Facebook says it was a target of sophisticated hacking

Facebook says it was a target of sophisticated hacking Fri, Feb 15 19:30 PM EST By Tim Reid and Joseph Menn (Reuters) - Facebook Inc said on Friday it had been the target of an unidentified hacker group, but it found no evidence that user data was compromised. "Last month, Facebook security discovered that our systems had been targeted in a sophisticated attack," the company said in a blog post posted on Friday afternoon, just before the three-day Presidents Day weekend. "The attack occurred when a handful of employees visited a mobile developer website that was compromised." The social network, which says it has more than one billion active users worldwide, also said: "Facebook was not alone in this attack. It is clear that others were attacked and infiltrated recently as well." Facebook declined to comment on the motive or origin of the attack. A security expert at another company with knowledge of the matter said he was told the Facebook attack appeared to have originated in China. The FBI declined to comment, while the Department of Homeland Security did not immediately return a call seeking comment. Facebook's announcement follows recent cyber attacks on other prominent websites. Twitter, the microblogging social network, said earlier this month it had been hacked and that about 250,000 user accounts were potentially compromised, with attackers gaining access to information, including user names and email addresses. Newspaper websites, including those of The New York Times, The Washington Post and The Wall Street Journal, have also been infiltrated. Those attacks were attributed by the news organizations to Chinese hackers targeting coverage of China. While Facebook said no user data was compromised, the incident could raise consumer concerns about privacy and the vulnerability of personal information stored within the social network. Facebook has made several privacy missteps over the years because of the way it handled user data and it settled a privacy investigation with federal regulators in 2011. Facebook said it spotted a suspicious file and traced it back to an employee's laptop. After conducting a forensic examination of the laptop, Facebook said it identified a malicious file, then searched company-wide and identified "several other compromised employee laptops." Another person briefed on the matter said the first Facebook employee had been infected via a website where coding strategies were discussed. The company also said it identified a previously unseen attempt to bypass its built-in cyber defenses and that new protections were added on February 1. Because the attack used a third-party website, it might have been an early-stage attempt to penetrate as many companies as possible. If they followed established patterns, the attackers would learn about the people and computer networks at all the infected companies. They could then use that data in more targeted attacks to steal source code and other intellectual property. In its statement, Facebook said the attack was launched using a "zero-day," or previously unknown flaw in its software that exploited its Java built-in protections. "Zero-day" attacks are rarely discovered and even more rarely disclosed. They are costly to launch and often suggest government sponsorship. In January 2010, Google reported it had been penetrated via a "zero-day" flaw in an older version of the Internet Explorer Web browser. The attackers were seeking source code and were also interested in Chinese dissidents, and Google reduced its operations in the country as a result. Attention to cyber security has ratcheted up since then and this week President Barack Obama issued an executive order seeking higher safety standards for critical infrastructure. Other companies stand to benefit more from comprehensive legislation, which has stalled in Congress. Republicans have opposed additional regulations that would come with mandatory security standards. (Reporting by Tim Reid.; Editing by Gary Hill, G Crosse and Andre Grenon)

