Daily News Digest
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Friday, April 5, 2013 HPQ at 7:00 AM PT: XX.XX X.XX (X.XX%)

HP news highlights:


  • HP names new board chairman, seeks replacement board members.  HP director Ray Lane announced yesterday that he will step down from his position as chairman of the board to “reduce any distraction from H.P.’s ongoing turnaround,” though he will remain on the board. HP director Ralph Whitworth will take over as interim chairman, effective immediately. Board members John Hammergren and G. Kennedy Thompson will leave HP’s board in May; director Rajiv Gupta will take over Thompson’s position as head of HP’s audit committee, while Whitworth will take over Hammergren’s position as head of its finance committee. HP stated that it plans to appoint two or three new independent directors. New York Times; Wall Street Journal; Reuters (also New York Times); Financial Times
  • HP unveils cloud-based mobility management service.  HP introduced its HP Enterprise Cloud Services – Mobility management service, enabling businesses to quickly deploy tools and services for access to applications, file storage and sharing with multiple mobile platforms. The service allows users to download applications from a secure storefront, and synchronize files between HP’s cloud infrastructure and their mobile devices. HP’s Pete Karolczak says that the service offers clients “the highest level of user experience and productivity while minimizing the risk for IT." ZDNet; InfoWorld; Investor’s Business Daily
  • HP’s Dawson discusses bridging IT and "shadow IT.”  At UBM Tech's Cloud Connect conference, HP’s Margaret Dawson advised attendees on the growing “shadow IT” development, stating that they can gain better control over the situation by auditing cloud services and conducting a review of management and security policies that drive company mandates. CRN
  • Analyst notes HP’s rebound.  Lorne Steinberg Wealth Management analyst Brian Pinchuk said that HP is often “misunderstood” as a PC company only, as 30 percent of its revenue is generated from its IT services division, and it sees a strong contribution from its printing operations. Pinchuk opined that HP should begin to gain traction in the tablet PC market with Windows 8 products. Globe and Mail

Industry news highlights:


  • Blackstone said to conduct due diligence at Dell headquarters.  Sources report that Blackstone will visit Dell’s headquarters in Round Rock, Tex. on Monday to conduct an in-depth analysis of the company. Other sources claim that Blackstone is working with Michael Dell to determine a business plan for the company, as well as plans to secure his role as CEO. Bloomberg; Reuters
  • Apple's "spaceship” campus reportedly surpasses 2011 budget; removes apps from China App Store; sued by mobile telecom company.  Sources report that Apple’s "spaceship” campus will cost nearly $5 billion to construct, surpassing the less than $3 billion budget decided in 2011. The opening will reportedly be delayed until 2016. Separately, the Financial Times reports that Apple has removed apps with content that is illegal in China from its China App Store. Finally, Mobile Telecommunications Technologies has filed a lawsuit against Apple, alleging that Apple’s messaging services infringe on several of its patents. Bloomberg; PC Magazine; Financial Times; CNET
  • Lexmark’s Mosser departs; VMware appoints new marketing director.  Lexmark’s Carmel Mosser, general manager at Lexmark ANZ, has left the company. Lexmark is currently looking for a replacement. Separately, VMware has appointed Carly Rogowski marketing director for its ANZ division. Rogowski will be responsible for building and directing marketing strategies for alliances, channel, web, customer relations, operations and communications. CRN (1); CRN (2)
  • BlackBerry said to sign ad deal with NYC’s Barclays Center.  Sources report that BlackBerry has signed a marketing deal with the Barclays Center in Brooklyn, N.Y., worth between $1 million and $5 million. The deal will give BlackBerry prominent ad placement and an "experiential” area for customers to test its devices. Fox Business
  • Xerox releases iGen4 upgrade; Adobe launches Adobe Anywhere, previews CS7.  Xerox launched its iGen4 Diamond in the US and Europe, upgrading its iGen4 cut-sheet color digital press with new software to improve uptime and enhance productivity. Xerox said the device gives current iGen4 customers "an asset protection component with this model - while also offering enhancements for new customers." Separately, Adobe launched its Adobe Anywhere network-based editing system, enabling users to collaborate with other project contributors across distance by saving projects to a centralized repository on a company's network server. Adobe also introduced its Premiere Pro CS7 video editing software, as well as upgrades to After Effects, Prelude, Audition and SpeedGrade. Printweek; IDG/Computerworld; PC Magazine
  • Google sells Frommer’s brand; challenges US information request; updates Google Compute Engine.  Google said that it has sold the Frommer’s travel-guide brand to founder Arthur Frommer, and will license "certain travel content" to him. Further details were not provided. Separately, Bloomberg reports that Google filed a petition to “set aside legal process” by the U.S. government for private user information in a national security probe. Finally, Google announced the availability of its Google Compute Engine for "Gold Support” program members, and updated the cloud infrastructure service to include an improved administration console, new instance type families, additional supported zones in Europe and an enhanced metadata server. Wall Street Journal; Reuters; Bloomberg; The Verge; Wired; VentureBeat
  • Samsung releases Q1 profit results.  Samsung announced that its Q1 operating profit increased to 8.7 trillion won ($7.7 billion) from 5.69 trillion won, ahead of the company’s full quarterly results scheduled for April 26. Analysts attribute the results to mid-tier smartphone and emerging market sales. Bloomberg; Reuters
  • Facebook introduces software for Android devices.  Facebook unveiled its Home software for Google’s Android, designed to display users’ Facebook feeds, photos and messages on smartphones’ home screens. Home will be preinstalled on the HTC First smartphone, and will be available in Google’s app store for other Android devices starting April 12. Google said that the collaboration “demonstrates the openness and flexibility that has made Android so popular.” New York Times (blog); Wall Street Journal


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H.P. Chairman Steps Down as 2 Resign From Board
New York Times, 04/4 , Quentin Hardy

In another upheaval for the board of Hewlett-Packard, the company said on Thursday that Raymond J. Lane, its embattled chairman, was stepping down from that post, just two weeks after his narrow re-election. Two other directors departed the board entirely.

The move may give Meg Whitman, H.P.'s chief executive, a little more breathing room in her long and painful effort to turn the technology giant around. H.P. is one of the biggest technology companies in terms of sales, but for years it has been marked with financial losses, bungled acquisitions, and turbulence in the executive ranks and boardroom.

Ms. Whitman, who took over in September 2011, has said H.P. will return to modest profitability in 2014 and have robust growth in the years after.

"The pressure is on Meg," said Toni Sacconaghi, an analyst with Bernstein Research. But, he said, a housecleaning of the board "bought her a year."

Mr. Lane, who will continue to serve on the board, will be temporarily succeeded by Ralph Whitworth, an activist shareholder who joined the H.P. board in November 2011. He has been a champion of Ms. Whitman.

No successors for the departing board members - John H. Hammergren and G. Kennedy Thompson - were immediately named. The two, who barely survived re-election to the board at a meeting in late March, are expected to serve until May.

During the shareholders meeting, Mr. Whitworth took the unusual step of indicating, while voting for directors was under way, that some board members would soon step down.

"All boards should evolve, certainly when they've had the recent past this one does," he said. "You can expect some evolution of the board over the coming years - months, maybe."< br />
It is not clear whether this comment swayed some votes toward Mr. Hammergren and Mr. Thompson, two of the longest-serving board members. Mr. Hammergren received 54 percent of the vote and Mr. Thompson 55 percent. Mr. Lane was re-elected with 59 percent of all votes cast. Other board members had majorities of over 90 percent.

"Having under 60 percent is not a vote of confidence," Mr. Sacconaghi said. "They worked hard to secure support, and in the end they barely got a majority for these three people. It reflected the sins of the past."

Mr. Lane said the vote was a major reason he was stepping down.

"After reflecting on the stockholder vote last month, I've decided to step down as executive chairman to reduce any distraction from H.P.'s ongoing turnaround," he said in a statement issued on Thursday by H.P.

In the same statement, Mr. Whitworth said Ms. Whitman "is leading a herculean turnaround, so most of all, we must build and maintain the best possible leadership structure for Meg and H.P.'s entire team to succeed."

Mr. Lane and the other two board members were publicly criticized for their oversight of H.P., including a spectacularly expensive acquisition that later failed, both before and after the shareholder vote. On Thursday, their critics were quick to praise their resignations.

"Directors must be willing to ask tough questions, challenge assumptions and have the capacity to walk away from a deal that is unlikely to add value for shareholders," said ISS, a proxy advisory firm that opposed Mr. Lane. "That clearly didn't happen at H.P., and shareholders hold Mr. Lane accountable for that failure."

The New York City comptroller, John C. Liu, another critic of the company, said in a statement, "H.P.'s board got the message." He added, "This a good day for H.P., its board and its share owners." The New York City pension fund has over $100 million in H.P. stock.

Mr. Hammergren, who as chief executive of the McKesson Corporation is one of the highest-paid chief executives in the United States, has served on H.P.'s board since 2005. He was on the board while it was at the center of a scandal involving spying on journalists, board members and employees, and during the 2010 resignation of Mark Hurd as chief executive after he admitted to improper relations with a contract employee.

Mr. Hurd's successor, Léo Apotheker, lasted less than a year. He was hired without meeting or speaking with most members of the board. As chief, he agreed to pay $11.1 billion for Autonomy, a British software company and mused publicly about whether to sell H.P.'s personal computer business. He was succeeded by Ms. Whitman a month after those actions.

Late last year, H.P. took a more than $8 billion accounting charge in conjunction with the Autonomy purchase. It contended that it had been misled about the health of the company.

Mr. Thompson, a principal of Aquiline Capital Partners and a former chairman of Wachovia, joined the H.P. board in 2006, after the spying scandal. Mr. Lane, a former president of Oracle and a venture capitalist at Kleiner Perkins, joined the H.P. board in 2010. He was a vocal supporter of Mr. Apotheker.

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H-P's Lane to Step Aside as Chairman
Wall Street Journal, 04/4 , Joann Lublin

Hewlett-Packard Co. director Raymond Lane on Thursday gave up his powerful chairman's post-a surprise move that heralds yet another shake-up of the technology company's long-beleaguered board.

Ralph Whitworth, a H-P director and principal at Relational Investors LLC, will run the board until H-P recruits a permanent chairman. Mr. Lane will remain a director but two other board veterans, John Hammergren and G. Kennedy Thompson, will resign.

Directors approved the changes during a conference call on Thursday.

The turnover follows dissatisfaction among H-P shareholders over a botched acquisition of U.K. software firm Autonomy Corp., which H-P bought for $11 billion in 2011 then wrote down by $8.8 billion about a year later. H-P said it was misled about Autonomy's finances, an allegation denied by the software firm's former chief executive.

The deal happened on Mr. Lane's watch. In a sign of shareholder unease, the chairman, Messrs. Hammergren and Thompson nearly lost their seats at the March 20 annual meeting.

Mr. Lane, 66 years old and a former president of Oracle Corp ORCL -0.11% ., was unavailable for immediate comment. H-P issued a statement quoting Mr. Lane as saying he made the decision "after reflecting on the stockholder vote last month,'' and remains committed to helping H-P finish its turnaround. Four H-P board members resigned and five new ones joined in early 2011.

The Palo Alto, Calif., company was hoping for a period of stability under the new lineup. In late February, H-P CEO Meg Whitman said she didn't expect imminent board changes, saying "we have a very good collection of individuals,'' many of whom had served less than two years. Mr. Whitworth will head the search for a new chairman.

Director Pat Russo, former CEO of telecom equipment maker Alcatel-Lucent, ALU.FR +0.64% said in an interview that the next permanent chairman "doesn't have to be someone who has run a computer company,'' but should be "technologically driven" and understand manufacturing, hardware and software.

The changes are the latest for a board that has endured regular turnover and unwanted attention for much of the past decade. Directors came under scrutiny over a spying scandal in 2006 that prompted Chairman Patricia Dunn to resign. Criticism followed the board's 2010 ouster of then CEO Mark Hurd, which confused investors, and the subsequent hiring of Leo Apotheker, Mr. Hurd's short-lived replacement who led the Autonomy purchase.

Mr. Lane, currently an emeritus partner at venture capital firm Kleiner Perkins Caufield & Byers, was reelected last month with just 58.9% of votes cast.

Mr. Lane "believes he doesn't have a mandate from the shareholders,'' Mr. Whitworth said in an interview Thursday. "He believes there has been a lot of distraction in the past few months. He wants the company to be able to move forward without that distraction.''

Mr. Whitworth joined H-P's board in late 2011 after the activist investment fund he co-founded acquired a roughly 1% stake. Relational reported holding 34.5 million H-P shares, or nearly 1.8% of the company's total, as of Dec. 31. He has recently assumed a more visible role in the boardroom, participating in an informal committee created to provide strategic advice to Ms. Whitman.

