Monday, April 29, 2013

Could Apple buy Intel?

Such a bold move would get rid of Samsung as a supplier and solve Apple's cash problem – but it is not without difficulties.


Halfway through the second quarter of the 2013 fiscal year, most of Apple's top execs meet at an undisclosed location (Eddy Cue's chair is empty – he's been called away to a Ferrari board meeting). They're joined by a few trusted industry insiders: Bill "the Coach" Campbell, Apple and Intuit director and adviser to Google's founders, Larry Page and Sergey Brin; Larry Sonsini, the Silicon Valley consigliere of more than three decades; and Frank Quattrone, the star investment banker with nine lives.

The meeting isn't about the company's dwindling profit margins. The smaller margins were expected and invited: The reduced-price iPad and heavy promotion of the "old" iPhone 4 as an entry-level product are part of the long term strategy of guarding Apple's lower end (so to speak). And no whining about AAPL's grim slide over the last six months, a problem that has only one solution: Apple needs to record a series of better quarters.

The problem of the day is, once again, what to do with Apple's obscene pile of cash.

By the end of December 2012, the company held about $137bn in cash (or equivalents such as marketable securities), including $23bn from operations for the quarter.

CFO Peter Oppenheimer delivers the bad news: It looks like operations will disgorge another $35bn this quarter. The stock buyback and dividend program that was designed to bleed off $45bn over the next few years (see this March 2012 Monday Note) won't be enough if the company continues at this rate.

Apple needs something bigger.

Quattrone has been sitting quietly at the end of the table. He clears his throat and speaks:

Buy Intel.

Well, yes, Frank (says Tim Cook), we've been buying Intel processors for the Mac since 2005.

Not the chips. The company. The planets are aligned for Apple to strike a blow that will leave the industry forever changed. Make history, acquire Intel.

Quattrone has their attention. He unfolds the celestial calibration:

Apple needs to extract itself from the toxic relationship with Samsung, its ARM supplier.
Intel is the best large-scale silicon manufacturer in the world. They have the people, the technology, and the plant capacity to match Apple's needs for years to come.
"But Intel doesn't do ARM!" you say. Indeed, Intel has no interest in the fierce competition and small margins in the ARM-based SoC market. Joining the ARM fray would severely disrupt Intel's numbers and infuriate Wall Street. But if Intel were to essentially "go private" as Apple's semiconductor manufacturing arm (pun intended), catering to all of Apple's x86 and ARM needs (and whatever else Bob Mansfield is secretly plotting), Wall Street would have no such objection.
Intel is flailing. The traditional PC market – Intel's lifeblood – continues to shrink, yet the company does nothing to break into the ARM-dominated mobile sector. In the meantime, the company makes perplexing investments such as buying McAfee for $7.68B.
There's a leadership vacuum at Intel. Six months after announcing CEO Paul Otellini's "retirement", Intel's board has yet to find a replacement who can sail the ship in more competitive waters. Apple could commission Pat Gelsinger, a 30-year Intel veteran and former CTO (Intel's first) who fled to VMware after his career stalled at Intel. Despite being a bit of a Bill Gates look-alike (once upon a time), Gelsinger is a real technologist who would fit well within Apple, especially if he were given the opportunity to really "go for" the ARM architecture instead of iteratively tweaking x86 devices.
Last but not least, Intel's market cap is about $115bn, eminently affordable. The company is profitable and generates a good deal of cash, even after the heavy capital expenditures required by its constant need to build new and expensive manufacturing plants.
…oh, and one more thing: Wouldn't it be fun to "partner" more closely with Microsoft, HP and Dell, working on x86 developments, schedules and… pricing?
A lively discussion ensues. Imagine solving many of Apple's problems with a single sweeping motion. This would really make Cupertino the center of the high-tech world.

It's an interesting idea, but there will be obstacles, both cultural and legal.

