Jay Z & Beyonce Lose Bid to Minecraft Creator for $70 Million Mansion

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Jay Z and Beyonce’s rumored plans to move to California have been thwarted by a billionaire game designer. The power couple lost a bidding war for a lavish mansion located in Beverly Hills, Calif.

According to Curbed, Minecraft creator Markus “Notch” Persson snatched the mega-mansion from the Carters for $70 million. The house has been on the market since August, and Jay and Bey were the highest bidders before Persson closed the deal. The original asking price was $85 million.

This 23,000-square-foot property is epic. The home boasts a candy room, eight bedrooms, 15 bathrooms, a movie theater, a car showroom and a 54-foot curved glass door that opens onto the pool.

The hefty price tag also covered everything inside the mansion, including artwork and cases of Dom Perignon. It’s currently the highest price ever paid for a house in the Beverly Hills area.

We’re not sure how Jay Z and Beyonce feel about losing their potential love nest. They might not be able to find another bigger and more exquisite mansion in California.

Check out pictures of this lavish home here.

See Bootylicious Beauties

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Lil Wayne Slapped with a $12 Million Tax Lien From IRS

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Lil Wayne’s ongoing tax troubles has reached an all-time high. The Young Money leader apparently owes a huge tax bill to the Internal Revenue Service.

According to Gossip Extra, Weezy owes $12,155,084.46 in back taxes dating back to 2011.

According to the lien filed with the Miami-Dade County Clerk of Court’s office, Wayne failed to pay $5.8 million in 2011 and $6.3 million in 2012.

If Wayne doesn’t cough up the dough, the IRS will seize his luxurious mansion in La Gorce Island, Fla., which is listed at $11.6 million in 2011. The nine bedroom home comes with a three-car garage and a three-bedroom guesthouse adjacent to a large swimming pool.

Wayne joins a list of rappers who have failed to pay their taxes. Fellow artists Lauryn Hill and Fat Joe both had to go to prison on tax-evasion charges.

So we are amazed that Weezy F. Baby is not facing any jail time for his delinquent tax bills. But we digress.

Meanwhile, Lil Wayne is set to release his Young Money compilation ‘Rise of an Empire’ on March 11.

If Wayne doesn’t handle his finances properly, he might have to change the name of his rap label from Young Money to Tax Money.

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Bits Blog: Target Says Data Was Stolen From 40 Million Shoppers

Jury Tells Samsung to Pay Apple $290 Million

The six-woman, two-man jury calculated the damages based on 13 products that infringed Apple’s patents. They determined that two smartphones incurred the heftiest damages: Samsung’s Infuse 4G, at about $100 million, and the Droid Charge, at $60 million.

While the price tag will not significantly affect either company’s pocketbooks — they are two of the most profitable companies in the technology industry — the ruling did give Apple another victory in the companies’ continuing legal fight.

In August last year, a California jury determined that Samsung had infringed on a series of Apple patents and needed to pay more than $1 billion in damages. But the judge, Lucy H. Koh of the Federal District Court for Northern California, later vacated $450 million of the original award, saying it was unclear how the jury had calculated that portion, but said Samsung owed the remaining $600 million.

The latest trial, also overseen by Judge Koh, was to determine whether Samsung needed to pay more or less than the $450 million that was vacated. In the trial, which ran for about a week in San Jose, Calif., lawyers for Apple and Samsung focused on how to calculate the damages: in lost profits or in royalties. The trial covered five patents and 13 products.

Apple said in a statement that the case “has been about innovation and the hard work that goes into inventing products that people love.” It added, “While it’s impossible to put a price tag on those values, we are grateful to the jury for showing Samsung that copying has a cost.”

Lauren Restuccia, a Samsung spokeswoman, said, “We are disappointed by today’s decision.” She added, “While we move forward with our post-trial motions and appeals, we will continue to innovate with groundbreaking technologies and great products that are loved by our many customers all around the world.”

Apple argued in the most recent trial that it deserved $379.8 million because it missed out on large amounts of profit after Samsung’s smartphones entered the market. Samsung contended that Apple should get much less, $52 million.

Legal experts said Samsung was most likely trying to minimize the damages to safeguard itself in future fights. The final award could influence another jury to make similar damage calculations.

This time, the process for calculating the amount Samsung owed was simpler than in the previous trial. The jurors had to fill out a one-page form assessing the damages for each infringed patent, unlike last time, when jurors filled out a complex 20-page form.

Still, the new jury appeared to have some trouble crunching the numbers, taking parts of three days to reach a conclusion. On Wednesday afternoon, the judge called a meeting to answer questions from the jury about how to decide whether Apple was entitled to lost profit, and if so, how to calculate it.

