quantifying Trading Behavior in Financial Markets Using Google Trends,” was published Thursday in Nature’s Scientific Reports.

The researchers tracked 98 search terms from Google Trends between 2004 and 2011. These included investment-related words, like debt, stocks, portfolio, unemployment and markets, and non-investment terms, including lifestyle, arts, happy, war, conflict and politics.

One of the leading search terms used to predict the markets was the word “debt” — an increase in such searches heralded a sell-off of stocks. A decrease in searches found the market rose slightly the following week.

But the results do not take into account volatile markets where a big sell-off can force investors to abandon ship sooner than they anticipated.

And sometimes Google Trends can give scientists inaccurate information when the proper context is not applied. For example, earlier this year Google Flu Trends said it believed that nearly 11 percent of the United States population had influenza. Yet the Centers for Disease Control and Prevention put the coughing and sniffling peak at 6 percent of the population. It turns out Google didn’t anticipate how outside influences, like media coverage of the flu and the rise in discussions on social media, would affect its data and statistics.

In 2010, researchers at Indiana University-Bloomington performed a similar study and found that people’s emotions on Twitter could help predict the stock market.

Special Report: Technology and Innovation: Ericsson Finds a Chinese Rival Hot on Its Heels

BARCELONA — As long as there have been mobile phones, Ericsson has dominated the global market for equipment for wireless telecom networks, selling the biggest share of gear to mobile phone operators around the world. But last year something happened that even the longtime market leader, based in Stockholm, had never faced.

A competitor, Huawei of China, pulled even in overall sales.

The rivals have different business mixes — Ericsson makes 43 percent of its sales by managing wireless networks, while Huawei also sells smartphones and corporate communication grids. And excluding those side businesses, Huawei’s sold $25 billion of equipment to operators last year, 29 percent less than Ericsson, which remains the biggest seller of key components like data and voice lines and routers, according to Dell’Oro, a research firm in Redwood City, California.

But Huawei, an upstart founded in 1987 initially to resell telephone switches in rural China, has become a global peer of equal scale, matching Ericsson with $35.7 billion in total sales.

Momentum for the time being appears to be with Huawei, whose profit rose 33 percent last year, to 15.4 billion renminbi, or $2.5 billion, as sales rose 8 percent to 220.2 billion renminbi, according to preliminary, unaudited figures from the company, based in Shenzhen. In the same period, Ericsson’s profit fell 53 percent, to 5.9 billion Swedish kronor, or $919 million, as network equipment sales dropped 11 percent, to 117.3 billion kronor.

Hans Vestberg, an Ericsson employee for 25 years who has been chief executive since January 2010, led the company’s diversification into network management, an outsourcing business that has helped Ericsson offset its equipment rivalry with Huawei. During an interview, Mr. Vestberg declined to discuss Huawei directly but noted that Ericsson had hundreds of competitors, depending on the type of equipment, the type of customer and geography.

Even so, remaining the overall market leader is important, he said.

“Ericsson has been the market leader throughout its 136-year history, and my job I guess is to make sure we hold on to that for another 130,” Mr. Vestberg said.

Product innovations, like antenna-integrated radio, or AIR, an antenna for a cellphone base station that has the radio transmitter built directly into the aerial to save space, electricity and cost for network operators, will keep Ericsson on top, he said.

But the rivalry, because of the increasingly strategic value of global communication networks, also has a significant geopolitical dimension. Amid national security concerns, the U.S. market for operator equipment has been essentially closed to Huawei, which was founded by Ren Zhengfei, a former engineer with the People’s Liberation Army.

The largest U.S. operators have not bought from Huawei, and, last October, the U.S. House of Representatives Select Committee on Intelligence recommended that they continue to avoid purchases from Huawei and another Chinese vendor, ZTE.

The House report, which followed hearings with Chinese company executives, concluded that Huawei had not supplied the requested information on its relationship with the Chinese government and a group of 10 state-owned Chinese banks that were among Huawei’s commercial lenders. The bipartisan panel, in its public report, concluded that Huawei was an extension of the Chinese government, using public subsidies to underbid and win business.

“Based on available information, the committee finds that Huawei receives substantial support from the Chinese government and Chinese state-owned banks, which is at least partially responsible for its position in the global marketplace,” according to the report.

A senior executive at an American maker of network equipment said he believed Huawei to be a de facto arm of the Chinese government, receiving preferential subsidies and support that had allowed it to undercut Ericsson and the other suppliers of equipment, Alcatel-Lucent and Nokia Siemens Networks, to build its market share.

Common Sense: Google Finds a Line Between ‘Aggressive’ and ‘Evil’

“Don’t Be Evil,” the founders of Google, Larry Page and Sergey Brin, proclaimed in their 2004 “Owner’s Manual” for prospective investors in the company. Despite widespread cynicism, criticism and even mockery, the company has never backed down on this core premise, reiterating in its most recent list of the “things we know to be true” that “you can make money without doing evil.”

Jon Leibowitz, chairman of the F.T.C., at the announcement of its Google antitrust ruling.

