The UpStream (Page 206)

Icahn Loses Case to Stop Dell Buyout Rule Changes

posted Saturday Aug 17, 2013 by Scott Ertz

Icahn Loses Case to Stop Dell Buyout Rule Changes

Michael Dell's plans to take the company that holds his name private has not gone his way. First, after announcing his plans, customers grew concerned that a wrong move could end the company. Enterprises that have relied on Dell's low-end hardware to run mission critical applications were forced to consider other alternatives. In addition, certain investors, most vocally Carl Icahn, objected to the plan, suggesting it was not in the stockholders' best interests.

Mr. Icahn made a lot of noise about his objections, getting enough support to concern Michael Dell and the board of directors. Then, in counter, Dell increased his offer, but required a change to the voting rules. As they stand, the rules state that unvoted shares would be counted as a "no" vote.

With the expectation that as many as 25% of all shareholders would not respond, that would allow a vocal minority of shareholders to block the plan. The change requirement would scrap unvoted shares, only counting those that are legitimately returned. Icahn filed a suit against the board, trying to prevent them from allowing the voting rules to change. Obviously he was counting on this loophole to get his way.

Unfortunately for Icahn, a judge this week denied his request to expedite the suit. This means that the hearing will take place after the vote and there is nothing legally that he can do about it. His only option at this point, as the judge points out, is to outbid Dell and Silver Lake Partners.

Comcast Confirms Prenda Planted Torrents

posted Saturday Aug 17, 2013 by Scott Ertz

It has been two months since The Pirate Bay accused Prenda Law of planting torrents on its site in order to sue. As The Pirate Bay had suggested, Comcast has confirmed that site user Sharkmp4 is actually John Steele, founder and head of the copyright roll Prenda Law.

As it turns out, the company was running a honeypot scheme in which they would upload and seed torrents for content that they owned and then sued the users who downloaded it. Leaders at TPB searched through backups of data to reveal IP addresses used by Sharkmp4 and encouraged other groups to cross-reference the address information to their own databases.

At the time, the IPs were connected to users on several other sites, some of which wrote positively about anti-piracy policies. This was enough information for a judge to allow the discovery process in the AF Holdings v Patel legal battle, Comcast was subpoenaed for data regarding the IP address in question. Comcast was able to link the address to Steele Hansmeier PLLC, which is obviously attached to Prenda through none other than John Steele, whose name appears in the account holder's name.

This is not the only subpoena out there in the case, but it is an important one. Being able to prove that Prenda setup the scheme ruins their credibility and also proves that they are not actually interested in protecting their intellectual property, but instead is interested in a business model of legal battles against torrent users. Probably not a successful long-term strategy, especially if the whole thing is a setup.

Android Platform to Hit 1 Million Malicious Threats by 2014

posted Sunday Aug 11, 2013 by Nicholas DiMeo

Android Platform to Hit 1 Million Malicious Threats by 2014

Cyber analyst team Trend Micro has warned us that by 2014, the count of malicious software created for Android will surpass the 1 million mark. To recap on why this is such a big deal and a problem, let's reference back to articles in the past two years about how Android is one of the most unsecure platforms on the market.

The report from Trend Micro also indicated that in 2012, "the Android platform (was) five times ahead of Windows on the number of created malicious software for it." That's some serious Nigerian scamming going on in the Android platform. Trend Micro also said that in the last three years, Android has matched the amount of malware for Windows that has been created for the past 14 years. That alone should be enough reason for anyone to switch operating systems, and fast.

It should be no shock that this prediction is so high, though. As it stands, Android currently runs about 80 percent of the entire smartphone ecosystem around the globe, up 70 percent from last year. Android also has one of the most lax processes for publishing an app, with very little safeguards. Combine all of that with the fact that only about 20 percent of Android users have some sort of security software on their device and you have a disaster waiting to happen. And it really does come down to the user not paying attention to what he or she is downloading. It is reported that almost half of the malware discovered in the second quarter of this year alone has to do with a user downloading some sort of app that sends expensive texts or calls, letting the creators of the app to rake in all the money. To further that, as we've covered in the show multiple times, a quarter of the malware involves stealing user data, either remotely or right upon download of the app from the market. Plus, there's also the new trend of hackers coming up with clever ways for apps to sneak into social media and automatically post viral news articles that lead to malicious sites, in hopes that your friends will click on them.

From the report, Trend Micro's VP of technology solutions, JD Sherry, said,

Due to the fractured nature of the Android network, it is very difficult for patches to reach all users in an effective time frame. In some cases, users will never get patches as vendors leave their customers at risk of attack. Until we have the same urgency to protect mobile devices as we have for protecting PCs, this very real threat will continue to grow rapidly. At the rate this malware is accelerating - almost exponentially - we appear to be reaching a critical mass. To fight this, Android users need to take great care when using their devices and take the simple, but effective, step of adding security software to all mobile devices.