The coach goes first: "Knowing both of these companies more than a little bit, I can attest to the pride they have in their respective cultures. They're both disinclined to reconsider their beliefs in any meaningful way. Merging these two dissimilar groups, shedding unnecessary activities such as McAfee and the like would be dangerously disruptive to Apple's well-honed, cohesive culture. As a general rule, merging two large organization rarely succeeds… unless you consider merging airlines a success…"

Finally, the consigliere speaks: "It's a tempting fantasy, it will mean years of work for my firm and many, many others, but as a friend of the company, as a past confidant of your departed founder, don't do it. There will be too much legal trouble with the feds, with competitors, with Intel partners. Most fantasies aren't meant to be enacted."

I won't dwell on the reality of the meeting: I made it up as a way to explain why Apple really has no choice other than submit to another cash phlebotomy, this time for an additional $60bn. And, as with real-world phlebotomies, the procedure will treat the problem, but it won't cure it. With $30bn from operations per quarter, the $60bn lancing will have to be repeated.

Some read the decision to return gobs of cash to shareholders as an admission of defeat. Apple has given up making big moves, as in one or more big acquisitions.

I don't agree: We ought to be glad that the Apple execs (and their wise advisers) didn't allow themselves to succumb to transaction fever, to a mirage of ego aggrandisement held out by a potential "game changing" acquisition.

A final word on taxes. To return the additional $60bn (for a total of $100bn when including the ongoing programme announced last year) through increased dividends and repurchased shares, Apple will have to borrow money.

Borrow? When it has so much cash?

Yes, thanks to our mangled tax code. As explained here, about $100bn of Apple's cash is stored overseas. If repatriated, it would be "heavily" (read "normally") taxed. Like most US companies that have international operations, Apple plays complicated, entirely legal tax games that allow their international profits to be taxed at very low rates as long as the profits — and the resulting cash — stay outside Uncle Sam's reach. And thus we have the apparent paradox of borrowing money when cash rich.

The benefit of these tax code contortions is difficult to explain to normal humans — as opposed to legislators who allowed the loopholes.

All this now makes Apple a different company. Once a fledgling challenger of established powerhouses such as IBM, Microsoft or HP, it now makes "too much cash" and is condemned to a life of paying dividends and buying back shares — like the old fogies it once derided.

Thursday, April 25, 2013

Apple Says Data Centers Now Use 100% Renewable Energy

Apple Inc. (AAPL) now uses only renewable energy sources to power its data centers, the iPhone maker said in an updated report on its environmental policies.


The company’s data centers now run on energy sources such as solar, wind and geothermal, instead of coal or other fossil fuels, Apple said on its website. The centers house server computers that store and distribute songs, applications and other content from services such as iTunes, iMessage and iCloud.

A year ago, Apple was targeted by Greenpeace International, which ranked Apple 12th out of 14 large technology companies in a report called “How Clean Is Your Cloud?” The environmental group, which held protests at Apple’s offices in Cupertino, California, charged Apple with relying on electricity from coal plants and gave Apple a grade of no better than D in the four categories it tracked.

“Increasing our use of renewable energy is our primary objective,” Peter Oppenheimer, Apple’s chief financial officer, said in an interview. “We think these efforts will result in learnings that other companies and communities can benefit from as well.”

Apple’s announcement shows “real progress,” Greenpeace said, urging the company disclose more detail on how it’s working with utilities and state governments to achieve its energy goals.

“Apple’s increased level of disclosure about its energy sources helps customers know that their iCloud will be powered by clean energy sources, not coal,” Gary Cook, an analyst at Greenpeace, wrote in an e-mailed statement.

Solar Farm

Oppenheimer said a 100-acre (40-hectare) solar farm next to its largest data center, in Maiden, North Carolina, became fully operational in December. With the solar array and a large installation of fuel cells made by Bloom Energy Corp, which convert biogases into energy, Apple said it met a goal of generating 60 percent of the energy for the data center on-site.

“The power we are using in North Carolina is 100 percent renewable and zero percent coal,” Oppenheimer said.

Oppenheimer said Apple would double its solar capacity in Maiden after the construction of another nearby 100-acre solar farm by the of this year.

Apple also said a data center that is under construction in Prineville, Oregon, will also run on local renewable energy sources such as wind, hydro, solar and geothermal power.

Apple now gets 75 percent of its total power from renewable sources, up from 35 percent a year ago. The company’s four largest office campuses, in Ireland, Germany and two in California, now use 100 percent renewable energy sources, according to Oppenheimer.

