Tomorrow's Newspapers Online 10-03-2013 | Po

While Microsoft Chief Executive Steve Ballmer has been under pressure for years to improve the company's performance and share price, this appears to be the first time that major shareholders are taking aim at Gates, who remains one of the most respected and influential figures in technology.

A representative for Microsoft declined to comment on Tuesday.

There is no indication that Microsoft's board would heed the wishes of the three investors, who collectively hold more than 5 percent of the company's stock, according to the sources. They requested the identity of the investors be kept anonymous because the discussions were private.

Gates owns about 4.5 percent of the $277 billion company and is its largest individual shareholder.

The three investors are concerned that Gates' role as chairman effectively blocks the adoption of new strategies and would limit the power of a new chief executive to make substantial changes. In particular, they point to Gates' role on the special committee searching for Ballmer's successor.

They are also worried that Gates - who spends most of his time on his philanthropic foundation - wields power out of proportion to his declining shareholding.

Gates, who owned 49 percent of Microsoft before it went public in 1986, sells about 80 million Microsoft shares a year under a pre-set plan, which if continued would leave him with no financial stake in the company by 2018.

He lowered his profile at Microsoft after he handed the CEO role to Ballmer in 2000, giving up his day-to-day work there in 2008 to focus on the $38 billion Bill & Melinda Gates Foundation.

In August, Ballmer said he would retire within 12 months, amid pressure from activist fund manager ValueAct Capital Management.

Microsoft is now looking for a new CEO, though its board has said Ballmer's strategy will go forward. He has focused on making devices, such as the Surface tablet and Xbox gaming console, and turning key software into services provided over the Internet. Some investors say that a new chief should not be bound by that strategy.

News that some investors were pushing for Gates' ouster as chairman provoked mixed reactions from other shareholders.

The Federal Bureau of Investigation said Wednesday it arrested Silk Road owner, Ross William Ulbricht, 29, known online as "Dread Pirate Roberts," in San Francisco on Tuesday, according to court filings.

Ulbricht, who holds an advanced degree in chemical engineering, appeared in federal court on Wednesday and a bail hearing was set for Friday.

His lawyer Brandon LeBlanc, a public defender, declined to comment.

Federal prosecutors in New York charged Ulbricht with one count each of narcotics trafficking conspiracy, computer hacking conspiracy and money laundering conspiracy, the filing said.

"Silk Road has emerged as the most sophisticated and extensive criminal marketplace on the Internet today," FBI agent Christopher Tarbell said in the criminal complaint.

The site was used by "several thousand drug dealers" to sell "hundreds of kilograms of illegal drugs," he said.

The site, which has operated since early 2011, also offered tutorials on hacking ATM machines, contact lists for black market connections and counterfeiters, and guns and hit men for sale, according to the charges.

More than 900,000 registered users of the site bought and sold drugs using the digital currency Bitcoin. In recent media reports about the growing popularity of Bitcoin, the Silk Road website has emerged as part of a darker side to the use of digital currencies.

Through the site, according to the charges, users could buy drugs and have them shipped to an address. Investigators, posing as regular users on Silk Road, made more than 100 purchases of drugs, which were shipped to the New York area.

"DREAD PIRATE ROBERTS"

According to the complaint, Ulbricht, who shortened his alias from Dread Pirate Roberts to DPR when posting on Silk Road's forums, operated the site from San Francisco.

At times, he used computers at Internet cafes to access the servers running the website, which employed several technological tools to mask the location of its servers and the identities of its administrators and users.

The complaint described other aspects of Ulbricht's online presence: In a Google+ profile, he described himself as a fan of libertarian economic philosophy and posted videos from the Ludwig von Mises Institute, an Auburn, Alabama-based economics institute.

The US manufacturer had been the last to support the operating system other than its creator, Microsoft.

Dell said the software had failed to "resonate" with its customers because it did not support legacy software available to the full Windows 8 OS.

The firm is in the process of being taken over by a group led by its founder, Michael Dell.

He plans to stop its shares being publicly traded and refocus Dell's operations on business-targeted software and services rather than consumer-focused hardware.

