By Jill Kuraitis and Noel Randewich

Fri Feb 3, 2012 8:58pm EST

BOISE, Idaho/SAN FRANCISCO, Feb 3 – Micron Technology Inc Chief Executive and Chairman Steve Appleton died in a small plane crash on Friday, a major loss for a U.S. memory chipmaker already struggling with sluggish computer sales and declining prices.

The 51-year-old Appleton, a three-decade industry veteran who performed stunts at airshows, died after the small plane he was piloting crashed at an airport in Boise, Idaho, where the chipmaker is headquartered.

His death stunned the tight-knit semiconductor industry. Appleton was a prominent figure in Boise, a city of 200,000 in the western United States, and a member of the Idaho Business Council.

President and Chief Operating Officer Mark Durcan, who was due to retire in August, will take up the CEO’s responsibilities until the company’s board can appoint a permanent successor. Directors will meet over the weekend, Micron said in a statement.

Shares in Micron, halted prior to the announcement, resumed trade after the regular market close and promptly slid 6 percent.

“Steve was a high-energy, never-give-up type of inspirational leader of the company. The entire industry will miss Steve’s energy,” said Stifel Nicolaus analyst Kevin Cassidy. “That said, Micron has a deep bench of managers that shared Steve’s vision.”

The accident happened while Appleton flew an experimental Lancair single-engine airplane, Boise Airport spokeswoman Patti Miller told Reuters. Lancair sells kits to build high-end planes.

After taking off and reaching an altitude of about 200 feet, Appleton radioed that he had a problem and needed to turn around, Boise police spokeswoman Lynn Hightower told reporters.

The aircraft rolled left, then plummeted to the ground, where it crashed, causing a large fire and leaving a twisted, black wreckage.

Appleton, a California native, joined Micron to work a night shift right after graduating from Boise State University in 1983. His subsequent meteoric ascent led to his becoming the youngest CEO on the Fortune 500 at the age of 34, in 1994.

He resigned in 1996, amid speculation about a boardroom power struggle, only to return nine days later after the board asked him to reconsider.

Appleton, a noted sports enthusiast who also scuba-dived, surfed and raced offroad cars and motorcycles, received the prestigious Robert Noyce award – the industry’s highest honor – from the Semiconductor Industry Association in 2011.

The award, named after Intel Corp cofounder Robert Noyce, is conferred on those who have made major contributions to the chip industry.

Employees at Micron’s sprawling headquarters and plant, where several flags flew at half mast, were visibly upset while others stuck to routine.

“I was in a meeting, which proceeded normally, but at the end when it broke up it was nothing but sad talk about Steve.” said employee Mike Peterson. “I know he liked airplanes so if he was going to go I guess this was fitting.”

Co-worker Melanie Wood said: “Someone told me over my cubicle and then I read the email and we all didn’t believe it at first. He’s so young, you don’t expect something like this.”

A BIG LOSS

“Steve was a visionary and a true leader in our industry. He will be deeply missed by the entire semiconductor community and our prayers and thoughts are with his family,” Brian Toohey, President of the Semiconductor Industry Association, said in a statement.

Micron makes memory chips used in personal computers, smartphones and tablets and competes against Asian rivals Hynix Semiconductor Inc, Samsung Electronics Co Ltd and Toshiba Corp.

Memory chip makers are struggling as falling prices and huge investments to stay competitive saddle them with massive losses. Micron is the last remaining U.S. producer of memory chips.

Boise Mayor Dave Bieter said Appleton was sensitive to how job cuts by Micron in recent years affected the community.

“He called me and told me about the layoffs coming up and explained how the business-end of chip technology would develop and that Micron would come out strong on the other end. And it happened exactly the way he said it would,” Bieter told reporters.

The company announced just last week that Durcan would retire in August, but Appleton’s death raised questions about whether he might stay on.

Seen as Micron’s even-keeled top technologist, Durcan has taken on a greater role running the chipmaker day-to-day in the past few years, while larger-than-life Appleton has focused more on strategy.

The loss of Micron’s dealmaker could waylay a possible acquisition of troubled Japanese rival Elpida Memory. Saddled with millions of dollars in operating losses and major upcoming debt payments, Elpida may be in talks to be bought by Micron or reach some kind of partnership, media recently speculated.

