French & Arabs Upset with US Security Obsession

An oncoming deal between the United Arab Emirates to purchase a couple of intelligence satellites from France worth $930 million seems to be in trouble after the National Security Agency tried to put backdoors into the technology. Two military observation satellites contained a couple of specific US-supplied components providing backdoors to the highly secure information transmitted to the ground station.

The Arabs have asked the French to come up with some components that won’t leak their plans to the US, saying that they would rather prefer Russian or Chinese firms to take over the project. Actually, only the US believes that Chinese and Russians are spying on people.

So, the United Arab Emirates is ready to scrap the whole deal. Apparently, the country is hugely miffed that it bought French and found itself spied on by the US. In reality, the French only won the deal because the American State Department had been such an arse about how the system could be used.

In the meantime, the UAE likes Russian technology a lot - for example, it used the GLONASS space-based navigation system fitted as a redundancy feature on a Western European weapon system. As for France, defence experts can’t find out why the French were using the American technology in the first place.

Media reports say that France operates the Pleiades spy satellite in a kind of a critical piece of the country's sovereignty. Taking into account that core competence, it seemed weird that France would use American technology, though there’s an agreement between Paris and Washington over transfer of capabilities.

Finally, the deal is also problematic because Israel may want to limit the ability of the system to work. The matter is that the French satellites sold to the Arabs, a very high optical resolution and encrypted code may be used to guide a cruise missile to a target in Iran.

NEW STANDARD ON INTER-CLOUD COMPUTING (Source_ITU@WebSite)

Cloud computing experts have reached first-stage approval (‘consent’) on a standardized framework for inter-cloud computing, an architecture whereby cloud service providers (CSPs) benefit from the services or resources of partnering CSPs to satisfy customer needs as dynamically as possible.

Recommendation ITU-T Y.3511 “Framework of inter-cloud computing for network and infrastructure” describes the framework for the interaction of multiple CSPs that might underlie the fulfillment of a single CSP’s service contracts with its customers.

The standard describes the possible relationship patterns among multiple CSPs – namely ‘peering’, ‘federation’ and ‘intermediary’ – based on several inter-cloud computing use cases and the consideration on different types of service offerings. It continues to introduce the concept of ‘primary’ and ‘secondary’ CSPs; the primary being the CSP required to fulfill a service contract with a customer, and the secondary the most immediate CSP that interworks its services and resources with other partnering CSPs to aid the primary CSP in its delivery of services. Building on these concepts, the interaction of CSPs in federation and intermediary patterns is discussed in-depth and Y.3511 concludes with the derivation of functional requirements for inter-cloud computing.

Although not integral parts of the Recommendation, Y.3511 also provides three annexes which detail “Use cases from the inter-cloud perspective”, “Use cases from telecom and non-telecom providers’ views”, and “Abstract service offering models for inter-cloud computing”.

Nine other standards found consent at SG13’s meeting:

• ITU-T Y.1903 “Functional requirements of mobile IPTV”
• ITU-T Y.2254 “Capabilities of multi-connection to support enhanced Multimedia Telephony (eMMTel) services”
• ITU-T Y.2253 “Capabilities of Multi-connection to Support Streaming Service”
• ITU-T Y.3032 “Configurations of node identifiers and their mapping with locators in future networks”
• ITU-T Y.3045 “Smart ubiquitous networks – Functional architecture of content delivery”
• ITU-T Y.3033 “Framework of Data Aware Networking for Future Networks”
• ITU-T Y.2065 “Service and capability requirements for e-health monitoring services”
• ITU-T Y.2064 “Energy saving using smart objects in home networks”

Apple and Google App Stores Are Vulnerable

Too many apps in Apple and Google app stores have been targeted for hacking. The security experts point out that financial apps on Android are the most vulnerable. In most cases, applications have been hacked and uploaded to 3rd-party stores or Google Play in a bid to capture credentials from consumers, or to operate maliciously, or to defraud the app’s creator by removing adware elements.