Facebook rolls out friends-based search product

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Facebook rolls out friends-based search product Tue, Jan 15 17:35 PM EST 1 of 5 By Alexei Oreskovic MENLO PARK, California (Reuters) - Facebook Inc took the wraps off a new search tool on Tuesday that lets people trawl their network of friends to find everything from restaurants to movie recommendations, an improvement that's likely to increase competition with review websites like Yelp and potentially even Google Inc. The so-called graph search marks the company's biggest foray into online search to date, though it displays only information within the walls of the social network rather than links to sites available across the Internet. Mark Zuckerberg, Facebook's 28-year-old founder and chief executive, introduced the new product at the company's first major product launch since a rocky initial public offering in May. "Graph search is designed to take a precise query and return to you the answer, not links to other places where you might get the answer," Zuckerberg told reporters at its Menlo Park, California, headquarters. "What you've seen today is a really different product from anything else that's out there." Facebook shares, which have climbed 15 percent since the start of the year, slid 3 percent Tuesday to just above $30. The product news fell short of some of the most optimistic predictions, which included speculation that the social network would introduce its own smartphone or an Internet search engine. Dubbed "graph search" because Facebook refers to its growing content, data and membership as the "social graph," the function will be available at first only as a "beta," or trial, for just hundreds of thousands of its billion-plus users. It will let users browse mainly photographs, people, places and members' interests. Zuckerberg stressed that people can sort through only content that has been shared with them, addressing potential privacy concerns. Shares in Yelp dived more than 6 percent on fears that Facebook's new friends-based search concept will begin to draw users away from the popular reviews site, which also lets people maintain a circle of trusted friends. Google stock held steady. Some analysts said Facebook may be taking a tiny step toward eventually challenging Google on its home turf, but said that was a much more challenging undertaking and a long-term possibility at best. Zuckerberg stressed that the new graph search did not encompass Internet searches, Google's specialty. Sterne Agee analyst Arvind Bhatia said the product was inevitable. "We think this will enable them to expand beyond display ads and ultimately compete with Google," he said. THE PROMISE AND THE THREAT The world's largest online social network, Facebook is moving to regain Wall Street's confidence after the IPO and concerns about its long-term financial prospects. Zuckerberg said the company is working on making money from users who are migrating to mobile devices. He said he could foresee a business in search over time, but analysts advised caution. Facebook has come under fire numerous times for unclear privacy guidelines. While Tuesday's revelation fell short of some of the wilder guesses about what Facebook planned to reveal in its highest-profile news briefing since its market debut, analysts said it was overdue for a well-rounded search tool, given its current inadequacies. Zuckerberg promised that users will be able to tailor their searches, specifying music and restaurants that their friends like, for instance, or their favorite dentist. The reverse is also possible, such as discovering friends who have an interest in a particular topic. "You need to be able to ask the query - like, who are my friends in San Francisco?" Zuckerberg said. "It's going to take years and years to index the whole map of the graph and everything we have out there. We'll start rolling it out very slowly. We're looking forward to getting it into more people's hands over coming weeks and months." Wedbush Securities analyst Michael Pachter argued that recommendations from trusted friends were more valuable than from strangers on the Web. Forrester analyst Nate Elliott was less sanguine. "Facebook's worst nightmare is a static social graph; if users aren't adding very many new friends or connections, then their personal network becomes less and less active over time," he said. "Terrifyingly for Facebook, that threat is very real: We haven't seen significant growth in the average number of friends per user recently." (Additional reporting by Malathi Nayak in San Francisco and Himank Sharma in Bangalore, writing and editing by Edwin Chan; Editing by Phil Berlowitz and Prudence Crowther)

Facebook IPO: In or Out; what is on display is the real genius of capitalism

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Tale of two hoodies
Facebook IPO features best and worst of capitalism

18 May 2012 | By Robert Cyran


Facebook’s initial public offering on Friday showcases the best and worst sides of capitalism. Execrable(Deserving of execration; hateful.
Extremely inferior; very bad) puffery(Flattering, often exaggerated praise and publicity, especially when used for promotional purposes.) accompanies the entrepreneurial achievement of transforming a dorm-room project into a company worth over $100 billion in just eight years. Poor corporate governance, Silicon Valley cronyism, breathless pundits spewing misinformation, bankers in hoodies and manic investors are all on display. And yet the flip side of such indulgence (Something granted as a favor or privilege.) is worth admiring.

Wall Street’s premier event of the year turned into an outright circus, including a 30-minute delay for the shares to start trading on Nasdaq despite considerable anticipation of the mega-volume that ensued. At its most benign(Showing gentleness and mildness.), otherwise serious thinkers about capital markets devoted unthinkable amounts of time publicly debating whether founder Mark Zuckerberg’s casual dress was a slight to investors while financiers cravenly(Characterized by abject fear; cowardly.) sucked up to the 28-year-old. But there’s a darker side to the hoopla(Boisterous, jovial commotion or excitement.
Extravagant publicity: ), too.

