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Yahoo denied prior knowledge of the alleged programme, describing it as a "completely unacceptable" privacy violation.

According to leaked documents, sexually explicit images were among those gathered - although not intentionally.

In a statement GCHQ has said all of its actions are in accordance with the law.

The operation, which was called Optic Nerve and was aided by the US National Security Agency, is alleged to have stored images between 2008 and 2010. In one six-month period in 2008, images from 1.8m users were gathered.

The report originated from documents leaked by whistleblower Edward Snowden.

It suggested that sexually explicit content would be captured by the system.

"Unfortunately … it would appear that a surprising number of people use webcam conversations to show intimate parts of their body to the other person," it read.

"Also, the fact that the Yahoo software allows more than one person to view a webcam stream without necessarily sending a reciprocal stream means that it appears sometimes to be used for broadcasting pornography."

'Whole new level' "We were not aware of nor would we condone this reported activity," Yahoo said in an emailed statement.

"This report, if true, represents a whole new level of violation of our users' privacy that is completely unacceptable and we strongly call on the world's governments to reform surveillance law consistent with the principles we outlined in December.

"We are committed to preserving our users' trust and security and continue our efforts to expand encryption across all of our services."

A statement from GCHQ said it would not comment on matters of intelligence, but added: "All of GCHQ's work is carried out in accordance with a strict legal and policy framework which ensures that our activities are authorised, necessary and proportionate, and that there is rigorous oversight, including from the secretary of state, the interception and intelligence services commissioners and the Parliamentary Intelligence and Security Committee.

Icahn, who disclosed a 2.15 percent stake in the e-commerce giant last week, had accused two long-time eBay board members, Marc Andreessen and Scott Cook, of having business interests that directly competed with eBay.

In his third letter to eBay shareholders this week, Icahn said on Thursday he had agreed to a public debate on CNBC business channel, but eBay had not responded.

"EBay has challenged us to focus on honest, accurate debate. We do not believe eBay is serious about this," Icahn wrote in the letter.

EBay could not be immediately reached for comment on the proposed debate.

However, eBay founder and Chairman Pierre Omidyar defended Andreessen and Cook, saying Icahn had chosen to attack the integrity of two qualified board members instead of having an "honest discussion."

Icahn, who called last month for eBay to sell off its fast-growing PayPal payments business, had also promised to lay out in the coming weeks a detailed case for spinning off PayPal.

Omidyar, in a statement on Thursday, rejected Icahn's call to separate PayPal, reiterating the company's position that the businesses were better off together.

Omidyar, who is the largest shareholder in eBay with a stake of 8.37 percent, said the board had evaluated the option of spinning off PayPal, but decided against it.

Underwriters at Lloyd's of London say they have seen a "huge increase" in demand for cover from energy firms.

But surveyor assessments of the cyber-defences in place concluded that protections were inadequate.

Energy industry veterans said they were "not surprised" the companies were being refused cover.

"In the last year or so we have seen a huge increase in demand from energy and utility companies," said Laila Khudari, an underwriter at the Kiln Syndicate, which offers cover via Lloyd's of London.

The market is one of few places in the world where businesses can come to insure such things as container ships, oil tankers, and large development projects and to secure cash that would help them recover after disasters. 'Worried' For years, said Ms Khudari, Kiln and many other syndicates had offered cover for data breaches, to help companies recover if attackers penetrated networks and stole customer information.

Now, she said, the same firms were seeking multi-million pound policies to help them rebuild if their computers and power-generation networks were damaged in a cyber-attack.

"They are all worried about their reliance on computer systems and how they can offset that with insurance," she said.

Any company that applies for cover has to let experts employed by Kiln and other underwriters look over their systems to see if they are doing enough to keep intruders out.

Assessors look at the steps firms take to keep attackers away, how they ensure software is kept up to date and how they oversee networks of hardware that can span regions or entire countries.

Unfortunately, said Ms Khudari, after such checks were carried out, the majority of applicants were turned away because their cyber-defences were lacking. "We would not want insurance to be a substitute for security," she said.

What was not clear, she said, was why firms were suddenly seeking cover in large numbers.