"I will provide leadership to the board and support Meg,'' Mr. Whitworth said in an interview on Thursday. "She has undertaken a herculean task to turn this company around.''

In a statement published on H-P's website, Mr. Whitworth said each director "considered the results of our recent shareholder meeting and made the personal decision to do what they felt was best for H-P."

Mr. Whitworth, 57, said H-P as soon as possible will "recruit a world-class chairman to take my place." He has served on about dozen public company boards and previously commanded the boards of Apria Healthcare Group Inc. and Waste Management Inc. WM +0.54%

The activist investor often gets companies to change course by winning a directorship or threatening proxy fights. After negotiating for two board seats at Sovereign Bancorp in 2006, he successfully lobbied fellow directors for the ouster of the bank's CEO. He threatened proxy fights at Sprint Nextel Corp. S +0.81% and Home Depot Inc., HD +0.47% prompting management shake-ups that led to the resignation of both companies' CEOs.

Mr. Thompson, a former CEO of Wachovia Corp., chaired H-P's powerful audit committee. That committee will now be headed by former Rohm & Haas Co. CEO Rajiv Gupta, previously H-P's independent lead director.

Mr. Hammergren, CEO of pharmaceuticals distributor McKesson Corp., MCK +0.25% ran the board's finance committee and will be replaced in that role by Mr. Whitworth.

Mr. Whitworth takes over as chairman immediately. Messrs. Thompson and Hammergren will step down at the company's board meeting in May.

H-P also is launching a search for two new directors and hopes to complete that hunt this year.

Frank K. Martin, founder of Martin Capital Management LLC, said the investment firm recently sold its shares of H-P after losing faith in the company in the wake of the Autonomy fracas and other concerns.

"I'm not surprised by what's going on at all," he said, referring to the board shake up. "The misadventure in Great Britain was symptomatic of board and management that are floundering." Martin Capital Management reported owning some 243,000 H-P shares on Dec. 31.

CtW Investment Group, an arm of labor federation Change to Win, ran a vote-no campaign against Messrs. Hammergren and Thompson's re-election. "We commend the H-P board for moving swiftly following last month's compelling opposition vote,'' said William Patterson, the group's emeritus executive director.

"The board has gotten it right,'' said Anne Sheehan, director of corporate governance for the California State Teachers' Retirement System, a public pension fund that owns about 13 million H-P shares. New directors ought to have extensive capital allocation experience, she suggested. "They [H-P officials] have made a couple big errors in terms of their acquisitions and shareholders paid for it,'' she said.

In after-hours trading, the company's shares were down 5 cents after climbing 39 cents to $22.30 in 4 p.m. New York Stock Exchange trading on Thursday.

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HP Chairman Lane Resigns, Whitworth Takes Over for Now
Reuters, Also appeared in New York Times, 04/4

Hewlett-Packard Co Chairman Ray Lane, who has come under fire from shareholders for his role in the acquisition of software company Autonomy Plc, has relinquished his post in the No. 1 personal computer maker's latest board shake-up.

Two other directors left as HP, which has gone through several board upheavals in the past decade, said director and activist investor Ralph Whitworth will serve as interim chairman until Lane's replacement is found.

HP is also seeking two to three new board members, the company said on Thursday.

The changes come weeks after Lane, a Kleiner Perkins managing partner who will remain an HP director, narrowly won reelection at HP's annual shareholders' meeting with less than 60 percent of voting shares compared with 96 percent a year ago.

Two other directors who kept their seats with narrow margins, G. Kennedy Thompson and John Hammergren, will leave the board, and the company will look for two to three new, independent replacements.

Lane is one of the most prominent casualties of an acquisition that has incensed investors, who have criticized the company for paying $11 billion for Autonomy and for failing to conduct proper due diligence. HP eventually took a multi-billion dollar writedown on the asset's value.

"After reflecting on the stockholder vote last month, I've decided to step down as executive chairman to reduce any distraction from HP's ongoing turnaround," Lane said in statement. "Since I joined HP's board a little over two years ago, I've been committed to board evolution to ensure our turnaround and future success."

The Autonomy deal capped a tumultuous decade for the company that included the "pretexting" scandal of 2006, which led to the resignation of then-Chairwoman Patricia Dunn.

Four directors left HP in early 2011 following the ouster of former CEO Mark Hurd in 2010. In late 2011 Whitworth joined the board and director Whitman became CEO.

Whitworth, who runs activist hedge fund Relational Investors LLC, had said at HP annual shareholders' meeting in March to prepare for an "evolution" of the board.


Influential proxy firms ISS and Glass Lewis had recommended that investors vote against a roster of directors at HP.

"The Board needs to embrace long-term shareholders in the selection of directors who can restore confidence in the audit process, lend the necessary skepticism to quick-fix acquisitions, and bring experience that can help HP nurture its workplace culture of innovation," shareholder CtW Investment Group said in a statement.

Hammergren and Thompson - who received 54 percent and 55 percent of shareholder votes, respectively - will exit after a board meeting scheduled for May, HP said.

Another director, Rajiv Gupta, will remain on the board but will no longer be a lead independent director. He will replace Thompson as chairman of audit committee.

The upheaval comes as HP and CEO Meg Whitman are undertaking a multi-year turnaround to stimulate growth at the company, which was once synonymous with Silicon Valley but has since stagnated as its personal computer and printer business declined.

She has asked investors to be patient while the company undertakes layoffs and cost cuts and expands into areas with longer-term potential, such as enterprise computing services.

HP shares fell to $22.10 in after-hours trade, from their close of $22.30 on the New York Stock Exchange on Thursday.

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Autonomy deal debacle takes toll at HP
Financial Times, 04/4 , Chris Nuttall

Hewlett-Packard's chairman and its longest-serving directors resigned from their positions on Thursday in a delayed reaction to last year's disastrous $8.8bn writedown relating to the company's $11bn acquisition of Autonomy.

Ray Lane will be succeeded as chairman temporarily by Ralph Whitworth until a permanent replacement is identified. Mr Whitworth, an activist investor who joined the board as an independent director in 2011, is HP's fifth chairman in a decade.

Mr Lane resigned just over two weeks after he narrowly avoided being voted off the board of the Silicon Valley company.

He received only a 59 per cent vote in favour of his re-election at HP's annual meeting in March, compared with 96 per cent a year earlier. He will remain a director.

"After reflecting on the stockholder vote last month, I've decided to step down as executive chairman to reduce any distraction from HP's ongoing turnround," said Mr Lane in a statement.

John Hammergren and Ken Thompson received only 54 and 55 per cent support respectively at the meeting, at which more than 50 per cent support was needed for re-election. HP said on Thursday they had now decided to leave the board, after eight and seven years' service as directors.

Anne Simpson, head of corporate governance for Calpers, the pension fund, welcomed the move, but said shareholders had made their intentions clear and that further change was necessary: " It's not quite leaving them in a room with a brandy and a revolver, but we expect them to do the right thing."

Calpers, which in addition to its direct holding of HP stock has $1bn invested with Mr Whitworth's Relational Investors investment fund, has been in active discussions with HP. Ms Simpson said that "all those who presided over the disaster should step aside", including Ernst & Young, auditor to HP for 14 years.

Institutional Shareholder Services, an influential proxy advisory firm, had urged HP's stockholders to vote against the re-election of Mr Lane and the two directors over their handling of the company's controversial acquisition of Autonomy, a UK software company. ISS said shareholders should be concerned by failures of oversight of the due diligence process.

Mr Hammergren, chief executive of the drug wholesaler McKesson, was chairman of HP's finance and investment committee. Mr Thompson, former chief executive of the Wachovia bank, was chairman of the audit committee.

Mr Lane had been executive chairman since September 2011, after being appointed in a non-executive role in November 2010. He is a former president of software company Oracle.

HP had alleged Autonomy had boosted its financial numbers to give a false picture of what it was worth. Mike Lynch, Autonomy' s founder and former chief executive, has strongly denied the allegations and accused HP of mismanagement.

The departures mark the latest upheaval in the PC maker's senior ranks in recent years. Non-executive chairman Patricia Dunne resigned amid a boardroom spying scandal in 2006, while former chief executives Carly Fiorina and Mark Hurd were forced out for different reasons.

Mr Whitworth said on Thursday: "Ray, John and Ken are terrific leaders, and they're passionate about doing the right thing for HP. From here we will continue to recruit outstanding directors, strengthen our governance and do the best we can - the best we know how - for stockholders."

Meg Whitman, chief executive, is in the second year of a five-year plan to move HP to higher-margin software and services products, although it continues to hold a global lead in PC shipments.

Mr Whitworth received 96 per cent support from shareholders at the annual meeting. Relational Investors owns around $800m worth of HP stock.

He told shareholders at the meeting that they should expect board changes in the coming months.

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HP shifts mobility management into the cloud
ZDNet, 04/4 , Toby Wolpe

HP says its new cloud-based mobility management service allows firms to give users access to apps and data via smartphones and tablets while still maintaining control over security.

The new service, HP Enterprise Cloud Services - Mobility, enables companies to deploy tools and services quickly for access to applications, file storage and sharing via multiple mobile platforms, according to HP .

To read more, please click on the following link:

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HP delivers mobile management via its own virtualized private cloud
InfoWorld, 04/4 , Ted Samson

Joining the likes of VMware, Citrix, and AppSense in helping enterprises get a better handle on BYOD, HP today unveiled the HP Enterprise Cloud Services Mobility, the latest addition to its expanding Converged Cloud portfolio. The service includes file storage, an enterprise app store, and granular policies, and it supports a breadth of mobile platforms, among them iOS, Android, Windows Phone, Windows Mobile, and Windows 8 RT.

HP handles the management and maintenance of the mobile infrastructure atop its VPC (Virtual Private Cloud) offering; there's no on-premise option for customers who would prefer administering it from the comfort of their own data center.

The solution lets users download approved enterprise applications from a secure store front, as well as synchronize files between HP's cloud infrastructure and their mobile devices. Admins have the ability to scale cloud file storage in step with their needs; there's also a local storage option for companies dealing with data-sovereignty and compliance requirements, according to HP. Mobile data is encrypted in transit and at rest.

The services components include Management Essentials and Cloud File Management. The former is a cloud-based management solution for mobile devices and applications that includes mobile security and native-application management via centrally configured and enforced policies. Management Essentials also delivers over-the-air provisioning, certificate-based policy enforcement, and enforceable administrative policy lockdown controls for mobile devices. It's built on Citrix XenMobile MDM Edition and SAP Afaria.

The Cloud File Management service lets users sync, store, and share data securely in the cloud, according to HP; they can also access all their data across all devices. Features include offline access to all files and folders; in addition, there's a Local Storage feature through which IT can store data both in HP cloud locations and on-premise.

One of the key questions in regard to the announcement is whether enterprises feel secure in entrusting a third party with the managing and maintaining a mission-critical mobile platform atop a virtualized private cloud. By HP's reckoning, the approach means lower costs thanks to shared infrastructure, as well as greater flexibility in terms of adding hundreds or thousands of new users at a time.

In terms of security, HP says its VPC is hosted in the company's highly secure data centers, and client data and processes are isolated from one another. Customers are provided their own their own virtual network compartment, and they can choose dedicated physical or virtual servers. The service employs logical unit security to isolates servers to storage devices so as to mask data from other users.

Further, VPC offers individual administrative logins, two-factor-authentication, encrypted login credentials, security log management, vulnerability scanning, multiple VLANs, and network intrusion prevention.

HP Enterprise Cloud Services Mobility is available immediately, with pricing based on such factors as the number of users.

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Hewlett-Packard Launches Cloud Service For Mobile
Investor's Business Daily, 04/4 , PETE BARLAS

Hewlett-Packard on Thursday unveiled a cloud-based computing service for enterprise users of mobile devices.

The service aims to let company employees and partners securely get access to files and applications on smartphones and tablet computers over the Internet "cloud."

HP is among companies - which include Oracle, SAP, Cisco Systems and Microsoft - scrambling to provide more cloud services.

HP has come under fire from investors for its $10 billion acquisition of business software maker Autonomy in 2011. Shareholders had expected some members of HP's board to be dismissed during its annual meeting last month.

The new service is part of HP's Converged Cloud portfolio. Offering a cloud-based mobile service that is both flexible and secure is a must-have option for businesses, Pete Karolczak, an HP senior vice president, said in the company's release.

"Mobility in the workplace continues to be a key focus and concern for IT executives," he said. "Mobility leverages HP's strong cloud portfolio by providing clients with a mobility service that provides the highest level of user experience and productivity while minimizing the risk for IT."