Yet the company has been dogged for years by widespread allegations that it violates its own pledge by manipulating the search results that remain the core of the company and the primary source of its enormous profits.

Google insists that its results have always been “unbiased and objective” and that they are “the best we know how to produce.” But for competitive reasons, it never disclosed the secret algorithms that produce those results, so no one outside the company knew for sure. A growing chorus of complaints from companies like Expedia, Yelp and, especially, Microsoft that Google manipulates the results to favor its interests at the expense of competitors led both the United States government and the European Union to take up the issue. On Thursday, after nearly two years of investigation, the Federal Trade Commission rendered a verdict: Google isn’t evil.

It may have been “aggressive,” as the commission delicately put it. But “regarding the specific allegations that the company biased its search results to hurt competition, the evidence collected to date did not justify legal action by the commission,” said Beth Wilkinson, outside counsel to the F.T.C. “The F.T.C.’s mission is to protect competition, and not individual competitors.”

The decision is “a huge victory for Google,” Randal Picker, a professor of commercial law at the University of Chicago Law School and a specialist in antitrust and intellectual property, told me just after this week’s decision.

It’s also a vindication of the integrity of Google’s search results and the company’s credibility. “There’s never been any evidence that consumers were harmed by Google’s practices, and no evidence that Google ever engaged in any manipulation that violates antitrust law,” said Eric Goldman, a professor of law and director of the High Tech Law Institute at Santa Clara University School of Law.

The decision is also likely to set standards for competition on the Internet for years to come. It’s a blow to competitors like Microsoft, which has been stirring up opposition to Google for years, not to mention newer rivals like Facebook, Apple and Amazon. “The gloves will be off,” Professor Picker predicted. “The F.T.C. has indicated it’s going to be taking a very cautious approach toward regulating competition on the Internet.”

But will the decision ultimately prove to be good for consumers?

The F.T.C. did secure some concessions from Google regarding patent licensing and advertiser options. But to call those a slap on the wrist would be an overstatement.

What mattered most to both Google users and competitors was Google’s search practices, which had never been put under the regulatory microscope to such a degree and which the F.T.C. left untouched.

Google’s search results have evolved significantly from its early, simpler days. When I searched for “flight JFK to LAX” this week, I got three categories of results: paid ads at the top and on the right; a Google-produced chart comparing flight options with the disclaimer, which you need to click on, that “Google may be compensated by these providers”; and so-called organic results below that. The first two organic results were entries for Expedia, a rival to Google’s travel site. But given the layout and size of my screen, none of the organic results were visible unless I scrolled down.

However clearly labeled, the prominence of Google’s own travel results gives pause to some antitrust experts. “Location is important,” Professor Picker said. “No one thinks otherwise. Years ago, it was important for airlines’ reservations systems to be on the first screen. But I’m not sure this is an antitrust problem.”

Questcor Finds Profit for Acthar Drug, at $28,000 a Vial

THE doctor was dumbfounded: a drug that used to cost $50 was now selling for $28,000 for a 5-milliliter vial.

The physician, Dr. Ladislas Lazaro IV, remembered occasionally prescribing this anti-inflammatory, named H.P. Acthar Gel, for gout back in the early 1990s. Then the drug seemed to fade from view. Dr. Lazaro had all but forgotten about it, until a sales representative from a company called Questcor Pharmaceuticals appeared at his office and suggested that he try it for various rheumatologic conditions.

“I’ve never seen anything like this,” Dr. Lazaro, a rheumatologist in Lafayette, La., says of the price increase.

How the price of this drug rose so far, so fast is a story for these troubled times in American health care — a tale of aggressive marketing, questionable medicine and, not least, out-of-control costs. At the center of it is Questcor, which turned the once-obscure Acthar into a hugely profitable wonder drug and itself into one of Wall Street’s highest fliers.

At least until recently, that is. Now some doctors, insurance companies and investors are beginning to have doubts about whether the drug is really any better than much cheaper alternatives. Short-sellers have written scathing criticisms of the company, questioning its marketing tactics and predicting that its shareholders are highly vulnerable.

 That Acthar is even a potential blockbuster is a remarkable turn of events, considering that the drug was developed in the 1950s by a division of Armour & Company, the meatpacking company that once ruled the Union Stock Yards of Chicago. As in the 1950s, Acthar is still extracted from the pituitary glands of slaughtered pigs — essentially a byproduct of the meatpacking industry.

The most important use of Acthar has been to treat infantile spasms, also known as West syndrome, a rare, sometimes fatal epileptic disorder that generally strikes before the age of 1.

For several years, Questcor, which is based in Anaheim, lost money on Acthar because the drug’s market was so small. In 2007, it raised the price overnight, to more than $23,000 a vial, from $1,650, bringing the cost of a typical course of treatment for infantile spasms to above $100,000. It said it needed the high price to keep the drug on the market.

“We have this drug at a very high price right now because, really, our principal market is infantile spasms,” Don M. Bailey, Questcor’s chief executive, told analysts in 2009. “And we only have about 800 patients a year. It’s a very, very small — tiny — market.”