Security experts admit that hacked apps are showing up in various storefronts, like Cydia, in a decrypted state, so by definition the software has been hacked. The specialists have seen multiple examples where there has been some tampering with the original code. In the meantime, financial apps are a particular concern, because people trust them with sensitive data, like bank account numbers and passwords. It was found that 23% of sample iOS financial apps had been hacked and reposted, as well as 53% of Android financial apps.

As you know, Android users are able to download apps from 3rd-party stores through setting on their devices, while iOS users have to “jailbreak” their device to do so. In other words, they voluntarily use a hacking attack to give themselves the equivalent of “root” privileges for installing software. Thus far, iOS 7 hasn’t been jailbroken.

However, even Google’s official Play store itself can be a source of malware and hacked applications. A few months ago BlackBerry had to halt the rollout of its BBM app for Android because a hacked version appeared in the Play store before the official one and had been downloaded over a million times. The experts also warn that it’s easy for people to upload a “Bank of America” app onto Google Play and use freely available data about the bank, while fooling users. It is believed that Google Play isn’t a vetted app store, having a lot of cruft, while in the Apple Store users are almost certain to see only legitimate apps. So, hacked code is not a significant problem in Apple’s App Store, as the company vets all apps before uploading them onto its App Store. As for Google, it will remove apps only after the complaints emerge or if they are detected as having malware. Both Google and Apple platforms have a “kill switch” that is able to retrospectively delete malicious installed apps from the devices.

Bitcoin Is Not a Currency of a Future

An expert on digital currencies from Ernst & Young claimed that Bitcoin doesn’t have to replace normal currency to have a future. The expert described a number of myths around the currency, one of which was its position as a replacement for “fiat” money.

Fiat currency is essentially currency the government decrees to be legal tender. And Bitcoin was obviously not created as a replacement for fiat currency. There are many people talking about how Bitcoin is going to take over, or how it doesn’t have the properties lending to it being used widely. The currency was really created to be used in electronic commerce and for micro transactions. If you remember this, the future risks for the currency take on a different shape. At the moment, many experts are concerned with such problems as price volatility and the deflationary nature of Bitcoin. Since there will only ever be 21 million Bitcoins, it has led some to fear that the currency will have a “deflationary” element, leading to each unit getting more valuable over time.

Deflation is usually blamed for the “lost decade” in Japan, and Ernst & Young emphasized that it adheres to the mainstream economic view that mild positive inflation is healthy for a national currency. However, when talking about using Bitcoin as an ecommerce tool, deflation seems to be not necessarily problematic.

Instead, the experts highlighted problems of speed and fraud control as the most pressing priorities for the virtual currency. To prevent fraud, the Bitcoin network has to “confirm” transactions every ten minutes. This is one of the weaknesses with Bitcoin – the problem is that you generally have to wait for 5 to 6 transaction confirmations before making sure that your money hasn’t been spent twice, which can take up to 40 or 50 minutes.

Some businesses have decided that speed is worth the risk. One pub in London takes Bitcoin and accepts unconfirmed transactions as payment, for example. However, not every retailer is able to that – especially if they are selling goods more expensive than beer.

Ernst & Young believes that there are definite possible gains in Bitcoin, in terms of lowered transaction costs. On the other side, there are also some significant negatives, in terms of accountability and how to deal with anonymous users and how to regulate in the market.

YouTube Advertising Revenues Estimated to Grow 50% in 2013

Google has never revealed the scale of profits YouTube makes since acquiring the video streaming service for $1.65 billion seven years ago. However, the analysts and researchers still can take guesses. The latest estimates were made by eMarketer – it predicts that the gross ad revenues of the service will increase over 50% to $5.6 billion this year, which is more than 10% of Google’s total revenue.