HP shares hit a 10-year low of 11.35 in November were trading near 22.30, up 1.8%, in the stock market today.

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Cloud Connect: Building Bridges Between IT and 'Shadow IT'
CRN, 04/4 , Ken Presti

As employees increasingly turn to the cloud to select and provision applications that meet their specific needs, IT leaders find themselves struggling to stay connected with the services running across their infrastructure.

This level of self-service is widely known as "shadow IT." However, the legitimate IT department is typically looking for ways to prevent it from happening. Under the best of circumstances, there are concerns about security, resources, and similar issues that map to the ultimate success of the company. At worst, the issue can devolve into a political turf battle as users seek to demonstrate their autonomy while IT people seek to assert their control over the infrastructure.

But, the two do not need to be at odds with one another, according to two presenters at UBM Tech's Cloud Connect conference, which is underway this week in Santa Clara, Calif.

"The line between the reality and the illusion of shadow IT is getting fuzzy; it can be difficult to know exactly what is approved and what is not," said Margaret Dawson, Hewlett-Packard's vice president of product marketing for HP Public Cloud. "But there are a number of things that can be done in order to gain better control of the situation while still enabling users to have at least some level of autonomy."

Dawson advised the conference attendees to begin the process with an audit of cloud services. This audit would include identifying, locating and classifying the data, and then conducting a review of management and security policies that drive the company mandate, maximize efficiency and minimize risk.

From this effort, clearly articulated cloud policies should not only be developed but also systematically communicated to the employees through various training vehicles. In most cases, she says it is not necessary to completely disallow shadow IT. The emphasis is on development of a model that works for all parties concerned.

"Give a little," she said. "Don't automatically shut everything down. Throw them a bone if you can. Identify what you will allow to stay on the network, and then shut down the rest."

Another Cloud Connect presenter, Lisa Larson, vice president of enterprise cloud solutions at Rackspace, noted that is more important than ever for IT professionals to empower employees and be innovative and transformative in the use of technology.

"Spinning up a cloud service is very easy for the users," she said. "And you have to keep in mind that technologists, by nature, will always want to play with the latest whiz-bang technologies and find new ways to use them for innovative purposes."

Larson explained that Rackspace's IT brain trust dealt with the situation by building their own service catalog from which employees could choose the assets that best meets their needs.

"All of this happened under the umbrella of IT," she said. "The services catalog was developed and even marketed within the organization so that people would be aware that these options were available to them. This is very empowering for the users. And after the users were empowered, the emphasis then shifted towards identifying new services that should be added to the catalog."

Both executives agreed that a spirit of collaboration and cooperation provided the best approach. But while innovative ways to address the issue are limited only by the bounds of creativity, it is also clear that it is incumbent upon the IT department to protect corporate assets at the same time it is enabling the users.

"It's not an easy task," said HP's Dawson. "You've got have the guts to set those policies and then deliver on them."

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Hewlett-Packard’s rebound dominates Globe stock-picking challenge
Globe and Mail, 04/4 , SHIRLEY WON

Three months ago, the battered shares of Hewlett-Packard Co. hardly seemed like a obvious choice for The Globe and Mail's My One and Only stock-picking contest. Today, the computer giant is leading the pack after a blockbuster first-quarter gain.

The share price of the U.S. high tech company - the pick of analyst Brian Pinchuk of Montreal-based Lorne Steinberg Wealth Management Inc. - surged 72 per cent in Canadian-dollar terms during the first three months of the year. That handily beat the 3.3-per-cent increase by the S&P/TSX Total Return index during the same period.

Given that the stock was trading close to 18-year lows in December, Mr. Pinchuk says he was not particularly surprised by its strong rebound. "That often happens when you shop at the discount store," he said. "We tend to look for great companies that have stumbled. … Often you can find some treasures."

The eight investment professionals participating in the annual stock contest were asked to choose a North American-listed security that they expected to outperform this year. To discourage bets on penny stocks, any Canadian pick had to have a minimum market capitalization of $100-million, while U.S. names were required to have a market value of more than $1-billion (U.S.). Returns are calculated in Canadian dollars, including dividends.

The prize? Eternal bragging rights and a Globe and Mail coffee mug.

In the case of Hewlett-Packard, Mr. Pinchuk saw a stock that many investors had given up on after a series of management mishaps. Declining personal computer sales and tough competition from Apple and Samsung in the growing world of mobile devices had further depressed sentiment.

"But Hewlett-Packard is somewhat of a misunderstood story," he said. "It's a lot more than [a] PC company." Thirty per cent of its revenue comes from its information technology services division, while its printing and ink-cartridge business remains a solid contributor. With the introduction of Windows 8 for touch-based devices, Hewlett-Packard should begin to gain traction in the tablet market, he added.

Mr. Pinchuk, who holds a degree in computer engineering, figured he couldn't go wrong with Hewlett-Packard after estimating that its services business alone was worth about $14 a share - the stock's price in December - while the company's break-up value exceeded $35 a share. The stock closed at $23.84 a share at the end of the quarter, and finished Thursday at $22.30 a share.

Even at its current price, the stock is compelling at under seven times forward earnings, Mr. Pinchuk said. But because of the price run-up, he is considering taking some profits. (Hewlett-Packard was bought for one of his firm's funds in December.)

He cautioned that it is still "a fragile story although the bleeding has stopped." Its latest chief executive officer, Meg Whitman, "has been fairly transparent about the problems and is working to solve them." On Thursday, however, Ray Lane announced he was stepping down as the company's chairman, which may herald yet another shake-up of the company's board.

"We would love to see a soft quarter," Mr. Pinchuk said. "We believe in the long-term story, but we are value investors and would love to pick it up at a cheaper price."

ProMetic Life Sciences Inc., a small bio-pharmaceutical stock chosen by Robert McWhirter of Selective Asset Management Ltd., was the second best-performer with a robust 47-per-cent return. The company, which has developed technologies to remove contaminants from blood and recover valuable proteins from plasma, has seen resurgent interest in its shares after China's Shenzhen Hepalink Pharmaceutical Co. took a 10-per-cent equity stake in the company last fall.

In contrast, U.S. iron ore producer Cliffs Natural Resources Inc. emerged as the worst performer in the contest with a stunning 49-per-cent loss. "Everything that could go wrong, did go wrong," said David Sherlock, a portfolio manager at Calgary-based McLean & Partners Wealth Management Ltd., who won last year's contest with a bet on U.S. oil refiner HollyFrontier Corp.

While Cliffs was purchased for a small pool of money in early December at his firm, he mitigated losses partly from having placed a brokerage order to automatically sell the stock when it dropped to $29 a share (the price at which it was purchased). The stock closed the quarter at $19.01 a share.

"For the contest it is not going to work, but as far the real money goes, it did not do any material damage," he said.

Mr. Sherlock had expected the firm to benefit from an improving Chinese economy. In February, however, Cliffs slashed its quarterly dividend by 76 per cent to 15 cents a share amid slumping iron-ore prices and cost overruns.

"The Chinese economy is still sluggish, and that is not going to bode well for the price of iron ore," he said.

On the other hand, "all the bad news is priced in. As a deep value stock, it might be reasonably priced to look at it again."< /p>

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Blackstone Talks With Dell Said to Sidestep CEO’s Role
Bloomberg, 04/5 , David Carey

After days of discussions, Blackstone Group LP and Dell Inc.'/ s Michael Dell have yet to tackle a critical issue, according to a person with knowledge of the matter: what role he would play if the private-equity firm wins the bidding for the computer maker.

Michael Dell, the company's founder, chief executive officer and largest shareholder, began talks with Blackstone after the world's largest buyout firm submitted a proposal on March 22 to buy the Round Rock, Texas-based company. At stake is Blackstone' s effort to top the $24.4 billion leveraged-buyout offer led by Michael Dell and backed by Silver Lake Management LLC that a special committee of Dell's board endorsed on Feb. 5.

Blackstone would prefer to win Michael Dell's support for a counterbid in which he would invest some portion of the $4.5 billion he agreed to inject into the Silver Lake buyout, said the person, who asked not to be identified because the talks are private. To do so, the New York-based firm will have to reach agreement with Michael Dell on the CEO's future role and other fundamental issues such as his ownership stake and Dell's strategic direction.

If Michael Dell doesn't get a deal he likes from a victorious Blackstone, he will cash out his 15.6 percent stake and walk away from the company he started 29 years ago while in college, a second person said.

Christine Anderson, a spokeswoman for Blackstone, and Dell spokesman David Frink didn't immediately respond to messages seeking comment.
Daily Talks

Michael Dell has met several times with Chinh Chu and David Johnson, the Blackstone executives overseeing the firm's bid, in Texas, and the three speak daily, the two people said. Johnson joined Blackstone in January from Dell, where he led mergers and acquisitions for almost four years.

The talks have focused on charting a strategic plan for Dell that Michael Dell and Blackstone can both embrace, said one of the people.

Other issues will be decided later, this person said, with due diligence -- Blackstone's scrutiny of Dell's internal financial statements and documents -- expected to take four or more weeks. Its analysis of Dell's books will begin April 8. Carl Icahn, a billionaire investor who also made a counterbid to Silver Lake's offer, plans to proceed with due diligence, a person familiar with his thinking said.
Potential Roadblocks

Blackstone and Icahn submitted the only proposals under the go-shop period set up by Dell's board to solicit competing offers.

A range of issues potentially stand in the way of Michael Dell collaborating with Blackstone.

Dell, 48, expects to wield operating control of the company after a buyout and would insist on remaining CEO, one of the people said. He also would object to Blackstone making wholesale changes to the executive team that he assembled. He is more flexible concerning Dell's business strategy, the person said.

For now Blackstone (BX) isn't contemplating a radical operational overhaul of Dell and would keep the company largely intact, said the person familiar with Blackstone's thinking. It would aim to keep Dell's personal computer business because of its distribution network and strong brand. Blackstone also believes that Dell's enterprise software and server business, in which it sees strong growth potential, would benefit from the linkage to PCs, the person said.

Blackstone hasn't made any decision on whether to sell Dell's finance arm, the person said. General Electric Co. and other parties have expressed interest in buying the unit, which provides financing for less than 20 percent of the computers Dell sells, the person said.
Control Question

Blackstone doesn't need to sell the unit to help fund the Dell (DELL) buyout, and there is a chance that it will hang on to it, the person said.

The Silver Lake bid would make Michael Dell the majority owner, with the buyout firm having a smaller ownership stake and giving Michael Dell a freer reign over Dell's strategy than Blackstone would probably support, a third person with knowledge of the discussions said.

Blackstone has offered to pay at least $14.25 a share to current investors with an option to hold onto some of their stake through a so-called equity stub. The Dell-Silver Lake deal would be a straight all-cash buyout of the shares Michael Dell doesn't own at $13.65 a share. Dell closed yesterday at $14.26 in New York.

A Blackstone bid would likely prevent Michael Dell from being a majority owner and put more restrictions on his ability to run the company than he would with Silver Lake, according to this person.
Two Options

Blackstone is weighing two alternate deal structures, said the person with knowledge of the firm's plans. One of them would probably give Michael Dell more than a 50 percent stake if he rolls over all of his shares, this person said. In the other, Dell would be a minority holder.

If Dell opts out, Blackstone is confident it can arrange debt and equity financing to get a deal done without him, the person said. Banks are indicating there's more debt available than would be needed to finance the deal. Existing shareholders such as Icahn, T. Rowe Price Group Inc. and Southeastern Asset Management Inc. may stay invested.

If those three shareholders roll in their holdings, it would largely fill the equity financing gap Dell's absence would create, according to the person. Southeastern expressed interest to Blackstone in participating in its deal, according to the person.

In its proposal, Blackstone said it was working with Francisco Partners and Insight Venture Partners, two much smaller private equity firms. They would each invest several hundred million dollars into the deal, the person said.

Jed Repko, a spokesman for Southeastern at Joele Frank Wilkinson Brimmer & Katcher, declined to comment. Executives at Insight Venture and Francisco Partners couldn't immediately be reached for comment.

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DEALTALK-Blackstone heading to Texas to firm up Dell strategy
Reuters, 04/4 , Nadia Damouni

Blackstone Group will visit Dell Inc's headquarters on Monday to begin an in-depth analysis of the company, sources said, a strong sign the buyout firm is proceeding with an offer that could upset founder Michael Dell's $24.4 billion buyout bid.

Blackstone and billionaire investor Carl Icahn separately made preliminary proposals in late March that, if finalized, could be superior to the offer on the table from Michael Dell and private equity firm Silver Lake Partners LP.