Companies often charge stratospheric prices for drugs for rare diseases — known as orphan drugs — and Acthar’s price is not as high as some. Society generally tolerates those costs to encourage drug companies to develop crucial, possibly lifesaving drugs for these often neglected diseases.

But Questcor did almost no research or development to bring Acthar to market, merely buying the rights to the drug from its previous owner for $100,000 in 2001. And while the manufacturing of Acthar is complex, it accounts for only about 1 cent of every dollar that Questcor charges for the drug.

Moreover, the tiny “orphan” market soon became much bigger. Before long, Questcor began marketing the drug for multiple sclerosis, nephrotic syndrome and rheumatologic conditions, even though there is little evidence that Acthar is more effective for those other conditions than alternatives that are far cheaper. And the company did so without being required to prove that the drug actually works. That is because Acthar was approved for use in 1952, before the Food and Drug Administration required clinical trials to show a drug is effective for a particular disease. Acthar is essentially grandfathered in.

Today, only about 10 percent of the drug’s sales are for infantile spasms. The new uses, Mr. Bailey has told analysts, represent multibillion-dollar opportunities for Acthar and Questcor, its sole maker.

The results have been beyond even the company’s wildest dreams. Sales of Acthar, which accounts for essentially all of Questcor’s sales, totaled nearly $350 million in the first nine months this year, up 145 percent from the period a year earlier. In the same period, Questcor’s earnings per share nearly tripled, to $2.12. In the five years after the big Acthar price increase in August 2007, Questcor shares rose from around 60 cents to about $50, in one of the best performances of any stock in any industry.

But in September, the shares plummeted after Aetna, the big insurer, said it would no longer pay for Acthar, except to treat infantile spasms, because of lack of evidence the drug worked for other diseases. The stock now trades at $26.93.

Peter Wickersham, senior vice president for cost of care at Prime Therapeutics, a pharmacy benefits manager that has found the drug is possibly being overused, says the huge increase in Acthar’s price for patients “just invites the type of scrutiny that it’s received.”

Media Decoder Blog: Young People Frequent Libraries, Pew Study Finds

In a digital world where many younger readers feel increasingly comfortable downloading novels and textbooks onto their computers or e-readers, a majority of Americans from the ages of 16 through 29 still frequent libraries.

According to a study released Monday by the Pew Research Center, 60 percent of Americans surveyed in this age group said they still visited the library. They use libraries to conduct research, borrow print, audio and electronic books and, in some cases, read magazines and newspapers.

That finding would seem to clash with the popular notion that young readers have turned away from libraries and print books as the source of their reading material, said Kathryn Zickuhr, research analyst with the Pew Research Center’s Internet and American Life Project. “A lot of people think that young people aren’t reading, they aren’t using libraries,” Ms. Zickuhr said. “That they’re just turning to Google for everything.”

The Pew Center has been researching the use of the nation’s libraries for more than two years, with financing from the Bill and Melinda Gates Foundation. The latest study involved a telephone survey, conducted last November and December, of nearly 3,000 people 16 and older talking about their reading habits, and data from two telephone polls conducted in January. While young people clearly do not read newspapers as regularly as their parents and grandparents did, their consumption of magazines is more closely aligned. The study showed that 40 percent of surveyed Americans under 30 regularly read newspapers, compared with 62 percent of older Americans. Seventy-one percent of those under 30 who do read news regularly said they viewed all of their news through hand-held devices.

While 42 percent of Americans under 30 read magazines, 50 percent of older adults read magazines.

But in troubling news for tablet makers, the study also found that the subjects under 30 who read electronically were more likely to read books on a cellphone or a computer.

In fact, the study found that 41 percent of readers under 30 view books using a cellphone and 55 percent read from a computer. Only 23 percent of Americans under 30 used an e-reader and 16 percent used a tablet.

“That’s definitely something we will keep an eye on,” Ms. Zickuhr said.

Assassin's Creed Movie Finds Studio

The Assassin’s Creed film moved a step closer to becoming a reality today, with Ubisoft teaming up with film studio New Regency to make the forthcoming video game adaptation, which is set to star Michael Fassbender.

According to Deadline, New Regency will finance and distribute the movie, while the Ubisoft Motion Picture division “will have strong creative input as the project moves into the script stage.”

“This is the perfect intersection of what we have been trying to do, and that is to work with top quality talent like Michael Fassbender,” explained Regency CEO Brad Weston. “We see this as our first big commercial action franchise property. Fassbender just did 12 Years A Slave with us, and he is as good an actor as there is right now. The storyline we are pursuing has a great narrative and because Ubisoft’s games are so character and story driven, Assassin’s Creed lends itself perfectly to our goal to re-brand Regency as a filmmaker driven company.”

“Ubisoft chose to partner with New Regency because they are a talent- and filmmaker-driven company, with the same independent and creative mindset that we have at Ubisoft Motion Pictures,” UMP CEO Jean-Julien Baronnet added. “Bringing aboard New Regency’s renowned production and distribution expertise while maintaining our own creative and financial flexibility ensures that Assassin’s Creed will be a high-quality film that respects the lore and fans of the video game franchise.”