Apple’s lawyer, Harold J. McElhinny, showed an internal Samsung document to highlight that employees had acknowledged that the battle in the mobile industry was a “two-horse race” between Apple and Samsung. Therefore, he said, many sales made to Samsung most likely could have gone to Apple.

Samsung, however, said that it should pay a much smaller amount in the form of royalties for each device it sold that carried the infringing features. Its lawyer, Bill Price, said that Apple was not entitled to lost profits because people had bought Samsung phones for reasons unrelated to the features covered by patents, like the fact that some Samsung phones had bigger screens and that Samsung’s phones and tablets were generally cheaper than Apple’s.

Also on Wednesday, Samsung tried to delay the entire trial. The company argued that a patent involved in the trial, which covered touch-screen mechanics, might be deemed invalid by the United States Patent and Trademark Office. In light of that, reaching a verdict now would be wasteful, Samsung said.

But Apple said in a response late Wednesday that Samsung’s motion to delay the trial had “crossed the bounds of reason.”

Apple and Samsung continue to fight in courts around the world. In the United States, the tide has shifted in Apple’s favor. Both companies persuaded the United States International Trade Commission that the other had violated patents, resulting in bans on each other’s products. The Obama administration ultimately vetoed the ban on Apple products, while upholding the ban on Samsung products.

The two companies are scheduled for another trial in March 2014. That trial will involve a different set of Apple patents and some newer products, including Samsung’s popular Galaxy S III — a smartphone that at one point surpassed the iPhone in sales. Judge Koh is expected to also oversee that case.

Bits Blog: Sheryl Sandberg Sells $91 Million of Facebook Stock

As Revenue Exceeds Estimates, Groupon Plans $300 Million Share Buyback

The company, which also announced a $300 million share repurchase program on Wednesday, reported a better-than-expected 7 percent jump in second-quarter revenue to $608.7 million, as sales in the United States and Canada climbed 45 percent.

Lefkofsky, who was named interim CEO in February, has pushed on with his mobile-centric strategy since fellow founder Andrew Mason was replaced in February. The former CEO had presided over a precipitous share price decline to below $5 from its $20 debut in 2011.

The stock, which has gained 80 percent in 2013, rose to $10.35 in after-hours trade on Wednesday, its highest since July 2012.

"I think the news about installing Lefkofsky played a big part," said Tom White, an analyst at Macquarie Research. "Investors have been very impressed by the progress he's made since being made interim head and improving metrics particularly in the North America business."

With its core daily deals business model in steep decline, Groupon in recent months has re-invented itself as a more traditional e-commerce business that sells long-term deals, particularly through its smartphone app.

Lefkofsky and other executives told Wall Street analysts on Wednesday that emailed deals, once the linchpin of Groupon's sales strategy, now only accounted for 40 percent of its quarterly revenue. Instead, Groupon's customers were increasingly logging into the site to search for goods they were actively seeking, they said.

"It was only a few short years ago when email was all of the business," Chief Financial Officer Jason Child said. "The good news for us is we see our most active cohort of customers engaging with the marketplace most often. They're browsing, they're searching, they're going in and typing in keywords."

The difference, Lefkofsky added, was that Groupon was transforming from a "demand-generation business to a demand-fulfillment business."

But company management warned it would take several quarters for Groupon to complete its shift in direction and fully enter and compete in an intensely competitive and crowded e-commerce marketplace dominated by giants like Amazon Inc and eBay Inc.

For Groupon to succeed, Lefkofsky said it needed to focus on refining its algorithms to present goods relevant to a user's interests, while also improving its product suite for sellers, which includes rewards tracking programs and credit card processing tools.

BY THE NUMBERS

Groupon's gross billings, or the total value of purchased goods and services - of which the company takes a cut - rose 30 percent in North America, outpacing a 10 percent expansion rate overall.

About 50 percent of its North American transactions came through smartphones and tablets, versus 30 percent a year ago, the company said.

Groupon's success with mobile adoption has been viewed with particular favor on Wall Street. Groupon shares jumped 11 percent on June 14 when Deutsche Bank analysts upgraded the stock, attributing their optimism to the company's progress on the mobile front.

Groupon's revenue in the United States and Canada in the second quarter grew 45 percent, offsetting a 24 percent slide in Europe, the Middle East and Africa (EMEA) and a 26 percent fall everywhere else.

Child told Reuters on Wednesday that while Groupon's international performance has been weak, the company's investment in shoring up its European operations will pay off soon.