What exactly Facebook will become, or even what it wants to be, isn’t entirely clear. This, along with the social network’s rapid growth, allows investors to dream big. Stock analysts played along with this “Faithbook” conceit, creatively reverse engineering models to justify lofty valuations. The headlong indulgences(Something granted as a favor or privilege.) left few to fear Zuckerberg’s control or the gray-market trading that allowed insiders to profit with asymmetric information ahead of the IPO. As insiders sold down, the hoi-polloi (The common people; the masses.) was invited to buy in at an alarming 25 times trailing revenue.

Yet hype and greed are often the best way to interrupt economic torpor (A state of mental or physical inactivity or insensibility.), spread new technologies and new forms of organizing business. Booms mobilize assets and talent - and fast. The benefits of the railroad, electricity, telecommunication and computer booms ultimately outweighed the costs of wasteful speculation.

The same dynamics are evident in Facebook. Zuckerberg began with a simple idea that quickly became revenue-free Internet traffic. The prospect of being part of the next big thing attracted money from all over the world and encouraged clever programmers to come knocking. Entrepreneurs far and wide have taken inspiration from the saga and built businesses on the back of Facebook, and beyond. Amid the unseemly IPO mania, what is on display is the real genius of capitalism: the ability to harness excess.
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Facebook faces US $15 billion lawsuit
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Published: 19 May, 2012, 06:52
Facebook faces US $15 billion lawsuit (Reuters/Shannon Stapleton)

Facebook faces US $15 billion lawsuit (Reuters/Shannon Stapleton)

TAGS: Scandal, Human rights, Law, Internet, USA

Tracking users after they log out and violating US wiretapping laws – these are the allegations behind a 15-billion-dollar nationwide class-action lawsuit filed against Facebook in California.

­The suit, combining 21 cases of alleged privacy violations by the social networking giant, was filed on Friday in the Federal Court in San Jose, Emil Protalinski writes on ZDNet.com. In their consolidated complaint, the plaintiffs claim that Facebook used cookies to track them across the Internet.

And yet, where does the staggering sum of the lawsuit come from? Violation of the Federal Wiretap Act provides suggests compensation of US $100 per day per user for every case of violation, up to a maximum of US $10,000 per user. The accusations also fall under the Computer Fraud and Abuse act, the Stored Communications Act, as well as various California Statutes and California common law.

“This is not just a damages action, but a groundbreaking digital-privacy rights case that could have wide and significant legal and business implications,” said David Straite, a partner at Stewarts Law. The firm is one of the plaintiffs leading the claim.

Accusations that Facebook used cookies to track its users even after they log out are countless. However, all such claims have been turned down so far on the grounds that cookies are simply not legally considered to be wiretaps. Proving damage is also a challenge here.

In September, the Data Protection Commissioner (DPC) in Ireland, where Facebook has its international headquarters, agreed to conduct a privacy audit of the network’s activities. Interestingly enough, and thankfully for Facebook, the three-month audit concluded that the company makes “innovative use of cookies to identify unusual or suspicious activity” on an account.

As for now, Facebook insists "this complaint is without merit" and prepares to "fight it vigorously" – PCWorld quotes Andrew Noyes, the network's manager of public policy communications.

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Morgan Stanley made big bet on Facebook
Fri, May 18 22:05 PM EDT

By Nadia Damouni and Olivia Oran

NEW YORK, May 18 (Reuters) - Lead Facebook Inc underwriter Morgan Stanley took a bet earlier this week when it increased the size of the social networking firm's $16 billion initial public offering and it boosted the price.

Thanks to massive hype surrounding Facebook's historic public offering, the wager looked safe. But a rocky first day of trading has raised questions about whether it paid off.

After a delayed start to trading, Facebook's shares spent much of the day struggling to stay above the $38 IPO price - and ended with just a 23-cent gain.

As a result, Morgan Stanley may have spent billions of dollars to support the stock price by buying shares in the market. Some market participants said that the underwriters had to absorb mountains of stock to defend the $38 level and keep the market from dipping below it.

The firm did this by tapping into a 63 million share over-allotment option, or greenshoe, according to sources familiar with the deal.

As an indication of the cost, had Morgan Stanley bought all of the shares traded around $38 in the final 20 minutes of the day, it would have spent nearly $2 billion. Underwriters are not obligated to prop up a stock on debut, but typically do.

