Thursday, March 7, 2013

US stocks edge up following Dow's record day

FILE - In this Tuesday, March 5, 2013, file photo, specialist Christian Sanfillippo, right, smiles as he works at his post on the floor of the New York Stock Exchange. The Dow's new all-time high and better economic data from the United States propelled world stock markets higher Wednesday March 6, 2013. (AP Photo/Richard Drew, File)

FILE - In this Tuesday, March 5, 2013, file photo, specialist Christian Sanfillippo, right, smiles as he works at his post on the floor of the New York Stock Exchange. The Dow's new all-time high and better economic data from the United States propelled world stock markets higher Wednesday March 6, 2013. (AP Photo/Richard Drew, File)

NEW YORK (AP) ? After barreling through a record the day before, the Dow Jones industrial average meandered higher on Wednesday.

The Dow edged up 42.47 points, or 0.3 percent, to close at 14,296.24. An encouraging job-market report helped nudge the stock market up and pushed bond prices lower.

On Tuesday, the Dow blew past the previous all-time high it hit more than five years ago. The index of 30 big corporations has more than doubled since hitting a low during the financial crisis in March 2009.

The question now is, how much longer can it keep climbing?

In the past, stock indexes have often drifted lower in the months after breaking through previous record highs. David Brown, director of Sabrient Systems, an investment research firm, sees plenty of reasons for the market to keep climbing, however. People are putting their cash into the stock market again. And the alternatives, like bonds, are hardly appealing.

"There is literally nowhere else to go," Brown said. "Do you really want to make 1.9 percent on a 10-year Treasury? You won't make any money doing that."

In other trading, the Standard & Poor's 500 index rose 1.67 points, or 0.1 percent, to 1,541.46. The Nasdaq slipped 1.77, less than 0.1 percent, to 3,222.36.

Microsoft led a decline in tech stocks, losing 26 cents to $28.09. European regulators fined the company for breaking an antitrust agreement requiring the software giant to offer computer users a choice of Internet browsers, instead of just Internet Explorer.

Companies added 198,000 U.S. workers to their payrolls in February, according to payment processor ADP. The firm also said employers added 23,000 more jobs in January than first reported.

The ADP survey suggests that government spending cuts have yet to deter employers from hiring. Investors look to the ADP survey as a preview to the closely watched Labor Department report, which comes out Friday. Economists expect the government to say employers added 152,000 jobs in February, lowering the unemployment rate to 7.8 percent from 7.9 percent.

As traders anticipated better news about the job market, bond prices fell and the yield on the 10-year Treasury rose to 1.93 percent from 1.90 percent late Tuesday.

Expectations of a stronger economy tend to lure traders out of Treasurys and into investments that tend to rise with economic growth, like stocks.

Over the long haul, stock markets head higher, but the path is rarely smooth. In October 2007, the Dow hit its previous high of 14,164. A year later, the country was in the middle of a financial crisis and the Dow was in free fall. In January 1987, the Dow closed above 2,000 for the first time, then hit a record of 2,722 in August. Two months later, the Dow had plunged 36 percent from its peak, including a huge drop on Black Monday.

That hardly means the market is about to take another plunge. Analysts point to other reasons, besides the poor returns offered by bonds, that the stock market could continue climbing: the economy is slowly recovering, interest rates and inflation are low, and stocks are not especially expensive. The 30 companies in the Dow trade for 15 times their per-share earnings in 2012, in line with their historical average.

Among other companies making big moves:

? Staples sank 7 percent after the office-supply chain posted a 72 percent drop in quarterly earnings. The company was hit by charges from closing stores. Staples also warned of weaker sales growth this year. Staples dropped 95 cents to $12.34.

? Strong quarterly profits propelled Big Lots up 6 percent. The discount store posted better earnings than analysts had projected, helped by soaring sales in Canada. Big Lots rose $2.08 to $35.97.

? American Eagle Outfitters fell 10 percent after the clothing retailer reported earnings that fell short of analysts' estimates. Its quarterly earnings forecast also fell short, and the company's stock dropped $2.28 to $20.27.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2013-03-06-Wall%20Street/id-c2e257ec9dfe4abba59439ca9000313e

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Android Phones May Release Confidential Contents When Frozen

Android is the world?s most popular smartphone operating system, but it?s also the least secure: Most security firms, including notables like McAfee, Kaspersky and Sophos, all agree that Google?s little green robot is the most popular place for new malware.