"North America continues to see strong growth and we made good progress in EMEA which flipped to positive gross billings growth," Child said. Gross billings in EMEA grew 4 percent in the second quarter. "We're now shifting our focus to the rest of the world."

The Chicago-based company reported quarterly revenue of$608.7 million compared with $568.3 million a year ago. Analysts on average expected $606.2 million in revenue, according to Thomson Reuters I/B/E/S.

It posted a second quarter net loss of $7.6 million, or 1 cent per share, compared with a year ago profit of $28.4 million, or 4 cents a share.

Excluding one-time items, it earned 2 cents a share, level with analysts' expectations.

(Reporting by Gerry Shih; Editing by Carol Bishopric)

Groupon Names a New Chief and Logs a Loss of $7.6 Million

Mr. Lefkofsky had been chairman and interim co-chief executive, with Ted Leonsis, the vice chairman, since Mr. Mason’s ouster. Mr. Leonsis will now be chairman.

Groupon, an online deals site, also reported second-quarter results on Wednesday. It posted a loss of $7.6 million, or 1 cent a share. That is down from earnings of $28.4 million, or 4 cents a share, in the second quarter of 2012.

Adjusted earnings, which exclude stock compensation expenses, were 2 cents a share in the latest period. That matched analysts’ average expectations, according to FactSet.

Revenue rose 7 percent to $608.7 million from $568.3 a year earlier. Analysts had expected $606.2 million, according to FactSet.

For the current quarter, Groupon, which is based in Chicago, predicted adjusted earnings in the range of a loss of 1 cent to a profit of 1 cent a share on revenue of $585 million to $635 million. Analysts had forecast earnings of 5 cents a share, on revenue of $621.5 million.

The company announced plans to repurchase $300 million of stock in the next two years.

Groupon built its business on e-mailing daily discount deals for restaurants, spas and nail salons to users and taking a cut of the money businesses make from them. To diversify, the company has expanded into product sales, payments services and other areas. Last month, it started Groupon Reserve, which lets people make restaurant reservations at a discount.

Groupon’s stock jumped $1.67, or 19 percent, to $10.39 in after-hours trading on Wednesday. It had closed regular trading at $8.72, up 79 percent since the start of the year.

Signs of Rebound as Sony Posts a $35 Million Profit

Sony of Japan posted net income of 3.5 billion yen ($35 million) in the quarter that ended June 30, after a loss of 24.6 billion yen in the period a year earlier. The results were helped by a weaker yen and increased sales of smartphones. Revenue increased 13 percent, to $17.3 billion.

Company executives did not comment on a report in the Nikkei business newspaper that Sony was “leaning toward” rejecting the breakup proposal from Daniel S. Loeb, a New York hedge fund manager whose firm, Third Point, holds a 7 percent stake in Sony. Mr. Loeb wants the company to separate the entertainment unit from the electronics and financial divisions by selling stock in the unit and giving it its own board.

“We are going to discuss this carefully and then come to a solid conclusion,” Masaru Kato, Sony’s chief financial officer, said in a conference call with analysts.

“Improving the profitability of electronics is the biggest priority of Mr. Hirai,” he added, referring to the chief executive, Kazuo Hirai. “At the same time, entertainment and financial services remain core parts of the business.”

Mr. Loeb stepped up his campaign for a breakup this week in a letter to Third Point investors in which he attacked Sony management over the weak performance of Sony’s Hollywood studio business. That unit has been hurt by poor box-office receipts for recent films like “After Earth” and “White House Down.”

In his letter, Mr. Loeb compared those films to the notorious Hollywood flops “Ishtar” and “Waterworld,” and added that the studio business was “characterized by a complete lack of accountability and poor financial controls.”

Sony confirmed the weak performance of the studio business in the quarter, saying sales had fallen 16 percent in constant currency terms.

Later in the day, in Hollywood, the company announced a significant and surprising move in its film operation, saying it would revive its semidormant TriStar unit as a movie and television venture in partnership with Thomas E. Rothman, who this year stepped down as chairman and chief executive of Fox Filmed Entertainment.

The new venture promises to bring back a film and television label that until the late 1990s was operated as a fully staffed studio, run in parallel with the Columbia Pictures unit of Sony. Its peak moments included the successes of “Jerry Maguire” and “Terminator 2: Judgment Day.”

Mr. Rothman, who expressed support for Sony’s managers, declined to say how much Sony would invest in the studio. He and company executives said Sony was expected to make four films a year, and to split its activities evenly between television and film. Mr. Rothman said he would have an equity stake in the venture and was open to outside investment, though he expected to begin with Sony’s money.