However, the company said it would continue to sell devices in order to provide its customers with an "end-to-end solution".

"We're not going to put all our eggs into different baskets - what we have to do is focus on our strengths," Adam Griffin, Dell's global product manager for commercial tablets, told the BBC.

"We've focused our attention on the Windows 8.1 operating system because that's where the majority of the applications are [in the] segment that we're after, which is the commercial consumer environment.

"RT, even by Microsoft's admission, is a little bit limited in terms of the amount of applications you can get."

Mr Griffin added that there had been resistance from corporate IT departments to the idea of supporting what was effectively another operating system on top of the various releases of the main Windows OS. Missing programs

Windows RT was launched just under a year ago. It is designed for machines powered by ARM-based processors rather than the x86 chip architecture used by Intel and AMD.

ARM's designs tend to deliver longer battery life at a cheaper price, but its chips need Windows programs to be recompiled to be able to run them.

New software can only be added to Windows RT devices via Microsoft's own online store or via special enterprise software made available to companies.

That has meant there has been no way to install high-profile programs such as the iTunes media library, the Chrome and Firefox browsers, and the fully equipped version of Photoshop.

Samsung, Lenovo, Acer and Asus were among the other companies to initially back the platform but later switch efforts elsewhere.

Dell continues to offer the XPS 10 tablet - which uses Windows RT - in some markets, but said it would only do so until its factories had used up all the relevant components.

'Fizzled out'

That leaves Microsoft as the only manufacturer to have released a Windows RT device in recent months.

A visitor could check in at a hotel without having to line-up at a front desk by simply signing in via the Facebook application on a smartphone, Cisco said.

The company also demonstrated how it might work at a hospital as Chief Executive Officer John Chambers gave a speech at the Interop technology conference in New York.

Chambers said retailers could deliver tailored promotions or information to consumers who check in through Facebook when they arrive at a store.

Cisco said some customers of its Connected Mobile Experience Wi-Fi technology are currently testing the system.

While Cisco is looking to sell network equipment, Facebook appears to be following arch-rival Google Inc in collecting data on the shopping and Web browsing habits of customers so it can offer targeted ads.

Earlier this year, Google announced plans to bring free wireless Internet access to 7,000 Starbucks Corp cafes across the United States.

A person familiar with the matter told Reuters that private equity group Cerberus Capital Management LP was considering an offer for BlackBerry, which put itself on the block in August after bleeding market share to other smartphone makers.

The Wall Street Journal earlier named Cerberus as one of two firms that specialize in distressed investing that might be looking at BlackBerry. It did not name the second firm.

The Journal quoted one of its sources as saying that Cerberus aims to sign a confidentiality agreement with BlackBerry that would give it access to private financial information, but that it might in the end not bid.

Cerberus declined to comment.

BlackBerry shares were up about 1 percent, reversing a 5 percent fall earlier in the session.

The stock, at about $8 by mid afternoon, remained well below a tentative $9 a share offer from a consortium led by Toronto insurer Fairfax Financial Holdings Inc, which wants to take the smartphone maker private.

BlackBerry, which increasingly competes unsuccessfully with Apple Inc's iPhones and devices running Google Inc's Android operating system, accepted the tentative $4.7 billion Fairfax offer last month.

Fairfax and BlackBerry declined to comment.

"We do not intend to disclose further developments with the respect to the process until we approve a specific transaction or otherwise conclude the review of strategic alternatives," a BlackBerry spokesman said.

Waterloo, Ontario-based BlackBerry, previously known as Research In Motion, was founded by Mike Lazaridis, whose little wireless devices offered the first easy way for lawyers, executives and politicians to access email away from the office.

Lazaridis left the company last year but remains a major shareholder. The Journal said he is also assessing whether to bid. Lazaridis could not be immediately reached for comment.

In the latest in a string of underwhelming results, BlackBerry last week reported a wide loss and slumping sales. It will cut 40 percent of its workforce to halve operating expenses.

When BlackBerry reported these results, it said it would update its 2013 outlook in a regulatory filing, and the likely $400 million in expected charges formed part of the latest filing, released late on Tuesday.