Although many governments had sent warnings about the threat from hackers, attackers and hacktivists to utility firms and other organisations running critical infrastructure, none had mandated them to get cover.

"I think what's behind it is the increase in threats and the fact that a lot of these systems were never previously connected to the outside world," she said.

Such a report - to have been prepared last year - would almost certainly have angered Iran and complicated efforts to settle a decade-old dispute over its atomic aspirations, moves which accelerated after pragmatic President Hassan Rouhani took office in August.

According to the sources, the International Atomic Energy Agency (IAEA) has apparently dropped the idea of a new report, at least for the time being.

There was no immediate comment from the IAEA. The sources said there was no way of knowing what information collected by the agency since it issued a landmark report on Iran in 2011 might have been incorporated in the new document, although one said it could have added to worries about Tehran's activities.

As relations rapidly improved, Iran struck an interim nuclear deal with six world powers in November which Israel denounced as an "historic mistake" as it did not require Tehran to dismantle its uranium enrichment sites.

One source said probably only Israel, which is believed to be the Middle East's sole nuclear-armed state, would criticize the IAEA for not issuing a new report in the present circumstances. Iran and the world powers hope to reach a final settlement by July, when the interim accord expires, although they acknowledge this will be an uphill task.

A decision not to go ahead with the new document may raise questions about information that the United Nations agency has gathered in the last two years on what it calls the "possible military dimensions" (PMD) to Iran's nuclear program. Tehran says the program is peaceful and denies Western allegations that it is seeking to develop the capability to make bombs.

The sources, who declined to be identified due to the sensitivity of the issue, suggested the more recent material concerned extra detail about alleged research and experiments that were covered in the November 2011 report. A new report would probably have included "updated information on PMD" which could have "reinforced the concern" about Iran, one said.

The IAEA's dossier in November 2011 contained a trove of intelligence indicating past activity in Iran which could be used for developing nuclear weapons, some of which it said might still be continuing. Iran rejected the allegations.

With a narrow but bruising presidential election defeat behind him and the next election not due until 2019, the state governor saw good government in opposition strongholds and grassroots work with the poor as the best way to build support.

Now, though, an explosion of protests has put President Nicolas Maduro under pressure and also exposed rifts inside the opposition as a rival to Capriles takes a more prominent role.

Leopoldo Lopez, a U.S.-educated economist who leads a radical wing of the opposition, defied Capriles' moderate approach to organize street resistance against Maduro - and has been jailed for leading the protests.

That has made him a 'martyr' for some in the opposition and wrong-footed Capriles, who backs the protesters' grievances but not their tactics as he seeks to preserve his own standing as the main anti-Maduro figurehead.

Capriles, 41, acknowledges tension within the opposition and is frustrated by Lopez but insists the main battle is against Maduro, who succeeded late socialist leader Hugo Chavez by being Capriles in an election last April.

"We must not be scared of differences. Unity can't be straitjacket," Capriles told Reuters in an interview at his office in Caracas. "Nicolas is desperate ... We're seeing the last kicks of a drowning man. He wanted to copy Chavez but he's a really bad copy, he has failed."

Focusing on the Capriles-Lopez split in the opposition would not only play into Maduro's hands but is also irrelevant given Venezuelans' grave day-to-day problems, he said.

"It's a false dilemma people are trying to create in the heart of the opposition. To try and turn the opposition debate into who is the leader makes a mockery of the historic moment the nation is going through."

"I've not fallen into this trap and I tell my followers that's not the problem. If the discussion centers on that, you can be sure that Maduro will escape intact."

A wiry and sports-loving lawyer from a well-to-do family, Capriles trounced other opposition aspirants in a 2012 primary to face a cancer-stricken Chavez. Although he fell short in the election later that year, he won the largest opposition vote ever against Chavez, 44 percent.

He then ran again last April after the socialist leader's death, losing by just 1.5 percentage points to Maduro in an election the opposition still says was rigged.

Crimea, the only Ukrainian region with an ethnic Russian majority, is the last big bastion of opposition to the new leadership in Kiev since President Viktor Yanukovich was ousted at the weekend and provides a base for Russia's Black Sea fleet.