In a statement, Sony Pictures Entertainment said Mr. Rothman would report to Michael Lynton, who is chief executive of that unit, and Amy Pascal, a chairwoman.

Speaking separately on Thursday, Ms. Pascal and Mr. Rothman said negotiations for the TriStar venture, which will be called TriStar Productions, began well in advance of the first round of criticism by Mr. Loeb.

Ms. Pascal said early conversations with Mr. Rothman had centered on a venture that might provide the smaller, artier films for which Mr. Rothman became known when he years ago started Fox Searchlight for the News Corporation and its 20th Century Fox unit. Ultimately, she said, the partnership was drafted to allow for more scope. “We want to make movies that make money,” she said.

In Sony’s earnings report, its electronics business showed clear signs of a turnaround.

Although sales of video cameras and compact digital cameras have been caught up in an industrywide slide, Sony reported a “significant increase” in quarterly sales of smartphones, to 9.6 million from 7.4 million in the period a year earlier. Sony said average selling prices had risen as well, helping the mobile division post a profit of $60 million, after a loss of $28.1 million in the year-ago period.

Although analysts have questioned the value of retaining the broad array of product lines in which the company competes, they said the improved outlook had bolstered the position of Mr. Hirai as he tries to persuade investors of the merits of keeping the company intact.

“It’s very clear that the company is focused on fixing electronics, and these results show that the strategy seems to be working,” said Damian Thong, an analyst at Macquarie Securities.

Eric Pfanner reported from Tokyo and Michael Cieply from Los Angeles.

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DealBook: Revolution Fund Invests $40 Million in E-Commerce Start-Up

Microsoft Lost $900 Million on Surface RT in Q1

Today, as part of its Q4 earnings report, Microsoft announced that it has incurred a $900 million loss due to its struggling Surface RT tablet. While the company otherwise reported $4.97 billion in earnings from $19.9 billion in revenue, the Surface RT cost the company a significant sum as a result of "inventory adjustments."

The news comes on the heels of Microsoft's $150 price drop on the Surface RT, now carrying a $349 MSRP for the 32GB model and $449 for the 64GB version. While Microsoft has not released specific sales statistics, IDC figures for Q1 placed Surface sales at under a million, with the Surface Pro accounting for a majority of total units sold.

Based on a stripped down version of Windows 8 and running apps optimized for touchscreen interfaces, the Surface RT acts as Microsoft's alternative to the iPad and Android-based tablets. However, with a limited array of compatible apps and the Surface Pro offering a far greater level of versatility, the Surface RT has struggled to find an audience.

For more, check out our comprehensive reviews of the Microsoft Surface RT and Surface Pro.

Scott Lowe is IGN's resident tech expert and Executive Editor of IGN Tech. You can follow him on Twitter at @ScottLowe and on MyIGN at Scott-IGN.

Bits Blog: Coursera, an Online Education Company, Raises Another $43 Million

Ramin Rahimian for The New York Times Daphne Koller, a co-founder of Coursera, at the company’s offices in Mountain View, Calif. Over the next few months, Coursera plans to double its employees to about 100.

Coursera, a year-old company offering free online courses, has raised another $43 million in venture capital from investors active in both domestic and international education.

The new investors include the International Finance Corporation, the investment arm of the World Bank, and Laureate Education, an international higher education company with dozens of profit-making universities around the world, as well as GSV Capital, Learn Capital and Yuri Milner, an individual entrepreneur.

“We hope it’s enough money to get us to profitability,’’ said Daphne Koller, a co-founder of Coursera. “We haven’t really focused yet on when that might be.’’

Coursera, based in Mountain View, Calif., previously raised $22 million from Kleiner Perkins Caufield & Byers; New Enterprise Associates; and the University of Pennsylvania and California Institute of Technology, two of its university partners.

Over the next few months, Coursera plans to double its employees to about 100, and expand in several areas, including mobile apps and its Signature Track offerings, which charge a fee to students who want an identity-verified certificate upon successful completion of Coursera’s free courses. Since January, when the Signature Track option was first offered in five courses, Signature Track fees have produced more than $800,000, Ms. Koller said — and in the long run, she said, such revenue may be enough to make the company sustainable.

The company also plans to invest in international expansion, through localization, translation and distribution partnerships, and techniques for blended learning, in which Coursera’s online materials are used alongside classroom sessions with a professor.

“We see great potential for using some of the Coursera materials in our universities, so there is a strategic element to this investment,’’ said Douglas L. Becker, chairman and chief executive officer of Laureate. “The I.F.C. made the largest education investment they ever made in Laureate, and they’re joining us in this investment. Coursera allows us to invest in something we see as a rising technology impacting higher education, and gives us access to their content and curriculum.”