Vast areas of collapsed ground in a region of the planet called Arabia Terra are their likely remains, believe Joe Michalski and Jacob Bleacher.

The two scientists report their findings in this week's Nature journal.

They say such supervolcanoes would have had a profound impact on the early evolution of Mars.

Their gases would have influenced the make-up of the atmosphere and perturbed the climate. And the ashfall would have covered the landscape across great swathes of the planet. It is quite likely some of the deposits the rovers are now encountering on Mars have their origin in colossal blasts.

"Scientists know the planet must have been more active in its deep past, in its first billion years. But we've always struggled to find evidence for these early volcanoes. The supervolcanoes we report in Nature may solve this puzzle," said Dr Michalski, who is affiliated to the Natural History Museum in London, and the Planetary Science Institute in Tucson, Arizona.

Supervolcano is an informal term to describe an immense eruptive event that expels in excess of a 1,000 cu km of rock and ash.

Earth has experienced this type of cataclysm numerous times, although not for many thousands of years. The US Yellowstone National Park, for example, sits on top of a past supervolcano.

But these behemoths are not so straightforward to identify. Unlike, familiar volcanoes - such as Etna or St Helens on Earth, or indeed Olympus Mons on Mars - supervolcanoes do not build mountains out of layers of lava. Rather, their great scale means that, when they erupt, the whole landscape lets go with multiple vents and fissures. And after the eruption, the ground will fall back into the void left by all the ejected material, producing a large bowl or caldera.

Michalski and Bleacher, from Nasa's Goddard Space Flight Center, have identified a number of potential supervolcanoes in an area of Mars's northern hemisphere known as Arabia Terra. It is assumed to be one of the oldest terrains on the planet.

Loeb's roughly $13 billion fund, now Sotheby's largest shareholder, with a 9.3 percent stake, said it would seek to replace current CEO William Ruprecht once Loeb gains a seat on the company's board, according to a letter disclosed in a regulatory filing Wednesday.

"We are troubled by the company's chronically weak operating margins and deteriorating competitive position relative to Christie's, as evidenced by each of the contemporary and modern art evening sales over the last several years," Third Point said in the letter.

"We have concluded that Sotheby's malaise is a result of a lack of leadership and strategic vision at its highest levels."

Loeb called for the positions of CEO and chairman to be separated upon the departure of Ruprecht, who holds both positions.

Third Point had raised its stake in Sotheby's from the 5.7 percent it owned as of August 15.

In a written statement Sotheby's said it is making ongoing efforts to improve the company's balance sheet, deliver shareholder value and improve the cost of capital, including a "comprehensive capital allocation review" that is already underway.

Last month Sotheby's said it would review its capital allocation strategy, leaving the door open to raising its dividend and taking on debt, after activists Loeb, Nelson Peltz and Mick McGuire revealed big stakes in the company.

"Today, rather than debating incendiary and baseless comments, we are focused on serving our clients' needs during this critical autumn sales season," the statement said. "We will comment on the communication from Third Point at the appropriate time."

Sotheby's shares were up about 0.8 percent at $50.10 in midday trading on the New York Stock Exchange. The stock has risen almost 45 percent since the beginning of the year.

"Sotheby's trades on the auctions and supply as well as what's going on in the art market," said Kristine Koerber, an analyst at Discern. "They have made some management changes. The stock has continued to migrate upward and it could be due to the strong auction results recently or the activists' involvement."

Koerber, who has covered Sotheby's for several years, said she had read the letter from Loeb and doesn't agree with everything stated in it. She declined to comment further.

Berlusconi had initially promised to topple the government by withdrawing his party's support - a move which prompted the Senate vote.

But he backed down when it became clear that several of his senators would back the government.

Mr Letta had earlier said that if he were defeated in the vote, it might prove a "fatal risk" for Italy.

In the event he won easily: the Senate voted 235 to 70 in favour of the government.

Some of Berlusconi's most hardline followers left the chamber and did not vote at all.