The outcome of the auction would determine the future of Dell as well as Chief Executive Michael Dell, who founded the company in a dorm room in 1984 and turned it into the world's No.3 personal computer maker.

In its first step toward firming up a bid, Blackstone is working closely with Michael Dell in putting together a new business plan and actively talking to him about staying on in his current role as CEO, two people familiar with the matter said.

If Michael Dell gets on board with Blackstone's still-developing strategy for Dell, he would be Blackstone's preferred choice running the new company, the sources said. But the buyout firm also is putting an alternative executive plan in place.

Blackstone has hired an executive consulting firm that has reached out to about half a dozen high profile industry executives to help evaluate Dell's businesses and provide advice around strategy, the sources said.

The New York-based private equity firm and its consultant are also talking to a few of the executives for potentially running Dell, while some others are being considered for board positions, the sources said.

The executives that have been contacted by the executive reference firm include Cisco Systems Inc director Michael Capellas, former IBM Corp services head Michael Daniels, Oracle Corp President Mark Hurd and Hewlett-Packard Co's PC boss Todd Bradley, the sources said.

Hurd, who sources previously have said was being pursued for a CEO job, has said he is happy at Oracle. Representatives for Capellas and Daniels did not return calls seeking comment. Bradley said in an email he was not contacted for a CEO position.

The leading external candidate for the Dell CEO job is Capellas, who has been in extensive discussions with Blackstone in recent weeks brainstorming on strategy for Dell and evaluating the industry, the sources said.

Capellas, best known as CEO and Chairman of PC maker Compaq, that he sold to Hewlett-Packard in 2002 for $25 billion, has been spotted entering and leaving Blackstone's Park Avenue headquarters several times over the past few weeks.

In recent years, Capellas served as Chairman and CEO of VCE, a collaboration between EMC Corp, Cisco and VMware Inc . He still remains chairman.

"No one knows who will ultimately sign on yet," one of the sources said. "(Blackstone) is exploring options with those people."

Executives from the private equity firm and its consultants will head to the Round Rock, Texas, Dell's headquarters on Monday, to kick off the due diligence that is expected to last about four weeks, people close to the matter said.

"What Blackstone is trying to do is develop a smarter structure that provides more options than what Michael Dell and Silver Lake seem to be doing," another said, adding that the firm is trying to figure out a different way for Dell going forward.

All the sources asked not to be named because the discussions are confidential. Spokesmen for Blackstone and Silver Lake declined to comment. A spokesman for Michael Dell was not available for comment.

Blackstone's team leaders for the bid include Dell's former head of strategy, Dave Johnson, currently a senior managing director at Blackstone. In the past, Johnson and Michael Dell have not seen eye-to-eye over a strategy that would take Dell forward, the sources said.

Johnson is working with Chinh Chu, one of Blackstone's most experienced partners, who has been carrying out transactions for the firm since 1990.

Michael Dell and Silver Lake envision Dell as an integrated company, with the No. 3 PC-maker continuing to focus on a diverse offering that includes enterprise software, servers, PCs and financial services.

Johnson's strategy, if Blackstone acquires Dell, would be to focus the company on enterprise software and accelerate the effort to bring together all the acquisitions made in this space, a source close to Johnson said.

In addition, under Johnson's plan, the company would exit its finance business, the source said, adding that Johnson also wants to make the company less Texas-centric and more global to attract more talented employees.

During Johnson's three years at Dell, he oversaw an aggressive acquisition strategy with some 18 to 20 deals, including the 2009 purchase of Perot Systems Corp, which catapulted Dell into the technology services market alongside IBM and HP.

But one of the sources cautioned that the due diligence process is still in the early stages, and that Blackstone is just starting to put together a business plan.

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Apple New Campus Cost Seen Jumping to $5 Billion: Tech
Bloomberg, 04/4 , Peter Burrows

At what turned out to be his last public appearance, Steve Jobs stood before the Cupertino City Council on June 7, 2011, to present plans for a new corporate campus for Apple Inc.

Scarecrow thin yet forceful as ever, Jobs displayed several renderings of a headquarters intended to accommodate more than 12,000 employees in a single, circular building.

"It's a little like a spaceship," he said of the massive, four-story ring, which, at 2.8 million square feet, would be two-thirds the size of the Pentagon and set among 176 acres of trees where today there are mostly asphalt parking lots. "We have a shot," he said, "at building the best office building in the world. I really do think that architecture students will come here to see it."

Jobs died four months later, before the final plans could be submitted to Cupertino city planners, though he had made it clear that this corporate Shangri-La would be expensive. Apple would add 6,000 trees and hide almost all the roads and parking spaces underground. There would be plenty of cafeterias, including one that could handle lunch for 3,000 employees. Jobs highlighted the main building's curved exterior walls. The plans call for unprecedented 40-foot, floor-to-ceiling panes of concave glass from Germany.

Before the Cupertino council, Jobs said, "there isn't a straight piece of glass on the whole building," adding that "as you know, if you build things, this isn't the cheapest way to build them."
Ballooning Budget

He had that right. Since 2011, the budget for Apple's Campus 2 has ballooned to almost $5 billion from less than $3 billion, according to five people close to the project who weren't authorized to speak on the record.

If their consensus estimate is accurate, Apple's expansion would eclipse the $3.9 billion being spent on the new World Trade Center complex in New York, and the new office space would run more than $1,500 per square foot -- three times the cost of many top-of-the-line downtown corporate towers.

Before his death, Jobs had hoped to break ground in 2012 and to move in by the end of 2015. Apple will start tearing down the 26 buildings on the site in June, according to another person familiar with the plan. At the company's annual meeting on Feb. 27, Chief Executive Officer Tim Cook said the move-in date has been pushed back to 2016. Apple declined to comment for this article.
Cost Cutting

One reason for the new timetable, say three people who have spoken to Apple personnel about the project, is that the company has been working with lead architect Foster & Partners to cut $1 billion from the budget before proceeding. Jobs and Apple first hired Norman Foster's firm, renowned for the rebuilt Reichstag in Berlin and Hearst Tower in New York, in 2010.

Apple has named a general contractor -- a joint venture of DPR Construction, in Redwood City, California, and prefabrication specialists Skanska USA Building in New York -- though it hasn't completed agreements with the scores of subcontractors needed to finish the job. Some contractors will be submitting bids by May. There's so much dirt to be removed, excavating the site will take six months and require a continuous, 24-hour convoy of trucks, says a former Apple manager who heard a presentation from Foster's firm.

Cost overruns are to be expected on large construction projects, and the scale of this one has evolved -- from an initial plan to accommodate 6,000 employees to offices for 12,000 or even 13,000 in one place. Meanwhile, $1 billion is still less than 1 percent of Apple's $137 billion in cash reserves.
Falling Shares

Yet the multibillion-dollar budget for Campus 2 could add fuel to the debate about what Apple's doing with all of its money. Investors didn't squawk much when Apple was dominating the smartphone and tablet market, though its shares have fallen 38 percent since September amid rising competition from Samsung Electronics Co. and concerns about Apple's product pipeline.

Now shareholders are calling for a big dividend, stock buyback or, in the case of Greenlight Capital's David Einhorn, the issuance of a new class of preferred shares. Apple has hinted it might oblige in some way, though critics are sure to question whether curved glass is the best use of funds.

"It would take some convincing for me to understand why $5 billion is the right number for a project like this," said Keith Goddard, the chief executive of Tulsa, Oklahoma-based Capital Advisors Inc., which owns 30,537 shares of Apple. "This is rubbing salt in the wound, to spend at a level that most anyone would say is extravagant, at a time when they're being so stingy on dividends."

If the stock continues to underperform, Goddard predicted, " this headquarters would perpetuate the negative story."
'Campus Curse'

Moreover, in Silicon Valley, nothing says you've peaked quite like a lavish new headquarters. Highfliers such as Silicon Graphics Inc., Borland Software Corp. and Sun Microsystems Inc. all suffered the "campus curse": Their fortunes went south soon after opening swank corporate villages.

Few architects will publicly question the judgment of Jobs and Foster, though many privately snicker at the doughnut-shaped design. At a time when Google Inc., Facebook Inc. and others favor floor plans that promote as many chance meetings as possible -- a Jobsian virtue -- the circle could isolate people and teams. A circle does not allow for much flexibility. Many companies today opt for "living buildings" that can be easily reconfigured. Facebook's West Campus in Mountain View, California, will be one huge quarter-mile-long structure -- essentially a large warehouse that can be adjusted on the fly as projects are started and finished.
Aesthetics, Productivity

Aesthetics seem to trump productivity, says Scott Wyatt, a managing partner at NBBJ, a Seattle-based architecture firm that's designing offices in the region for Google and Samsung.

"I would be concerned that it would be alienating, as opposed to convening," Wyatt said. Rather than making it a great place to work, "it seems more like an object, just like the iPhone is an object."

There's no indication that Apple is getting cold feet. For one thing, it needs the space. Even after the campus opens, it will continue using its current Infinite Loop headquarters, which houses 2,800 employees. Given its cash, Apple can make it happen, even at $5 billion. Yet Cook dropped hints at Apple's annual meeting in February that the campus would not be precisely what Jobs envisioned.

"Steve put a lot of love and attention into this before he passed away," Cook said. "Hopefully we've made it better during the design phase. We want to do this right."
Sustainable Design

Apple's spectacular second campus, at least as Jobs conceived of it, was never going to be purely practical. Set on land Apple purchased in two blocks -- 50 acres in 2006, and roughly twice that from Hewlett-Packard Co. (HPQ) in 2010 -- Jobs wanted it to be a model of sustainability. The goal, he said, was for the facility to generate all of its own electricity, relying on the grid only as a backup. He wanted the whole place to look less like an office park and more like a nature refuge.

Shortly after entering the new campus at one of just two entry roads, the plans reveal, most cars will be directed underground into a network of roads and garages. The company plans to plant 15 acres of native California grassland and 309 different species of trees (that includes the 6,000 new ones and 1,000 existing trees that will be dug up, stored during construction and transplanted back from the nursery later). The vast courtyard in the center of the main building's doughnut will be especially verdant, with apricot, olive and apple orchards and an herb garden near the patio of a sprawling cafe.
Underground Auditorium

The plan is for only six structures to be visible when it's all done: the headquarters, the lobby to an underground auditorium (no more schlepping to San Francisco for product demos), a four-story parking garage separating the campus from Interstate 280, a fitness center, and two research and development labs housing testing facilities such as an anechoic chamber for analyzing antenna signals.

"The overall feeling of the place is going to be a zillion times better than it is now," Jobs told the Cupertino City Council.

To achieve its goals of a "net-zero energy" campus, the roof of the spaceship will hold 700,000 square feet of solar panels, enough to generate 8 megawatts of power. (That's enough to power roughly 4,000 homes.) Apple says it's negotiating contracts for additional solar and wind power.
Open Windows

To keep consumption down, the company plans to install " climate responsive" technology. Judging from the drawings, this will include window treatments that automatically open or close to let in just the right amount of light, wind and fresh air to maintain a comfortable temperature. Apple will probably make liberal use of Solatubes -- skylights that are used to shunt outdoor light into internal offices -- and huge, airplane propeller-size fans made by companies such as Big Ass Fans Co. in Lexington, Kentucky, that move lots of air without using much energy.

The true expense of the campus lies not in green tech, though, as much as the materials -- as well as what product designers call "fit and finish." As with Apple's products, Jobs wanted no seam, gap or paintbrush stroke showing; every wall, floor and even ceiling is to be polished to a supernatural smoothness. All of the interior wood was to be harvested from a specific species of maple, and only the finer-quality "heartwood" at the center of the trees would be used, says one person briefed on the plan last year.
Curved Glass

The main building will also be groundbreaking in how it's assembled. While the structural shell will be erected on site, the glass that forms the exterior walls will be bent and framed by Seele GmbH in its factory in Gersthofen, Germany.

"It's something like 6 kilometers of glass," said Peter Arbour, an architect with Seele, who said no company has attempted to use panes as large -- certainly not curved panes -- in anything approaching this scale. "Normally we talk in terms of square feet."

Seele, which built the glass staircases in many Apple stores as well as the large glass cube at the entrance to its store on Fifth Avenue in New York, has doubled the capacity of its plant to supply the Apple project, Arbour said. Most curved glass is created through a heating process that can lead to cloudiness or house-of-mirror-style distortions. Apple's will use a cold-bent process; Seele developed machines to bend the panes and hold them in place as they are laminated with a bonding material so they keep the correct shape.