And according to Variety, in addition to preserving elements of the game that make up its DNA – like the design of its characters and historical elements – Ubisoft hopes to tie the release of a film in with a new game launch.

Chris Tilly is the Entertainment Editor for IGN in the UK and is hoping that this will be the video game adaptation that doesn't suck. He can be found on both Twitter and MyIGN.

Huawei, Chinese Telecom Company, Finds Warmer Welcome in Europe

Declaring that Britain was “open for business,” Mr. Cameron announced that his guest, Ren Zhengfei, the chief executive of Huawei, had agreed to expand the company’s already sizable operations in Britain with an investment of £1.2 billion, or $2 billion.

Given the typically close cooperation between the United States and Britain on security issues, the trans-Atlantic divide over Huawei and another Chinese equipment provider, ZTE, is striking. On Monday, the Intelligence Committee of the U.S. House of Representatives branded the companies security threats and raised the possibility that their gear could be used to spy on American interests if used in U.S. telecommunications networks.

Huawei has rejected the allegations as “little more than an exercise in China bashing and misguided protectionism.”

By contrast, said Roland Sladek, a spokesman for Huawei, “Europe is almost like a second home market for us.”

And for good reason. Huawei means jobs and investment for Britain and, more broadly, for Europe. The company already has 800 employees in Britain and a research center in Ipswich. The investment announced by Mr. Ren is expected to create 700 jobs in five years and additional technical centers in the country. In all, the company has about 7,300 employees in Europe.

Mr. Cameron’s government said it had no plans to change its relationship with the Chinese company in the wake of the U.S. committee’s recommendations. But in a trust-but-verify approach to the partnership, Huawei set up a Cyber Security Evaluation Center two years ago in Banbury, England. There, its engineers work alongside officials of Government Communications Headquarters, a British spy agency, to vet Huawei equipment for use in Britain.

“We recognize, of course, that no systems can be completely invulnerable, but by working together we can mitigate some of the risks,” said a spokesman for the Cabinet Office in London, who asked not to be identified as a matter of government policy.

Huawei counts as its customers many of the biggest telecommunications companies in Europe, including BT and Vodafone of Britain, Telefónica of Spain and Everything Everywhere, a partnership between France Télécom and Deutsche Telekom in Britain. The company’s equipment is in high demand, analysts say, as those companies scramble to roll out next-generation wireless broadband networks.

ZTE’s European telecommunications clients include KPN of the Netherlands. In Sweden ZTE is working with Hutchison Whampoa of Hong Kong on a high-speed wireless network.

As the world’s second-largest supplier of telecommunications network equipment, after Ericsson of Sweden, Huawei generated only 4 percent of its $32.4 billion in revenue in 2011 in the United States. In Europe, Huawei has gotten a friendlier welcome. Europe accounted for nearly 12 percent of its revenue last year, and sales in the region rose 26 percent last year, more than twice the company’s worldwide growth rate.

BT, which uses Huawei gear in the metal-clad sidewalk boxes where local telephone lines are fed into the company’s network, considers Huawei a “trusted equipment supplier,” the company said.

“We find them to be good value and high quality — that’s why they have been chosen as a supplier in a fiercely competitive international market,” BT added.

The company declined to comment on whether it had received any requests from U.S. officials to stop doing business with Huawei. The Cabinet Office spokesman said he was unaware of any such pressure.

“We don’t see this as an issue that affects our relationship,” he said.

Bits Blog: On Big Real Estate Sites, Study Finds Gaps in Listings

Damian Dovarganes/Associated Press A house for sale in Los Angeles.

For some time, executives at Redfin, an online real estate brokerage firm, grumbled to themselves that better-known real estate sites like Zillow and Trulia didn’t have all the property listings that Redfin and other sites had. So Glenn Kelman, the chief executive of Redfin, finally set out to prove it.

A study underwritten by Redfin to be released on Wednesday seeks to compare the comprehensiveness and accuracy of real estate listings on five sites, Zillow, Trulia, Redfin and the sites of two regional real estate brokerage firms, Windermere and Long & Foster. The study, conducted by a real estate consulting firm called the WAV Group, looked at a sample of 6,401 home listings in 33 ZIP codes from 11 metropolitan areas in the United States. It found that Redfin, Long & Foster and Windermere all had 100 percent of the agent-listed homes for sale, while Trulia had 81 percent and Zillow had 79 percent.

The study also found that 36 percent of the agent-listed properties shown as active listings on Zillow and and 37 percent of those on Trulia were no longer for sale on the local multiple listing service, or MLS, the local associations around the country through which agents share their property listings. The study said that 0.1 percent of the listings on Redfin and 1.7 percent of the listings on Windermere’s site were no longer for sale. All of Long & Foster’s listings mirrored their status in the local MLS.

