Newspapers online. 11-09-2013 | Politics Ru

Twitter CFO Mike Gupta grilled banks about how to sidestep the problems that beset Facebook's IPO from start to finish, asking detailed questions about everything from how to pick an exchange to how to communicate with analysts.

"They were really information and data hogs," said one person who worked on the process. "They wanted a lot of different perspectives and to make sure that they did this right."

In the end, Twitter made different choices from its rival social networking site. Facebook selected Morgan Stanley (MS.N) as its lead underwriter, while Twitter picked Goldman Sachs (GS.N). Facebook listed on Nasdaq, where trading glitches marred the initial hours of trading, while Twitter listed on the New York Stock Exchange.

Twitter made sure its shares were sold for a low enough price to attract strong interest and keep shares high in their early days of trading, after Facebook's shares dropped in the days after its IPO.

Bankers said Gupta and Twitter's director of investor relations Nils Erdmann also looked closely at what worked - and what did not - for other Internet companies that went public, including Pandora Media Inc (P.N), Zynga Inc (ZNGA.O) and LinkedIn Corp (LNKD.N).

A key player in the IPO was Goldman's lead Twitter banker, Anthony Noto. The New York-based Noto was a former top ranked equity research analyst who left Goldman in 2008 to serve as an executive for the National Football League. He rejoined the firm just two years later to serve as the co-head of global technology, media and telecom investment banking.

Noto has built the team into the number one U.S. underwriter for tech IPOs so far this year, over Morgan Stanley and rival banker Michael Grimes who led the Facebook IPO, as well as other high profile deals including Google (GOOG.O) and LinkedIn.

Goldman has taken over 16 technology companies public since January, including software darling Tableau Software Inc (DATA.N). For the same period last year Goldman was fifth, according to Thomson Reuters data.

A handful of agency employees who gave their login details to Snowden were identified, questioned and removed from their assignments, said a source close to several U.S. government investigations into the damage caused by the leaks.

Snowden may have persuaded between 20 and 25 fellow workers at the NSA regional operations center in Hawaii to give him their logins and passwords by telling them they were needed for him to do his job as a computer systems administrator, a second source said.

The revelation is the latest to indicate that inadequate security measures at the NSA played a significant role in the worst breach of classified data in the super-secret eavesdropping agency's 61-year history.

Reuters reported last month that the NSA failed to install the most up-to-date, anti-leak software at the Hawaii site before Snowden went to work there and downloaded highly classified documents belonging to the agency and its British counterpart, Government Communication Headquarters.

It is not clear what rules the employees broke by giving Snowden their passwords, which allowed the contractor access to data that he was not authorized to see.

Snowden worked at the Hawaii site for about a month last spring, during which he got access to and downloaded tens of thousands of secret NSA documents.

COVERING TRACKS

"In the classified world, there is a sharp distinction between insiders and outsiders. If you've been cleared and especially if you've been polygraphed, you're an insider and you are presumed to be trustworthy," said Steven Aftergood, a secrecy expert with the Federation of American Scientists.

"What agencies are having a hard time grappling with is the insider threat, the idea that the guy in the next cubicle may not be reliable," he added.

The day after Obama said in a nationally televised interview he was sorry some Americans were dropped by their health plans because of changes mandated by the Affordable Care Act, he will tour a busy cargo and cruise ship port, the White House said.

He will again deliver the message that the United States should spend more on its roads, bridges and ports as a way to expand jobs and strengthen U.S. firms through increased trade.

His remarks will come on the day the government releases a jobs report for October, which is expected to show U.S. employers added 125,000 positions in the month.

That number was likely half as much as employers would have added if not for the 16-day government shutdown in October, the White House has estimated.

The administration has drummed home the point the economy would be growing more rapidly and job growth would be more robust without the shutdown, prompted by Republican efforts to defund or delay the healthcare law, known as Obamacare.

The White House budget office issued a report on Thursday cataloguing ways in which the shutdown had hurt individuals and businesses.

The Mississippi River port will give an Obama an appropriate setting to talk about his proposal to spend $50 billion to repair and upgrade the nation's infrastructure and efforts to expand trade.

The president "believes that exports are central to our national economy and has made increasing exports a major focus for his administration," the White House said in a statement.

But Obama's efforts to press Congress for more spending to strengthen economic growth will be overshadowed by lingering questions about Obamacare.

HEALTHCARE HEADACHES

The botched rollout of the online signup mechanism for insurance was the first major problem for the program, which aims to extend access to healthcare for millions of uninsured Americans by offering insurance at competitive prices.

Disney bought Lucasfilm, the company behind Star Wars, from creator George Lucas last year for $4bn (£2.6bn).