"With cold-bent glass, you get a true surface and true transparency and true reflectivity," Arbour said. Seele can complete this process only at its Gersthofen factory, requiring that the glass be shipped from Europe.
Prefab Modules

Arriving by truck will be thousands of prefabricated 26- foot-long modules in various configurations -- bathrooms, utility closets and banks of offices complete with carpets and window treatments, said three of those who spoke with Bloomberg Businessweek about the project.

Because the work is done in factories designed specifically for the purpose, the approach can yield far more precise construction and fewer hours of on-site labor -- and potential savings on local union rates. It's also faster. Apple hopes to complete construction in two years, compared with the three to five it could take using conventional methods.

Apple hasn't announced any major changes to Jobs's vision, so some of the sought-after $1 billion savings will probably come by rolling back his sky-high requirements for fit and finish.
Museum-Quality Floors

Rather than cement floors, Jobs wanted to use a stone- infused alternative such as terrazzo, buffed to a sheen normally reserved for museums and high-end residences. Jobs insisted that the tiny gaps where walls and other surfaces come together be no more than 1/32 of an inch across, versus the typical 1/8 inch in most U.S. construction.

Rather than a lightweight, sound-absorbing acoustical tile, Jobs even wanted the ceilings to be polished concrete. Contractors would typically erect molds with crude scaffolds to pour the cement in place, yet that leaves unsightly ruts where the scaffolding puts extra pressure on the surfaces. According to two people who've seen the plans, Apple will instead cast the ceilings in molds on the floor and lift them into place, a far more expensive approach that left one person involved in the project speechless.
Grand Future

On a recent visit to the site, a hint of the grand future blended in with the practical and unglamorous present. Apple has vacated some buildings in one corner of the property, though the parking lot is almost full outside the offices of Apple's facilities staff. A large square structure looms up from behind the building, obscured by a 30-foot fence that's covered with white tarps.

A peek through the fence reveals what appears to be a life- size mock-up of the entrance to the future headquarters, complete with floor-to-ceiling glass and a huge banner hanging from the ceiling with a photo of an iPhone, like the ones that hang in the lobby of Infinite Loop. It's clean, minimalist and stunning -- a four-story iPad.

Wyatt, the NBBJ partner, met with Jobs to talk about various projects over the years.

"I can imagine Jobs going through some of Foster's buildings and thinking, 'This is what architecture should be,'" said Wyatt. "This isn't a bad thing, but they're an architect's architect, not a customer's architect." (Foster & Partners is the lead architect for Bloomberg Place, the London offices of Bloomberg LP, the parent of Bloomberg News and Bloomberg Businessweek.) The firm declined to comment for this article.
Demanding Designs

Foster & Partners has designed several of the most demanding and technically innovative buildings in the world. Foster made his name with the Hongkong & Shanghai Banking Corp. (now HSBC) headquarters, completed in 1985. Built quickly with then-novel prefabrication and structural engineering techniques (reflected in the tubular columns and elaborate trusswork of the tower's exterior), the skyscraper cost $1.3 billion -- in 1985 dollars, making it the world's most expensive tall office building at the time.

Since then, Foster has emerged as the U.K.'s best-known architect. The kinds of projects he chooses these days, such as new airports in Hong Kong and Beijing, are rarely budget-driven, and the clients seem only too glad to spend on them.

The 1997 Commerzbank AG headquarters in Frankfurt pioneered many energy-conserving techniques and featured multistory "sky" gardens. A delicate, costly, high-tech glass dome crowns Berlin' s Reichstag, the ruined home of the Bundestag, which Foster rehabilitated in 1999. Its design was controversial, though it has become a much-beloved symbol of progressive, unified Germany.
Little Opposition

Jobs and Foster's vision isn't likely to run into any civic obstacles. Cupertino expects to have completed an environmental impact report by July, said City Manager Dave Brandt, who doesn' t anticipate much in the way of community opposition. Apple won points by agreeing to transport Glendenning Barn, a historic landmark, to a more accessible site, and by investing in a public transit program to encourage more than a third of employees to get to work by a method other than car.

Apple may struggle to find subcontractors, though. There's a building boom in Silicon Valley, with new hospitals, a new stadium for the San Francisco 49ers (who are finally leaving Candlestick Park and moving to Santa Clara), and offices for Samsung, as well as Facebook West and Google.
Thin Profit

With so much good business out there, some companies may hesitate to commit manpower to a project that's running behind. Moreover, according to two of the people close to the project, Apple is offering a cost-plus contract that pays only half the percentage of profit of some large deals, leading some potential partners to wonder if Apple expects them to sign up more for the glamour of working on a marquee master plan than for the money.

If that were ever true -- and no doubt, many an Apple supplier discovered it had fallen into Jobs's reality distortion field -- it's far less likely in the Tim Cook era. Apple may have more money than Croesus, though without Jobs's star power and maniacal control, it's becoming more like other big, conventional companies.

Ironically, that may be precisely why Jobs's spaceship will one day land in Cupertino, regardless of cost. To backtrack now would be tantamount to admitting it.

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Apple's Spaceship Campus $2B Over Budget
PC Magazine, 04/4 , Stephanie Mlot

Someone should have warned Steve Jobs that spaceships are expensive to build. Apple 's second home, a 176-acre "spaceship-like" campus slated for a 2016 opening, is apparently about $2 billion over budget.

The late CEO appealed to the Cupertino City Council in June 2011, outlining plans to expand its footprint with a 3.1 million square foot, circular structure to hold the 12,000 employees currently scattered at Infinite Loop and throughout the city in rented buildings.

Jobs planned for a sub-$3 billion budget, but since his death, Apple Campus 2 has ballooned to almost $5 billion in costs, Bloomberg reported, citing a number of people close to the project. The hush-hush structure's growing price tag has far surpassed the $3.9 billion being spent on New York's new World Trade Center complex.

Before Jobs's death, he'd planned to break ground in 2012, and move into the new building by the end of 2015. In November, the company revealed that it won't complete its environmental impact report until June, which delays construction until 2014. Employees likely won't enter the campus until 2016.

Cupertino has reportedly been working to slim its unwieldy budget, though. According to Bloomberg, the company has been working with lead architect Foster + Partners to cut $1 billion before moving forward.

People familiar with the project told Bloomberg that Apple will begin tearing down the 26 buildings on the new campus site this summer; excavating the area will take six months of round-the-clock work. Subcontractors will begin submitting their bids next month.

The massive price tag seems overreaching for most, but as Bloomberg pointed out - $1 billion is less than 1 percent of Apple 's $137 billion in cash reserves.

And the company did its due diligence last year by informing its neighbors about what's in store for their future. A brochure by Cupertino talked up the transportation options provided to Apple employees - shuttles, bike shares, carpooling, walking - which will reduce vehicular traffic.

Additionally, the four-story Apple Campus 2 will be outfitted with a restaurant, fitness center, and other amenities, reducing the need for employees to leave during the day.

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Apple bars China app for ‘illegal’ content
Financial Times, 04/4 , Jamil Anderlini

Apple has removed at least one online application from the China App Store because it provides access to books that are banned by the Chinese government, according to the developer of the app.

Hao Peiqiang, the developer of an online bookstore app called "jingdian shucheng", received a letter from Apple's "App Review" on Thursday morning telling him his app will be removed because it "includes content that is illegal in China".

Apple did not specify what content it was referring to, but Mr Hao told the Financial Times he believed the offending content consisted of three books by Wang Lixiong, the Chinese writer whose works are mostly banned in China.

The app only offers 10 book titles, including the three by Mr Wang, and has not been removed from app stores outside China.

The decision by Apple to remove the app in China came just days after Tim Cook, chief executive, issued an apology to Chinese customers for the company's perceived arrogance and said Apple had a lot to learn about operating and communicating in China.

That apology came after weeks of scathing attacks from China' s state-controlled media that began with an expose on primetime television featuring deficiencies in Apple's after-sales service but evolved into a co-ordinated campaign attacking nearly every aspect of the company's operations in China.

"Friends of mine tell me that Apple has had a censorship policy in place for at least two years so I'm not sure if my app's removal has anything to do with Apple's recent trouble," Mr Hao told the FT. "But the app has been operating normally for the last two months until now without any problems."

Other western technology companies such as Yahoo and Google have faced serious international criticism for agreeing to censor content or hand over personal information of individuals at the behest of the Chinese state, but Apple has so far managed to avoid much scrutiny of its content management policies in China.

Apple is not a member of the Global Network Initiative, a group co-founded by Google, Yahoo and Microsoft several years ago to promote online privacy and free expression. In its rules for developers, Apple says that apps released in any country " must comply with all legal requirements in any location where they are made available to users".

"This is an issue that we've been waiting to hit the news - there's so much foreign content available through the app store that has not been directly approved by the Chinese government," said Jeremy Goldkorn, director of Danwei, a company that researches Chinese media and internet and is a subsidiary of the Financial Times.

"In the wake of the recent apology, I imagine Apple China employees have been told to be extra careful about anything at all that could get them in trouble in China."

The three books by Wang Lixiong that Mr Hao believes Apple has identified as "illegal content" are all banned in China.

Mr Wang is married to Woeser, a prominent Tibetan poet, and the couple are both well-known political activists who have been subjected to periodic persecution and intimidation by China's state security apparatus.

One of the banned books, entitled Tianzang, is about the future of China's policies in Tibet while another, Yellow Peril, is a political novel about the future collapse of China's government and society.

The third book - My WesternTerritory, Your Eastern Land - is a personal memoir of the author's visit to the troubled territory of Xinjiang and his subsequent detention at the hands of state security officers.

On Thursday, Mr Wang told the FT he had not contacted Apple to enforce his copyright over the books.

"So I believe the decision to take down [the bookstore app] must be because of political reasons [and not because of issues over intellectual property]," Mr Wang said.

Mr Hao said he had never received any complaints over copyright and he was sure Apple had decided to remove his app from the China store because of the content in Mr Wang's books.
Phone calls and written requests to Apple for comment on its decision to remove the app and whether or not other apps had been removed in China went unanswered on Thursday.

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Mobile telecom company sues Apple over messaging
CNET, 04/3 , Donna Tam

A mobile communications company is suing Apple for allegedly infringing on its patents with messaging services on devices like the iPhone and the iPad, patent blog Patently Apple reported today.

To read more, please click on the following link:

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Lexmark's Aussie chief departs
CRN, 04/4 , Allie Coyne

Lexmark A/NZ general manager Carmel Mosser has left the company, CRN sister site iTnews has learned.

Mosser has been the local boss of Lexmark since mid-2011, after a 6-year career at the company that saw her work her way up through Lexmark's channel ranks.

She stepped down late last month after a total of 8 years with the company. Lexmark is currently recruiting a replacement.

It is understood that Mosser left Lexmark to investigate new opportunities but is not expected to begin a new job immediately.

Prior to her career at Lexmark, Mosser held sales and distribution roles at rival printing giant Fuji Xerox.

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VMware taps A/NZ marketing boss
CRN, 04/4

VMware has appointed industry veteran Carly Rogowski as its marketing director for A/NZ, filling the vacancy left by Peter Di Pietrantonio some time ago.

Rogowski has been charged with building and directing marketing strategies to agressively grow VMware's marketshare in A/NZ.

Her role spans marketing for alliances, channel, web, customer relations, operations and communications.

Rogowski brings 20 years experience in the IT and finance industries having lead regional marketing teams for Ernst & Young, IBM, Logica, and Dell.

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Report: BlackBerry Inks Ad Deal With NY’s Barclays Center
Fox Business, 04/4 , Matthew Rocco

BlackBerry inked a two-season marketing deal with the Barclays Center in Brooklyn, N.Y., according to a report by the New York Post.

The report, citing an industry source, said the deal is valued at $1 million to $5 million.
The Barclays Center is home to the NBA's Brooklyn Nets.

BlackBerry, which late last month launched its new Z10 touchscreen smartphone in the U.S., will get prominent ad placement and an "experiential" area where customers can try out the smartphone maker's devices, Mike Zavodsky, the Nets vice president of new corporate marketing, told the Post. BlackBerry will also get a suite-level lounge.

Zavodsky added that BlackBerry ads will be seen from "street to seat."

BlackBerry's ad deal with the Brooklyn arena follows a new marketing push that started with a $4 million Super Bowl commercial, as the Canadian company attempts to regain market share. It also reportedly reached a $12 million deal with Formula 1 racing.

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Xerox upgrades iGen4 with features from the iGen150
Printweek, 04/4 , Barney Cox

Xerox has launched the iGen4 Diamond, an upgrade to the iGen4 cut-sheet colour digital press, which improves uptime and productivity.

The upgrade is based on features first introduced on the iGen150, which was launched at Drupa, excluding the physical increase in printing speed.