"I am appealing to the military leadership of the Russian Black Sea fleet," said Oleksander Turchinov, Ukraine's acting president.

"Any military movements, the more so if they are with weapons, beyond the boundaries of this territory (the base) will be seen by us as military aggression," he said, a day after 150,000 troops in western Russia were put on high alert.

Ukraine's Foreign Ministry summoned Russia's acting ambassador in Kiev for consultations as the face-off between Moscow and the West revived memories of the Cold War.

The United States called on Moscow to avoid doing anything risky over Ukraine, which has been in crisis since November, when Yanukovich abandoned a proposed trade pact with the EU and turned instead towards Russia.

Russia said U.S. Secretary of State John Kerry had proposed cooperation with Moscow to resolve the Ukraine crisis during a telephone call with Foreign Minister Sergei Lavrov on Thursday.

The fresh turmoil in Crimea sent the Ukrainian hryvnia tumbling to a new record low of 11 to the dollar on the Reuters dealing platform.

The International Monetary Fund said it would send a team to Kiev in the coming days.

Ukraine's new finance minister, Oleksander Shlapak, said he hoped the IMF would work on an aid package of at least $15 billion. Ukraine says it needs $35 billion over the next two years to avoid bankruptcy.

The minister also said he expected the hryvnia to strengthen soon at around 10 to the dollar.

COALITION GOVERNMENT

Ukraine's new rulers pressed ahead with efforts to restore stability to the divided country, approving formation of a national coalition government with former economy minister Arseny Yatseniuk as its proposed head.

Yatseniuk told parliament that Yanukovich had driven the country to the brink of collapse. He accused the deposed president of stripping state coffers bare and said $70 billion had disappeared into offshore accounts.

"The state treasury has been robbed and is empty," he said.

Apple (AAPL, Fortune 500) has stopped issuing updates for Mac OS X 10.6, known as Snow Leopard. That means the company won't be sending out software fixes to protect you from hackers and computer viruses.

The Snow Leopard operating system, released in 2009 remains popular. Snow Leopard is still running on 19% of Macintosh computers, according to data tracker Net Applications. Apple has since released three new iterations of its Mac operating system, including Lion, Mountain Lion and Mavericks.

The good news for Snow Leopard users is that upgrading to the latest operating system is relatively easy -- and free. Most Snow Leopard users can download Mac OS X Mavericks from the Mac App Store, so long as they have the latest Snow Leopard update installed and their Mac was purchased in 2007 or later. Mavericks won't work with MacBooks and iMacs sold before 2007.

Related: Apple fixes security flaw for Macs Snow Leopard users don't have to upgrade -- Macs running Mac OS X 10.6 will keep working without upgrading to Mavericks. But without the occasional software patches from Apple, bugs and security flaws will go unaddressed, making computers running Snow Leopard a potential target for hackers.

Macs are increasingly targeted by cyberattackers. The recently discovered security hole in Apple devices -- which allowed outsiders access to emails, instant messages and online bank transactions -- shows how significant updates can be. That bug was fixed earlier this week.

Like Snow Leopard, Microsoft (MSFT, Fortune 500) has announced that it will discontinue security updates for Windows XP on April 8. That will pose a potentially much more serious security problem. An amazing 29% of computers across the globe are still running Windows XP, according to NetMarketShare.

In fact, Hollywood-style entertainment and advertising has already consumed half of the video Web, and its growth is accelerating.

Web ads on long-form entertainment – including live sports and music events, movies and recorded network TV shows – surged 86 percent in the fourth quarter from a year earlier, according to a new report from FreeWheel TV, whose video ad-serving technology is used by top U.S. cable, network and broadcast companies.

That was up from 56 percent year-over-year in the third quarter of last year, according to the quarterly report due out this week from FreeWheel, a seven-year-old private firm which is headquartered in Silicon Valley and has offices in New York and China.

The growth was part of a phenomenal explosion in digital video in 2013, as total online video views tracked by the company rose by roughly a third to 75 billion.