Oppenheimer declined to disclose how much Apple spent on the equipment to generate its own power. He said Apple will keep investing in green technologies and isn’t focused on earning a financial return on the investments.

Wednesday, April 24, 2013

India's grand solar plans threatened by ugly US trade spat

In a tit-for-tat trade battle between the US and India over solar power, what is certain is that the environment will be the loser.Should trade wars and protecting local jobs get in the way of clean energy?

That's the dilemma before India – and the world – at the moment. Desperately short of power, but with an average of 300 sunny days a year, India is aggressively pursuing solar energy. Its national solar programme, the grandly named Jawaharlal Nehru National Solar Mission (named after India's first prime minister) plans to generate 20,000 megawatts of solar power by 2022. But an ugly trade spat with the US may frustrate India's efforts to go solar.

In February this year, the US asked the World Trade Organisation for dispute consultations concerning the "domestic content" requirement of the solar programme. Domestic content is a loaded phrase in international trade. What it means is that India requires solar energy producers to use locally manufactured solar cells, and offers them special subsidies. This allegedly violates WTO principles that require countries to treat both foreign and domestic goods equally.

This isn't India's first move to protect local companies. In November 2012, India began anti-dumping investigations against Chinese, Malaysian, and US firms, following complaints by Indian manufacturers of solar cells that cheap Chinese imports were hurting their business. US and Chinese imports can be brought into the country tax-free, but Indian manufacturers have to pay duties on raw materials to make the same products.

H.R Gupta, chairman of Indosolar, one of the companies that filed the complaint, says: "Local manufacturers are not getting any business, and the solar industry is doing very poorly because of lack of orders." Many local manufacturers have stopped production, or are operating at far below normal capacity. In a press conference last week, the Indian Solar Manufacturer's Association flayed lack of support by the government.

But it isn't just Indian companies that are worried. Twelve influential green organisations, including the Sierra Club, Greenpeace USA, Action Aid USA and Friends of the Earth, have urged the US to withdraw the complaint, and called for a compromise that allows India to build a solar economy. In a strongly worded letter, the groups pointed out that India's domestic solar industry is critical to global efforts to tackle climate change. The groups also expressed dismay at the idea that climate policy might be determined by trade wars rather than climate science.

Things got worse. The 60-day consultation ended on 7 April, and with no sign of a compromise, the US may now ask the WTO to resolve the complaint. India, meanwhile, is not taking things lying down. On 17 April, it retaliated by asking the US to justify trade restrictions in its own renewable energy projects, arguing that incentives offered to U.S. companies to use local labour make it equally difficult for Indian companies to enter the US.

In this tit-for-tat game, what's certain is that the environment will be the loser. The Obama Administration is committed to strengthening the American clean energy sector and preserving the millions of jobs it supports," said US trade representative Ron Kirk in a statement back in February. A fine sentiment, except when jobs come up against lives. India currently burns a phenomenal amount of coal, which kills tens of thousands prematurely every year. With no viable alternative energy sources, more coal plants are on their way.

But forget India for a moment. Can climate change worldwide be resisted, as long as India continues to burn coal at this pace? Unlikely. As green groups have pointed out, behemoths such as India and China need to have every tool at their disposal to make the difficult shift to clean energy. The globe is teetering on the brink. Block India's fledgling solar industry and you may just push the country over, and take the rest of the world with you.

Friday, April 19, 2013

Google Fiber 1000 Mbps Internet headed to Provo, Utah

Terms of an agreement between Google Inc. and Provo, Utah, show the company will pay $1 for a fiber-optic system that cost $39 million to build.


Even as Google takes ownership of the municipal network, Provo will have to pay off loans for its construction for another dozen years.

Provo officials say it's a good deal because the system hasn't been able to pay for itself. They say Google will make upgrades and complete connections to every home.

And Google Fiber will offer basic Internet service at no charge for a $30 hookup fee far less than the current $700 activation fee.

Provo households are paying off the cost of the network with a $5.35 monthly utility fee, and city officials say they'll get something for their money now.