I guess fragmentation was an issue after all. Does this information, along with all of the other Android vulnerability stories, detract you from purchasing an Android device? Are you going to switch from Android to a more secure operating system? Why or why not? We want to know in the comments below.

Sony Rejects Media Spinoff Proposal by Third Point LLC

posted Sunday Aug 11, 2013 by Nicholas DiMeo

Sony Rejects Media Spinoff Proposal by Third Point LLC

When Sony's CEO Kaz Hirai took over in April of last year, he immediately said the company would undergo a revival plan that would take some time, but would eventually result in a complete turnaround of the company. Through the year, Sony has seen a few quarters in the black along with a couple of key purchases to boost their portfolio. All of this culminated last month with Daniel Loeb's Third Point LLC hedge fund, Sony's biggest stockholder, suggesting that the company spinoff its media division in order to raise the stock price. After a month of Sony, Hirai, Morgan Stanley and Citi carefully looking over the numbers, the board of directors unanimously decided this week that Sony will not be selling off its media assets into its own entity.

In a letter sent to Daniel Loeb and Third Point LLC, Sony respectfully outlines the reasons why.

Since your first letter on May 14, 2013, the Board of Directors and management team, with the assistance of external financial and legal advisors, have thoroughly considered the merits of your proposal... While we share with you the objectives of increasing profitability and driving shareholder value, after careful review, the Sony Board of Directors has unanimously concluded that continuing to own 100% of our entertainment business is the best path forward and is integral to Sony's strategy. We do, however, expect to increase disclosure regarding Sony's entertainment businesses. We agree this can help market participants analyze their performance and monitor their success.

Hirai also added that removing Sony's media division from the company would not fit in with Sony's new "One Sony" strategy that he has been trying to implement under the revival plan.

We are encouraged by our progress as we continue to execute on our One Sony strategy. We have made many changes during my tenure as CEO, and we are confident that we are on the right path. Sony's entertainment businesses are critical to our corporate strategy and will be important drivers of growth, and I am firmly committed to assuring their growth, to improving their profitability, and to aggressively leveraging their collaboration with our electronics and service businesses. We are determined to pursue sustained growth in profitability and shareholder value, so that we can meet and exceed the expectations of all of our stakeholders.

Hirai seems to be really taking this initiative to heart and is working very hard to make sure that Sony continues to remain a competitor in the industries in which it conducts business. The rejection was made are a lot of conversations and extreme consideration, and I honestly feel that their media properties have the most amount of buzz around them, along with revenue. I'd want to keep that as part of One Sony as well. Third Point, however, isn't accepting Sony's rejection. In what looks to be something out of a high school crush, the hedge fund said in a statement,

Third Point looks forward to an ongoing dialogue with management and intends to explore further options to create value for Sony shareholders.

We'll see what that means for Sony as time goes on, but at least for now, Sony said no. And no means no.

NetZero Brought Back to Life as 4G ISP, Signs Deals with Verizon Wireless and Sprint

posted Sunday Aug 11, 2013 by Nicholas DiMeo

NetZero Brought Back to Life as 4G ISP, Signs Deals with Verizon Wireless and Sprint

Last year, United Online, the company which was the result of the merger between NetZero and Juno, decided to rejuvenate the NetZero brand by offering up some 4G hotspots and as you'd expect, there was a free option. However the prices were too high if you actually used any data above email browsing, and the network availability was really inconsistent, even in major metropolitan areas. The good news is that last year's announcements were just a piece of a bigger picture. NetZero will continue to be a 4G Internet service provider but will also come complete with deals signed with both Verizon Wireless and Sprint.

During a financial report this week, CEO Mark Goldston announced the new plan for NetZero.

We are pleased to announce two agreements that will significantly expand the coverage and enhance the offerings of our NetZero Mobile Broadband service. We have signed a three-year agreement with Verizon to offer the NetZero Mobile Broadband service on Verizon's nationwide 3G network. When the service is launched, we expect NetZero Mobile Broadband will be available in approximately 500 markets and cover more than 300 million people, or approximately 95% of the entire U.S. population. Also, we have signed a five-year agreement with Sprint to offer the NetZero Mobile Broadband service via Sprint's 4G LTE and 3G networks. This agreement will allow us to expand our NetZero Mobile Broadband coverage to a projected 200 million people in 2014 on the Sprint 4G LTE network.