"Advertising will follow the viewer growth," says Doug Knopper, co-founder and co-CEO of FreeWheel. The growing digital ad economy is being driven by a proliferation of mobile devices, improved measurement of ad effectiveness and increased digital production and distribution, Knopper says.

"The Internet is mimicking TV," Knopper told me in a phone interview Tuesday, after we first spoke at the Goldman Sachs Technology and Internet Conference in San Francisco two weeks ago.

The surge in ad-buying and ad placement has led to a significant milestone for the entertainment industry, and for online viewers, cementing a multi-year trend.

In the third quarter of last year, for the first time, half of the Web video content tracked by FreeWheel consisted of digital ads, driven mainly by surging views of long-form content on mobile devices.

In other words, old-school TV commercials already comprise half of U.S. Web video traffic, which itself now consists of a large and growing share of reality shows, scripted dramas, sports and music events.

"We call them a 'TV special,'" Knopper says of the 15- and 30-second ads that pop up amid long-form entertainment.

Ad views and total video views are now growing in lock-step, with the former rising 30 percent and the latter rising 31 percent in the fourth quarter, respectively.

Ad views for shorter-form content also grew in the double digits.

If the trend were a feature film, it could be called 'Hollywood gobbles up the video Web.'

Hope, a former British Treasury official and now head of compliance at Hong Kong-based MatrixVision, says that while Mt. Gox's fate is unclear, its troubles form part of a wider shift as more professional players move into the bitcoin mainstream.

"It's good for us as a business, not so good for us as consumers," he said. "Over the longer term it will be good for bitcoin because over time the entire ecosystem will be made more robust."

Steve Beauregard, CEO and founder of Singapore-based GoCoin, is more blunt about Mt. Gox's woes: "It's important in the sense of sweeping away a lot of the early unsophisticated folk who got into this and made a name for themselves, but didn't have the management horsepower to manage a company."

Mt. Gox, at one time the biggest bitcoin exchange, abruptly stopped trading this week amid reports on the internet that more than 744,000 bitcoins - worth around $380 million at prevailing rates - had been stolen. If accurate, that would mean around 6 percent of the world's 12.4 million bitcoins minted would be missing. The exchange's CEO Mark Karpeles told Reuters in an email that his company was "at a turning point" and would issue a statement "soon-ish." His LinkedIn profile reads: "I have a long experience in company creation, and experienced almost any imaginable kind of trouble."

On Wednesday, Japan said its authorities were looking into the Mt. Gox closure, and The Wall Street Journal reported that the virtual currency's exchange had received a subpoena from federal prosecutors in New York. A spokesman for the U.S. Attorney's office in Manhattan did not respond to requests for comment.

Also, the European Banking Authority warned bitcoin users they were on their own when it comes to losses from using unregulated online currencies, noting there is no safety net as with mainstream bank deposits. "Currently, no specific regulatory protections exist in the EU that would protect consumers from financial losses if a platform that exchanges or holds virtual currencies fails or goes out of business," it said in a statement.

The 1,400 gold pieces, dating to the mid- to late 1800s and still in nearly mint condition, were discovered buried in eight decaying metal cans on the couple's land last April, said coin expert David McCarthy of currency firm Kagin's.

"We've seen shipwrecks in the past where thousands of gold coins were found in very high grade, but a buried treasure of this sort is unheard of," McCarthy said. "I've never seen this face value in North America and you never see coins in the condition we have here."

Kagin's has declined to identify the couple, who according to the firm want to remain anonymous for fear treasure hunters will descend on their property in Northern California's so-called Gold Country, named after the state's 1849 Gold Rush.

The couple had been walking their dog when they came across a rusty metal can sticking out of the ground and dug it out. After finding gold coins inside they searched further and found the rest of the cache.

Also unclear is who hid the gold pieces, which were minted between 1847 and 1894, in a variety of 19th-century metal cans on land that eventually became part of the couple's yard.

McCarthy said it was curious that the containers were discovered scattered across one section of the property at different depths, suggesting that they were not all put there at the same time.

The $20 gold pieces appeared to have been new when they went into the ground and had suffered little damage from being in the soil for so long.

McCarthy said the couple wisely refrained from cleaning the coins themselves and brought a sampling of them to him in little baggies, still covered in soil.