O.B. Jacobi, the president of Windermere, a big real estate brokerage firm in the Pacific Northwest, said consumers should be aware that local real estate Web sites provide the most complete view of properties for sale. “If I’m doing the largest purchase of my life, I want to see everything,” Mr. Jacobi said.

Zillow and Trulia do not dispute that their listings have some gaps and inaccuracies, though they dispute some of the particulars of the Redfin study. There’s a simple reason they don’t have everything their rivals do: neither of them belongs to the local MLSes, which provide the most complete sets of agent-listed properties.

That’s because Zillow and Trulia are not real estate brokerage firms. Rather than making money by selling properties, the companies sell advertising and other services that allow agents to reach home shoppers and buyers through their sites. They have both built up big online audiences by packing their sites with a variety of information services, including real-time estimates of the value of properties.

Because Zillow and Trulia have such big audiences, they have been able to form relationships with many local real estate brokers like Windermere, which provide electronic feeds of all their listings. The problem with that approach, said Redfin’s Mr. Kelman, is that there are a lot of small real estate firms because the barriers are relatively low for entering the real estate businesses.

“Most of those mom-and-pop brokers don’t upload their listings” to sites like Zillow and Trulia, Mr. Kelman said.

Sometimes agents that do provide feeds to the sites don’t take listings down quickly when the properties sell, Mr. Kelman said. Although Redfin is an Internet start-up firm, it employs brokers, so it gets access to MLS listings.

Ken Shuman, a spokesman for Trulia, said the company had a dedicated team that was forming stronger relationships with brokers around the country to improve the completeness and accuracy of its real estate data. Mr. Shuman estimated that Trulia had about 90 percent of the property listings in the United States at any given time.

Cynthia Nowak, a spokeswoman for Zillow, said it was making a similar effort. “We’re always looking to improve accuracy,” she said.

“There is no gold standard for listings data, so comparing Zillow’s MLS-only listings to an MLS isn’t going to give you the whole picture. For example, Zillow has hundreds of thousands of rental, for-sale-by-owner, new construction and foreclosure listings, which often aren’t listed on an MLS,” she said.

“In addition to these listings, home shoppers visit Zillow for deep information on all homes, Zestimates, price cuts and community and historical home data, all of which typically can’t be found on a brokerage site,” she said

This post has been revised to reflect the following correction:

Correction: October 3, 2012

An earlier version of this article misstated the number of listings on Redfin that the site said were active but that a study said were no longer for sale. That number was 0.1 percent, not 0.1 percentage point.

Social Networks Can Affect on Voter Turnout, Study Finds

The study, published online on Wednesday by the journal Nature, suggests that a special “get out the vote” message, showing each user pictures of friends who said they had already voted, generated 340,000 additional votes nationwide — whether for Democrats or Republicans, the researchers could not determine.

The scientists, from Facebook and the University of California, San Diego, said they believed the study was the first to show that social networks could have at least some impact on elections, and they added that the findings could have implications far beyond voting. For example, research is now being conducted on the use of social networks to help people lose weight.

Significantly if not surprisingly, the voting study showed that patterns of influence were much more likely to be demonstrated among close friends, suggesting that “strong ties” in cyberspace are more likely than “weak ties” to influence behavior. It also found an indirect impact from the messages: friends of friends were influenced as well.

“What we have shown here is that the online world and the real world affect one another,” said James H. Fowler, a professor of medical genetics and political science at the university.

On Nov. 2, 2010, the day of the nationwide Congressional elections, nearly every Facebook member who signed on — 61 million in all — received a nonpartisan “get out the vote” message at the top of the site’s news feed. It included a reminder that “today is Election Day”; a link to local polling places; an option to click an “I Voted” button, with a counter displaying the total number of Facebook users who had reported voting; and as many as six pictures of the member’s friends who had reported voting.

But two randomly chosen control groups, of 600,000 Facebook members each, did not receive the pictures. One group received just the “get out the vote” message; the other received no voting message at all.

By examining public voter rolls, the researchers were able to compare actual turnout among the groups. They determined that the message showing friends who had voted was directly responsible for 60,000 more votes nationwide and indirectly responsible for 280,000 that were spurred by friends of friends — what they called “social contagion” effect.

Intriguingly, they also discovered that about 4 percent of those who claimed they had voted were not telling the truth.

Because only about 1 percent of Facebook users openly state their political orientation, the researchers said they could not determine whether political leanings had any influence on social networking and voting behavior.

The study was financed by the James S. McDonnell Foundation and by the University of Notre Dame’s Science of Generosity Initiative, which is supported by the John Templeton Foundation.

Past studies have shown that a variety of methods for mobilizing potential voters have a disappointing effect. Knocking on doors is the most effective technique; e-mail is one of the least.

While the number of votes generated by the Facebook message was small compared with the overall turnout (about 90.7 million, or 37.8 percent of the voting-age population), the researchers said it could well have made a difference in individual races. After all, they pointed out, the 2000 presidential election was decided by less than 0.01 percent of the vote in Florida.

Bits Blog: Microsoft Finds PCs That Ship Pre-Infected

One more thing to worry about: Your brand-spanking-new computer could be infected with a virus that will raid your online bank account.