RISKY LIFESTYLES

Appleton’s death raises questions about whether some CEOs’ daredevil lifestyles are too risky for shareholders.

British tycoon Richard Branson has tried to circle the world in hot air balloon and in 1985 had to be rescued after capsizing a sailboat. Oracle co-founder Larry Ellison races sailboats and also flies planes.

Micron’s recent regulatory filings make no mention of a “key man” life insurance policy on Appleton, nor do they specifically mention directors’ and officers’ insurance that would cover him.

A senior executive at a national insurance brokerage said it is entirely possible to get directors’ and officers’ insurance on someone like a CEO who flies his own planes, but added that Appleton’s death could still cause legal headaches for the board.

“DO really is about, at its core, for a public company, whether or not the company is susceptible to litigation by shareholders,” said the broker, speaking anonymously because of the sensitivity of the matter.

The broker said Micron’s board would have an obligation to have a contingency plan in place, particularly given Appleton’s risky lifestyle, and that the degree to which the company might face legal questions depends a great deal on what Micron’s stock does on Monday.

“If trading opens substantially lower it could be the case that a plaintiffs’ attorney or two or three will start to conduct an investigation,” the broker said.

Trading in Micron shares was halted on Friday morning pending the company’s announcement. The shares were down at $7.48 in extended trading, from a last quote of $7.95 on the Nasdaq, before the halt.

(Additional reporting by Himank Sharma in Bangalore, Ben Berkowitz in New York, Writing by Edwin Chan, Editing by Andre Grenon, Gary Hill and Tim Dobbyn)

Article source: http://feeds.reuters.com/~r/reuters/technologyNews/~3/LY6ENZvxFtc/us-micron-idUSTRE8121L820120204

LONDON/WASHINGTON |
Fri Feb 3, 2012 2:28pm EST

LONDON/WASHINGTON (Reuters) – Internet activist group Anonymous published a recording on Friday of a confidential call between FBI agents and London detectives in which the law-enforcement agents discuss action they are taking against hacking.

British police said they were investigating reports of the illegally recorded call, and the FBI said a criminal investigation was under way into the incident.

Anonymous also published an email inviting participants to the call, with dial-in details, in which an FBI agent wrote that investigations relating to Anonymous, LulzSec, Antisec and associated splinter groups would be discussed on the call. (pastebin.com/8G4jLha8)

Anonymous and fellow group LulzSec have carried out a number of high-profile hacking actions against companies and institutions across the globe including the Central Intelligence Agency, Britain’s Serious Organized Crime Agency, Japan’s Sony Corp and Mexican government websites.

On the 16-minute-long call, one British detective is heard discussing an alleged 15-year-old hacker who they described as “a bit of an idiot” who was doing it for attention. (here)

He also tells his U.S. counterpart hosting the call that “we cocked things up in the past” when he is thanked for the help they are providing.

In other fairly unremarkable exchanges, they also discuss at length the merits of the northern English town of Sheffield where a cyber security conference was to be held.

Britons Ryan Cleary and Jake Davis, who have both been charged with hacking-related offences, are discussed on the call. The names of other alleged hackers are bleeped out.

Peter Donald, a spokesman for the FBI in New York, said on Friday: “The information obtained on the call was intended for law enforcement only. It was illegally obtained and a FBI criminal investigation is under way.”

An FBI official said the FBI’s systems were not hacked into, and the discussion did not include classified material.

The official said the conference call dial-in details were sent in an email to officials and someone forwarded it to a private, non-government email account which was compromised at some point.

London’s Metropolitan Police (MPS) said in a statement: “We are aware of the video, which relates to an FBI conference call involving a PCeU (Police Central e-crime Unit) representative.”

“The matter is being investigated by the FBI. At this stage no operational risks to the MPS have been identified; however, we continue to carry out a full assessment,” the MPS said.

An official involved in coordinating international efforts to crack down on cyber crime said that law enforcement agencies sometimes do not carefully authenticate the identity of people who dial in to participate on conference calls.

The email released by the hackers that appears to be the one the FBI sent out to organize the teleconference asked all participants to use a single code to gain entry to the call.