"All together these enhancements improve efficiency and I think will be a natural upgrade for all iGen4 users," said Xerox UK product marketing manager Alan Clarke.

Most of the features are upgrades to the software and can be retro-fitted. The one hardware addition is the long sheet high-capacity stacker, which can take 660mm long sheets. To date longer sheets on the iGen4 have had to be delivered to the bypass stacker.

"80% of iGen4 customers take the long sheet option and we expect this to be as popular on the Diamond Edition and as the most requested upgrade from existing users," said Clarke.

Other features include automating image-to-paper set up, eliminating the need for users to check and adjust front-to-back image registration, and automated colour maintenance.

This uses the built in spectrophotometer to monitor colour quality and to automatically correct output or recalibrate if needed based on user-determined intervals, either time or number of sheets printed.

Upgrade price is dependent on the age of the machine and what digital front end the user has. All the new features are supported in the latest version of Xerox's Freeflow and EFI's Fiery controllers.

Xerox stopped selling the Creo DFE at Drupa, and firms using Creo would need to completely replace it with one of the two remaining controllers to take advantage of the new functions.

Kevin Horey, Xerox VP or Production Product Marketing, told PrintWeek the upgrade was being rolled out in the United States and Europe, with an Asia Pacific roll-out yet to be determined.

The US list price is $662,000 and Horey said: "The iGen family really has a full portfolio now with this Diamond edition and the iGen 150, giving us different price points in the marketplace.

"And what this really does is give our current iGen4 customers the ability to add some things that they currently don't have - so there's an asset protection component with this model - while also offering enhancements for new customers."

As for the overall market for new press sales, Horey said: "The sales environment is certainly better than it was in '09 and '10, but again it couldn't have gotten much worse. The leading indicator we see is page volumes - when printers maximize their page volumes, it's time to either get another piece of equipment or upgrade. We've already seen that page volume growth and now that's starting to translate into new equipment."

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Adobe Premiere Pro CS7 revealed
IDG/Computerworld, 04/4 , Neil Bennett

The next version of the video editor brushes up the interface and add Looks effects.

Adobe has given us a sneak peek at the next version of its Premiere Pro video editing software, alongside upgrades to After Effects, Prelude, Audition and SpeedGrade - as well as formally launching its network-based editing system Adobe Anywhere.

The main new creative feature in Premiere Pro CS7 is the ability to apply the Lumetri Looks effects available in the SpeedGrade CS6 colour grading software within Premiere. These work in a similar fashion to Red Giant's Magic Bullet Looks, applying a set of visual styles to footage from Bleach Bypass and Day For Night to Sepia and a variety of black-and-white effects. In Speedgrade they're GPU-accelerated and work in a 32-bit floating bit colour space - and we expect that they will be in Premiere Pro too.

A less creative but equally important - and much requested - feature is a redesigned way to deal with unlinked files that show up as offline media. The new system uses the Media Browser panel to navigate to or search for missing files, and Premiere Pro automatically relinks files it discovers in the same directory as ones you select.

A new FX button on clips in the Timeline shows which clips have effects applied to them. The button appears with different colours to indicate whether it's what Adobe calls 'intrinsic' effects - Motion and Opacity - or other effects, or both.

When pasting effect properties from one clip to another, you will get a dialog to choose what properties to apply

Adobe is making much of editors moving from Final Cut Pro - especially moving from FCP 7 to Premiere Pro rather than to FCP X - and Avid Media Composer and has added some features from those tools at the request of editors making the move. These include pink lines on clips that indicate duplicated frames, where a clip has been used more than once in a project.

Clips cut in two with the Razor tool sitting next to each other on the timeline - known as through edits - can be rejoined by selecting both clips, right-clicking and selecting Join.

A different path

Adobe's business development manager for video Niels Stevens says that the company has been asked by many editors to add support for opening more than one project at once, but says that instead it's chosen to allow editors to import projects (or selected sequences from them) into an open project. He said that this allows for what most editors want from being able to open more than one project at once - copy edits or elements from one to another. Editor can also bringing in nested sequences into a sequence as component parts.

Another feature that Adobe says has been much requested is the new Audio Clip Mixer panel. This shows the audio levels of all tracks in a single line of audio meters, which is designed to make balancing audio faster as it's easy to spot which tracks are louder or quieter than others.

Other new audio features including support for VST3 plug-ins, and new audio effects including a new Multi-band Compressor from Izotope for a quick sound boost and TC Electronics Loudness Radar for checking broadcast compliant of audio levels.

One final new feature is the ability to flatten multi cam sequences when outputting projects (or EDLs) to other applications or servers.

* While Adobe has released updates to tools such as Photoshop, Illustrator and Dreamweaver for free to subscribers to its Creative Cloud service, the company is talking about Premiere Pro's new features in terms of the 'next version' of the software, leading us to believe that this will be Premiere Pro CS7 - so a paid-for upgrade available for non-Cloud members and free to those who are. We've also received information pointing to the next version of AE that was demoed at the same time is After Effects CS7.

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Adobe Anywhere Collaboration Tool Unveiled at NAB
PC Magazine, 04/4 , MICHAEL MUCHMORE

Adobe this week provided a sneak peek at some of its upcoming software, including Adobe Anywhere, a platform that allows collaboration among video editors and other project contributors no matter where they're located.

The technology is on display at the National Association of Broadcasters (NAB) show, but PCMag got an even earlier look at the new applications at an Adobe press event in New York.

The updated apps include the Premiere Pro$348.95 at ivmshop video editor; After Effects, the premier motion graphics effects creator; the Audition sound editor; SpeedGrade, a detailed color correction and enhancement tool; Story, for script writing, development, and collaboration; and Prelude, a media ingesting/organizing application.

But top billing has to go to Adobe Anywhere, which lets editors work locally, but also saves projects to a centralized repository on a company's network server. Other users can stream the full-resolution video using the company's Mercury streaming engine, rather downloading entire project files.

"This is really an exciting thing for us, because as we go out and talk to our customers, we're becoming more aware of the idea that the network is becoming the new platform," said Anywhere's product manager, Michael Coleman.

He noted that workers who create by themselves are not as productive as those who collaborate. "The competitive advantage is all about working in groups," Coleman said. "Collaboration is a really hard thing to do right. We spent two years researching and developing this."

Anywhere's collaboration tools will be built into the interface of the next generation of Adobe Premiere and Prelude-t he platform doesn't have a separate app of its own. "On the one side, we have the enterprise infrastructure-things like your storage system or asset management system. On the other side you have the creative apps," Coleman said.

The idea is that Anywhere ties those together in a very efficient workflow that uses a new file type called a " Production." This dissolves the barriers between various contributors' separate project files. Anywhere can take advantage of a company's LDAP directory and assign rights to various team members for each asset.

Maxon Plays Nice with After Effects

The recently announced strategic alliance between Adobe and Maxon, maker of the Cinema 4D animation software, has yielded its first fruits. A Lite version of Cinema 4D will be included with After Effects, and work created in the former won't require rendering before you can edit it in After Effects. The Lite version of Cinema 4D will be able to import, create, and edit 3D objects in OBJ, FBX, and Alembic 3D file formats. Previously, the rendering and file exchange required could take as long as 10 minutes per frame, so instant importing could be a game changer.

After Effects also gets improved rotoscoping, with a new Refine Edge tool. Adobe's Steve Forde demonstrated this tool in action by transforming a scene with a mountainous background into a flat grassy savannah. A rough fringe of trees made this a tough assignment, but the result was convincing.

Premiere Pro, the main Adobe pro video tool, gets some interface streamlining, such as improved track targeting and simplified linking and locating of source footage. The program will also benefit from the Lumetri Deep Color Engine, which will let editors apply rich color-grading presets.

Adobe's professional color correction application, SpeedGrade, gets a very impressive and useful new tool: the Shot Matcher. This lets a video colorist accurately align the looks of different camera angles and lighting. While Apple's Final Cut Pro X includes a similar tool, Adobe's Patrick Palmer told me that Shot Matcher uses far deeper colorimetry to accomplish the matching, and the results were indeed impressive, with previously unusable footage dovetailing nearly perfectly with another differently lit shot.

Software that eases writing scripts would seem pretty basic, but Adobe's Story does wonders with this crucial early part of the creative process. In addition to offering collaboration through its Web-based interface, it lets writers and directors assign roles to actors and build an ideal shooting schedule. Integration with Premiere Pro and Prelude means Story scripts can be accessed within panels in those apps. Story can also create metadata using speed-to-text technology.

Adobe Prelude, the "ingest and logging" tool, can make the production process a whole lot smoother. It lets someone organizing a production acquire media from most sources and apply custom metadata tags and preview clips with skimmable thumbnails. According to product manager Michael Goshey, it lets producers "put their vision together in rough cuts." It offers a more simplified view than Premiere Pro.

"Instead of people thinking of metadata as two four-letter words, we're trying to make people think of it as something positive," Goshey said. Prelude lets users apply temporal markers, with subclips and comments the most popular, since they're useful later in the production process, indicating what' s going on at that point in the clip. You can even jump to relevant points in the video via the comment list.

Pricing Special

In honor of the NAB show, Adobe is offering Creative Cloud for a reduced monthly price of $29.99, compared with the regular $49.99. You can find out more about the offer at this Adobe Creative Cloud page. For a closer look at the CS6 apps included with Cloud, read PCMag's review of Adobe CS6.

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Google and Frommer's Part Ways
Wall Street Journal, 04/4 , Amir Efrati

Nearly eight months after Google Inc. acquired the Frommer's travel-guide brand, the Internet giant on Thursday said it reversed course and sold the brand to its founder, Arthur Frommer.

Google declined to give a reason for the about-face but said it had been integrating content from Frommer's into its Google+ Local business listings and other Google services. It also said it is licensing certain travel content to Mr. Frommer, though it declined to elaborate.

Terms of the deal weren't disclosed.

"Starting this autumn, we plan to publish some 40 titles, 20 of which will be available digitally and in print, and the other half available only in print," said Mr. Frommer, 83 years old, in an interview on Thursday. "All will contain the judgments and recommendations of some of the best travel writers in the world."

Mr. Frommer, who founded the Frommer's guidebook series in 1957 with the publication of "Europe on $5 a Day," will also operate the Frommer's website, where he has a travel blog and answers questions from readers who visit the site.

Mr. Frommer said that he will be joined by his daughter, Pauline Frommer, who edited a series of guidebooks for John Wiley & Sons Inc., the publishing house that sold Frommer's to Google for $22 million last year.

"My father and I will be co-presidents of Frommer Media, and we hope to fill a niche," said Ms. Frommer in an interview. "We know there is an abundance of travel information out there, but we still believe that expert, curated information written by passionate journalists who know their destinations inside and out has a place and a value." Ms. Frommer, like her father, declined to discuss Google.

Sales of travel guide books have been hammered in recent years amid the rise of websites such as TripAdvisor Inc., Yelp Inc., Expedia, and Wikitravel.org that provide user-generated reviews or Wikipedia-style entries on hotels, restaurants, monuments and other travel venues across the globe.

In March, British Broadcasting Corp. said it would sell its Lonely Planet travel guides to NC2Media, a Franklin, Tenn., media business controlled by wealthy businessman Brad Kelley for 60% less than its total purchase price.

Mr. Frommer, however, said that he believes there is still a significant market for travel guides, print and digital, that have been written by knowledgeable writers. "There are many millions who believe in relying on the judgment of experts and who enjoy the books and carry them with them."

When Google purchased Frommer's, Bernardo Hernandez, a Google director of product management, said Frommer's would help give Google's users "fresh, accurate information" when they search for information about specific places or business and would help them make travel plans and bookings.

The comments strongly implied Google was hoping to attract more online-advertising dollars tied to online-travel bookings. Some research firms say U.S.-based travelers spend more than $100 billion to book trips online. A small fraction of that comes from Google's own flight-booking service, which launched in 2011.

Sites such as Expedia Inc. and Priceline Inc. already are among the top advertisers on Google's search engine, according to research firms.

At the time of the deal, Google said the Frommer's brand would be integrated with the Zagat brand, which Google had acquired in 2011 in order to beef up the information it posts about restaurants and other businesses when people use its search engine for local searches.

After the acquisition, Frommer's continued publishing some guides during the fall.

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Google unloads Frommer's guides after less than a year
Reuters, 04/4 , Edwin Chan

Google Inc has sold the Frommers' line of travel-guidebooks, acquired just eight months ago from John Wiley & Sons Inc to strengthen its trove of local content and reviews, to founder Arthur Frommer.

Google had intended to use the popular brand to beef up its own local content, listings and reviews, executives said at the time. To that end, it has spent the past few months integrating Frommer's travel content into Google+, its social network, and other services, a company spokesperson said.