Even after the company has paid ad partners and video creators their percentage, its net ad revenues are still predicted to reach almost $2 billion in 2013, up 65% compared to last year’s $1.18 billion. The researchers have also broken out YouTube’s net ad revenues in the United States, estimating that the figure will reach $1.08 billion, $850 million of it coming from video ads. Thus, YouTube gets 1/5 of all US video advertising revenues for 2013.

Of course, all these estimations are all guesswork, but eMarketer claims that it is based on “hundreds of datapoints and studies about YouTube revenues, ad impressions, rates, usage and other information received from research companies, investment banks, Google reports and interviews with industry executives.

Those interested can compare eMarketer’s analysis to other numbers: for example, in May 2013, Morgan Stanley predicted that the company’s gross revenues would reach $4 billion this year, while Barclays thought it would be $3.6 billion. Recent report by analyst firm Wedge Partners also suggested that YouTube accounts for about 10% of Google’s revenues (which corresponds with eMarketer’s analysis), which if the Google’s 4th quarter matched the average revenues across the previous quarters would result in approximately $5.7 billion of YouTube revenues for the year as a whole.

Still, it all remains guesswork, and Google is very unlikely to announce the real figures anytime soon. It is worth noting that the $1.65bn Google paid for YouTube seven years ago (a sum which shocked many people at the time) looks like something of a bargain today.

The company’s public statistics for YouTube reveal that the service attracts 1bn people watching over 6bn hours of video per month, and 80% of its traffic is coming from abroad. 40% of its viewing time is consumed by mobile devices.

2/3rd of Web Traffic is Bots

The security outfit Incapsula has found out that about 62% of all website traffic today is generated by bots. There was a 21% rise on 2012 figure where bots accounted for a bit over 50% of the traffic.

Of course, some of those automated software instruments are malicious, but the rapid growth in traffic was for good bots used by search engines to crawl sites to index their content. Other types of bots are employed by analytics companies to provide feedback about how a portal performs, or by others to carry out specific tasks like helping the online archive preserve material before it’s removed.

The security company observed almost 1.5 billion bot visits within a 3-month period from the 20,000 websites operated by its customers. Regardless of the overall growth in bot activity, the company pointed out that many of the traditional malicious uses of the tools are now less common. There had been a 75% drop in the frequency spam links were being automatically posted.

In addition, it had seen a 10% drop in hacking tool bot activities. Those include the use of code to distribute malware, steal credit cards and hijack and deface sites. Another new trend was an 8% growth in the use of so-called “impersonator bots”. This classification includes software which masquerades as being from a search engine or other legal agent and manages to fool security measures. Such bots are custom-made to carry out a specific activity like a DDoS attack, forcing a server to crash taking a site or service offline by flooding it with traffic or to steal corporate secrets.

The developing good bots show that the legitimate services were sampling the net more frequently, which can allow search engines to add breaking news stories to its results quicker, for instance.

Internet Cafés Disappear

Internet cafes, once being the communication hub in developing countries, are fast disappearing from our life. The reason is obvious – the rise in smartphones is making the need to go into a café largely redundant.

For example, in Rwanda one Internet café went from 200 daily customers to just 10. India is suffering as well – for instance, some businesses in the southern city of Mysore have opted to sell stationery or sweets instead of Internet access. In the meantime, Internet café owners have to diversify their offerings in order to include flight bookings, mobile phone top-up cards, and accessories for different gadgets. Even cafés in Myanmar, where mobile penetration is very low, are facing the same trend there.

However, more developed countries had seen cafés survive to cater for immersive Internet gaming. At the same time, the number of such cafes in South Korea dropped to 15,800 in 2012 from 19,000 in 2010. As for China, the number of online cafes there dropped 7% to 136,000 in 2012 from 2011.

The above mentioned statistics flies in the face of a 5-year study released by the University of Washington in July, which discovered that Internet users in developing countries still rely on such public venues as cafes and libraries for Internet access even when smartphones are available. The research insisted that one technology won’t replace the other and smartphones are not responsible for the current trend.