That official, who declined to be identified by name because he was not authorized to publicly comment on the matter, said that the call would have been more secure if attendees had each been assigned unique access codes and been required to identify themselves by name upon dialing in.

If a hacker had dialed in using somebody’s unique access code and somehow made it past initial screening, the organizers may have possibly identified a breach when it became clear that two parties were using the same dial-in credentials, said the official.

(Reporting by Michael Holden and Georgina Prodhan in London, Jeremy Pelofsky in Washington and Basil Katz in New York; Editing by Michael Roddy)

Article source: http://feeds.reuters.com/~r/reuters/technologyNews/~3/09fRlS6iAXI/us-britain-hackers-idUSTRE81216E20120203

By Nathan Layne and Yoko Kubota

TOKYO |
Thu Feb 2, 2012 11:02am EST

TOKYO (Reuters) – Ailing Japanese electronics giant Sony Corp warned it was heading for a bigger-than-expected $2.9 billion annual loss, presenting a daunting task for incoming CEO Kazuo Hirai, who vowed to move quickly to turn things around.

Overtaken by more innovative rivals such as Apple Inc and Samsung Electronics over the past decade, Sony posted a $2.1 billion net loss for October-December, normally a strong quarter boosted by year-end holiday sales, as it battled a strong yen, flooding in Thailand that ruptured supply chains, and a weak economy.

It also took a one-off charge for exiting a flat panel joint venture with Samsung, and said sales dropped 17 percent to 1.82 trillion yen.

The forecast for a 220 billion yen ($2.9 billion) net loss for the year to March, Sony’s fourth straight year of red ink, was close to double what the market had expected, and revealed the task ahead for Hirai, who replaces Howard Stringer as CEO in April.

Hirai, a 51-year old Sony veteran known for reviving the PlayStation gaming operations through aggressive cost-cutting, said he would not hesitate to scale back or withdraw from businesses if they were not competitive.

“I have a very strong sense of crisis about the environment surrounding us,” Hirai told a news conference. “We cannot be afraid to make painful choices for the future of Sony. Our rivals and the operating environment won’t wait for us.”

There is unlikely to be a honeymoon period for Hirai, who is under immediate pressure to sort out the ailing TV business after it fell behind South Korean rivals such as Samsung in a market where prices are tumbling.

Above all, Hirai will strive to recapture the innovative flair that led Sony to come up with the Walkman personal music-player in the 1980s and the PlayStation in the 1990s, and regain ground lost since then to Apple and Samsung whose iPhones, iPads and Galaxy gadgets are snapped up by consumers.

Some analysts believe Hirai — 51, tall, urbane and a fluent English speaker — can rekindle the flame, saying he has a good grasp of the overall business and is likely to know how to break down its silos and integrate its divisions.

Others are less optimistic about his chances.

“It won’t be easy for Sony to regain its lost ground under new leadership, as its overall competitiveness has sharply weakened,” said Kim Young-Chan, analyst at Shinhan Investment Corp in Seoul.

“It’s got structural problems that will take years to fix.

“It’s not just Sony, but Japanese IT firms have similar problems. They are failing to innovate and produce industry-leading products in almost every major area – from TVs to displays, tablets and smartphones.”

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Sony earnings graphic: r.reuters.com/vah46s

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Hisashi Kuroda, general manager of equity investment at Meiji Yasuda Asset Management in Tokyo said Sony had to take tough decisions.

“Unless they do radical reforms, like the ones that would put everything completely upside down, Sony may not be able even to make profits.”

PAINFUL DECISIONS

A chief concept in Hirai’s strategy hinges on merging Sony’s robust roster of entertainment properties – including singers Kelly Clarkson and Michael Jackson, and the “Spider-Man” and “Men in Black” film franchises – with its Vaio, Bravia and other electronics brands, in an effort to boost sales.

He said the TV business would be crucial to this “convergence” strategy, brushing aside suggestions it may need to pull out of the market even with the business set to lose 220-230 billion yen this financial year.

“There’s still a chance in home electronics and I don’t think Sony should quit TV’s, but unfortunately I can imagine the day may come when they will pull the plug on the business,” said a former engineer and executive at Sony.