Coursera has grown with stunning speed since it began in April 2012, with four university partners. Now, the company works with 83 educational institutions on four continents, offering about 400 free college-level courses to more than four million students from every country in the world.

But after the initial burst of enthusiasm last year about massive open online courses, or MOOCs, and their potential for democratizing higher education worldwide, this year has brought some pushback. Faculty members at several institutions have expressed concern about how the courses may change higher education, how quickly university administrators signed on to work with MOOC providers, and whether the aim is more to save money than improve the quality of education.

So far, most of the students who have completed Coursera MOOCs have been college graduates, and it is still unclear how well the format will work to help students without degrees earn college credit for their online work. Coursera has recently started to market its materials for use by public universities in blended on-campus classes. Universities that use the materials will pay licensing fees, which Coursera will share with the universities that produce the courses.

Bits Blog: T-Mobile to Pay $308 Million for More Spectrum

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Facebook Says Technical Flaw Exposed 6 Million Users

Facebook blamed the data leaks, which began in 2012, on a technical flaw in its huge archive of contact information collected from its 1.1 billion users worldwide. As a result of the problem, Facebook users who downloaded contact data for their list of friends obtained additional information that they were not supposed to have.

Facebook’s security team was alerted to the problem last week and fixed it within 24 hours. But Facebook did not publicly acknowledge the flaw until Friday afternoon, when it published a message on its blog explaining the situation.

A Facebook spokesman said the delay was because of a company procedure stipulating that regulators and affected users be notified before making a public announcement.

“We currently have no evidence that this bug has been exploited maliciously, and we have not received complaints from users or seen anomalous behavior on the tool or site to suggest wrongdoing,” Facebook said on its blog.

While the privacy breach was limited, “It’s still something we’re upset and embarrassed by, and we’ll work doubly hard to make sure nothing like this happens again,” it added.

The breach follows recent disclosures that several consumer Internet companies, including Facebook, Google, Microsoft, Apple and Yahoo, turned over troves of user data to a large-scale electronic surveillance program run by American intelligence officials.

The companies, led by Facebook, successfully negotiated with the United States government last week to reveal the approximate number of user information requests that each company had received, including secret national security orders.

Facebook Says Technical Flaw Exposed 6 Million Users

Facebook blamed the data leaks, which began in 2012, on a technical flaw in its huge archive of contact information collected from its 1.1 billion users worldwide. As a result of the problem, Facebook users who downloaded contact data for their list of friends obtained additional information that they were not supposed to have.

Facebook’s security team was alerted to the problem last week and fixed it within 24 hours. But Facebook did not publicly acknowledge the flaw until Friday afternoon, when it published a message on its blog explaining the situation.

A Facebook spokesman said the delay was because of a company procedure stipulating that regulators and affected users be notified before making a public announcement.

“We currently have no evidence that this bug has been exploited maliciously, and we have not received complaints from users or seen anomalous behavior on the tool or site to suggest wrongdoing,” Facebook said on its blog.

While the privacy breach was limited, “It’s still something we’re upset and embarrassed by, and we’ll work doubly hard to make sure nothing like this happens again,” it added.

The breach follows recent disclosures that several consumer Internet companies, including Facebook, Google, Microsoft, Apple and Yahoo, turned over troves of user data to a large-scale electronic surveillance program run by American intelligence officials.

The companies, led by Facebook, successfully negotiated with the United States government last week to reveal the approximate number of user information requests that each company had received, including secret national security orders.

Bits Blog: Dots, a Highly Addictive Game, Passes 3 Million Players

Betaworks

On Sunday afternoon my entire family sat in my sister’s living room, fingers jabbing at our iPhones, as we yelled a series of numbers aloud: “124!” “217!” “Oh, I just got to 400!” We were playing Dots, the highly addictive free game from Betaworks. (I won, with 474 points.)

It turns out we were not the only group engaged in competitive Dots playing last weekend. Paul Murphy, senior vice president for product at Betaworks, said that since the app made its debut in early May, more than three million people have downloaded the game and have collectively played 250 million games.

To play Dots, you simply connect the same colored dots together on a screen by drawing your finger to create a line that can be placed through dots. The more dots you connect, the higher the score.

On Thursday, the company announced an updated version of the game that allows people to play one another in a more competitive setting.

“When we released the game, we saw a lot of people playing on the subway, passing their phones back and forth, comparing scores,” the makers of the game wrote in a company blog post. “Now each player has the same set of dots, so it’s truly a battle of skill.”

The update also includes an official version that can be played on an iPad. The updated app also includes a two additional color modes, to accommodate color-blind players who had trouble with the first version of the game.