"I picked up one of bags. It was an 1890 $20 gold piece. It was covered in dirt," McCarthy said, recalling when he first saw one of the gold pieces. "An area of the coin was exposed and the metal looked as if it had just been struck yesterday."

His company took what became known as the "Saddle Ridge Hoard" to an independent coin-grading service, which found that it was comprised of nearly 1,400 $20 gold pieces, 50 $10 gold pieces and four $5 gold pieces. One of the coins, a so-called 1866-S No Motto Double Eagle, is said to be valued at $1 million on its own.

"The Saddle Ridge Hoard discovery is one of the most amazing numismatic stories I've ever heard," said Don Willis, president of Professional Coin Grading Service. "This will be regarded as one of the best stories in the history of our hobby."

Using computer-generated augmented reality, the patient can see and move a virtual arm controlled by their stump.

Electric signals from the muscles in the amputated limb "talk" to the computer, allowing real-time movement.

Amputee Ture Johanson says his pain has reduced dramatically thanks to the new computer program, which he now uses regularly in his home. He now has periods when he is free of pain and he is no longer woken at night by intense periods of pain.

Mr Johanson, who is 73 and lives in Sweden, lost half of his right arm in a car accident 48 years ago.

After a below-elbow amputation he faced daily pain and discomfort emanating from his now missing arm and hand.

Over the decades he has tried numerous therapies, including hypnosis, to no avail.

Within weeks of starting on the augmented reality treatment in Max Ortiz Catalan's clinic at Chalmers University of Technology, his pain has now eased.

"The pain is much less now. I still have it often but it is shorter, for only a few seconds where before it was for minutes. "And I now feel it only in my little finger and the top of my ring finger. Before it was from my wrist to my little finger."

Mr Johanson says he has noticed other benefits too. He now perceives his phantom hand to be in a resting, relaxed position rather than a clenched fist.

"Can you imagine? For 48 years my hand was in a fist but after some weeks with this training I found that it was different. It was relaxed. It had opened."

Mr Johanson has also learned to control the movements of his phantom hand even when he is not wired up to the computer or watching the virtual limb.

Max Ortiz Catalan, the brains behind the new treatment, says giving the muscles a work-out while being able to watch the actions carried out may be key to the therapy.

"The motor areas in the brain needed for movement of the amputated arm are reactivated, and the patient obtains visual feedback that tricks the brain into believing there is an arm executing such motor commands. He experiences himself as a whole, with the amputated arm back in place."

Didn't think so. Apparently not many others did, either. So after three-plus years, the world's largest social media outlet is pulling the plug on its little-used e-mail service, the company confirmed Tuesday.

"We're making this change because most people haven't been using their Facebook e-mail address, and we can focus on improving our mobile messaging experience for everyone," Facebook said in a statement.

For those who do have a Facebook mail account, messages will be forwarded to the primary e-mail address listed in a user's account, the company said. The changes are planned to roll out in March, and users can turn off that forwarding option if they prefer not to have their personal inboxes flooded with these messages.

"It's a little bit of bowing to the inevitable," said Justin Lafferty, editor of the trade site Inside Facebook. The e-mail addresses, which showed up as messages for Facebook users, never took off, and when Facebook tried to make them the default e-mail accounts for all users in mid-2012, "a lot of people were unhappy with that," he said.

"It was kind of rolled out to everyone regardless of what they wanted," Lafferty said.

With last week's $19 billion acquisition of WhatsApp, the fast-growing messaging service, Facebook is focusing more on mobile messaging than e-mail these days.

Facebook ventured into the e-mail field in November 2010, adding the service to the messaging system already used heavily by its 1.2 billion users. CEO Mark Zuckerberg said at the time that the system would complement, not compete, with entrenched e-mail giants such as Google, Yahoo and Microsoft.

"We don't expect anyone to wake up tomorrow and say, 'I'm going to shut down my Yahoo account or my Gmail account and switch exclusively to Facebook.' But we do expect a shift to more real-time communication," he said.

Lafferty said the reversal is unlikely to be remembered in the company's annals -- much like the service itself.