“This is because when you keep making losses and you have no fresh ideas, that becomes the easy choice.”

Chief Financial Officer Masaru Kato said Sony aimed to halve losses on flat TVs in the next financial year from April, when as a company it hopes to make an operating profit of about 200 billion yen.

Hirai singled out medical as a potential core business for the future, but he declined to comment on any possible investment in troubled endoscope maker Olympus Corp.

TROUBLED LEGACY

Welsh-born Stringer, a former journalist who ran U.S. broadcaster CBS, was brought in as a rare foreign CEO in Japan to shake things up, but many analysts see his major achievement as cost-cutting.

Sony’s shares have lost nearly two-thirds of their value since Stringer, who turns 70 this month, took the helm as CEO and chairman in 2005.

Stringer sold off TV factories in Spain, Slovakia and Mexico and outsourced more than half of its production to other companies, including Hon Hai Precision Industry, the contract electronics maker whose key customer is Apple.

Recently, Sony exited an LCD panel venture with Samsung, enabling it to obtain screens for its TVs more cheaply. It also agreed to buy out Ericsson’s half of their smartphone venture for $1.5 billion to shore up its position in a market where Apple and Samsung have become leaders.

Hirai was effectively anointed as Stringer’s successor last March when he was promoted to head Sony’s consumer products and services businesses, which produce the bulk of Sony’s $85 billion in annual sales.

“They’ve been grooming him for a while,” said Dan Ernst, Hudson Square analyst. “I think he will carry on the plan for Sony – as difficult as it is.”

The last year has been brutal for many Japanese companies, hit by a strong yen that hurt exports, and two natural disasters – the March earthquake in Japan and the Thai floods.

Stringer said those disasters and the Lehman shock of 2008 had hit Sony hard and masked much of the progress made during his watch.

“If we hadn’t reformed Sony as we did, can you imagine where we would be today,” Stringer said. “I rest my case.”

($1=76.13 yen)

(Additional reporting by Kim Miyoung in Seoul; Editing by Mark Bendeich, Ian Geoghegan and Neil Fullick)

Article source: http://feeds.reuters.com/~r/reuters/technologyNews/~3/Vgi5IcwvoyQ/us-sony-results-idUSTRE8110E020120202

By Alexei Oreskovic and Sarah McBride

SAN FRANCISCO |
Thu Feb 2, 2012 6:27pm EST

SAN FRANCISCO (Reuters) – Facebook unveiled plans for the biggest ever Internet IPO that could raise as much as $10 billion, but made it clear CEO Mark Zuckerberg will exercise almost complete control over the company, leaving investors with little say.

The Harvard dropout, who launched the social networking phenomenon from his dorm room, will control 56.9 percent of the voting shares in a company expected to be valued at up to $100 billion when it goes public. Facebook says it has 845 million active monthly users.

Wednesday’s long-awaited filing kicks off a process that will culminate in Silicon Valley’s biggest coming-out party since the heyday of the dotcom boom and bust.

In its filing Facebook says it is seeking to raise $5 billion, but that is a figure used to calculate registration fees among others and analysts estimate it could tap investors for $10 billion.

That would value the company at $100 billion, dwarfing storied tech giants such as Hewlett Packard Co, while validating the explosive growth worldwide of social media as communication and entertainment.

Zuckerberg’s economic control of about 28 percent of the shares would be worth $28 billion at a $100 billion valuation, ranking him as the fourth-richest American.

The 27-year-old’s ownership position means Facebook, a company dissected in 2010′s Oscar-winning “The Social Network”, will not need to appoint a majority of independent directors or set up board committees to oversee compensation and other matters.

The company’s ownership structure and bylaws go against shareholder-friendly corporate governance practices put in place in the United States after years of investor activism.

As Facebook states in its prospectus, Zuckerberg will “control all matters submitted to stockholders for vote, as well as the overall management and direction of our company.”

Zuckerberg struck deals with several Facebook investors that granted him voting rights over their shares in all or most situations. Those included Yuri Milner’s DST Global, venture capital firm The Founders Fund, and entities affiliated with Technology Crossover Ventures, the IPO filing shows.