Google said on Wednesday that its experimental high-speed Internet service is setting its sights on the Utah city of Provo.
Provo is slated to be the third US city to get Google Fiber service that promises to move data at a blazing gigabyte-per-second, according to a blog post by Google Fiber general manager Kevin Lo.

Last week, Google released word that its Internet service will spread to Austin, the Texas home of a South By Southwest festival beloved by technology trendsetters, after a successful pilot program in Kansas City.

Google Fiber should start connecting its so-called gigabit Internet to homes in Austin, the Texas state capital and a hotbed for Internet entrepreneurs, by the middle of next year, said vice president of access services Milo Medin.

As part of a plan to install Google Fiber in Utah, the California-based Internet giant inked a deal to buy an iProvo fiber-optic network that the city of Provo began building in 2004 but has not completed, according to Lo.

The agreement with Provo must be approved by the city council to proceed, and a vote is slated for April 23, Google said.

"We're committed to keeping their vision alive," Lo said of the plan to build iProvo into a Google Fiber network in that city.

If the deal is approved, Google would provide free Internet lower-speed service along the existing Provo network for at least seven years, with each home required to pay a $30 activation fee.

Google would charge monthly subscription rates for high-speed Internet connections along with optional services such as television programming.

Google's 'Gigabit Internet' would be free to public institutions such as schools, hospitals and libraries.

Google Fiber debuted in Kansas City and in November began providing users there with Internet service that moves data at about 100 times faster than the speed provided by typical broadband connections.


Google Fiber made a big splash upon launch, with its promise of Gigabit speeds at the cost of regular broadband. Google announced that it will be launching its fiber-based Internet service in Kansas City, USA. The service will let users download unlimited Internet data at the speed of 1000 megabits per second for $70 per month.

The Internet search giant had received 3,900 registrations for Google Fiber as on Sunday, with users having another 41-days to pre-order. The installations will begin in September.

Here's all you need to know about Google Fiber.

1) A free Nexus tablet
Every customer who signs up for Google Fiber with TV will get a free Google Nexus tablet to use as a remote. As of now, it is not clear whether it will be the 8GB model of Nexus 7 or the 16GB one that will be provided but nevertheless it is a great deal. There is also speculation that with the subscription of Google's Internet one may be able to get a ChromeBook for a discounted price of $299. The TV + Internet plan costs $120 per month, against $70 per month for Internet only.

 2) No caps
Apart from the speed, what is exciting about Google Fiber is that it is offering unlimited data uploading and downloading. Yes, that's right. There are no star marks or caps that the company plans to put on the amount of data you transfer.

 3) DVR Box
Google Fiber TV also comes along with a DVR box that lets users record as many as eight channels simultaneously. There is also an on-board memory of 2TB to help store all data that one may want to save.

 4) Installation cost and neighbourhood criteria
Google is charging $300 as an installation cost for this service and everyone who wants to pre-register will have to pay $10 to make a request. One would need at least 50 neighbours to make a request for Google to install this service in their area.

 5) No Broadband, no worries
For areas in Kansas, which still do not have broadband access (about 25 percent of the area), Google is offering 5Mbps download speeds and 1Mpbs upload speeds for the next seven years on payment of $300.

 6) 1 Gbps either way
Google Fiber offers 1Gbps download and upload speeds. In a world where upload speeds are capped at rather ridiculous levels, that must be music to the ears of end users. Torrent-ers rejoice!

7) Customer service
The Internet Service Provider (ISP) business is a new vertical for Google and given that it has little expertise in a consumer facing business, it will be interesting to see what it's strategy will be for this vertical. It will be a challenge even for Google to establish a robust customer service mechanism.

8) Home users only
The plans shared so far are clearly targeted at the home user, so what about the business users? Will Google continue to ignore them or will it have special plans for businesses in the future, remains to be seen.

9) Only for Kansas
Though Google has promised that it will be looking at rolling out this service to other states soon, but for now it is available only for the people living in Kansas City, Missouri. Google may prefer to wait and see how things turn out, so it may be a long

10) India? Forget about it!
In India, where most are struggling to get even a steady 1Mbps line, a service like Google Fiber will be really welcome. But given the state of infrastructure in our country and the amount of investment that setting something like Google Fiber will entail, we wouldn't advise you to hold your breath.