On Thursday, Microsoft said it had discovered several new computers, fresh from Chinese factory floors, that carried a particularly pernicious computer virus — one capable of invading bank accounts, starting computer attacks and creating back doors that allow criminals to have their way with infected machines. 

Microsoft’s digital crime researchers purchased 20 new computers from different cities in China and discovered that four of them had been infected with viruses. In each case, the computers were running counterfeit versions of Windows software that were infected with the virus.

That virus, called Nitol, reported back to a command and control center hosted by the Web domain 3322.org, which is registered to Bei Te Kang Mu Software Technology. That domain, Microsoft’s researchers say, hosts 500 different strains of malware. Some are capable of switching on a victim’s microphone or Web camera. Others record victims’ keystrokes, giving cybercriminals access to their log-in credentials and online bank accounts.

Microsoft got permission from a United States court to take down the network of Nitol-infected computers. The takedown was part of a civil suit brought by Microsoft in its increasingly aggressive campaign — called Project MARS, for Microsoft Active Response for Security — to take the lead in combating digital crime, rather than waiting for law enforcement to act.

Using similar legal means, Microsoft took down four other botnets — or networks of infected computers — in the last few years. In each case, Microsoft obtained a court order that allowed it to seize Web domains and computers associated with the botnets without first notifying the owners of the property. The court gave Microsoft permission to seize the 3322.org domain on Monday.

“This action will significantly reduce the impact of the menacing and disturbing threats associated with Nitol and the 3322.org domain, and will help rescue people’s computers from the control of this malware,” Richard Boscovich, a senior lawyer in Microsoft’s digital crimes unit, said  in a blog post. 

Peng Yong, the owner of Bei Te Kang Mu Software Technology, told The Associated Press that he was not aware of his domain’s seizure by Microsoft and that his company had a “zero tolerance” policy toward illegal activity on the domain. But he added that with 2.85 million domain names, his company “cannot exclude that individual users might be using domain names for malicious purposes.”

Social Networks Can Affect on Voter Turnout, Study Finds

The study, published online on Wednesday by the journal Nature, suggests that a special “get out the vote” message, showing each user pictures of friends who said they had already voted, generated 340,000 additional votes nationwide — whether for Democrats or Republicans, the researchers could not determine.

The scientists, from Facebook and the University of California, San Diego, said they believed the study was the first to show that social networks could have at least some impact on elections, and they added that the findings could have implications far beyond voting. For example, research is now being conducted on the use of social networks to help people lose weight.

Significantly if not surprisingly, the voting study showed that patterns of influence were much more likely to be demonstrated among close friends, suggesting that “strong ties” in cyberspace are more likely than “weak ties” to influence behavior. It also found an indirect impact from the messages: friends of friends were influenced as well.

“What we have shown here is that the online world and the real world affect one another,” said James H. Fowler, a professor of medical genetics and political science at the university.

On Nov. 2, 2010, the day of the nationwide Congressional elections, nearly every Facebook member who signed on — 61 million in all — received a nonpartisan “get out the vote” message at the top of the site’s news feed. It included a reminder that “today is Election Day”; a link to local polling places; an option to click an “I Voted” button, with a counter displaying the total number of Facebook users who had reported voting; and as many as six pictures of the member’s friends who had reported voting.

But two randomly chosen control groups, of 600,000 Facebook members each, did not receive the pictures. One group received just the “get out the vote” message; the other received no voting message at all.

By examining public voter rolls, the researchers were able to compare actual turnout among the groups. They determined that the message showing friends who had voted was directly responsible for 60,000 more votes nationwide and indirectly responsible for 280,000 that were spurred by friends of friends — what they called “social contagion” effect.

Intriguingly, they also discovered that about 4 percent of those who claimed they had voted were not telling the truth.

Because only about 1 percent of Facebook users openly state their political orientation, the researchers said they could not determine whether political leanings had any influence on social networking and voting behavior.

The study was financed by the James S. McDonnell Foundation and by the University of Notre Dame’s Science of Generosity Initiative, which is supported by the John Templeton Foundation.

Past studies have shown that a variety of methods for mobilizing potential voters have a disappointing effect. Knocking on doors is the most effective technique; e-mail is one of the least.

While the number of votes generated by the Facebook message was small compared with the overall turnout (about 90.7 million, or 37.8 percent of the voting-age population), the researchers said it could well have made a difference in individual races. After all, they pointed out, the 2000 presidential election was decided by less than 0.01 percent of the vote in Florida.

Siletz Language, With Few Voices, Finds Modern Way to Survive

But the forces that are helping to flatten the landscape are also creating new ways to save its hidden, cloistered corners, as in the unlikely survival of Siletz Dee-ni. An American Indian language with only about five speakers left — once dominant in this part of the West, then relegated to near extinction — has, since earlier this year, been shouting back to the world: Hey, we’re talking. (In Siletz that would be naa-ch’aa-ghit-’a.)

