World news. 06-20-2013 ScienceTechnology Microsoft

Microsoft unveiled the rewards program, one of the most generous in the high-tech industry to date, on Wednesday as it sought ways to prevent sophisticated attackers from subverting new security technologies it has introduced in the latest versions of the Windows operating system.

The program is open to computer experts as young as 14, though minors need permission from their parents. Residents of countries under U.S. sanctions, such as Cuba, Iran, North Korea, Sudan and Syria, are banned from the program.

The sheer size of the bonus is likely to grab the attention of the hacking community, though claiming the big money will require them to do battle with Microsoft's latest anti-hacking technology and then detail their approach.

"It's pretty generous, though what they are asking for is a pretty high bar," said Chris Wysopal, chief technology officer of Veracode, a security firm that helps identify software bugs.

Microsoft has plenty of competition in getting elite hackers to turn their attention on its aging Windows franchise, which operates the vast majority of the world's personal computers.

Windows computers have been involved in most major attacks to date, including the recent Citadel cyber crime ring that stole more than $500 million from banks and the Stuxnet virus that attacked Iran's nuclear program in 2010 by exploiting previously unknown bugs in Microsoft software.

COMPETING FOR TALENT

The best hackers are heavily recruited by the military, intelligence agencies and big corporations, who lure them with scholarships and high-paying jobs.

Microsoft is also competing for the attention of the top hacking talent on a growing global gray market, where information about vulnerabilities is sold to criminals as well as governments that use it in military and intelligence operations. Bounties start at $50,000 for tools that enable attackers to break into computers, even when they are protected by up-to-date security software.

In the industry, exploits of such vulnerabilities are called "zero-days," because a targeted software maker has had zero days' notice to fix the hole when the malicious software is eventually discovered. (See SPECIAL REPORT: link.reuters.

"We, like others, are constantly being bombarded by people who are trying to get into our systems," said Mark DeYoung, chief executive of U.S. rocket engine and ammunition maker Alliant Techsystems (ATK).

ATK, Lockheed Martin Corp, Boeing Co and other defence companies report hundreds of thousands of attempted probes into their computer networks every day, a matter of growing concern to the U.S. government, which after years of silence has become far more open about its belief that China is actively stealing intellectual property.

Trade shows, especially in foreign countries, pose particular challenges given the large array of people coming in contact with top executives who have access to sensitive information. In recent years, training has focused heavily on avoiding any violations of U.S. export control laws, but cyber security was a huge focus this year.

"The threat is not exaggerated," Dave Hess, president of Pratt & Whitney, a unit of United Technologies Corp, said. "It's a significant issue that we're all struggling with."

ATK disclosed several months ago that its networks had been attacked, but DeYoung said no classified or protected information was lost.

He said every ATK employee attending this year's air show took part in an extensive security briefing before coming and the company has invested millions of dollars in recent years to stay ahead of constantly changing data security threats.

Only new, encrypted laptops may be used, and executives are warned about disclosing sensitive information in any phone call, text message, email or even conversation, "whether you think you're in a private room or car or not," DeYoung said.

Two weeks ago, half a dozen FBI experts joined by officials from other government agencies gave a two-hour briefing on cyber security issues for DeYoung's top dozen executives.

"The sophistication of the people who are trying to get into our systems continues to increase," DeYoung said.

"If you're comfortable, you're probably in trouble, but we're quite confident that we're putting in place all the right kinds of protocols, processes, training and people to keep up with the threat."

Raytheon executives also participate in a lengthy security briefing before the show, but they are not allowed to travel with a laptop at all, said William Swanson, chief executive of Raytheon Co.

Their addiction? "Candy Crush Saga," an easy-to-play, hard-to-master puzzle game that's seemingly ensnared everyone from your kids to your co-workers to your Aunt Sally. Launched last year, the game is now the most popular app on Facebook, where it has almost 32 million fans.

"Candy Crush," as it's usually called, also is among the most-downloaded mobile games for Android and Apple devices and has more than 15 million daily users, according to AppData, an analytics firm. The game has been such a hit for its creator, London-based game publisher King, that the company has plans to go public, according to a report Tuesday in the Wall Street Journal.

Like predecessor "Bejeweled," to which it's often compared, "Candy Crush" requires players to form chains of brightly colored tiles -- shaped like jelly beans, lemon drops and other candy pieces -- to earn points and advance. The game also borrows from mobile-game blockbuster "Angry Birds" in that players must successfully complete one level before going on to the next.