Microsoft, Google and Apple are among those tapping solar, wind and hydroelectric power sources


Microsoft is building a data center next to a Wyoming landfill in order to use its methane gas to power the facility.

Apple now uses a massive 100-acre solar energy farm to power its Maiden, N.C., data center.

And Google has placed data centers in Oklahoma and Iowa so they can plug into wind farms.

America's top tech companies are going green in a big way, so much so that the availability of clean energy resources is now a key consideration in where they locate corporate offices and data centers. The move is designed to save them millions of dollars in long-term energy costs.


"We believe energy is the future of our business," said Josh Henretig, director of environmental sustainability at Microsoft.

"Microsoft has increasingly transitioned from a software company to a services and devices company," said Henretig. "The services are largely based on our need for cloud [infrastructures] and, in turn, the energy that those clouds and data centers use. So we are absolutely focused on the role energy plays in our organization longer term."

Massive renewable growth
Over the past six years, the growth in wind farm deployments in the U.S. has been second only to gas-powered electrical plants.

According to the latest data, 6.8 gigawatts of wind power was added in the U.S. in 2011, a 31% increase over 2010. That 2011 jump brought the cumulative wind power capacity for the U.S. to 47 gigawatts, according to a study published by the Lawrence Berkeley National Laboratory.

The latest data from the Solar Energy Industries Association (SEIA) shows that the U.S. now has more than 6.4 gigawatts of installed solar electric capacity, enough power for more than a million households. And, while the numbers aren't in yet, 2012 was expected to be a record year for more growth, according to the SEIA.

Dan Shugar, an SEIA board member, said that when he first entered the solar energy industry 25 years ago as an electrical engineer, the world's collective solar arrays produced only about .03 gigawatts of power. Today, they produce 30 gigawatts (a gigawatt is a billion watts).

"That's a 1,000 times increase over my career. It's unstoppable," Shugar said.

The list of companies using and deploying renewable energy resources includes Intel, Kohl's, Staples, Wal-Mart, Ikea, McDonalds, Walgreens, Macy's, FedEx, Toyota and Lockheed Martin, according to the U.S. Environmental Protection Agency (EPA).


A greener Google
In 2011, the EPA awarded Google the Green Power Partner of the year award.

Google has pledged to reduce its carbon footprint to zero through energy efficiency and by purchasing carbon-free renewable electricity to power its data centers and corporate facilities.

Currently, a third of Google's energy consumption comes from renewable energy -- 20% from utility companies and 13% from wind and solar facilities owned by Google or a third party.

In 2007, Google constructed a 1.7-megawatt solar farm for its central facilities in Mountain View, Calif. The cost of that project, which has not been disclosed, was expected to produce return on investment (ROI) within seven years through cost savings. It's now on target to beat that projection and see ROI this year, according to Gary Demasi, Google's director of Global Infrastructure.

From this year forward, the solar power facility will continue to produce about 3 million kilowatt hours of power per year, saving the company in energy costs while reducing its carbon footprint.

In 2011, Google signed two 20-year contracts to purchase all the power from wind farms in Iowa and Oklahoma for two of its data centers in those states. The first contract was for 114 megawatts of wind generation from NextEra's Story County II facility in Iowa; the second was for 100.8 megawatts of wind generation from NextEra's Minco II facility in Oklahoma.

Last year, Google signed a separate wind power purchase agreement with the Grand River Dam Authority to power the company's Mayes County, Okla., data center with 48 megawatts of wind energy from the Canadian Hills Wind project.


"We've also done some methane capture projects on some landfills in the U.S., thereby reducing the amount of carbon released into the atmosphere," Demasi said.

Large-scale data centers and corporate facilities can use tens of millions of watts of electricity and they require a steady, reliable power source. While both wind and solar are intermittent power sources, solar has an advantage over windmills -- even if wind power is steadier.

"The nice thing with solar is it produces energy when your data centers are at peak power rates, during the middle of the day when it's super hot inside," Demasi said.

Renewable premium
While Google has made a significant dent in its power requirements with renewable energy, green power projects such as the Grand River Dam Authority windmill farm cost more than brown, or polluting, energy resources.