Now if you will excuse me, I have to go and try to beat my high score of 474 dots.

DealBook: Nasdaq Is Fined $10 Million Over Mishandled Facebook Public Offering

Bebeto Matthews/Associated PressNasdaq said it has put measures in place to prevent problems like the Facebook I.P.O. last May.

Nasdaq’s parent company will pay the largest fine ever levied against an exchange for “poor systems and decision making” both before and after the bungled Facebook initial public offering.

In the minutes after Facebook’s initial public offering spun out of control last year, executives at the Nasdaq stock exchange received an e-mail pleading for a pause.

“We are all trading blind,” said the message, which was sent by the chief executive of the trading firm Knight Capital, according to people briefed on the details of the e-mail. “Should you stop trading for some period of time so we can all catch up and actually understand our exposure?”

The confusion on the morning of May 18, 2012, had been caused by errors in Nasdaq’s computer programming, but executives at the exchange decided to ignore the request for a break and proceed with trading, leading to mounting confusion.

The back-and-forth is one of many details to come out on Wednesday when the Securities and Exchange Commission released the results of its investigation into the bungled Facebook I.P.O. The S.E.C. announced that the Nasdaq OMX Group will pay $10 million, the largest fine ever levied against an exchange, to settle accusations that it had violated numerous rules before and after the I.P.O.

The settlement helps Nasdaq put behind it an episode that hurt its reputation and damaged investor confidence in the stock market. But the investigation also suggests that Nasdaq’s shortcomings were, in some ways, much deeper and more widespread than previously understood.

The head of the S.E.C.’s market abuse unit, Daniel M. Hawke, said in a statement that there has been too much of a tendency to write off incidents like the Facebook I.P.O. as “technical ‘glitches.’ ”

“It’s the design of the systems and the response of exchange officials that cause us the most concern,” Mr. Hawke said.

Robert Greifeld, the chief executive of Nasdaq, wrote in an open letter on Wednesday that the company had put new safeguards in place to prevent future problems. But he also defended the company’s overall performance.

“While we prepared extensively for the Facebook initial public offering, including thorough tests of our systems with member firms, the challenges we encountered that day were unprecedented,” Mr. Greifeld wrote.

The mishandled Facebook I.P.O. was among a series of breakdowns that rocked the United States stock markets last year and led to questions about the safety and soundness of an increasingly complex and computer-driven system.

In addition to the $10 million fine, Nasdaq has already agreed to pay $62 million to the brokers who lost money because of the problems. Even that has not been enough to placate the firm that was hurt the most, UBS, which contends that it lost $356 million because of Nasdaq’s errors. UBS has said it plans to seek more money from Nasdaq through arbitration.

The S.E.C.’s findings could aggravate some of the remaining tensions over the Facebook I.P.O. because it reveals numerous and previously unknown ways that the exchange executives fumbled the incident.

The problems began before the I.P.O. when Nasdaq tested its computer programs, but only on 40,000 orders, according to the S.E.C. When it was time to begin actual trading, at 11 a.m. on May 18, the system was overwhelmed by 496,000 orders.

The deluge of orders sent Nasdaq’s computers into a continuous loop that made it impossible to establish a correct opening price for Facebook stock, which had priced at $38 a share the night before.

Nasdaq executives were immediately aware of the problems and summoned a “Code Blue” conference call, but they decided to proceed with the opening after making a few temporary fixes to the computer code and switching to an untested backup system, the S.E.C. found.

Once Facebook started trading at $42 soon after 11:30 a.m., numerous brokers contacted Nasdaq to complain that they still did not know how many shares of Facebook they had purchased. At 1:50 p.m., Nasdaq executives realized they had failed to execute tens of thousands of orders that had been sent in.

At that point, Nasdaq caused more problems by selling many of these shares into the market, leading to a sharp drop in Facebook’s share price. It closed at $38.23 after Facebook’s bankers stepped in to help support the stock. The company’s stock has never risen above its opening price of $42.05 and was trading down 3.2 percent on Wednesday, at $23.32.

The S.E.C. also reported that shortcomings in Nasdaq’s technology hit the stock of game-maker Zynga on the day of the Facebook I.P.O., causing big price swings in Zynga shares.

The S.E.C. said Wednesday that Nasdaq had broken market rules two other separate times. In October 2011 and August 2012, programming errors caused Nasdaq to mistakenly execute some customer orders below the publicly listed price.

Although the settlement could put to rest some of the speculation surrounding the exchange, it does not shine a positive light on Nasdaq and its management, said Patrick Healy, the chief executive of the Issuer Advisory Group, a capital markets consulting firm.