"It looks like the most childish, simple, throwaway game you could ever think of. And then you start playing it," said Byler, a pastor to young adults in Wichita, Kansas. "It's challenging, and a real test on your brain, because you really have to think about what your next move is going to be."

The phone version of the game has 365 increasingly difficult levels, and it's not unusual for daily players to be stuck on a level for several weeks at a time -- a source of much frustration for many Facebook commenters.

The basic version of the game is free, although players only get five "lives," or chances, a day without paying for more. Some obsessed players have even hacked the game to get access to unlimited play.

Enright, of Waukesha, Wisconsin, got hooked after she began playing the game three months ago with her boyfriend. Now she's on level 213.

"I got a lot further than he did, and now he's given up," she said, with a trace of pride. "I've always liked puzzle games -- 'Tetris' and games like that." Players also can share their "Candy Crush" progress with friends via Facebook -- something that Byler was reluctant to do at first because he was weary of friends posting "FarmVille" updates.

Marlon, 13, had tried one sport and after-school activity after another, but none of them stuck. That was until he started going to Pixel Academy, an extracurricular tech wonderland for kids in Brooklyn, NY.

"Every parent's constant anxiety is screen time," said Broach, who lives in New York's East Village. "At Pixel Academy, he's spending time in front of a screen and learning at the same time."

Marlon, like the other 50 kids who go to Pixel Academy, learns to code, make movies with special effects and use the 3-D printer. He made Broach a 3-D heart from the printer for Mother's Day.

Mike Fischthal, a former 3-D animator at Nickelodeon, started Pixel earlier this year. It's grown so quickly that the academy is ready to hire an eighth employee this summer and will run a 3-week camp in July, after parents pleaded for one. The youngest coder at the academy is six years old.

The conditions are just right for a place like Pixel Academy to thrive. Earlier this year, the kid coding craze heated up after tech executives Microsoft (MSFT, Fortune 500) founder Bill Gates, Facebook (FB) founder Mark Zuckerberg and Twitter's Jack Dorsey released a video urging kids to learn how to code.

Add to that the recent tech wunderkind stories -- David Karp sold blogging site Tumblr, which he built at 20-years-old, to Yahoo (YHOO, Fortune 500) for $1.1 billion, and 17-year-old Nick D'Aloisio sold his news-reading app also to Yahoo for tens of millions. Karp dropped out of high school, and D'Aloisio started coding at the age of 12. Similar schools across the country and online, including Codeacademy and CoderDojo, with branches in Minneapolis, Seattle and Bismark, ND, have also cropped up to meet the growing demand.

In the first public hearing dedicated to the programs since former NSA contractor Edward Snowden exposed them this month, members of the House of Representatives Intelligence Committee showed little will on Tuesday to pursue significant reforms.

Instead, both U.S. officials and lawmakers spent hours publicly justifying the phone and Internet monitoring programs as vital security tools and criticized Snowden's decision to leak documents about them to media outlets.

General Keith Alexander, the head of the NSA, said Snowden's leaks had inflicted "irreversible and significant" damage on national security.

"I believe it will hurt us and our allies," Alexander told the House intelligence panel, which helps oversee the vast surveillance efforts.

Snowden's disclosures have ignited a political furor over the balance between privacy rights and national security, but President Barack Obama and congressional leaders in both parties have backed the programs and no significant effort has emerged to roll them back.

While critics have blasted the surveillance as government overreach without enough independent oversight, proposed legislative remedies discussed so far have focused on tightening rules for contractors and making the secret court that approves warrants for surveillance more transparent.

"People who are skeptical of the program have no understanding of what the program is," U.S. Representative Mike Rogers, the Republican chairman of the intelligence panel, told reporters after the hearing.

Alexander told the panel the monitoring was not "some rogue operation," and defended it as legal, closely supervised and crucial to defending Americans.

"I would much rather be here today debating this point than trying to explain how we failed to prevent another 9/11," he told the committee in his second public appearance before Congress since the programs were exposed.

"In recent years these programs, together with other intelligence, have protected the U.S. and our allies from terrorist threats across the globe to include helping prevent ... potential terrorist events over 50 times since 9/11," he said.

After more than a week, the biggest series of protests to sweep Brazil in more than two decades continued in major capitals and moved into smaller cities. Focused at first in cities like Sao Paulo, Rio de Janeiro and the capital, Brasilia, demonstrations in more than 70 smaller cities were expected across the country on Thursday.

Wednesday's protests in Sao Paulo, the site of the most frequent marches, followed overnight demonstrations that led to looting and vandalism. Police arrested more than 63 people after protesters torched a police facility, tried to storm City Hall and broke windows and ransacked stores.