"In places where we're procuring renewable energy through a utility ... we're paying a slight premium for that power, but it's worth it to the company because we've determined that small premium we pay is financially reasonable," Demasi said.

"It's tough to procure renewable energy at equal to or less than what you can buy power off the grid," he continued. "So you've got to have a corporate appetite for that premium. The founders and leaders of the company believe we should do the right thing for the environment. That's definitely a clear mandate."

By pumping money into renewable energy resources, Google also hopes to drive up the economies of scale in order to eventually push prices below that of brown energy resources, Demasi said.

According to the U.S. Energy Information Administration, utility-scale wind projects cost about $2 per watt to install, and solar projects are about $3 per watt. Using those figures, a 100-megawatt wind project would cost about $200 million; a similar solar facility would cost about $300 million.

Independent power producers such as NextEra and Invenergy own more than 80% of all wind power capacity installed in the U.S. The same is true for solar power.

Dropping prices
The median installed price of solar photovoltaics has dropped by 25% to 35% over the past three years, according to a study published by the Lawrence Berkeley National Laboratory in November 2012.

The cost for solar electricity dropped by $2.1 per watt from 2008 through 2011, according to Lawrence Berkeley National Labs.

The study, which includes preliminary data for 2012, included data based on more than 150,000 individual residential, commercial and utility-scale photovoltaic systems, totaling more than 3,000 megawatts and representing 76% of all grid-connected photovoltaic capacity in the U.S.

According to the study, the median installed price in 2011 was $6.1 per watt for systems less than 10 kilowatts in size; $5.6 per watt for systems between 10 and 100 kilowatts in size; and $4.9 per watt for systems offering more than 100 kilowatts. Prices for 2012 are not yet available.

But partial data for the first six months of 2012 indicate that prices continue to fall, with the median installed price of projects last year 3% to 7% cheaper than in 2011.

The installed price of solar power has dropped even more in states such as Massachusetts, where incentives for renewable energy have placed the state ahead of the rest of the country in solar deployments.

According to the Lawrence Berkeley Lab study, the market for photovoltaic power in the United States is, to a significant extent, driven by national, state and local government incentives, including up-front cash rebates, production-based incentives, renewables portfolio standards and federal and state tax benefits.

For example, the price for solar power deployments in Massachusetts now costs an average of $4 per watt, down from $12 in 1998, according to Carrie Cullen Hitt, senior vice president of state affairs for the Washington-based SEIA.

While Massachusetts is ranked 44th in size among the other 50 states, the Bay State is ninth in solar energy deployment, mostly due to aggressive state government incentive programs.


To date, Massachusetts corporations have deployed 200 megawatts of solar power and utilities have deployed another 50 megawatts, according to Hitt. Yet, solar power still only makes up about 1.5% of the state's 13,000 megawatts of power generation.

At the federal level, the IRS's Investment Tax Credit (ITC) is still considered the big dog among incentive programs for using renewable energy. While not specific to renewable energy, the ITC offers companies a 30% tax credit for renewable power investments.

Remarkable growth
Just seven years ago, deploying a one-megawatt solar array was considered a huge accomplishment. Companies today, however, are regularly deploying systems that are 100 times larger, according to the Shugar.


For example, Apple last year completed a 100-megawatt solar farm for its North Carolina data center. A fuel cell facility capable of storing five megawatts of electricity will support the solar farms.

At full capacity, Apple's data center will draw about 20 megawatts of power.

"While we'll produce 60% of the power used by our Maiden data center onsite, we'll meet the remaining 40% of our energy needs by directly purchasing clean, renewable energy generated by local and regional sources," said Apple spokesman Nick Leahy.

Apple rival Microsoft is one of the largest purchasers of green power in the U.S. The EPA recently recognized it as the third largest purchaser of green power in the U.S., buying up more than 1.1 billion kilowatt-hours of green power a year.

Microsoft has been dabbling in renewable energy for more than a decade.

In 2004, it installed what at the time was Silicon Valley's largest solar power system, which produced 480 kilowatts at peak capacity. The solar farm was composed of 2,288 tiles, and today offsets as much as 15% of Microsoft's energy needs at a five-building campus with about 1,800 workers, according to Microsoft spokesman Doug Free.