While Android is exceedingly susceptible because its code is famously open source, a team of German researchers have discovered a new vulnerability in the operating system, which essentially bypasses Google?s data scrambling encryption system introduced in Android 4.0 "Ice Cream Sandwich" to reveal the phone?s hidden data.

Engineers at the Friedrich-Alexander University in Erlangen released a report on Thursday that explains how freezing an Android phone can help law enforcement or forensic workers expose a scrambled Android phone?s contact lists, photos, browsing histories, and more.

?We present FROST, a tool set that supports the?forensic recovery of scrambled telephones,? the researchers said in their report?s abstract. ?To this end we perform cold boot attacks against Android smartphones and retrieve disk encryption keys from RAM. We show that cold boot attacks against Android phones are generally possible for the first time, and we perform our attacks practically against Galaxy Nexus devices from Samsung. To break disk encryption, the bootloader must be unlocked before the attack because scrambled user partitions are wiped during unlocking. However, we show that cold boot attacks are more generic and allow to retrieve sensitive information, such as contact lists, visited web sites, and photos, directly from RAM, even though the bootloader is locked.?

In their work, FAU researchers Tilo Muller, Michael Spreitzenbarth and Felix Freiling left a locked Galaxy Nexus phone running Android 4.0 inside a -15 degree Celsius freezer for about 60 minutes.

?Cooling the device down under 10 degree Celsius increases the success of cold boot attacks considerably, because RAM contents fade away more slowly if RAM chips are cold,? the researchers said. ?After an hour, the phone temperature should be below 10 degree. Note that the temperature varies with the point you measure (metal or plastic).?

Once the phone was cold enough and still operational (one can check by pressing the power button), the Android phone was ready for ?cold boot attacks.? Without a reset button, however, the team had to reboot the Galaxy Nexus by disconnecting and replugging its battery in a very swift motion that lasts ?less than 500ms.? Once the battery?s back in place, the FAU researchers simply held down the power button with both volume up and down buttons ? a combination that brings the Android phone into ?fastboot mode,? which means researchers could flash their ?FROST? tool directly onto the device.

The FAU researchers connected the Android phone to a Linux PC via USB, and installed the ?frost.img? file to the phone. Once the operation was completed, a ?Recovery Mode? option appears under the ?fastboot? menu, which then rebooted the phone with the FROST tool. The recovery image features several options like key recovery using quick or full search options, the ability to decrypt and mount the phone?s data, and crack the 4-digit PIN key with brute force (like in the photo below).

frost_pincrack Photo: Courtesy / informatik.uni-erlangen.de/ The rebooted Galaxy Nexus shows the Frost tool, which can expose critical information about the Android phone without even needing to unlock it.

"We thought it would work because smartphones are really small PCs," Muller told BBC. "But we were quite excited that the trick with the freezer worked so well."

Muller may be right about Android devices being similar to PCs, but in the US and Australia, Sophos says Android threat exposure rates have greatly exceeded those of PCs in 2013.

We?ve reached out to the trio of FAU researchers to learn more about whether or not the FROST tool can be applied to all Android phones running 4.0, or possibly phones even running 4.1 Jelly Bean. We will update this story as soon as we learn more.

Android currently claims 52.3 percent of all smartphone platform share, according to comScore.

Source: http://www.ibtimes.com/android-phones-may-release-confidential-contents-when-frozen-1115287

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Oops: Kia car name stirs controversy in N. Ireland

Korean carmaker Kia has touched off an unanticipated firestorm with the debut of its Provo concept vehicle at this year?s Geneva Motor Show.

Finding a suitable name for a vehicle is never easy, usually because the best choices are already taken, but occasionally because they might carry some inadvertently negative meaning. In the case of the Provo, a British lawmaker has gotten fired up because Provo was the street name for the Provisional IRA, the violent arm of the Irish Republican Army blamed for nearly 2,000 deaths during the period referred to as The Troubles, the 1970 to 1997 campaign of violence meant to win independence for the region from Britain.

It didn?t help that Kia ? whose name can be seen as shorthand for ?Killed in Action? ? promoted the design concept vehicle as a ?radical super-mini coupe which aims to set the streets alight.?

That led Gregory Campbell, a member of Parliament from Northern Ireland?s E. Derry to introduce a bill asking Kia to make sure it didn?t actually sell a car with the Provo name. His goal, MP Campbell said, according to RTE News, was to "reinforce with Kia the seriousness of the issue and the need to deal with their customers in a sensitive manner.?