“We don’t know where it’s going to go,” said Bud Lane, a tribe member who has been working on the online Siletz Dee-ni Talking Dictionary for nearly seven years, and recorded almost all of its 10,000-odd audio entries himself. In its first years the dictionary was password protected, intended for tribe members.

Since February, however, when organizers began to publicize its existence, Web hits have spiked from places where languages related to Siletz are spoken, a broad area of the West on through Canada and into Alaska. That is the heartland of the Athabascan family of languages, which also includes Navajo. And there has been a flurry of interest from Web users in Italy, Switzerland and Poland, where the dark, rainy woods of the Pacific Northwest, at least in terms of language connections, might as well be the moon.

“They told us our language was moribund and heading off a cliff,” said Mr. Lane, 54, sitting in a storage room full of tribal basketry and other artifacts here on the reservation, about three hours southwest of Portland, Ore. He said he has no fantasies that Siletz will conquer the world, or even the tribe. Stabilization for now is the goal, he said, “creating a pool of speakers large enough that it won’t go away.”

But in the hurly-burly of modern communications, keeping a language alive goes far beyond a simple count of how many people can conjugate its verbs. Think Jen Johnson’s keypad thumbs. A graduate student in linguistics at Georgetown University, Ms. Johnson, 21, stumbled onto Siletz while studying linguistics at Swarthmore College, which has helped the tribe build its dictionary. She fell in love with its cadences, and now texts in Siletz, her fourth language of study, with a tribe member in Oregon.

Language experts who helped create the dictionary say the distinctiveness of Siletz Dee-ni (pronounced SiLETZ day-KNEE), or Coastal Athabascan as it is also called, comes in part from the unique way the language managed to survive.

Most other language preservation projects have a base, however small, of people who speak the language. The Ojibwe People’s Dictionary, for example, which went online this year, focuses on one of the most widely spoken native languages in Canada and the Upper Midwest.

The 12 other dictionaries financed in recent years by the Living Tongues Institute, a nonprofit group, in partnership with the National Geographic Society — which helped start the Siletz dictionary project in 2005 and now uses it as a blueprint — are all centered on languages still in use, however small or threatened their populations of speakers may be. Matukar Panau, for instance, an Oceanic language of Papua New Guinea, has about 600 speakers remaining, in two small villages.

Siletz, by contrast, had become, by the time of the dictionary, almost an artifact — preserved in song for certain native dances, but without a single person living who had grown up with it as a first language.

There were people who had listened to the elders, like Mr. Lane, and there were old recordings, made by anthropologists who came through the West in the 1930s and 1960s, but not much else. Mr. Lane wants to incorporate some of those scratchy recordings into future versions of the dictionary.

What can also bridge an ancient language’s roots to younger tribe members, some new Siletz learners said, is that it can sound pretty cool.

“There are a couple of sounds that are nowhere in the English language, like you’re going to spit, almost — kids seem much more open to that,” said Sonya Moody-Jurado, who grew up hearing a few words from her mother — like nose (mish), and dog (lin-ch’e’) — and has been attending with a grandson Siletz classes taught by Mr. Lane.

“They’re trailblazers, showing the way for small languages to cross the digital divide,” said K. David Harrison, an associate professor of linguistics at Swarthmore who worked with the Siletz tribe and the other partners to build the dictionary. Professor Harrison said he went to Colombia recently, talking to indigenous tribes about preserving their languages, but when the laptops opened up, the Siletz dictionary, with its impressive size and search capabilities, was the focus. “It’s become a model of how you do it,” he said.

When settlers were streaming west in the 1850s on the Oregon Trail and displacing American Indians from desirable farmland, government Indian policy created artificial conglomerates of tribes, jamming them into one place even though the groups spoke different languages and in many instances had little in common.

The Siletz people were among the largest bands that ended up here on this spit of land jutting into the Pacific Ocean. By dint of their numbers, their language prevailed over other tribes, and their dances, sung in Siletz, became adopted by other tribes as their cultures faded.

“We’re the last standing,” Mr. Lane said.

But the threat of oblivion was constant. In the 1950s, the tiny tribe was declared dead by the United States — a “termination” from the rolls, in the jargon of the time. The Siletz clawed back — clinging to former reservation lands and cultural anchors in songs and dances — and two decades later, in the mid-1970s, became only the second tribe in the nation to go from nonexistence to federally recognized status. The Confederated Tribes of Siletz Indians now have about 4,900 enrolled members and a profitable casino in the nearby resort town of Lincoln City.

School was also once the enemy of tribal languages. Government boarding schools, where generations of Indian children were sent, aimed to stamp out native ways and tongues. Now, the language is taught through the sixth grade at the public charter school in Siletz, and the tribe aims to have a teaching program in place in the next few years to meet Oregon’s high school language requirements, allowing Siletz, in a place it originated, to be taught as a foreign language.

Siletz Language, With Few Voices, Finds Modern Way to Survive

But the forces that are helping to flatten the landscape are also creating new ways to save its hidden, cloistered corners, as in the unlikely survival of Siletz Dee-ni. An American Indian language with only about five speakers left — once dominant in this part of the West, then relegated to near extinction — has, since earlier this year, been shouting back to the world: Hey, we’re talking. (In Siletz that would be naa-ch’aa-ghit-’a.)