Morgan Stanley declined to comment.

The debut marks a rare stumble for a high-profile IPO. Facebook is the only recent U.S. internet listing not to enjoy a large price jump on its first day of trading. LinkedIn, Groupon and Pandora Media all saw significant gains at their public debuts.

The debut also underscores Morgan Stanley's go-it-alone handling of the offering process. Though 32 other underwriters signed on to the deal, Morgan Stanley retained tight control over information, decisions and allocations of shares, according to other underwriters.

To be sure, Morgan Stanley's strong approach may have been crucial to managing such a large, high-profile offering with so many underwriters. And the fact that the stock didn't soar on its first day means they achieved full value for their client.

Some issues were beyond Morgan Stanley's control. Glitches at the Nasdaq stock exchange delayed the start of trading by 45 minutes, and throughout the day many investors did not receive confirmations that their orders had been completed, brokers at Morgan Stanley, Raymond James & Associates and others said. That uncertainty about their positions may have prompted some investors to sell, worsening the downward pressure on the stock.

Nasdaq posted a notice late in the day saying that orders entered for the stock before trading started "resulted in nothing being done" and offering to match orders if customers send in requests by Monday. Sources said the exchange was working through the weekend to deal with the botched trades.

Facebook also altered its guidance for research earnings last week, during the road show, a rare and disruptive move.

In many ways, the deal is a crowning moment for Morgan Stanley. When it won the coveted role as Facebook's primary underwriter for its IPO, veteran technology banker Michael Grimes managed to convince executives at the social media giant that his bank would single-handedly control the process.

And as Grimes, co-head of global technology investment banking, boarded a Bombardier Global Express jet at Mineta San Jose International Airport with Facebook executives last week along with Morgan Stanley Internet banker Marcie Vu -- according to documents obtained by Reuters -- he had effectively accomplished his goal.

Successfully pulling off one of the largest IPOs in U.S. history would underscore Morgan Stanley's status as the top underwriter for tech offerings and set it above arch rival Goldman Sachs, with total global proceeds last year of $2.2 billion, according to Thomson Reuters data. But even with high profile deals like LinkedIn and Zynga under its belt, Morgan Stanley had to be careful.

And so the bank led a highly secretive, tightly controlled process in which other institutions -- including top underwriters JPMorgan Chase & Co and Goldman -- were effectively shut out.

"There was some frustration by JPMorgan and Goldman, as they were getting limited information. They thought they would be more inside the process," one source close to the matter said.

Goldman Sachs declined to comment. JPMorgan did not return calls seeking comment.

For its efforts, Morgan Stanley will receive 38 percent of the overall IPO fees, about $67 million, which is more than JPMorgan and Goldman combined, according to regulatory filings.

But more importantly, Morgan Stanley was the only bank actively talking to investors on the deal and able to pull the order book together, a rare feature for IPOs where top underwriters typically split the work more evenly.

At one of the venues during the investor roadshow, dozens of fund managers congregated at the St. Regis Hotel in New York including Neuberger Berman, SAC Capital Advisors LP, Soros Fund Management LLC, Tiger Global Management LLC and Och Ziff Capital Management Group LLC, trying to get a piece of the pie, according to the sources.

Representatives for Neuberger Berman, Tiger Global and Och Ziff declined to comment. The other funds were not immediately available for comment.

With almost all 33 Facebook underwriters kept in the dark about the deal, including additional changes to terms such as pricing range and IPO size, one underwriter called the process the "Morgan Stanley show" while another underwriter said the bank is "essentially running it by themselves."

JPMorgan pulled out all the stops when Facebook executives visited its New York headquarters. A Facebook-branded flag adorned the building and the bank gave out Facebook baseball hats and coffee cup holders. But the moves "mostly attracted press," said one source.

Facebook Chief Financial Officer David Ebersman and VP of Finance & Treasurer Cipora Herman were the primary executives working with underwriters, a separate source close to the matter said. Facebook Chief Operating Officer Sheryl Sandberg also remained actively involved.