It has committed to making at least three new films in the series, one of the most successful franchises ever.

Disney announced the release date as it reported a better-than-expected 12% jump in net profit for the three months to 28 September.

It made a net profit of $1.39bn during the quarter, up from $1.24bn during the same period last year.

The company also reported that its net income for the financial year to 28 September jumped 8% from a year ago to $6.1bn.

"We're extremely pleased with our results for Fiscal 2013, delivering record revenue, net income and earnings per share for the third year in a row," Robert Iger, chief executive of the firm, said in a statement.

Disney's movie studio business saw a 7% jump in revenues during the fourth quarter.

Revenues rose to $1.5bn during the period, helped mainly by the strong performance of Monsters University, which Disney said "partially offset" the weak showing of The Lone Ranger.

The Amazon Source programme, launching first in the US, would let bookshops sell the devices and receive a small cut of e-book sales thereafter.

But reaction has been hostile - one US bookseller described it as "inviting hungry foxes into the henhouse".

Amazon said bookshops "should be striving to offer customers what they want".

Announcing the initiative earlier this week the company said: "With Amazon Source, customers don't have to choose between e-books and their favourite neighbourhood bookstore - they can have both."

However, it appeared bookshop owners are not convinced. New York-based publisher Melville House gathered opinions, and posted the frosty responses on its website.

"Hmmm, let's see," wrote Carole Horne from Harvard Book Store in Massachusetts.

"We sell Kindles for essentially no profit, the new Kindle customer is in our store where they can browse and discover books, the new Kindle customer can then check the price on Amazon and order the e-book.

"We make a little on their e-book purchases, but then lose them as a customer completely after two years. Doesn't sound like such a great partnership to me."

Staff at Skylight Books in California said it was "a Trojan Horse-style attempt to gain access to our customers".

Anger Amazon has not yet announced whether it has plans to extend the scheme to the UK.

However, retailer Waterstones began selling the Kindle device in its stores earlier this year, despite managing director James Daunt previously describing Amazon as a "ruthless, money-making devil".

Mr Daunt admitted that readers were migrating to digital platforms, but that it was beyond the company's capabilities to develop and manufacture its own device.

But whether independent bookshops will welcome the same logic is as yet unclear. The resentment stateside was welcomed by Patrick Neale, president of the Booksellers Association and co-owner of Jaffe & Neale bookshop and cafe in Chipping Norton, Oxfordshire.

"I was really pleased to see that American independent bookshops were saying no thanks," he told the BBC.

The head of a Palestinian committee set up to investigate Arafat's 2004 death called it an "assassination".

He said investigations would continue "to confirm all the details and all elements of the case".

Israel has repeatedly denied any involvement in Arafat's death.

Arafat's widow, Suha, has said she believes the latest report proves he was assassinated. However, she said her late husband had many enemies around the world and she could not directly accuse anyone.

The Palestinian leader died in a military hospital in Paris in 2004 after suddenly being taken ill at his presidential compound in the West Bank city of Ramallah. "We say that Israel is the prime and only suspect in the case of Yasser Arafat's assassination, and we will continue to carry out a thorough investigation to find out and confirm all the details and all elements of the case," Palestinian committee head Tawfik Terawi told a news conference in Ramallah.

It is not clear how the Palestinian investigators believe the poison was administered to Arafat, who was surrounded by guards and a close circle of aides at his compound.

The BBC's Yolande Knell, who was at Friday's hearing, said that in response to that question, the head of the committee said there had been a lot of interviews and he had "security information" but could not make details public at the moment.

A report by Swiss scientists said Arafat's remains contained "unexpectedly high" amounts of polonium-210. However, they could not confirm it had caused his death.

His remains were exhumed last year following tests on his belongings that suggested he could have been poisoned.

About 60 samples were divided between Swiss and Russian investigators and a French team carrying out an investigation at his widow's request.

France began a murder inquiry in August 2012 after the preliminary findings of polonium by the Swiss scientists, who have been working with an al-Jazeera documentary crew.

One Russian official said last month that no traces of polonium had been found.

Our correspondent says some Palestinian officials have already called for a new international inquiry into Arafat's death.

Scientists from the Vaudois University Hospital Centre (CHUV) in Lausanne, Switzerland, had carried out a detailed examination of Arafat's medical records, samples from his remains and items he had taken into the hospital in Paris.

The biological materials included pieces of Mr Arafat's bones and soil samples from around his corpse.

Employers added 204,000 new jobs to their payrolls last month, the Labor Department said on Friday. The unemployment rate, however rose to 7.3 percent from September's nearly five-year low of 7.2 percent.

The department said there had been no "discernible" impact on payrolls from the 16-day federal government shutdown, adding that it had received an above average response rate from employers to its survey.