The result of the vote increases the possibility of Berlusconi being thrown out of the Senate on the grounds he is a convicted criminal.

On Friday a Senate committee is due to vote on whether to strip him of his seat following his conviction for tax fraud.

As he left the Senate building on Wednesday, people outside greeted him with catcalls, whistles and cries of "go away".

'Internal travail'

Last weekend, Berlusconi demanded that five ministers from his centre-right People of Freedom party (PDL) leave the government and bring it down.

But some of his closest colleagues said they would defy him, and the BBC's Alan Johnston in Rome says it gradually became clear that Berlusconi had badly overreached himself.

Our correspondent says the former prime minister has been forced into a humiliating climbdown, and will emerge a weakened figure with his capacity to influence Italian politics diminished.

But Berlusconi's close ally Renato Schifani insisted he had not been weakened by the vote, telling Italian news agencies that his leadership "has been strengthened".

When he rose to speak in the Senate to announce his turnaround, Berlusconi said: "Italy needs a government that can produce structural and institutional reforms. We have decided, not without internal travail, to back the confidence vote."

The Milan stock exchange gained nearly 2% on the announcement.

In his address to the Senate, Mr Letta defended his government's performance and said Italy "runs a risk, a fatal risk" if it were to fall.

The world's most popular search engine has been under investigation for three years by the European Commission, which acts as the bloc's antitrust regulator, over complaints it was blocking competitors in search results.

More than a dozen companies, including Microsoft, British price comparison site Foundem and German online mapping company Hotmaps, have accused it of squeezing them out of the market.

Google proposed concessions in September, hoping to end a case which could otherwise lead to a fine of up to 10 percent of its global revenue, or $5 billion.

Competition Commissioner Joaquin Almunia told lawmakers in the European Parliament on Tuesday he believed the company's offer made it easier for web users to see results from Google's rivals in Internet searches.

While he said he could not lay out the precise concessions offered by the U.S. company, he said they went a long way to addressing the antitrust authority's concerns fully.

"We have reached a key moment in this case," Almunia said. "Now with the significant improvements on the table, I think we have the possibility to work again.

"I think that the settlement route remains the best choice," The commissioner said, adding that a decision on the case could be made next spring.

Almunia said the Commission would seek feedback on Google's offer from the companies which lodged the complaints.

MOBILES

Almunia said it would be much easier for a user to see competing services in Google search results irrespective of which device was being used. Rival firms had worried that even if concerns around computers were addressed, search results displayed on smaller devices such as mobiles could still prevent them from appearing prominently.

The new concessions would also give companies greater control to opt out of appearing in searches, Almunia said. Firms offering directories had complained that Google search showed too much of their content, making it less attractive for users to visit their site.

Google, which has a market share of over 80 percent in Europe's Internet search market, had previously come up with concessions in April, telling the Commission it would mark out its services from rival products in web search results.

It also proposed providing links to at least three competing search engines and making it easier for advertisers to transfer their search advertising campaigns to rival platforms.

Federal agencies were directed to cut back services after lawmakers could not break a political stalemate that sparked new questions about the ability of a deeply divided Congress to perform its most basic functions.

After House Republicans floated a late offer to break the logjam, Senate Majority Leader Harry Reid rejected the idea, saying Democrats would not enter into formal negotiations on spending "with a gun to our head" in the form of government shutdowns.

In the hours leading up to the deadline, the Democratic-controlled Senate repeatedly stripped measures passed by the House that tied temporary funding for government operations to delaying or scaling back the Affordable Care Act healthcare overhaul known as Obamacare.

Shortly after midnight, President Barack Obama tweeted: "The Affordable Care Act is moving forward. You can't shut it down."

Whether the shutdown represents another bump in the road for a Congress increasingly plagued by dysfunction or is a sign of a more alarming breakdown in the political process could be determined by the reaction among voters and on Wall Street.

The U.S. dollar slipped 0.2 percent against a basket of widely traded currencies. The price of the 10-year U.S. Treasury note, a bedrock reference for bond markets, fell 0.3 percent.