The Internet search leader will also license "certain travel content" to Frommer's founder, the spokesperson added without elaborating. No financial terms were disclosed.

With the return to its founder, Frommer's has come full-circle after a 55-year journey that began in the early years of commercial air travel.

In 1957, Arthur Frommer, a former U.S. soldier, released his European sightseeing book, entitled "Europe on 5 Dollars a Day", after fellow GIs snatched up a similar guide that Frommer had distributed while he was stationed in Germany.

Written in a breezy style and appealing to the budget-conscious, the slim book encouraged Americans across a broader economic spectrum to venture overseas in the flush postwar era.

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Google Fights U.S. National Security Probe Data Demand
Bloomberg, 04/4 , Karen Gullo

Google Inc, operator of the world's largest search engine, is challenging a demand by the U.S. government for private user information in a national security probe, according to a court filing.

It "appears" to be the first time a major communications company is pushing back after getting a so-called National Security Letter, said the Electronic Frontier Foundation, an Internet privacy group. The challenge comes three weeks after a federal judge in San Francisco ruled that NSLs, which are issued without a warrant, are unconstitutional.

"The people who are in the best position to challenge the practice are people like Google," said EFF attorney Matt Zimmerman, who represented an unidentified service provider that won the March 14 ruling. "So far no one has really stood up for their users" among large Internet service providers.

The government has issued 300,000 NSLs since 2000, and only four or five recipients have challenged the letters, Zimmerman said. Civil-rights groups say NSLs give federal agents unchecked powers to spy on people while the government says they're a crucial tool in the fight against terrorism and threats to national security.

Google, in its first public disclosure about national security letters, said in a March 5 report that it received in the range of zero to 999 NSLs annually starting in 2009 affecting more than 1,000 accounts. In a company blog post, Richard Salgado, Google's legal director for law enforcement and information security, thanked U.S. government officials " for working with us to provide greater insight into the use of NSLs."
'Legal Process'

Google filed a petition to set aside a "legal process" pursuant "to 18 U.S.C. Section 3511 (a) and (b)," according to a March 29 filing in federal court in San Francisco seeking a court order to seal its request. Petitions "filed under Section 3511 of Title 18 to set aside legal process issued under Section 2709 of Title 18 must be filed under seal because Section 2709 prohibits disclosure of the legal process," Kevan Fornasero, Google's lawyer, said in the filing.

The petition itself was lodged under seal with the court. No details of the government's demand for records were disclosed in the filing.

Section 2709 is a federal law authorizing the Federal Bureau of Investigation to issue NSLs requiring wire and electronic communication service providers to turn over subscriber information and other records that the agency certifies are relevant to an investigation of international terrorism or clandestine intelligence activities. The law prohibits NSL recipients from disclosing they've received one.
'Unreasonable, Oppressive'

Section 3511 (a) allows recipients of NSLs to petition a federal judge to set aside the request and allows judges to modify or set aside the request if complying with it would be " unreasonable, oppressive or otherwise unlawful." Section 3511 (b) allows NSL recipients to ask a court to lift the gag order.

U.S. District Judge Susan Illston yesterday granted Google's request to seal documents in the case. Illston ruled March 14 that the gag order section of the NSL law was unconstitutional and rendered the entire statute illegal.

Illston said the NSL statutes violated free speech and separation of power principles because the government failed to show that, to protect national security, it needs to always bar people from disclosing the mere fact they've received an NSL and the law impermissibly restricted courts from reviewing the need for nondisclosure.

She ordered the FBI to stop issuing NSLs and put her ruling on hold for 90 days to allow the government time to appeal.

"We are in this interesting in-between moment in which the government is still able to enforce its authority," said Marc Rotenberg, president and executive director of the Washington- based Electronic Privacy Information Center. "I suspect that this filing is an effort to push the issue further."

Chris Gaither, a spokesman for Mountain View, California- based Google, declined to comment on the filing. Chris Allen, an FBI spokesman in Washington, also declined to comment.

The case is In Re Google Inc.'s Petition to Set Aside Legal Process, 13-80063, U.S. District Court, Northern District of California (San Francisco).

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Google challenges US government's private data demand in court
The Verge, 04/5 , Sam Byford

Google is fighting back against National Security Letter, the secretive, controversial form of datarequest for data from the US government that bypasses the court process and comes with a gag order. The company has filed papers in a case called In Re Google Inc. Petition to set aside Legal Process; while the documents are sealed, Bloomberg reported on the nature of the filing. No details are currently available on the request itself, but the move is significant - Google would be the most prominent company yet to challenge an NSL.

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Google Ramps Up Its Amazon Cloud Rival
Wired, 04/4 , Cade Matz

Anyone can now use the Google Compute Engine - the web giant'/ s answer to Amazon's seminal EC2 cloud computing service. Well, anyone who's willing to pay Google $400 a month for customer support.

On Thursday, the company announced that you too can now use Google Compute Engine if you sign up for "Gold Support" program, which provides twenty-four-hour-seven-day-a-week access to Google support engineers for prices beginning at $400 a month. Previously, the service was only available to certain beta testers. "You no longer need an invitation or a conversation with sales to get access," the company said in a blog post.

Uncloaked last summer, Google Compute Engine is an online service that provides instant access to virtual machines where you can run just about an software you like, including, say, your entire website. It's a lot like Amazon's Elastic Compute Cloud, or EC2, service, which first brought the cloud computing idea to the mainstream and is now widely used by startups and developers and so many others. According to one study, Amazon's cloud services now run as much as one percent of the internet.

Google, you see, wants a piece of what has become a very large pie.

For years, Google has a offered a service known as the Google App Engine, and this too was a place where you could build and host software applications without setting up you own physical machines. But it only ran certain programming languages and certain types of software in certain ways. The idea was to make life easier for developers - to hide some of the hassle that comes with juggling raw virtual machines as you do on Amazon EC2 - but as Amazon showed, many developers want more freedom to run what they want.

Thus, Google is now offering Compute Engine as well. And the early reviews are good. Though this particular service is new, it runs atop the same infrastructure that underpins Google's entire web empire - an infrastructure that most of the industry views as state of the art.

According to recent tests by a company called Scalr - an outfit that helps businesses manage their use of Amazon EC2 and other cloud services - virtual servers boot 4 to 10 times faster on Google Compute Engine than on EC2, and in some cases, the company says, you can move data onto Google as much as 20 times faster.

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Look out, Amazon: Google opens Compute Engine to more devs & lowers prices
VentureBeat, 04/4 , Sean Ludwig

Google has opened up cloud infrastructure service Compute Engine to more customers while also lowering prices and adding several new features, the company said today in a blog post.

Amazon currently holds the title for largest infrastructure-as-a-service provider with Amazon Web Services, with Rackspace firmly in second place. But Google has a lot of cash and a lot of servers, both of which could help it force its way into the infrastructure-as-a-service sector - much like Microsoft is doing with Azure.

Google announced Compute Engine back in June, but it has limited its widespread availability so far. Today's announcement makes it so any developer who buys Google's $400 per month gold support package will now have access to it.

The search giant also lowered all Compute Engine pricing by 4 percent. In the United States, pricing starts at $0.132 per hour for its smallest virtual machine and tops out at $1.221 per hour its most powerful high-memory virtual machine. (Prices in Europe are a bit higher.)

Google says that it has also added the following features to Compute Engine:

• The option to boot from persistent disks mounted as the root file system, persistent disk snapshots, the capability to checkpoint and restore the contents of network resident persistent disks on demand, and the capability to attach and detach persistent disks from running instances.

• An improved administration console, the Google Cloud Console (preview), which allows you to administer all your Google Cloud Platform services via a unified interface.

• Five new instance type families (diskless versions of our standard instance types, plus diskful and diskless versions of high-memory and high-CPU configurations), with 16 new instance types.

• Two new supported zones in Europe, which provide lower latency and higher performance for our European customers. We'v e also made it easy to migrate virtual machine instances from one zone to another via an enhancement to our gcutil command line tool.

• An enhanced metadata server, with the ability to support recursive queries, blocking gets and selectable response formats, along with support for updating virtual machine tags and metadata on running instances (which enables dynamic reconfiguration scenarios).

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Samsung Primed for Record Profit as S4 Phone Sales Set to Start
Bloomberg, 04/5 , Jungah Lee

Even without Christmas or the benefit of a new hit device, Samsung Electronics Co. posted near-record earnings in the first quarter. Profit is set to surge when the Galaxy S4 smartphone goes on sale this month.

The mobile-phone business again was the company's biggest earnings driver, with sales of cheaper handsets in emerging markets supplementing growth by high-end Galaxy models. Operating profit rose to about 8.7 trillion won ($7.7 billion) in the three months ended March 31 from 5.69 trillion won a year earlier, Asia's biggest technology company said today.

"Second-quarter profit looks even better than the first, as the Galaxy S4 will have a great impact," said Chung Chang Won, a Seoul-based analyst at Nomura Holdings Inc. "Samsung's shipments of its flagship smartphone will outpace that of the iPhone sometime in the second or third quarter."

Operating profit for the quarter ended March 31 almost matched the record 8.84 billion won for the preceding quarter that included the year-end holiday season. Analysts estimate the current quarter could reach 9.3 trillion won as Samsung releases the S4 in the U.S. on April 26 and tries to reclaim the top spot in sales from Apple Inc.

Samsung, which is scheduled to release audited earnings results later this month, fell 0.7 percent to 1,505,000 won in Seoul trading today, compared with a 1.6 percent decline for South Korea's benchmark Kospi index. The shares have declined 1.1 percent this year, compared with a 20 percent drop for Apple.
China, India

The first-quarter profit exceeded the 8.38 trillion-won average of 39 analyst estimates compiled by Bloomberg before the announcement. Sales rose to about 52 trillion won from 45.27 trillion won a year earlier, Samsung said.

Samsung's mobile division, which accounted for 67 percent of total operating profit last year, probably had a first- quarter operating profit of 6.25 trillion won as sales increased 40 percent, according to a Bloomberg News survey of five analysts before today's announcement. The company didn't provide net income figures or results for individual businesses.

"In addition to the Galaxy S3, mini models sold well in emerging markets, including China, Brazil and India," Lee Sei Cheol, a Seoul-based analyst at Meritz Securities, said by phone before the earnings release. "Samsung's continued ascent in the smartphone industry seems to be unparalleled."
Apple's Lead

Samsung plans to release three high-end smartphones this year, including the S4, a new Galaxy Note and a device using the Intel Corp. -backed Tizen operating system. The handset market grew almost 12 percent last year to $358 billion in sales, according to IDC.

The South Korean company unveiled the S4, featuring a bigger screen and improved software functions, on March 14 in New York as it chases Apple in U.S. sales. The new phone, featuring a 5-inch screen, 13-megapixel camera and motion- detecting technology so users can control features with face movements, will be available globally by early May, Samsung said last month.

Cupertino, California-based Apple extended its lead over Samsung in U.S. smartphone subscriptions in the three months ended in February, research company Comscore said in a statement yesterday.

Apple's average share of smartphone subscribers in the country rose to 38.9 percent, from 35 percent in the three months ended Nov. 30, the research company said. Samsung's share rose to 21.3 percent from 20.3 percent.
Samsung 'Unstoppable'

Samsung's first-quarter smartphone shipments probably increased 11 percent from the preceding quarter, said Song Myung Sup, a Seoul-based analyst at HI Investment & Securities. With the S4 and the new Note scheduled for release this year, the company's mobile division won't reach its peak until the third quarter at the earliest, when Apple is expected to introduce a new iPhone, Song said.

"Samsung's mobile division seems unstoppable, even during the typically slower first quarter," Song said. "I expect Samsung's second-quarter profit to be about 10.3 trillion won."

The company's shipments of flagship models, including the S4, may total 37.8 million units in the second quarter, Lee Seung Woo, an analyst at IBK Securities, said in a March 26 report. The average selling price may rise 17 percent, bringing operating profit at the mobile business to about 7.9 trillion won, according to Lee.
Surging Displays

Samsung's total smartphone shipments may grow to 82 million units in the second quarter from 68.5 million in the first quarter, he said in the report.

Apple sold 47.8 million units in the quarter ended Dec. 31, it said in January.

In addition to its mobile division, Samsung probably boosted first-quarter operating profit in all segments including displays, chips and consumer electronics, according to the analysts surveyed by Bloomberg News.

Earnings at Samsung's display unit, which dominates the market for panels using organic light-emitting diodes, or OLEDs, probably surged to 910 billion won from 230 billion won a year earlier, according to the analyst survey. The displays are used in Galaxy models.