The report also showed 60,000 more jobs created in September and August than previously reported, suggesting that the economy had upward momentum heading into the shutdown last month.

Economists polled by Reuters had forecast payrolls rising 125,000 in October and the unemployment rate ticking up a tenth of a percentage point to 7.3 percent.

Last month's job gains pushed them above the 190,000 average for the past 12 months. But there was some bad news as more people dropped out the labor force, pushing the participation rate to 62.8 percent, the lowest level since March 1978.

The department said the drop in the participation rate was not related to the government shutdown as furloughed government workers remained in the labor force.

The private sector accounted for all the job gains last month, with government payrolls shrinking 8,000.

While party leaders have promised unprecedented reforms at the four-day closed-door plenum, these will focus on economic issues, and there have been no expectations of Western-style political reforms.

In a turgid full-page article in the official People's Daily, the party's historical research institute was emphatic that China could only prosper under the party's leadership.

For those who "preach the indiscriminate copying of the Western system" the party will "uphold its leadership", it said.

It warned, as President Xi Jinping has already done, that efforts to undermine the party's legitimacy by "negating" tragedies such as the 1966-76 Cultural Revolution, which preceded landmark economic reforms begun in the late 1970s, would only sow the seeds of the party's own destruction.

"The ancients had a saying: 'If you're going to destroy somebody's country, you must first wipe out their history'," the institute wrote.

"From an analysis of enemy forces at home and abroad, you can see that their negation of the period before reform and opening up is to negate our party's great historical achievements ... (they are) demonizing our party so as to deny the Chinese Communist Party's position in power."

The party will not stand for this, and continue on its path of "socialism with Chinese characteristics", it added, referring to its program of market-oriented economic reforms.

"Uphold and develop socialism with Chinese characteristics, neither walking down the closed and rigid road nor taking the evil road of changing (our) flags and banners," it said, an expression commonly used by the party when it talks about not copying Western political systems.

The document echoes an October report in an influential party journal that denounced Western calls for political reform, saying such pressure was aimed at getting rid of the Communist Party.

Before Xi took power in a generational leadership change last November, some had expected him to loosen China's rigid political system, which tolerates no dissent, pointing to the legacy of his liberal-minded father, a former vice premier.

But Xi has overseen a new crackdown on dissidents and freedom of expression, while at times espousing old school Maoism as he seeks to court powerful conservative elements in the party.

The shares opened at $45.10 a share, up from the initial public offering price of $26 set on Wednesday, then added to those gains, hitting a high of $50. They were up 73.7 percent to $45.15 at midday.

Sources said the flotation drew strong demand, with investors asking for 30 times the number of shares on offer as they bet on potential growth at the money-losing social media company.

The opening price valued the shares at about 22 times forecast 2014 sales, nearly double that multiple at social media rivals Facebook Inc and LinkedIn Corp.

The shares opened 75 percent above the $26 initial public offering price set on Wednesday, making it the biggest in a series of huge opening day "pops" for IPOs.

Including restricted share units and other securities that could be exercised in the coming months, the company's market value was over $28 billion.

Twitter executives including Chief Executive Dick Costolo and the company's three co-founders - Evan Williams, Biz Stone and Jack Dorsey - went to the floor of the NYSE to witness the IPO. The Big Board, which marked the occasion with an enormous banner with Twitter's bird logo along its Broad Street facade, snatched the offering away from Nasdaq after the normally tech-focused Nasdaq stumbled with the larger Facebook flotation last year.

POSTER BOY

"Facebook was so overhyped people felt like they couldn't miss out," said Kenneth Polcari, a senior floor official at O'Neil Securities Inc. "Twitter isn't like that, though you can feel the excitement."

British actor Patrick Stewart rang the opening bell at the exchange together with 9-year-old Vivienne Harr, who started a charity to end childhood slavery using the microblogging site.

"I guess I represent the poster boy for Twitter," Stewart said, adding that he had only been tweeting for about a year and wasn't buying Twitter stock today.

Twitter's building staff opened its offices in San Francisco extra early, at 5:30 a.m. on Thursday. By 7:30 a.m., hundreds of employees had flocked to their 9th floor cafeteria to watch Stewart ring the opening bell on TV while eating "cronuts," a croissant-donut hybrid, made by Twitter's resident chef, Lance Holton.

Like its predecessor, the new Silk Road listed hundreds of advertisements for marijuana, cocaine, ecstasy and other illegal drugs available for purchase from independent sellers using the anonymous Bitcoin digital currency.

On October 1, the Federal Bureau of Investigation shut down the original Silk Road and arrested its alleged mastermind, Ross William Ulbricht, 29, known online as "Dread Pirate Roberts," in San Francisco.