Google Inc’s Sergey Brin and Larry Page retained control of the search giant through similar arrangements and the Sulzbergers did much the same at the New York Times.

“Zuckerberg, at the time, probably had his choice of investors,” said Steven Kaplan, a professor at University of Chicago’s Booth School of Business, who researches venture capital and corporate governance. “He basically had the ability to say ‘my way or the highway.’”

“The downside of doing this is that the value of Facebook may be slightly lower than it would be if he were not retaining control.”

Facebook could make its market debut in the middle of the year based on the usual timetable of IPOs.

Its IPO prospectus shows that Facebook generated $3.71 billion in revenue and made $1 billion in net profit last year, up 65 percent from the $606 million it made in 2010.

“We often talk about inventions like the printing press and the television,” Zuckerberg said in a letter accompanying the documents. “Today, our society has reached another tipping point.”

“The scale of the technology and infrastructure that must be built is unprecedented.”

Facebook appointed Morgan Stanley, Goldman Sachs and JPMorgan as its lead underwriters. Other bookrunners include Bank of America Merrill Lynch, Barclays Capital and Allen Co.

Zuckerberg agreed to cut his compensation from $1.48 million last year to $1 effective January 1, 2013, following the example of Apple founder Steve Jobs.

Facebook’s chief operating officer and Zuckerberg’s top lieutenant, Sheryl Sandberg, earned $30.8 million in total compensation last year.

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Overview of the company: link.reuters.com/rev36s

User growth over the years: link.reuters.com/mut36s

Bankers fees — how low? link.reuters.com/fep36s

Top 10 global IPOs: link.reuters.com/myn36s

The Zynga factor: link.reuters.com/paf65s

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DOTCOM MANIA?

Facebook’s growing popularity has pressured entrenched Internet companies from Yahoo to Google Inc. In 2011, the social network overtook Yahoo to become the top provider of online display ads in the United States by revenue, industry research firm eMarketer says.

A $10 billion IPO would be the fourth-largest in U.S. history after Visa Inc, General Motors, and ATT Wireless, Thomson Reuters data shows.

The $5 billion figure in Wednesday’s prospectus was an initial, reference figure — a basis for registration fees, among other things — and could change based on investor demand.

The prospectus said 85 percent of Facebook’s 2011 revenue was derived from advertising. Social-gaming company Zynga, creator of Farmville, accounted for 12 percent of Facebook’s revenue last year.

The IPO will dwarf any recent debuts of Internet companies, such as Zynga, LinkedIn Corp, Groupon Inc and Pandora Media Inc.

Their IPOs had mixed receptions. The last debut, from Zynga, closed 5 percent below its IPO price during its first trading day in December.

Google raised just shy of $2 billion in 2004, while Groupon last year tapped $700 million and Zynga $1 billion.

THE HACKER WAY

Facebook aims to be more attractive to potential large advertisers. It has improved its ad targeting capabilities as it collects user data through new features such as the Timeline, said George John, founder of Rocket Fuel, a digital marketing company.

Advertising revenue increased 69 percent in 2011 from 2010, and its average revenue per ad increased 18 percent.

“As Facebook gathers more and more users’ time and data, it makes sense for advertisers to get more serious about allocating more budget to Facebook,” he said.

In its prospectus, Facebook revealed an effective 2011 tax rate of 41 percent and warned it could climb in 2012. That rate surpasses the average corporate rate of 35 percent and far outstrips industry peers like Apple, which through offshore businesses pay far less.

Yet in his letter to investors, Zuckerberg stressed Facebook’s “social mission” over the pursuit of profits.

“Facebook was not originally founded to be a company,” he said. “Simply put: we don’t build services to make money; we make money to build better services.”

He laid out his vision for a company that remained grounded in an engineering culture, devoting several paragraphs of his letter to what he called “The Hacker Way” at Facebook.

Some of Facebook’s most successful products – including Timeline, chat and video – emerged from “hackathons” where coders gathered to build out prototypes and compare notes, Zuckerberg wrote.

“Hackers believe that something can always be better, and that nothing is ever complete,” he said. “There’s a hacker mantra that you’ll hear a lot around Facebook offices: ‘Code wins arguments.’”