The red-faced automaker quickly made a U-turn. Though it was too late to re-badge the Kia Provo concept vehicle, it now promises it will not use the name on a production vehicle ? certainly not when for sale on the British Isles.

The lawmaker said he is pleased Kia ?acted quickly,? adding the maker?s ?decisive action will be welcomed by many people, in Northern Ireland and beyond, whose lives have been affected by the murderous actions of the Provisional IRA.

Along with actions in Northern Ireland, the ?provos? were blamed for numerous bombings and murders in England.

The unexpected flap underscores the challenges carmakers face when they try to come up with new names. Perhaps the most famous example was General Motors errant decision to market its Chevrolet Nova small car in Latin American markets, unaware the name also could mean, ?doesn?t go.? As The Associated Press noted, the Mazda LaPuta could be translated into ?the whore,? while the Honda Fitta was interpreted by some Scandinavians to refer to a woman?s genitalia.

A whole industry has grown up around finding available and safe names, though Toyota ran into a snag when it launched its luxury brand Lexus in 1989. It was sued by Mead Data Central, the parent company of LexisNexis, the legal and news service, but after initially agreeing to a pay-off, Toyota let the case go to court where the car company won on appeal.

However, Toyota backed down when Ford threatened to sue over the planned name for a new full-size pickup. Ford claimed Toyota?s T-150 was too close to the Ford F-150, long the best-selling vehicle in the U.S. The Japanese maker ultimately decided to name its truck the Tundra.

? China Set to Become Globe?s Top Luxury Car Market

? Ford Sets Up European Carsharing Operation

? Chrysler Retains Sales Lead in Canadian Market

? Management Shake-Up at Toyota Increases Role of U.S. Execs

Copyright ? 2009-2013, The Detroit Bureau

Source: http://www.nbcnews.com/business/oops-kia-car-name-stirs-controversy-northern-ireland-1C8728066

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Members of Hugo Chavez's inner circle

Key players within Venezuelan President Hugo Chavez's inner circle:

? Nicolas Maduro, vice president: One of most visible and resilient leaders of Chavez's United Socialist Party of Venezuela. Was bus driver and union leader years ago. Showed political finesse as National Assembly president and was foreign minister from 2006 until 2012, when he was appointed vice president. Chavez designated Maduro as his chosen successor before his final surgery.

? Diosdado Cabello, former army officer who joined 1992 coup attempt led by Chavez: Was governor of Miranda state in 2004-08, when he lost re-election bid. Also served as vice president. Named National Assembly president in January 2012, Chavez said, due to support within his party.

? Adan Chavez, president's older brother: Mild-mannered former university physics professor. Was Venezuela's ambassador to Cuba before president appointed him in 2006 as minister of the presidency. Was education minister in 2007-08, and then was elected governor of their home state of Barinas.

? Rafael Ramirez, oil minister and president of state oil company Petroleos de Venezuela SA: Was mechanical engineer. Appointed energy minister in July 2002. Has played powerful role overseeing oil industry.

? Elias Jaua, former vice president: Former university professor. Became Chavez's minister of the presidency and agriculture minister. Earned sociology degree from Central University of Venezuela before getting involved in politics.

? Adm. Diego Molero, defense minister: Chavez promoted him to the rank of admiral in chief just before his last surgery.

? Gen. Henry Rangel Silva, former defense minister: Joined Chavez in unsuccessful 1992 attempt to overthrow government. Was chief of country's civilian intelligence agency under Chavez, and in 2012 was appointed defense minister. Criticized by opposition for saying in 2010 interview that military wouldn't accept "hypothetical opposition government." U.S. officials accused Rangel of aiding Colombian rebels; Chavez dismissed accusation as politically motivated.

? Maria Gabriela Chavez and Rosa Virginia Chavez, two daughters often at Chavez's side: Of his four children, Maria and Rosa took on biggest roles accompanying the divorced president at events, though they seldom spoke publicly. Maria took on important role in 2002, when in midst of a coup that briefly ousted Chavez she told Cuban television that her father hadn't resigned and was being held by soldiers. Eldest daughter Rosa married to Jorge Arreaza, government's science and technology minister. Both daughters were with Chavez frequently during his cancer treatment.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/3d281c11a96b4ad082fe88aa0db04305/Article_2013-03-05-Venezuela-Chavez's%20Inner%20Circle/id-915a454504704a04bf2fb43733bb409a

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Should President Obama give up golf during 'sequester'?