The company is now exploring using biogas from landfills to power its facilities. Last fall, Microsoft's Global Foundation Services Group, which runs the company's cloud services and data centers, unveiled a data center that will run on biogas produced by a local Wyoming landfill and water treatment facility. The "mini-data center" will use 200 kilowatts coming from the biogas facilities, said Henretig.

But Microsoft's largest investment has been in hydroelectric energy because the company's headquarters, and 60% of its operations, is located in the Puget Sound region of Washington state.

About 46% of the energy used by Microsoft's Redmond, Wash., campus comes from hydroelectricity, and most of the power for its data center in Quincy, Wash., is from hydropower generated in the Columbia River Basin. That alone put Microsoft in the No. 3 spot on the EPA's top 50 green companies in 2012.

At the top of the list was Intel. Officials there declined to speak about Intel's renewable energy program.

The carrot and the stick
Microsoft said what really sets it apart is its carbon fee. The fee, implemented last July, is a charge-back model to business divisions that use energy that produces carbon emissions.

Microsoft's business groups were told they must build into their budgets the price of carbon emissions for the energy they use.

The business divisions pay a carbon fee for each metric ton of carbon emissions associated with the operation of data centers, software development labs, office buildings and employee air travel. The carbon fee goes into a central fund used to purchase renewable energy and carbon offsets to achieve net carbon neutrality.

The charge-back model makes the company's business divisions responsible for the cost of offsetting the carbon emissions, Henretig said.

It also forces business units to include carbon in their long-term cost plans and figure out how to not only reduce the amount of energy they require, but how to make investments that will lead to the transition to cleaner sources of energy.

"We are trying to push accountability out within the company to the point of use," said Henretig, who would not disclose the fee Microsoft charges divisions for carbon emissions.

Unlike Microsoft, Google reduces its carbon emissions through the use of carbon credit offsets -- investing in an activity that reduces carbon emissions elsewhere when renewable energy isn't available.

The carbon credit is verified by a third party, and it signifies that greenhouse gas emissions are lower than they would have been had no one invested in the offset. One credit equals one metric ton of carbon dioxide prevented from entering the atmosphere, according to Google.

For example, if a Google data center is located in a region without renewable energy, Google would invest in renewable energy in another region that may not even effect its facilities directly.

Thursday, April 18, 2013

Google’s airport dreams take off: San Jose private terminal approved


n a move that benefits Google executives and other corporate high-flyers, the City Council on Tuesday night approved an elite corporate jet center at San Jose’s airport, without adding an extra curfew provision that had been omitted in the bidding process.

In a 10-1 vote, the council approved a 50-year lease agreement with Signature Flight Services to build an $82 million facility on the west side of Mineta San Jose International Airport.

Only San Jose City Councilman Pierluigi Oliverio was opposed, saying there were other ways the city could help the cash-strapped airport repay its exhorbitant debt without disturbing citizens with more flights.

RELATED: GOOGLE’S OWN $82 MILLION AIRPORT MAY SOON BE A REALITY
About two dozen residents who live near the airport’s flight path urged the council to reconsider the project by adding back the extra curfew provision, increasing the curfew violation fines, or reducing the length of the lease.

“If the city approves the Signature aircraft lease, it will accomplish one good thing and two bad things,” said Ed Hodges, co-chair of the Citizens Against Airport Pollution, a community group that has battled the city over airport noise issues for decades.

The airport will get $3 million a year in rent, he said, but also generate thousands of additional flights every year during the curfew hours, and less trust with neighbors.

Residents Tina Morrill and Tom Sawyer both questioned not only the length of the 50-year lease, but what they considered the influence of big money in the process.

“This whole thing really appears to be a 1 percent giveway to the 1 percent corporate jet (companies) against the 99 percent of us who are trying to make a living,” said Sawyer.

Signature’s project includes seven hangars for corporate jets, with five of those hangars to be used by Blue City Holdings, its primary tenant. That company will manage aircraft for Google co-founders Larry Page and Sergey Brin and Google Executive Chairman Eric Schmidt, whose private jets are now parked at Moffett Field, where their lease is up next year.