(Additional reporting by Alistair Barr, Poornima Gupta and Gerry Shih, Writing by Edwin Chan, Editing by Peter Lauria and Tiffany Wu)

Article source: http://feeds.reuters.com/~r/reuters/technologyNews/~3/HtQJ_cNlYPs/us-facebook-ipo-idUSTRE80U29V20120202

By Gerry Shih

SAN FRANCISCO |
Wed Feb 1, 2012 5:26pm EST

SAN FRANCISCO (Reuters) – Facebook on Wednesday filed to raise $5 billion in an initial public offering. Here are a few highlights of its meteoric rise, several of which were chronicled in David Fincher’s seminal Oscar-winning 2010 movie, “The Social Network”:

October 28 2003 – Mark Zuckerberg, a Harvard psychology sophomore, writes “Facemash,” a website that asked users to judge students’ attractiveness based on their dorm-directory photos. The authorities — and many students — were not amused.

February 4 2004 – Zuckerberg launches Thefacebook.com, a social network that allows users to create basic profiles including personal information and photos.

February 10 2004 – Harvard students Cameron Winklevoss, Tyler Winklevoss and Divya Narenya send Zuckerberg a cease-and-desist letter, accusing Zuckerberg of independently developing thefacebook.com while he was hired to work on their social networking project, HarvardConnection.

June 2004 – Peter Thiel, PayPal co-founder and venture capitalist, invests $500,000 in Facebook.

May 26, 2005 – Accel Partners, the venture capital firm headed by investor Jim Breyer, invests $12.7 million in Facebook, valuing the company at roughly $100 million.

October 24, 2007 – Microsoft Corp announces that it purchased a 1.6 percent share of Facebook for $240 million, giving the company a total implied value of around $15 billion.

April 7, 2008 – Facebook settles with the founders of “ConnectU”, the Winklevoss twins and Divya Narendra, for a purported $65 million, according to promotional material later published by ConnectU’s lawyers.

May 26, 2009 – Russian investor Yuri Milner’s Digital Sky Technologies invests $200 million for a 1.96 percent stake, bringing Facebook’s value down to $10 billion.

June 3, 2010 – Zuckerberg sweats profusely as he takes questions about Facebook’s privacy policy while onstage at the All Things Digital conference. The episode, which the Twittering classes dubbed a “Nixon Moment,” renewed questions about Zuckerberg’s viability as the CEO of a company rumored to go public soon.

June 30, 2010 – In one of the more bizarre twists in Facebook’s history, New York businessman Paul D. Ceglia files suit against Zuckerberg, claiming he had struck a deal with the founder in 2003 for half of Facebook’s revenue and rightfully owned 84 percent of the company. Three successive lawyers withdrew from his legal team within a period of four months in late 2011. The litigation remains ongoing.

October 10, 2010 – Columbia Pictures releases “The Social Network,” a film about Facebook’s beginning, directed by David Fincher and written by Aaron Sorkin.

January 2, 2011 – Facebook raises $500 million from Goldman Sachs and Digital Sky Technologies in a deal that valued the company at $50 billion.

January 2011 – Goldman controversially markets as much as $1.5 billion worth of Facebook shares to its private investors, but withdraws the offer from American clients on January 18 following intense media coverage and scrutiny from the U.S. Securities and Exchange Commission. The offer was withdrawn because of accusations that it ran afoul of regulations prohibiting share-placement sponsors from aggressively promoting a deal to potential investors.

November 29, 2011 – Facebook agrees to settle Federal Trade Commission charges that it deceived users on what information it would keep private. The incident underscored how user concerns about privacy were spurring top-level government scrutiny of Silicon Valley.

January 25, 2012 – Trading of Facebook shares is halted on the secondary market as rumors of an impending IPO gain steam.

February 1, 2012 – Facebook files its Form S-1 with the Securities and Exchange Commission seeking to raise $5 billion in a highly anticipated IPO.

(Reporting by Gerry Shih)

Article source: http://feeds.reuters.com/~r/reuters/technologyNews/~3/wSZyjY0WMiY/us-facebook-timeline-idUSTRE8102KL20120201