S&P stock futures rose 0.3 percent, pointing toward a higher Wall Street open. On Monday, the S&P 500 index closed 0.6 percent lower, weighed down by defense contractors since the shutdown would likely diminish its new business.

The political dysfunction at the Capitol also raised fresh concerns about whether Congress can meet a crucial mid-October deadline to raise the government's $16.7 trillion debt ceiling.

"A technical Treasury default could follow, sending financial markets into a tailspin," wrote ING analyst Tom Levinson.

After missing the midnight (0400 GMT) deadline to avert the shutdown, Republicans and Democrats in the House continued a bitter blame game, each side shifting responsibility to the other in efforts to redirect a possible public backlash.

The recently launched Surface 2, which runs the Windows RT 8.1 platform, will provide crews with key charts and navigation tools via a customised app.

The tablets will replace the 17kg (2st 10lb) flight bags currently carried by pilots, reducing fuel consumption.

The company expects all its cockpits to be paperless by the end of 2014.

Delta had previously tested Apple iPads as potential Electronic Flight Bags (EFB), but has recently embraced Microsoft devices.

It equipped 19,000 of its flight attendants with Nokia Lumia 820 smartphones in August, which run on a Windows operating system.

Essential documents

The sight of pilots wheeling heavy cases through airports is a familiar one, but electronic alternatives have been around for decades.

Many commercial airlines now use tablets as EFBs, and the devices are even common among single-seat, or recreational pilots.

Delta's senior vice president, Capt Steve Dickson, said the Surface tablets would "minimise time spent looking for flight information", and allow pilots the "opportunity for greater situational awareness in the air and on the ground".

The tablets will feature a custom-built app called FliteDeck Pro, developed by aerospace technology company Jeppesen, a subsidiary of Boeing.

They will contain thousands of electronic documents, charts, navigational aids, checklists and other key reference materials.

The new Windows 8.1 platform allows users to view two applications side-by-side, a feature which Delta said made the Surface 2 tablets an attractive option for its cockpits. Delta says it will roll out the device to pilots on its Boeing 757 and Boeing 767 fleets later this year, subject to approval by the US Federal Aviation Administration (FAA).

About 500,000 hijacked computers have been taken out of the 1.9 million strong ZeroAccess botnet, the security company said.

The zombie computers were used for advertising and online currency fraud and to infect other machines.

Security experts warned that any benefits from the takedown might be short-lived.

The cybercriminals behind the network had not yet been identified, said Symantec.

"We've taken almost a quarter of the botnet offline," Symantec security operations manager Orla Cox told the BBC. "That's taken away a quarter of [the criminals'] earnings."

The ZeroAccess network is used to generate illegal cash through a type of advertising deception known as "click fraud".

Communications poisoned

Zombie computers are commanded to download online adverts and generate artificial mouse clicks on the ads to mimic legitimate users and generate payouts from advertisers.

The computers are also used to create an online currency called Bitcoin which can be used to pay for goods and services.

The ZeroAccess botnet is not controlled by one or two servers, but relies on waves of communications between groups of infected computers to do the bidding of the criminals.

The decentralised nature of the botnet made it difficult to act against, said Symantec.

In July, the company started poisoning the communications between the infected computers, permanently cutting them off from the rest of the hijacked network, said Ms Cox.

The company had set the ball in motion after noticing that a new version of the ZeroAccess software was being distributed through the network.

The updated version of the ZeroAccess Trojan contained modifications that made it more difficult to disrupt communications between peers in the infected network.

Symantec built its own mini-ZeroAccess botnet to study effective ways of taking down the network, and tested different takedown methods for two weeks.

The company studied the botnet and disabled the computers as part of its research operations, which feed into product development, said Ms Cox.

"Hopefully this will help us in the future to build up better protection," she said.

Internet service providers have been informed which machines were taken out of the botnet in an effort to let the owners of the computers know that their machine was a zombie.

Resilient zombies

Although a quarter of the zombie network has been taken out of action, the upgraded version of the botnet will be more difficult to take down, said Ms Cox.

"These are professional cybercriminals," she said. "They will likely be looking for ways to get back up to strength."