"People have the right to participate in protests," Sao Paulo Mayor Fernando Haddad said at a news conference. He was critical, however, of unrest that interfered with "the right to get to work, to get home."

Haddad on Wednesday said he was considering a reduction in bus fares, following cuts by officials in a handful of other state capitals, but still had to weigh how to make up for the subsequent shortfall in revenues for Brazil's biggest city and its financial and industrial hub.

In response, the Free Fare Movement, a protest group that is pushing for free transportation and is one of the chief organizers of the demonstrations, lambasted what it called the "inversion of the debate" by local authorities.

"They say the demonstrations impede the right to come and go of the population," the group said in a statement. "It is the people demonstrating who are in fact fighting to guarantee that right."

POOR PUBLIC SERVICES

The nationwide protests were sparked last week by transportation fare increases, which came as Brazil struggles with annual inflation of 6.5 percent, unleashing a tide of complaints that caught authorities off guard.

Contrasting the country's high taxes with its ramshackle schools, hospitals and other government services, demonstrators have criticized the 28 billion reais ($12.9 billion) of public money being spent on preparations for the 2014 World Cup of soccer, to be played in 12 Brazilian cities.

Speaking in Berlin where John F. Kennedy and Ronald Reagan gave rousing Cold War speeches, Obama urged Russia to help build on the "New START" treaty that requires both countries to cut stockpiles of deployed nuclear weapons to 1,550 each by 2018.

The speech, a day after Obama met President Vladimir Putin at a summit where they disagreed publicly about Syria, was given a frosty reception by Moscow which said it could "not take such proposals seriously" while Washington was beefing up its own anti-missile defenses.

"After a comprehensive review I have determined that we can ensure the security of America and our allies, and maintain a strong and credible strategic deterrent, while reducing our deployed strategic nuclear weapons by up to one third," Obama said.

"I intend to seek negotiated cuts with Russia to move beyond Cold War nuclear postures," he said at the Brandenburg Gate, which once overlooked the Berlin Wall that divided the communist east and the capitalist west.

Russia says U.S. plans for anti-missile defenses harm the goal of arms reduction by requiring Moscow to hold more missiles or lose its deterrent capability.

"How can we take the idea of strategic nuclear weapons reductions seriously when the United States is building up its ability to intercept these strategic nuclear weapons?" Deputy Prime Minister Dmitry Rogozin said.

"These things clearly do not go together. It's obvious that Russia's highest political leadership cannot take such proposals seriously," Rogozin told reporters.

Obama's vision of a "world without nuclear weapons" set out in a speech in Prague in 2009, three months into his presidency, earned him the Nobel Peace Prize. But his mixed results so far have fuelled criticism that the prize may have been premature.

Experts said reducing the nuclear arsenal makes strategic and economic sense. But Mark Fitzpatrick at the International Institute for Strategic Studies said Obama faces major obstacles "including a recalcitrant Russia and a reluctant Senate".

Putin, speaking in St. Petersburg minutes before Obama's speech, made no direct comment but voiced concern about U.S. missile defenses and high-precision weapons. Body language between Obama and Putin was chilly when the two men met at the Group of Eight summit on Tuesday in Northern Ireland.

The Swiss government has warned that the bill's failure could prompt impatient U.S. prosecutors to indict banks, though it could still use an executive order to allow them to hand over data to try to avoid criminal charges.

The bill, which lawmakers from both the center-left and right opposed for widely differing reasons, was designed to let banks sidestep Swiss secrecy laws by disclosing their U.S. dealings so they could avoid prosecution. With or without the law, they will still seek out of court settlements with U.S. authorities that could cost the industry as much as $10 billion.

Parliament's lower house voted 123 to 63 against debating the legislation, effectively killing the law, even though the upper house had confirmed its support earlier in the day.

Switzerland's banking lobby expressed regret about the vote and urged the government to do everything possible to help banks reach settlements under a U.S. Department of Justice program.

"Switzerland must not take the risk of a further indictment of a bank lightly," the Swiss Bankers Association said in a statement.

Finance Minister Eveline Widmer-Schlumpf said the government would do everything in its power but its options were limited without the bill.

The protection of client information has helped to make Switzerland the world's biggest offshore financial center, with $2 trillion in assets. But the haven has come under fire as other countries have tried to plug budget deficits by clamping down on tax evasion, with authorities investigating Swiss banks in Germany and France as well as the United States.

Experts were divided over the threat posed to Swiss banks by parliament's decision to oppose the law.