The (failed) GOP bid to strip funds for presidential golf trips was just one move in an escalating struggle over Obama's 'sequester' strategy, such as axing popular White House tours.

By Peter Grier,?Staff writer / March 6, 2013

The White House is seen through a chain-link fence where the inaugural reviewing stand once stood in Washington. The Obama administration is canceling tours of the White House beginning March 9, citing staffing reductions prompted by automatic budget cuts that began to take effect last Friday.

Pablo Martinez Monsivais/AP

Enlarge

Should President Obama give up golf for the duration of the "sequester"? That?s what some irritated conservative GOP lawmakers believe. They?re not mad at presidential sports per se as much as annoyed at what they consider to be Mr. Obama?s grandstanding on spending cuts mandated by sequestration. In particular, they?re peeved that the administration, with blaring trumpets, has announced that public tours of the White House have been cancelled pending further notice.

Skip to next paragraph Peter Grier

Washington Editor

Peter Grier is The Christian Science Monitor's Washington editor. In this capacity, he helps direct coverage for the paper on most news events in the nation's capital.

Recent posts

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So on Tuesday, Rep. Louie Gohmert (R) of Texas offered an amendment to the omnibus spending bill that the House is currently considering. None of the money authorized by this continuing resolution ?may be used to transport the President to or from a golf course until public tours of the White House resume,? read Representative Gohmert?s amendment.

In a Tuesday floor speech, Gohmert said he hoped this prodding would make the White House rethink tour cancellations. The Texas lawmaker noted that spring break is coming up and tourists of all political persuasions have already made plans for tours of D.C.

?They?ll get their tour of the White House, and all it will cost is one or two golf trips less,? said Gohmert.

Nope. This isn?t happening. House Republican leaders ruled the amendment not relevant to the spending bill, and blocked it from getting a vote on the chamber floor.

But we think Gohmert?s effort was nevertheless indicative. For one thing, it shows that the conservative wing of the GOP remains unhappy with their leadership?s approach to the sequester standoff.

They want more confrontation with the White House, not less. In particular, they want to use the continuing resolution as a club to try to force through even deeper spending reductions, such as cutting money for implementation of some aspects of the Affordable Care Act, aka ?Obamacare."

Influential conservative pundit Erick Erickson makes this point Wednesday at RedState. He bemoaned the demise of Gohmert?s amendment and urged GOP conservatives to vote against allowing the continuing resolution to proceed, in the name of trying to force deeper cuts.

?Conservative groups must set a new standard,? Mr. Erickson writes, but he holds out little hope they?ll actually block the bill.

For another thing, the golf-versus-building-tour dust-up shows how the White House has shifted from making big claims about the sequester?s alleged dire effects to implementing small, yet pointed reductions.

ABC?s Rick Klein makes this point Wednesday in the morning political newsletter The Note.

?Inside week one of the sequester, we went from workplace deaths and forest fires and airport chaos to ... no more White House self-guided tours? The Obama administration has gone from very big to very small in sequester messaging, brushed back by the fact some early claims turned out to be less than truthful, and that, well, big things aren?t happening yet,? Mr. Klein writes.

The fact is White House tours are popular with voters. Both Republican and Democratic House members are more than happy to procure tour tickets for traveling constituents. But because of security concerns and sheer popularity, this has to be done well in advance ? so tourists with spring break tour times are not going to be happy. They?ll have to hit the Smithsonian instead.

Do the tours really have to be cut? That?s another question entirely. Given their visibility, it?s quite possible that the administration is just engaging in a variant of the time-honored Washington Monument budget ploy.

That?s named after an apocryphal story of a Parks Service chief offering to close the Washington Monument as a contribution to budget austerity. The point is to highlight the effect of reductions by doing away with the most visible and well-liked government services.

But the Obama administration can?t close the Washington Monument this time around. It?s already shut to visitors due to repairs needed to fix the effects of the 2011 D.C.-area earthquake.

Source: http://rss.csmonitor.com/~r/feeds/csm/~3/ujBKAGli-II/Should-President-Obama-give-up-golf-during-sequester

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Friday, March 1, 2013

Hoping for a 'fresh start,' mother abandons child in woods

By Andrew Rafferty, Staff Writer, NBC News

A 24-year-old Pennsylvania woman abandoned her 8-month-old daughter in the woods with the hopes of getting ?a fresh start,? according to police.