“It sure looks like the guy who couldn’t shoot straight,” Mr. Healy said. “There’s no question that it’s an embarrassment.”

Bits Blog: Planning for Another 100 Million Web Sites

Weebly David Rusenko, the chief executive of Weebly.

More than 20 years after the advent of the World Wide Web, some might argue that it has already yielded a surfeit of Web pages, mobile sites, and the digital equivalent of shiny time wasters.

Ha.

“There are maybe 100 million Web sites out there – that is not many, when you consider that there are billions of people,” said David Rusenko, the chief executive of Weebly, a service that enables relatively easy creation of Web sites.

On Thursday, Weebly is doing its modest best to resolve the deficit with a new site planner and creator that uses the HTML5 programming standard for creation of sites that will work correctly on different Web browsers.

The product will also automatically reformat a site for viewing on mobile devices, like smartphones and tablets, Mr. Rusenko said. It will also be possible to edit a site from a mobile device, and view changes before they are published. Prices for using the service vary, with a free elementary product and a high-end version that runs about $100 a year.

Weebly, which is privately held, says its tools have generated more than 15 million sites since its founding in 2006. These draw 100 million visitors a month, Mr. Rusenko said. It has been a nice business, profitable since 2009, he said, but recently the company wondered if it was really meeting the demand for site creation.

One reason for that is that while making Web sites used to be relatively straightforward, the advent of kinetic elements like video, or the need to build for mobile devices, had made things much tougher. “We did a survey, and found that while 60 percent of people didn’t trust a business without a Web site, 75 percent of people didn’t know it was possible to create their own site,” Mr. Rusenko said.

HTML5 is supposed to solve the problem of writing for different devices and browsers, but designers have found that the standard has its own complexities. Weebly claims to have overcome these by automating processes and adding tools to help newcomers plan their graphic expression. One tool is copying; on their own people get a kind of designer’s block, so Weebly offers templates to study, and an interactive guide with tutorials on things like organization and layout.

Besides helping ordinary businesses develop a Web presence, Weebly says uncertain employment and increasing number of freelancers in the modern economy means more individuals need to be mongering themselves on the Web. If so, it’s part of a trend that includes services like Elance, ODesk, and Freelancer.com, which try to match short-term jobs in things like design and programing with a global talent base. Similarly, Etsy encourages small business by allowing craftspeople a place to display their work.

Maybe the first 100 million sites were the hardest. If so, get ready for an explosion, from lots of people and places. And, in turn, even more competition for work.

Bits Blog: LivingSocial Hack Exposes Data for 50 Million Customers

LivingSocial, the daily deals site, told its employees Friday that it had been breached, and said that data for 50 million users might have been compromised.

In a memo to employees, the company, based in Washington, said online criminals had gained access to user names, e-mail addresses and dates of birth for some users and encrypted passwords for 50 million people. The company’s databases that store user and merchant credit card and banking information were not compromised in the attack, it said.

livingsocial.com, via Associated Press The attack on Living Social is just the latest in a string of attacks on consumer Internet companies in recent months.

“We recently experienced a cyberattack on our computer systems that resulted in unauthorized access to some customer data from our servers,” the company told employees. “We are actively working with law enforcement to investigate this issue.”

Andrew Weinstein, a spokesman for LivingSocial, confirmed that the attack might have compromised 50 million of its users, and said the company was resetting passwords and would be alerting customers by e-mail. Mr. Weinstein said it would contact customers in all the countries LivingSocial operates with the exception of Thailand, Korea, Indonesia and the Philippines, where its systems were not compromised.

The attack on Living Social is just the latest in a string of attacks on consumer Internet companies in recent months. Twitter, Facebook and Apple all stepped forward in February to say they had been the victims of what they described as a “sophisticated attack.” Evernote, the notetaking app, said last month that it had reset passwords for 50 million users after it was compromised by hackers.

Living Social did say it “hashed” passwords — which involves mashing up users’ passwords with a mathematical algorithm — and “salted” them, meaning it appended random digits to the end of each hashed password to make it more difficult, but not impossible, for hackers to crack. Once cracked, passwords can be valuable on auctionlike black market sites where a single password can fetch $20.

Europe Fines Microsoft $732 Million Over Antitrust Law

Joaquín Almunia, the E.U. competition commissioner, said the Union had been “naïve” to put Microsoft in charge of monitoring its adherence to the deal it agreed to in 2009, when his predecessor let the company escape a fine in exchange for offering users of its Windows software a wider choice of Internet browsers.