Ebersman had been very thorough in his thinking throughout the process, one of the sources close to the matter said, considering everything from the more transparent Dutch Auction process that Google Inc used to a directed shares program. In the end, Facebook decided it wanted a traditional IPO process.

Their thought was to "bring in the right shareholders" as part of the IPO process and not get tangled up in other strategies that would be disruptive to the running of Facebook's business, the source said.

Zuckerberg was less involved, and also chose not to attend a majority of the roadshow stops last week, other than a brief appearance in his trademark hooded sweatshirt on May 7 at the Sheraton Hotel in New York and then again in Palo Alto that Friday.

The roadshow -- in which Zuckerberg was treated less as CEO and more as rockstar -- only lasted nine days rather than the typical 12.

Security was so tight that in New York attendees were asked for multiple forms of identification and were cross- checked against a list of names. According to one source, even one of Morgan Stanley's equity sales heads had difficulty entering the roadshow lunch because his name was accidentally left off of the list.

Until late Thursday night, co-managers were still left in the dark about their allotments and if they were even going to get shares, said one underwriter who preferred anonymity because the talks are private.

"Everything was very hush hush," he said.
================= =========== Facebook costs UBS some of its new friends Tue, Jul 31 10:16 AM EDT By Peter Thal Larsen The author is a Reuters Breakingviews columnist. The opinions expressed are his own. UBS is making a habit of springing nasty second-half surprises. Eleven months ago, the Swiss bank shocked investors with a 2 billion Swiss franc rogue trading loss. Now it has fessed up to dropping 350 million francs on Facebook’s bungled initial public offering. In an already tough second quarter, it’s the last thing UBS’s slimmed-down investment bank needed. For months, rivals have wondered how UBS could have stubbed its toe on Facebook despite not being selected as a bookrunner on the much-hyped offering. According to the bank, its equities arm received many orders for Facebook stock from fund managers and wealthy clients. Due to trading glitches at the Nasdaq exchange, it repeated orders multiple times, only to be left with large amounts of unwanted stock. Assuming UBS paid an average price of $40 per share and subsequently sold at an average of $31, that implies the bank ended up with almost 40 million Facebook shares – or roughly 10 percent of the company’s freely traded stock. UBS says it will take legal action against Nasdaq for what it describes as the exchange’s “gross mishandling” of the IPO. Nevertheless, the debacle overshadowed a second quarter already marred by weak trading volumes and reduced corporate finance activity: as a result, UBS’s investment bank slipped back into the red. In other areas, however, UBS actually performed rather well. Assuming the full implementation of Basel III rules, the bank’s core Tier 1 capital ratio improved by more than a percentage point to 8.8 percent, aided by ongoing deleveraging. There are also signs that UBS is recovering its status as a safe haven for the world’s wealthy: its private banking arm attracted 9.5 billion francs of net new money in the quarter. The flipside is that risk-averse clients tend to hoard cash. As a result, the private bank’s gross margin slipped by 4 basis points to 89 basis points. UBS continues to shrink its investment bank: the unit’s target for risk-weighted assets by 2016 has been shaved to 135 billion francs, from 170 billion francs today. But as long as UBS remains capable of producing unwelcome shocks, investors will remain wary. BP missed analysts’ projections by a wide margin as it announced second-quarter results on July 31. The UK oil major tipped into a net loss of $1.4 billion for the period after it announced $4.8 billion of write-downs on U.S. assets, including shale gas fields, refineries and an abandoned project in Alaska. Total pre-tax charges were $5 billion. Excluding the one-off items, second quarter underlying earnings on the industry’s preferred measure were $3.7 billion, down from $5.7 billion a year ago and about $700 million short of consensus estimates of $4.4 billion. By 1100 GMT on July 31, BP shares were down just over 4 percent at 425 pence. ==== Re: O/T Facebook Hobnob34 4 '$50 Billion wiped out in a couple of months time after the best of analysts and bankers had valued it at $100 Billion at IPO. Unbelievable.' ---- There's a shining example of why you should ignore what the 'experts' and analysts say. Whether it's because their clueless or part of a master plan it's best to make your own mind up.