Jennifer Cutruzzula was spotted by a neighbor walking into the woods with her child, only to emerge alone. The neighbor called police and went into the woods and found the baby girl on a muddy hillside next to a bottle of milk.

?She walked into this area with the intention of abandoning the child,? said Alleghany County District Attorney Stephen Zappala.

Cutruzzula told police she left her child because she wanted ?a fresh start,? according to a criminal complaint.

Authorities say the infant is fine after being treated and released from a local hospital. The baby is currently in the custody of Child and Youth Services, according to WPXI-TV Pittsburgh.

Cutruzzula is charged with endangering the welfare of children and recklessly endangering. She is being held on $50,000 bail.

Zappala said the Pittsburgh-area woman will undergo a mental evaluation.

?I have never see anything like this. I don?t know how anyone could leave a child in the woods and walk away,? said Zappala.

Source: http://usnews.nbcnews.com/_news/2013/02/28/17137418-hoping-for-a-fresh-start-mother-abandons-child-in-woods?lite

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Loss Of Online Privacy Kills Free Speech - Business Insider

A few months back, an advertising executive argued that more online privacy would kill free speech.

Richard Frankel, president of the advertising company Rocket Fuel, titled the post ?How the Do Not Track Plan Will Ultimately Kill Free Speech.?

It?s understandable that advertisers are so resistant to the concept of Do Not Track ? it could change the way they access data, which would force them to innovate their business models and practices.?

Just because DNT could impact the advertising industry in the short-term, however, doesn?t warrant its intense broadcasting of fear, uncertainty and doubt (FUD), and at times, outright deception. Frankels?s piece was one in a string of ad exec attacks on privacy that claim that the Internet will be doomed if consumers get more of the privacy they want.

In the interest of transparency, let me explain my angle here. I?m an attorney, privacy advocate, and analyst at Abine, an online privacy company in Boston. We make simple tools that give people a choice over whether their personal info is collected, stored, and sold online.

Unlike the advertising companies, we don?t collect or sell any user data. We only get paid if users like our free products and choose to buy our premium ones. It?s an up-front relationship that?s clear to our customers.

And beyond my role at Abine, I care deeply about preserving the web as a place where we can say and explore interesting, sometimes controversial, things. As a fan of free speech and expression, I have a vested interest in keeping the Internet open and uncensored.

Make no mistake about it: we live in a state of surveillance. Hundreds of advertising and tracking companies follow everything we do online -- the articles we read, the videos we watch, the sites we always visit, the Facebook comments we make, and more.

They combine that online data with offline data like our voting record, employment history, and marriage licenses, and use it to build an extremely detailed profile. Companies like Facebook scan the contents of photos and private messages for Homeland Security ?risk words? like ?infection,? ?body scanner,? or ?hacker? and turn them over to law enforcement.

Even if you delete your embarrassing Facebook posts, companies like Social Intelligence sell the past 7 years of posts to hiring managers. The wireless companies you pay for mobile service turn over 1.3 million customer records to law enforcement each year, which include texts and your phone?s GPS location wherever it went.

The divide between public and private surveillance is virtually nonexistent, and advertising companies are part of this ecosystem.

When you?re constantly being watched, you necessarily lack privacy. And when you?re constantly being watched, you act differently. That seems like an obvious point to those of us who?ve belted out song lyrics alone in our cars but would be terrified to do the same on stage in front of thousands or who laugh at things with their friends that they?d never say in front of their bosses, but observation effects are also well-established in scientific research, law, and popular culture (Big Brother, anyone?).

Privacy scholar Neil M. Richards writes that ?surveillance inclines us to the mainstream and the boring?when we are watched while engaging in intellectual activities, broadly defined?thinking, reading, web-surfing, or private communications?we are deterred from engaging in thoughts or deeds that others might find deviant.?

Deviance just means difference: deviation from the norm, creativity, standing out from the crowd. If you knew you were being watched and that your activities may resurface down the road in a job interview, on a date, in a newspaper, you?d be less likely to go that political rally, that Alcoholics Anonymous meeting, that gay bar, or that protest, all things that you have a right to do that are valued parts of a free, democratic society.

With privacy, you have control over who gets to see what you?re doing and where you are. You get to be one way around your boss, another around your kids, another around your best friends since elementary school. You get to pick that divide.