So, while 3G service may be the only option available for many customers at this point in time, NetZero is definitely looking forward to the future. The past 4G hotspot by NetZero was on Sprint/Clearwire's 4G WiMAX network, a service which, in certain areas, was spotty at best and was merely to hold Sprint customers over until their rollout of 4G LTE late last year. Now, NetZero has a chance to really cover a lot of people, with a range of networks, inevitably ending with full 4G LTE coverage by Sprint for the next five years.

Unfortunately, prices are still a bit high if you're looking to use this for anything beyond an emergency modem. Of course, 200MB will be served up for free, similar to FreedomPop (which will still be on WiMAX for the foreseeable future), but jumping into 500MB will cost you $10 per month, and a 4GB package will run a whopping $50 per month. Luckily if you're interested, NetZero is currently doubling data for those who sign up as a new customer. In the end, NetZero seems to be a good option over some of these "freemium" competitors out there, with the service provider using three different networks to allow for the most reliable and consistent coverage for its customers.

OUYA Issues Apology to Kickstarter Backers Who Still Haven't Received Console (Editorial)

posted Sunday Aug 11, 2013 by Nicholas DiMeo

OUYA Issues Apology to Kickstarter Backers Who Still Haven't Received Console (Editorial)

To continue the OUYA craze this week, the company is handing out credits to their backers on Kickstarter for not shipping out a console to each of them who pre-ordered one, even though the game system is already on shelves in retail stores. For those not aware, OUYA is an Android gaming system that only runs you $99, and I've never quite understood it. It doesn't have the same power as NVIDIA's SHIELD and appears to have been made to appease all of the gamers who are mad at corporations for putting DRM on their games to protect them from piracy, or something like that.

Regardless, the OUYA is Android powered so all of the games you'd want to play, DRM free, aren't included on the system, hence the reason none of it has ever made sense to me. To further that, you could imagine the type of mentality a company like this would have. The company wanted to "stick it to the man" by not appearing in an official capacity at E3, and instead elected to rent out a parking lot outside of the convention center and converted it into a booth. Naturally, this prompted E3 to call the cops and have the booth shut down, outraging fanboys everywhere. The ESA (which runs E3) then proceeded to place semi-trucks in that space, and the back-and-forth commenced for the entire length of the convention. Because of all this, it doesn't really surprise me that OUYA is having shipping issues to make good on the pre-orders that were supposed to be delivered over a month ago.

In a letter sent out by CEO Julie Urhman, the company apologizes for the delay.

To our beloved backers,

It's been 11 months and 26 days (360 days for those who prefer a more exact count) since we left the gates of Kickstarter and set out to turn our vision into a reality.

It wasn't OK that some of you-our most loyal supporters-didn't get your OUYA until after it was on store shelves. Others had an issue with our still-new customer service. Despite your frustrations, you've played on, putting up with our bumps and bugs as we work to get better every day.

That being the case, we want to do more than tell you how much we appreciate you-we want to show it.

If you feel you've had any kind of less-than-OUYA experience with us (a polite way of saying at any time you felt pissed at us for whatever the reason: late shipment, missing controllers, a delayed response to a CS ticket you opened), we'd like to give you a store credit of $13.37 to use toward any purchase(s) on DISCOVER.

If you are annoyed with us, we hope this is a first step to winning back your <3.

And for those loving on us, love on.

We've learned a lot over the past year and we're going to continue making Ouya better every day!

Play on,


The letter not only highlights the fact that shipping the pre-orders has been a disaster, but that there are other problems, like the system lacking a controller, a seemingly integral part of the gaming experience. Urhman continues on by saying that the company has "learned a lot over the past year" and that their "still-new" customer service couldn't appease customers. It sounds like OUYA is saying, "Hey we're a new company and are so busy trying to not be oppressed by the man that we forgot we're a business and ended up treating our backers exactly like the companies you guys are so mad at. Our bad."

To top it all off, OUYA is offering an extremely clever credit of $13.37 to use at their DISCOVER store, in an effort to apologize for their issues. Now, I'm not an OUYA backer, but if I was spending my money on something in order to be an early adopter, an apologetic and partial credit should only be offered if the company or product I invested in was bought by another company and then the product was suddenly discontinued (see: HP Touchpad). The credit, at this point, just seems like a slap in the face when the console should've just been delivered on time, simple as that. We, as gamers, hold these big companies to such a high standard, yet let these startups treat their customer base the same exact way and have no reaction.

If there are any backers of this system out there, I'd love to know your take. How do you feel about all of this? Is the "leet" credit enough to keep you on the OUYA ship? Or would you rather just cut your losses and pick up an Android tablet or something better? Sound off in the comments section below.

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