"The Americans will get the data they want. They will not stop until they have it," said Martin Naville, head of the Swiss-American Chamber of Commerce. "It is taxing the patience of our American friends. When their patience is over, there will be indictments, perhaps just one or two, but it will be more than enough to create chaos."

No one was immediately available for comment at the U.S. Department of Justice. WEGELIN PRECEDENT?

The company says the device, at 6.18 mm thick, is the world's slimmest. It has a 5 megapixel front-facing camera, designed for taking "selfies", or pictures of the owner to be shared on social media networks.

The company picked the launch date - 6/18 (June 18) - to tie in with the smartphone's dimensions.

The launch, at an arts venue in North London, takes a cue from Apple and Samsung, both of which have made new product announcements at high profile events for a number of years.

Previously Huawei unveiled its handsets at industry trade shows like Mobile World Congress in Barcelona.

Huawei, which also makes telecom networking gear, is looking to drive sales of its consumer devices, a sector in which it has only had its own brand for about three years.

The company was the fourth-largest maker of smartphones in the first quarter of 2013, trailing LG Electronics and the two dominant brands Apple and Samsung, according to analyst firm Gartner. The top two sold more than 100 million units between them, while LG sold 10 million and Huawei 9 million, most of which were in its native China.

The Ascend P6 uses Huawei's customized version of Google's Android operating system.

Industry analyst Ben Wood at CCS Insight said that at the right price the Ascend P6 would attract buyers who had not considered Huawei before.

"Huawei P6 is darn thin," he tweeted. But he added that the device was not, at this stage, compatible with the high speed, next generation 4G networks, which are being rolled out across the world.

Carolina Milanesi at Gartner said she would have liked to see a more original design instead of something that tries to position the brand as an alternative to Apple by going with a similar rounded metal design.

Bradley is stepping aside as executive vice president of the printing and personal systems unit, which also includes tablet computers, and will report directly to Chief Executive Meg Whitman in his new job as vice president for strategic growth initiatives.

Siemens, together with its partner Nokia is reviving efforts to find a buyer and has approached private equity companies TPG, KKR and Blackstone, the sources said.

Nokia and Siemens have been looking to exit the joint venture company through a buyout or public offering.

Nokia and Siemens declined to comment, as did the private equity companies.

NSN has shown signs of a turnaround in recent quarters, helped by a massive restructuring drive last year that cut around 20,500 out of 74,000 jobs.

Siemens is again taking the initiative to woo potential investors with a progress report on the unit's performance, the sources said.

Siemens has made previous efforts to sell the unit to private equity firms, but potential investors have been put off by different expectations on price.

In April a founding six-year pact binding Siemens and Nokia in Nokia Siemens Networks expired with sources saying at the time there was no sale in sight for at least the next few months.

What investor would pay millions to build a data center for a new game or service that might not take off?

Now, enterprises are following the little guys' lead and embracing cloud computing. But because of security concerns, custom requirements, and in some cases, sheer scale, a number of big organizations are doing it with a twist: They're creating their own private clouds.

PayPal, the U.S. National Security Agency, Samsung, BestBuy.com, Comcast, Bloomberg and even a group of particle physicists are among those that have launched their own isolated networks.

A private cloud is built on hardware that a business controls itself (sometimes through a contract with an outside vendor), rather than sharing it with others. Clouds are different than traditional data centers in several ways, a key one being that users can call up new computing resources on demand. That's a major improvement for many enterprises, where a developer might have to wait months to get access to an IT department server.

At PayPal, a unit of eBay (EBAY, Fortune 500), developers used to have to fill out as many as 100 forms and sit through hours of meetings to roll out a small service, recalls Saran Mandair, the company's senior director of platform engineering and operations.

Now, programmers log into a portal where they can upload code to test, change and deploy. The goal -- which Mandair says PayPal hasn't quite reached -- is for a feature or service to go from a developer's desktop to a live service in an hour. BestBuy.com is also shaving time off its development cycle with a newly launched cloud.

The company has more than 40 development teams around the world working on its website, which were using a variety of setups to test their projects. Many didn't match the production platform, causing problems when new features launched.

With the new cloud system, developers can test features in exactly the way they'll function on the live site. Because the process is so easy, developers are more likely to experiment. "Our teams are free to innovate," says Steve Eastham, Best Buy's director of e-business architecture.

It also means that coders are less likely to go rouge. Previously, some were turning to public cloud services for the computing resources they needed. But because they were doing so independently, charging the services on corporate credit cards, it was difficult for Best Buy to track resource usage and control spending, Eastham says.