But when you?re watched all the time and you never know how that information will be used or where it?ll turn up, you censor yourself everywhere. This is called the Panopticon Effect. All this openness that social networks insist we want by default, the pervasive data collection that advertisers argue is good for us: they make anyone who?s paying attention censor themselves.

A key part of free speech is anonymous speech. Anonymous speech is a constitutionally protected First Amendment right, and as the Supreme Court stated in McIntyre v. Ohio Elections Commission, ?an honorable tradition of advocacy and of dissent.?

Online advertising constantly fights against anonymity and pseudonymity, trying to learn everything about web users to unmask them and peel away layers of demographic info, interests, and behaviors. Many social networks like Facebook have real name policies, insisting that members use their full, legal names on their accounts or be banned.

Frankel says that ?With higher ad revenues comes more rich content that spurs vibrant discussion.? I disagree. You know what spurs vibrant discussion? People, especially people behind pseudonyms. Ever been on a message board? A Reddit thread?

The most ?vibrant? discussions happen when people feel sufficiently protected to be honest. Sure, some people hide behind pseudonyms to harass others, but the core of the First Amendment avoids censoring the positive, protected uses of speech just because certain bad actors may abuse it.

To say that advertising is the only thing driving creative content doesn?t give credit to humanity?s ingrained creativity. First, plenty of content providers get paid for their work directly, from recording artists to bestselling authors to journalists. 43% of Americans pay content creators?authors of magazine articles and books?for e-books, and there are 400,000 paid subscribers to the Wall Street Journal alone.

The majority of people blogging and posting on social media today create content out of a desire to express themselves that?s unrelated to money. Just talk to any one of the thousands of bloggers and podcasters, particularly the anonymous ones, who pay to host their own websites just to get their message out to the public.

Most of these people don?t blog or podcast for a living; they do it because they love it and because their message is important to them. There?s power?and satisfaction?in speaking one?s mind, and it exists independently from ad money.

Privacy isn?t a hindrance to free speech; it?s the driving force behind it. Privacy provides both the boundaries of and protection for the space in which we can be ourselves. Privacy nurtures self-expression, creativity, speaking your mind, associating with whomever you wish, and exploring your interests.?

These are the First Amendment?s protections:? freedom of speech, of association, and of assembly.? They?re so important for self-actualization and self-determination that our founders immortalized them in the Bill of Rights. Privacy isn?t about having something to hide; it?s about having something to live for.

Why the ad industry is wrong about Do Not Track

A few months back, an advertising executive argued that more online privacy would kill free speech. Richard Frankel, president of the advertising company Rocket Fuel, titled the post ?How the Do Not Track Plan Will Ultimately Kill Free Speech.?

It?s understandable that advertisers are so resistant to the concept of Do Not Track ? it could change the way they access data, which would force them to innovate their business models and practices.? Just because DNT could impact the advertising industry in the short-term, however, doesn?t warrant its intense broadcasting of fear, uncertainty and doubt (FUD), and at times, outright deception.

Frankels?s piece was one in an ongoing string of ad exec attacks on privacy that claim that the Internet will be doomed if consumers get more of the privacy they want.

In the interest of transparency, let me explain my angle here. I?m an attorney, privacy advocate, and analyst at Abine, an online privacy company in Boston. We make simple tools that give people a choice over whether their personal info is collected, stored, and sold online. Unlike the advertising companies, we don?t collect or sell any user data.

We only get paid if users like our free products and choose to buy our premium ones. It?s an up-front relationship that?s clear to our customers. And beyond my role at Abine, I care deeply about preserving the web as a place where we can say and explore interesting, sometimes controversial, things.

As a fan of free speech and expression, I have a vested interest in keeping the Internet open and uncensored.

Make no mistake about it: we live in a state of surveillance. Hundreds of advertising and tracking companies follow everything we do online -- the articles we read, the videos we watch, the sites we always visit, the Facebook comments we make, and more.

They combine that online data with offline data like our voting record, employment history, and marriage licenses, and use it to build an extremely detailed profile. The divide between public and private surveillance is virtually nonexistent, and advertising companies are part of this ecosystem.

In this post, I?ll address Frankel?s argument - and the other advertisers using similar arguments - which goes something like this: 1) behavioral (or tracking-based) advertising is how online advertisers make money; 2) without advertising, content providers like online newspapers won?t be able to survive; 3) with paid subscriptions; only rich people who can afford content will get it, creating class segmentation.