“We don’t know where it’s going to go,” said Bud Lane, a tribe member who has been working on the online Siletz Dee-ni Talking Dictionary for nearly seven years, and recorded almost all of its 10,000-odd audio entries himself. In its first years the dictionary was password protected, intended for tribe members.

Since February, however, when organizers began to publicize its existence, Web hits have spiked from places where languages related to Siletz are spoken, a broad area of the West on through Canada and into Alaska. That is the heartland of the Athabascan family of languages, which also includes Navajo. And there has been a flurry of interest from Web users in Italy, Switzerland and Poland, where the dark, rainy woods of the Pacific Northwest, at least in terms of language connections, might as well be the moon.

“They told us our language was moribund and heading off a cliff,” said Mr. Lane, 54, sitting in a storage room full of tribal basketry and other artifacts here on the reservation, about three hours southwest of Portland, Ore. He said he has no fantasies that Siletz will conquer the world, or even the tribe. Stabilization for now is the goal, he said, “creating a pool of speakers large enough that it won’t go away.”

But in the hurly-burly of modern communications, keeping a language alive goes far beyond a simple count of how many people can conjugate its verbs. Think Jen Johnson’s keypad thumbs. A graduate student in linguistics at Georgetown University, Ms. Johnson, 21, stumbled onto Siletz while studying linguistics at Swarthmore College, which has helped the tribe build its dictionary. She fell in love with its cadences, and now texts in Siletz, her fourth language of study, with a tribe member in Oregon.

Language experts who helped create the dictionary say the distinctiveness of Siletz Dee-ni (pronounced SiLETZ day-KNEE), or Coastal Athabascan as it is also called, comes in part from the unique way the language managed to survive.

Most other language preservation projects have a base, however small, of people who speak the language. The Ojibwe People’s Dictionary, for example, which went online this year, focuses on one of the most widely spoken native languages in Canada and the Upper Midwest.

The 12 other dictionaries financed in recent years by the Living Tongues Institute, a nonprofit group, in partnership with the National Geographic Society — which helped start the Siletz dictionary project in 2005 and now uses it as a blueprint — are all centered on languages still in use, however small or threatened their populations of speakers may be. Matukar Panau, for instance, an Oceanic language of Papua New Guinea, has about 600 speakers remaining, in two small villages.

Siletz, by contrast, had become, by the time of the dictionary, almost an artifact — preserved in song for certain native dances, but without a single person living who had grown up with it as a first language.

There were people who had listened to the elders, like Mr. Lane, and there were old recordings, made by anthropologists who came through the West in the 1930s and 1960s, but not much else. Mr. Lane wants to incorporate some of those scratchy recordings into future versions of the dictionary.

What can also bridge an ancient language’s roots to younger tribe members, some new Siletz learners said, is that it can sound pretty cool.

“There are a couple of sounds that are nowhere in the English language, like you’re going to spit, almost — kids seem much more open to that,” said Sonya Moody-Jurado, who grew up hearing a few words from her mother — like nose (mish), and dog (lin-ch’e’) — and has been attending with a grandson Siletz classes taught by Mr. Lane.

“They’re trailblazers, showing the way for small languages to cross the digital divide,” said K. David Harrison, an associate professor of linguistics at Swarthmore who worked with the Siletz tribe and the other partners to build the dictionary. Professor Harrison said he went to Colombia recently, talking to indigenous tribes about preserving their languages, but when the laptops opened up, the Siletz dictionary, with its impressive size and search capabilities, was the focus. “It’s become a model of how you do it,” he said.

When settlers were streaming west in the 1850s on the Oregon Trail and displacing American Indians from desirable farmland, government Indian policy created artificial conglomerates of tribes, jamming them into one place even though the groups spoke different languages and in many instances had little in common.

The Siletz people were among the largest bands that ended up here on this spit of land jutting into the Pacific Ocean. By dint of their numbers, their language prevailed over other tribes, and their dances, sung in Siletz, became adopted by other tribes as their cultures faded.

“We’re the last standing,” Mr. Lane said.

But the threat of oblivion was constant. In the 1950s, the tiny tribe was declared dead by the United States — a “termination” from the rolls, in the jargon of the time. The Siletz clawed back — clinging to former reservation lands and cultural anchors in songs and dances — and two decades later, in the mid-1970s, became only the second tribe in the nation to go from nonexistence to federally recognized status. The Confederated Tribes of Siletz Indians now have about 4,900 enrolled members and a profitable casino in the nearby resort town of Lincoln City.

School was also once the enemy of tribal languages. Government boarding schools, where generations of Indian children were sent, aimed to stamp out native ways and tongues. Now, the language is taught through the sixth grade at the public charter school in Siletz, and the tribe aims to have a teaching program in place in the next few years to meet Oregon’s high school language requirements, allowing Siletz, in a place it originated, to be taught as a foreign language.