Profit probably rose to 1 trillion won at the chip business from 700 billion won a year earlier, and to 500 billion won at the consumer electronics business, including TVs and home appliances, from 460 billion won a year earlier, according to the survey.
Sharp Investment

Samsung is counting on OLED displays, which offer brighter and sharper images than current liquid-crystal-display models, to extend its market lead in TVs. Samsung said Feb. 19 it will start selling OLED TVs in the first half of this year.

The company's share of global flat-panel TV revenues rose 6 percent in 2012 from a year earlier, NPD DisplaySearch said in a March 21 report. Samsung had 27.7 percent market share by revenue, ahead of LG Electronics Inc.'s 15 percent, according to the Santa Clara, California-based research company.

Samsung invested 10.4 billion yen ($108 million) in struggling Japanese electronics maker Sharp Corp. (6753) last month to secure LCDs for smartphones and TVs.

Samsung's executive vice president for its mobile business, Lee Young Hee, said in an interview last month the company is developing a wristwatch that may perform similar tasks as a smartphone. She had no comment on when the watch would go on sale.

Following is a table showing median operating-profit estimates for the four main business divisions of Samsung. The estimates are in billions of won.

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Samsung Electronics first-quarter profit guidance beats street view
Reuters, 04/4

Samsung Electronics, the iPhone's main adversary, estimated its January-March operating profit rose 53 percent to 8.7 trillion won ($7.7 billion) as sales of mid-tier smartphones helped the South Korean giant tide over the off-peak season.

The guidance, released ahead of full quarterly results by April 26, was better than an average forecast for 8.3 trillion won in a poll of 42 analysts by Thomson Reuters I/B/E/S.

That marks the end of five straight quarters of record profits for the world's biggest technology firm by revenue. But analysts say earnings will hit a new high in the current quarter as Samsung's Galaxy S IV smartphone hits the market this month.

The Galaxy S and Note series have fuelled Samsung's record-breaking earnings growth and made it the No.2 player in the global premium smartphone segment after Apple Inc. But as the high-end market swarms with new offerings, Samsung is turning to less affluent customers in emerging markets, offering cheaper models such as the Rex and Galaxy Pop, analysts said.

Samsung capitalised on its 30-plus smartphone models that cover nearly all price points to boost shipments to a record in the first quarter while the post-year end holiday season sapped sales at chief rival Apple, according to the analysts.

Samsung, valued at around $220 billion, estimated its first-quarter sales at 52.0 trillion won, versus a market forecast for 53.0 trillion won.

The South Korean firm likely sold 68-70 million smartphones, up from 63 million in the December quarter, according to five analysts.

By comparison, Apple's iPhone shipments likely slumped some 30 percent to the 30 million range from 47.8 million in the previous quarter, they said.

Shares in Samsung, worth around $220 billion, fell 3 percent over the past three months, beating a 2 percent drop in the wider market. Apple lost 19 percent in the same period.

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Facebook Software Puts It Front and Center on Android Phones
New York Times (blog), 04/4 , Somini Sengupta

Cellphones have long been Facebook's Achilles' heel. With its users flocking to mobile phones by the millions - and many of its newest users never accessing the services on computers at all - the company has struggled to catch up to them.

On Thursday, Facebook unveiled its latest, most ambitious effort to crack the challenge: a package of mobile software called Facebook Home that is designed to draw more users and nudge them to be more active on the social network.

The new suite of applications effectively turns the Facebook news feed into the screen saver of a smartphone, updating it constantly and seamlessly with Facebook posts and messages.

In so doing, Facebook has cleverly, perhaps also dangerously, exploited technology owned by one of its leading rivals, Google. Facebook Home works on Google's Android operating system, which has become the most popular underlying software for smartphones in the world.

The Facebook News Feed appears as soon as the phone is turned on. Pictures take up most of the real estate, with each news feed entry scrolling by like a slide show. Messages and notifications pop up on the home page. To "like" something requires no more than two taps. Facebook apps are within easy reach, making the phone essentially synonymous with the Facebook ecosystem.

"Today, our phones are designed around apps, not people," said Mark Zuckerberg, Facebook's chief executive, said at a news conference here at the company's headquarters. "We want to flip that around."

Facebook Home will be available for download from Google's app store, Play, on April 12 for four popular, moderately priced phones that use Android and are made by HTC and Samsung. A fifth one, a new model called the HTC First, will be sold by AT&T for $100 with the software already loaded.

For the time being, Facebook will not show ads on the phone's home screen, which Facebook is calling Cover Feed. Since advertising revenue is crucial to the company's finances, however, it will almost certainly display ads there in the future.

Facebook Home is also clearly designed to get Facebook users to return to their news feeds even more frequently than they do now. Every time they glance at their phone at the supermarket checkout line or on the bus to work, they will, in essence, be looking at their Facebook page.

"It's going to convert idle moments to Facebook moments," said Chris Silva, a mobile industry analyst with the Altimeter Group. "I'm 'liking' things, I'm messaging people, and when ads roll out, I'm interacting with them and letting Facebook monetize me as a user."

Krishna Subramanian, the chief marketing officer at Velti, a San Francisco-based company that buys targeted advertisements online on behalf of brands, pointed out that even without showing ads on the mobile cover feed, Facebook Home could prove to be a lucrative tool.

By nudging its users to do more on the social network, he said, the company will inevitably get "an explosion of mobile data that can be tied back into desktop advertising" to Facebook users.

A majority of Facebook's one billion-plus users log in on their cellphones. Most Americans now have an Internet-enabled phone, and smartphone penetration is growing especially fast in emerging market countries, where Facebook has substantial blocs of its users.

At Thursday's press event, Mr. Zuckerberg repeatedly signaled that he wanted the new product to enable a mass, global audience to connect to Facebook, especially those have yet to get on the Internet. "We want to build something that's accessible to everyone," he said.

Although HTC is rolling out the first new phone with Facebook Home installed, and AT&T has agreed to sell it, other phone makers and carriers may be reluctant to load the software.

Jan Dawson, a telecom analyst at Ovum, said that Apple's iPhone and many Android smartphones already do a good job of integrating the Facebook application into their phones. And he said phone carriers were unlikely to give a Facebook phone made by HTC much support because the Taiwanese phone maker's past attempt at a Facebook phone - the ChaCha, which had a physical button for posting photos on Facebook - sold poorly.

"HTC may be desperate enough to do this, but carriers aren't likely to promote it heavily," Mr. Dawson said. "As a gimmick, it may bring customers into stores, but they'll mostly end up buying something else."

At Facebook headquarters Thursday, HTC's chief executive, Peter Chou, showed off a model of his new Facebook phone, called HTC First, in lipstick red. "HTC First is the ultimate social phone," he said. "It combines the new Facebook Home and great HTC design."

Whether consumers will embrace a phone that emphasizes Facebook over everything else also remains to be seen. Some are likely to have concerns about how much personal information they are being asked to share with Facebook. Additionally, checking Facebook dozens of times every day could result in hefty data use charges, unless users are connected to a Wi-Fi network or negotiate special packages with carriers.

Facebook and AT&T executives said they had taken that into account. Users will be notified when they are about to reach their data limits. The software can also be set to download data-heavy content like video only when the user is connected to a Wi-Fi network, and then save it in its memory.

The software's most powerful feature is to turn the cellphone into a starkly personal gadget.

Facebook employees, current and past, were invited to the product announcement, a sign of how crucial it has been for Facebook to crack the mobile puzzle. Silicon Valley has whispered for months about the prospects of a Facebook phone. Mr. Zuckerberg has consistently denied building one.

Thursday's announcement signaled that Facebook had stopped short of even building an operating system. Instead, it had simply altered its rival Google's technology.

The Android platform, Mr. Zuckerberg said, was built to be open to new integrations. Asked at the news conference whether he feared that Google executives would change their mind about Facebook using it to advance its mobile aims, he turned somewhat testy.

"Anything can change in the future," he said. "We think Google takes its commitment to openness very seriously."

Google, for its part, was notably genteel. "This latest collaboration demonstrates the openness and flexibility that has made Android so popular," the company said in an e-mailed statement. "And it's a win for users who want a customized Facebook experience from Google Play - the heart of the Android ecosystem - along with their favorite Google services like Gmail, Search and Google Maps."

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Facebook Shows Off New 'Home' for Android
Wall Street Journal, 04/4 , Evelyn Rusli

Facebook Inc. is trying to rebuild the mobile experience- around itself.

The Silicon Valley company on Thursday unveiled new software for devices running Google Inc.'s Android operating system, called "Home," that gives the social networking company's content top placement on smartphones.

Instead of displaying a phone's traditional menu of apps, Home takes over a handset's cover screen-the first layer or images that appear when a phone is turned on-populating it with posts from a user's news feed, photos and messages from friends.

Home will come preinstalled on a new smartphone from HTC Corp. and will be available April 12 to download from Google's app store for use on other new Android phones. It represents Facebook's boldest move yet to take a more central role in the mobile-device world-a play that should also help it sell more ads on smartphones.

"You're going to be able to turn your Android phone into a great social phone," said Mark Zuckerberg, Facebook's chief executive, during a briefing at the company's campus here. "It becomes the home of your phone."

The software acts less like a single app than a collection of them stitched into the top layer of Android. Mr. Zuckerberg called it "a whole lot deeper than any other app."

Upon turning on a smartphone, a user will see images from Facebook updates cover the entire screen, while pertinent text and icons of friends float on the top. Simple gestures prompt interactions with Facebook, such as a double tap to "like" a photo, or a swipe to move to the next post.

Home also features a tool called "Chat Heads." It pops up small icons of friends when they send a Facebook or text message, which can be viewed when using another app. These also can be easily dragged, moved or pushed off the screen by the user, Facebook said.

The Home application also comes with a launcher, or a menu populated with a users' favorite apps and basic Android apps. Key Facebook tools, such as photos, status updates and check-ins, are also embedded at the top of the launcher as buttons.

By taking center stage with Home, Facebook is trying to become the default application for users who need to complete basic tasks, such as sharing photos or sending messages to friends.

Based on Facebook's data, the average mobile user interacts with the social network about a dozen times a day-but users check their phones' cover screens about a hundred times or more over the course of a day. The more minutes a user spends digesting and sharing content on Facebook, the more opportunities the company has to push ads to that user.

The company said it is planning to eventually display ads in the so-called "cover feed," but it is still working on that strategy.

Facebook's announcement, which was widely expected, is the latest outgrowth of its yearslong effort to move its franchise from the Web to mobile devices. While the company had explored issues related to hardware design, people close to the company have said, Mr. Zuckerberg reiterated Thursday that developing smartphones would limit Facebook compared with working with a broad number of hardware partners.

Creating an actual Facebook-branded phone, he said, might net the company 10 or 20 million users, an insufficient amount for a social network of more than one billion.

The device shown at the event, the HTC First, comes preloaded with Home and was described as offering a deeper integration with Facebook's software. It will be available on April 12 for purchase from AT&T Inc., priced at $99.99.

Facebook said Home also works on the HTC One X, HTC One X+ and forthcoming HTC One, as well as Samsung Electronics Co.'s Galaxy S III, Galaxy Note II, and forthcoming Galaxy S4. It flashed a slide at the event of additional handset makers and other partners that included Sony Corp., Qualcomm Inc., Huawei Technologies Inc. and Lenovo Group Ltd.

Mobile advertising has become a key growth driver for Facebook, which has more than 650 million mobile users. In the fourth quarter, mobile ad sales roughly doubled from the prior quarter to $305 million, making up about 23% of the company's advertising sales. But Google has a big lead; while Facebook is expected to make nearly $1 billion on U.S. mobile ad sales this year, according to the research firm eMarketer, Google is on track to make four times that.

According to analysts, Home may certainly push users to spend more time on the service. But it could also backfire.

Colin Sebastian, an analyst at Robert W. Baird & Co., said the application should gain considerable traction among Facebook's most ardent fans, but is less certain if casual users will find the experience compelling-especially if Facebook pumps too many ads on main screen. "They'll have to do a lot more experimentation and tread carefully," Mr. Sebastian said.

Others also wondered if users will feel comfortable sharing so much of their data, more messages, more photos, and more location-based information, with the social networking juggernaut. "Users don't want more advertising or tracking, and Facebook wants to do more of both,"said Jan Dawson, an analyst at Ovum.

Throughout the presentation, Mr. Zuckerberg frequently described Home as one that was "designed around people first," instead of tasks or applications.

The 28-year-old executive, who noted that he grew up with the Internet, said Facebook's Home was an acknowledgment that people's relationship with computing devices was rapidly changing from one focused on productivity or business to one centered around human connections. Home, he said, puts "people first, and then apps."

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