In brief, here?s why they?re wrong:

1) the majority of online advertising revenue comes from contextual ads, which don?t pose any personal privacy risks;
2), the online advertising industry?s move to real-time bidding platforms are actually hurting content providers far more than a shift from behavioral advertising to contextual advertising ever could; and
3), beyond this being a reductio ad absurdum argument (?everything will be locked behind a paywall if we stop tracking!?), this segmentation already exists through the filter bubble that the advertising industry and its tracking has caused.

Realistically, online privacy isn?t going to hurt anything but these advertisers? antiquated business models, which will have to adapt to respect the privacy of their target audiences.

Let?s first examine the fallacy that online tracking doesn?t use personal information. Frankel argues that ?Targeted, relevant ads don?t harm consumers?personal information is not necessary, or collected, to produce them.?

This statement is less than fully honest when we look at Rocket Fuel?s own website, which boasts that it can ?zero in on? people based on ?age, gender, profession, ethnicity, and relationship status,? among many other personal characteristics. They have more than 20,000 audience segments, including soccer moms and caregivers:

The company goes on to say that they can find ?users engaged in highly targeted activities that define their interests and personalities? by going ?beyond behavioral, contextual, or geo-targeting by combining intelligent demographic, lifestyle, purchase-intent, and social data with our own suite of targeting algorithms, blended analytics, and expert analysis.?

And they?re not just using your online activity here:? ?Online data has evolved from simply providing insights like browsing activity, shopping cart info, sign ups, etc. into an incredible selection of more than 20,000 unique audience segments. Advertisers can even leverage offline purchase and consumption data for their online campaigns.?

Obviously, significant amounts of personal information are being collected. And the traditional advertiser counter-argument that ?it?s not personally identifiable; it?s only aggregate info? has been debunked time and time again by researchers like Stanford?s Arvind Narayanan and Jonathan Mayer (also see privacy professor Paul Ohm?s excellent summary of the failure of anonymization) and publications like the Wall Street Journal, which found in a December 2012 study that nearly 25% of the web?s 70 most popular sites shared personal data, like name and email address, with third-party companies.

Ad companies like Mixpanel come right out and say ?Now you can tie any kind of data to your users to see exactly who they are and what they have done.? The myth that de-identified data is private is even weaker now with the rise of ?data enhancement? that matches online info with offline data sets.

The only reason these ads can be personalized is because of the personal information, the data collection, that powers them. That?s the real harm here, and that?s always been the harm, despite advertisers trying to shift the focus to targeted ads. No one cares about targeted ads: at worst, they?re annoying or creepy. Let?s just drop it.

The thing people don?t like is having their personal info harvested, mined, sold, and used in ways they can?t even imagine: for determining their credit limits or creditworthiness, playing into whether they get a job, showing them different prices than other people see for the same online shopping items, or influencing their insurance rates.

Even Frankel seems to doubt himself: he says that ?consumers have become more open to [ads],? and then contradicts himself 6 paragraphs later when he says ?Everyone claims to hate online advertising.? His second statement is more accurate: an October 2012 UC Berkeley study found that most people--69%--never or hardly ever find ads useful, and 85% never or hardly ever click them; and a 2012 Pew phone survey of 2,253 participants found that 68% of them were ?not okay with targeted advertising because [they] don?t like having [their] online behavior tracked and analyzed.?

Microsoft surveyed their users about privacy in 2012 and found that 83% of Americans, 84% of Germans, and 81% of UK residents think that ?tracking of personal information is out of hand and consumers need easier ways to block it.? I won?t keep going; you get the picture. The advertising industry keeps preaching about how great data collection is for all of us. If the benefits are so clear, then why not let consumers choose to enable it? Overwhelmingly, the opposite is happening.

Let?s fact-check some of Frankel?s, and the advertising industry in general?s, more unsubstantiated statements:

Online ads have become ?less invasive?

If by ?invasive? he means ?in your face? like pop-ups, then he?s right. But just because data collection is invisible doesn?t mean it?s somehow safer or less intrusive. Advertisers employ a massive array of secret tracking techniques, collecting far more personal information than ever before in history, and they haven?t had the best rap while doing it: remember KISSmetrics creating undeletable cookies?

Google circumventing privacy controls in Safari and getting a $22.5 million FTC fine? Ad network Chitika?s opt-out that only lasted 10 days in contrast to any reasonable consumer?s expectations? Facebook tracking logged-out users anywhere there?s a Like button on the web?