US Snoops May Blackmail Muslim Clerics

US spies seem to be tracking sort of porn Internet users were downloading in order to blackmail them later. Another Snowden leak revealed that the NSA has been collecting records of Internet sexual activity and evidence of visits to porn sites.

It looks like part of a plan to blackmail or harm the reputations of people who are radicalizing others via incendiary speeches. The idea is that a radical Muslim cleric won’t be taken seriously if his followers knew he spends the nights downloading porn.

NSA secret documents revealed that six Muslims became an example of how “personal vulnerabilities” could become known via electronic surveillance, and then used to undermine people’s credibility, reputation and authority.

For some reason, it fails to mention giving similar attention to born-again Christian priests who called for Obama to be assassinated – maybe because they are Americans and therefore immune from spying. However, the fact is that American presidents have always been killed by their own people.

NSA lists a number of vulnerabilities of its targets, including those who can effectively be exploited: for instance, “viewing sexually explicit content” or “using sexually explicit persuasive language when communicating with inexperienced young girls”.

According to the US Civil Liberties Union, the leaks led to serious concerns about abuse. The outfit explained that the NSA was collecting massive amounts of sensitive data about almost everyone, so it knows what you are downloading, too.

In should be noted that none of the 6 people targeted by the agency was accused of being involved in terror plots and all of them currently reside outside the US.

Europe Told US How It Can Handle Spying Crisis

The European Commission has provided the United States with a list of hoops it wants the country to follow before it starts trusting it. This is the result of revelations about National Security Agency and UK spying on everyone under its PRISM program.

The EC said that spying on its citizens, businesses and leaders was unacceptable and that people of European Union and the United States have to be reassured about protection of their personal information. In addition, the businesses also need to be reassured that the existing agreements between the two regions are both respected and policed.

The European Commission announced that it will set out actions supposed to help restore trust and strengthen information protection in transatlantic relations. They listed 6 areas that the European Union and the United States need to do to restore confidence.

The list includes swift adoption of EU's information protection reforms, improving the protection safeguards, and commitment from the United States for making use of a legal framework. The European Commission also wants to address its concerns in the on-going American reform process, as well as promoting privacy standards internationally.

The EC claims that everyone from the users to governments on both sides of the Atlantic want to gain from cooperation, based on strong legal safeguards and trust that they will be respected.

Snapchat Declined Facebook Buyout Offer

Snapchat, the fast-growing messaging system that registers 5 million daily users, has rejected a $3bn buyout offer from Facebook. The financial experts point out that the offer came as other investors valued the loss making 2-year-old service at over $4bn. At $3bn messaging system would be the most expensive acquisition of the social network ever.

The application has been downloaded by 9% of mobile users throughout the United States. It allows users to send messages and images with an expiration date – i.e. they are deleted from the recipient’s device after being received. Snapchat claimed to be handling over 350m messages every day.

Evan Spiegel, 23, the co-founder and CEO of the service, decided to wait until early 2014 before considering any offers. Apparently, he hopes that Snapchat’s numbers will grow enough to justify a larger valuation. In fact, Snapchat’s valuation has been growing along with its user base – for example, in June 2013 the company raised $60m from investors that valued it at $800m. There were reports that Facebook offered $1bn for the company earlier in 2013, while China’s Tencent was discussing an investment that would value Snapchat at over $3.6bn.

Back in October, Pinterest, a social scrapbooking company, had raised $225m in new funds at a price which valued the company at $3.8bn. In the meantime, valuation of Snapchat and its social media peers will likely soar after Twitter’s IPO, which has valued the company at over $23bn.

Industry experts point out that the rapid growth in the company’s valuation reminds that of Groupon, the Internet discount company which has also rejected a $6bn offer from Google before filing for an IPO. Two years ago, Groupon started trading and was valued at over $16bn, but soon crashed to less than $4bn. However, the company has since recovered and is now worth about $7bn.