But Mr. Almunia insisted that the enforcement of settlements could be sufficiently strengthened to ensure that companies abide by their pledges, and he signaled that he would not retreat from his goal to use such deals to avoid lengthy legal battles with major companies in swiftly evolving technology markets.

Settlements “allow for rapid solutions to competition problems,” Mr. Almunia said. “Of course such decisions require strict compliance” and the “failure to comply is a very serious infringement that must be sanctioned accordingly.”

Microsoft agreed to alter Windows for five years to give users of newly purchased computers in Europe a ballot screen that would allow them to easily download other browsers from the Internet and to turn off Microsoft’s own browser, Internet Explorer.

Microsoft told the commission at the end of 2011 that it had been abiding by the deal. “We trusted the reports about the compliance,” Mr. Almunia said Wednesday.

In fact, the company had failed to include the ballot system in certain products starting in May 2011, affecting more than 15 million European users. The lapse came to light in July 2012, after rival companies reported its absence.

“We take full responsibility for the technical error that caused this problem and have apologized,” Microsoft said Wednesday. “We have taken steps to strengthen our software development and other processes to help avoid this mistake — or anything similar — in the future.”

A Microsoft spokesman declined to comment on whether the company would appeal, but it seemed unlikely, as the company prefers to focus on its rivalry with Google. Microsoft is among the companies that have complained about Google’s business practices to Mr. Almunia

The fine comes as Mr. Almunia’s office is negotiating with Google to try to resolve the commission’s concerns about the way it runs its Internet search service and its advertising business.

Mr. Almunia said Wednesday that attempts to reach a deal with Google were continuing and were unrelated to the decision taken against Microsoft. But he made it clear that the substantial fine was meant to serve as a warning to others.

If Google eventually settles, it “will have to exert extra care to not give the impression that it is deviating from the commitments that such a settlement will entail” to avoid a similarly high fine, Mario Mariniello, a research fellow at Bruegel in Brussels and a former antitrust official, wrote in a blog post.

But Mr. Almunia said some of the blame rested with regulators and indicated that the commission might never again, in effect, put the fox in charge of the henhouse.

“Maybe we should have tried to complement the responsibilities of the reports about the implementation, but we only reacted when we received the first complaint,” Mr. Almunia said. “Maybe in 2009 we were even more naïve than today.”

He said the commission would be more inclined to use trustees to police future settlements, would be more precise in defining their responsibilities and would “pay even more attention to the reports that the monitoring trustees will send to us.”

Companies that agree to settlements usually pay for trustees, but the choices are vetted for conflicts of interest, according to E.U. officials.

Since 2003, when the current settlement rule was introduced, the commission has taken 29 such decisions. But there were no appointments of independent monitoring trustees in the majority of those cases, including in a settlement with I.B.M. in late 2011.

Mr. Almunia said he had not yet decided whether to appoint a trustee to oversee whether Microsoft was adhering to the rest of its compliance period in the browser case, which runs to 2014.

Microsoft has been a special case in the history of E.U. antitrust enforcement, racking up a total of €2.26 billion, or $3.4 billion, in fines over about a decade.

Microsoft was the first company to pay so-called periodic penalties for failing to follow an order to make it easier for rival products to communicate with powerful server computers running Windows. That amount, nearly €900 million, was subsequently reduced to €860 million after the company appealed to the General Court of the European Union.

The decision against Microsoft was another milestone for E.U. antitrust law, and for Microsoft, which became the first company to be punished for failing to adhere to a settlement.

Although the commission can levy fines of up 10 percent of a company’s most recent global annual sales, the penalty on Wednesday represented 1 percent of Microsoft’s annual sales, partly because the company cooperated with the commission after the issue came to light.

Mr. Almunia said there had been no indication that Microsoft intentionally broke the settlement agreement.

The fact that nobody — apart, apparently, from rival companies — noticed the absence of the browser choice screen for more than a year has prompted critics of the European antitrust enforcement to question the effectiveness of the measure.

But Mr. Almunia insisted Wednesday that the remedy had been effective, saying that, “our decision was very relevant in opening the market and broadening the choice for users, for what kind of browsers they want to use.”

Microsoft, which currently offers a browser choice in its latest Windows 8 operating systems in Europe, said last year that it was prepared to extend the system beyond 2014 by an additional 15 months, partly to atone for its error. But it remained unclear on Wednesday whether that plan would go forward.

This article has been revised to reflect the following correction:

Correction: March 6, 2013

An earlier version of this article misstated the 14-month period in which, according to European officials, Microsoft failed to offer a choice of browsers to more than 15 million European users of the Windows 7 SP1 version. It was in 2011 and 2012, not from 2011 to 2014.