Online tracking is only getting worse: UC Berkeley?s Web Privacy Census, powered by Abine?s privacy software, found an alarming increase in tracking on the top US websites, showing that online tracking will double in 2.5 years if present trends continue.

?The alternative to an ad-supported Internet is a pay-for-play world supported by subscriptions or private ownership. Consumers may think they want an ad-free Internet, but do we really want to pay subscription fees to access all the sites we currently visit for free??

Frankel wrongly equates ?behavioral advertising? with ?all advertising? and offers a false choice between an ad-supported Internet and an all-paid subscription Internet. He neglects to mention that the vast majority of advertising revenue comes from contextual ads, ads that relate to the content the viewer sees and not the personal characteristics of the viewer.

Contextual ads don?t present a privacy problem, and they make up the majority of online advertisements. The reality is that privacy controls will not have a negative impact on the economics of the Internet (at least not past this short-term period of transition), as I?ve argued elsewhere.

And it?s not as though advertisers are truthfully concerned about publishers? bottom lines. Significant evidence suggests the opposite: although online advertising is getting cheaper for advertisers, it?s getting more costly for publishers.

In the past, publishers had the power when pricing ads. You wanted a full-page New York Times ad? There?s a set price for that. With the recent advent of real-time online bidding platforms, advertisers hurt content providers by competing more effectively and cutting down the content provider?s take and involvement.

And at bottom, there?s plenty of research showing that plenty of people will pay small price increases for more privacy. A few dollars is all that?s needed to make the difference, so we?re not talking about a prohibitive expense. Offer people a choice: those who don?t mind surrendering their privacy can keep the status quo, but people who want to avoid it can throw in a few bucks to do so.

The Do Not Track option could serve as the dividing line to signal a consumer?s choice about privacy. Of course, it would need to live up to consumer expectations and actually stop tracking on websites, which notable websites like Twitter have done.

Do Not Track would ?reduc[e] the effectiveness of advertising?

To the contrary. Do Not Track has great potential to increase the effectiveness of advertising. Why? Because Do Not Track lets people tell advertisers not to use certain personalized ads that they find ineffective, usually because they find them creepy or annoying.

Do Not Track is a clear communication from web users to advertisers about which ads those users prefer; which ads work better for them. If ads annoy people and make them build negative associates with the things advertised, they?re not effective advertising.

Even with Do Not Track, advertisers still get to collect and sell user data for advertising: they just can?t show personalized online ads. According to the definition of Do Not Track offered by advertisers (which is at odds with what real people want), people who don?t want to be tracked will still see ads, but not personalized ones. Meanwhile, all other web users will keep seeing behaviorally targeted ads.

Across the board?regardless of whether a consumer clicked Do Not Track?advertisers will still collect all consumers? personal data exactly as before. Again, their definition, not ours.? This definition means that consumers get to voice which type of ads they prefer?personalized or not?and advertisers can still collect and sell everyone?s info. It?s a win-win for advertisers, far from the end of the Internet economy and a blow to advertising effectiveness.

?If independent publishers lose a large percentage of their ad revenues because Do Not Track or other initiatives restrict the free flow of information on the web, they?ll have less money to fund unbiased, journalistic content creation?

We already have a restricted flow of free information on the web, thanks to advertising. Ever heard of a filter bubble? It?s ?a situation in which a website algorithm selectively guesses what information a user would like to see based on information about the user (such as location, past click behavior and search history) and, as a result, users become separated from information that disagrees with their viewpoints, effectively isolating them in their own cultural or ideological bubbles.?

In other words, the more that advertisers or websites (or both, in the case of sites like Google and Facebook) know about you, the more they envelop you with targeted content. You don?t see the same Google search results as everyone else, or the same Amazon home page. Even news sites are targeted to show you articles they think you?ll like. Personal data collection fuels filter bubbles.

Frankel says that greater privacy will ?muffle the voices of many consumers who can?t or won?t pay to express their opinions.? You know what muffles voices? Surveillance, tracking, and the threat that what you say today will be used against you in the future.

That?s why anonymous speech is constitutionally protected and why many people choose to mask themselves when they make political comments. Online advertising works extremely hard to unmask those people, identify them, sell their data, and barrage them with ads. And that?s not what people want.

Source: http://www.businessinsider.com/loss-of-online-privacy-kills-free-speech-2013-2

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