"It took the FBI two-and-a-half years to do what they did ... but four weeks of temporary silence is all they got," a site administrator wrote, also using the "Dread Pirate Roberts" moniker.

The FBI declined to comment on the new version of the Silk Road. For more than two years, the original site acted like an eBay of vice, allowing users to buy and sell illegal goods and services on the assumption that they were safe from the law. Deliveries were made through the mail in discrete packages.

U.S. authorities also say Ulbricht had tried to call out a hit on a user who had threatened to expose the identities of thousands of Silk Road users.

Ulbricht's lawyer on Wednesday said his client would plead not guilty to drug trafficking, hacking and money laundering charges.

The charges against Ulbricht said his website generated sales of more than 9.5 million Bitcoins, roughly equivalent to $1.2 billion.

The new website improves on technology from the previous Silk Road meant to keep identities secret, including measures to keep users from losing their Bitcoins in case the site shuts down, according to the new Dread Pirate Roberts.

Senator Tom Carper, a top lawmaker on the Homeland Security committee, who plans to hold a hearing on digital currencies this month, said the new Silk Road site shows that government needs to adapt to fast-moving technology. "Rather than play 'whack-a-mole' with the latest website, currency, or other method criminals are using in an effort to evade the law, we need to develop thoughtful, nimble and sensible federal policies that protect the public without stifling innovation and economic growth," Carper said in a statement.

A week after authorities shut down the Silk Road, British police said they arrested four men accused of being significant users of the site.

The photo-themed social network took the measure after being asked to respond to an investigation by #BBCtrending - a new social media series.

The journalists had uncovered many pictures and videos of narcotics posted alongside text advertising their sale.

Instagram is owned by Facebook.

The firm has a policy of acting on posts reported as being inappropriate, but it believes it would be impractical and invasive to search for such material. "Instagram has a clear set of rules about what is and isn't allowed on the site," a spokeswoman told the BBC.

"We encourage people who come across illegal or inappropriate content to report it to us using the built-in reporting tools next to every photo, video or comment, so we can take action.

"People can't buy things on Instagram, we are simply a place where people share photos and videos."

Among Instagram's "report photo/video" choices is the option to identify suspected drug use.

The BBC understands Facebook's staff aim to review posts flagged to either of its social networks within 48 hours. They also have the option of blocking terms classed as "bad hashtags" - ones that promote banned activities - if they are mentioned in the press or in user reports.

The only content Facebook does actively search for is images of child abuse.

Hidden identities Most of the drugs-related activity appears to be taking place in the US.

"Just getting a few packs ready for tomorrow morning... Place your order today, it gets shipped out at 8AM tomorrow," read one post placed beneath an image of bags of marijuana.

Another picture showed a variety of pills, adding: "$2 a pop for xans, $10 a pop for roxys."

This refers to Xanax, a psychoactive anxiety treatment, and Roxicodone, an opiate used to treat pain.

Both require prescriptions in the US and the UK, but are sometimes bought on the black market.

Crystals of MDMA and other amphetamine-related substances were among other drugs advertised via photos and videos.

In an unprecedented evidence session before parliament that local media likened to a scene from a James Bond film, the heads of Britain's three main intelligence agencies said Snowden's disclosures about the mass surveillance they undertake had prompted them to consider being more open about what they do.

But they said parts of their work had to remain secret for national security reasons and that the data leaks, which detailed Britain's close cooperation with the U.S. National Security Agency (NSA), had caused huge damage.

"The leaks from Snowden have been very damaging, they've put our operations at risk," John Sawers, the head of MI6, Britain's foreign intelligence service, told parliament.

"It's clear that our adversaries are rubbing their hands with glee, al Qaeda is lapping it up."

The robust nature of his comments underlined how angry intelligence chiefs are about Snowden and what they believe is the irresponsible way some newspapers published his information despite warnings not to do so.

The leaks have put intelligence chiefs under pressure to be more open about what they do and have prompted a debate about the balance between security and privacy which has led to calls for greater oversight of the agencies' work.

Iain Lobban, the director of GCHQ, Britain's electronic eavesdropping agency, told lawmakers that intelligence chiefs were "actively considering" whether more information should now be shared with the public as a result.

Visibly emotional, he argued however that "certain methods" should remain secret and cited what he said were specific examples where the Snowden data leaks had harmed Britain's national security.

"We've seen terrorist groups in the Middle East, in Afghanistan and elsewhere in south Asia discussing the revelations in specific terms," he said.

"We have actually seen chat around specific terrorist groups who, even close to home, discuss how to avoid what they now perceive to be vulnerable communications methods, or how to select communications which they now perceive not to be exploitable."