But Mayor Chuck Reed, among others, insisted that neither company had sought to undermine or exempt their companies from adhering to the 11:30 p.m. to 6:30 a.m. airport curfew, which allows aircraft that generate less than 89 decibels to fly during those hours.

Nor had city officials ever given them that impression, he said.

“I have never seen the council waver on the curfew — never — not in open session and not in closed session,” Reed said. “We have fought for the curfew and we will keep the curfew,” he told the council and audience members.

The council last Tuesday had been poised to sign off on the deal, but delayed it after a last-minute memo surfaced from Aviation Director Bill Sherry.

In the memo, Sherry told the council that while all airport leases include a provision requiring compliance with the city’s curfew ordinance at the airport, the bid documents omitted an additional curfew provision that applies only to fixed-base operators at the airport and their tenants.

That added provision, which has been in effect since 2004, requires obeying the curfew, even if the curfew is subsequently terminated. Three other fixed-based operators at the airport have been subject to that provision, which after Tuesday’s council vote will now be dropped from their leases as well.

Like Reed, Sherry stressed that both Signature and Blue City Holdings will abide by the curfew, even without the second provision.

The Signature facility is projected to provide at least $3 million annually in rent and other fees to the airport, which has been working to attract more planes and revenue to pay off the costs of a recent $1.3 billion renovation.

Wednesday, April 17, 2013

Jayalithaa's one-rupee idlis are a hit


J Jayalalithaa has delivered a hit with the piping hot, fluffy idlis that her budget canteens or kitchens offer at Re one. The 200 canteens in Chennai have reported the sale of about 2 lakh idlis a day.

The crowd swells at noon, when the lunch menu also has on offer sambar-rice at five rupees and curd-rice at three rupees.

The Tamil Nadu Chief Minister launched the kitchens, run entirely by women's self-help groups, in Chennai, to provide nutritious food at an affordable price for the poor. But among the schoolchildren, daily wagers and other hungry souls making a beeline for the one-rupee idli, are also professionals and people from the upper middle class.


They say the refreshing cleanliness and polite management draws them here. "The sambar and idlis are very nice. It is neat and clean. The management is nice," a customer at a canteen in Chennai said.  

Jayaseelan and his colleagues have been lunching at a budget canteen every day over the last one week. Working for a private Mobile phone company he told NDTV, "I save 40 or 50 rupees daily by eating here. It costs just eight rupees for a plate of Sambar Rice and Curd Rice."

The kitchens seem to be earning the Chief Minister many fans. A housewife, Lavanya, who ate at one, said, "definitely in the next elections this scheme will help Amma win. Everybody is talking about this."

Encouraged by the huge response in Chennai,  the state government now plans to expand the scheme across Tamil Nadu.

Customers hope there will also be an expansion of the menu to include pongal, vada and dosa for variety.

Ms Jayalalithaa has won elections before on the promise of freebies like mixer-grinders and fans, which may have limited appeal in a state with a chronic electricity shortage. But food is a universal need and in times of high inflation and sky-rocketing food prices, the budget canteens are striking a chord, barely a year before the state votes in the general elections.

Tuesday, April 16, 2013

Google Glass specs released


Google has officially released specifications of its wearable technology innovation, Google Glass.

While Google didn't release the exact specifications of the display inside Glass, it said the resolution will be equivalent to that of a '25-inch high definition screen from eight feet away'. Google confirmed that Glass will feature a 5-megapixel camera capable of recording 720p videos. It will also feature a Bone Conduction Transducer for audio.

Glass will be compatible with any Bluetooth-capable phone, however, for using GPS and SMS it requires the MyGlass companion app which is only available for phones running Android 4.0.3 Ice Cream Sandwich or higher. As per Google, Glass will offer 16GB internal storage space out of which 12GB will be usable and will be synced with Google cloud storage.

The company doesn't specify the battery capacity but mentions that it will offer one full day of typical use, however, it also warns that some features, like Hangouts and video recording, are more battery intensive. Glass will include a Micro-USB cable and charger, and Google specifies that Glass is designed and tested with the included charger and advises users to stick to using the bundled charger.

Glass comes with adjustable nosepads and Google also offers extra nosepads in two sizes.

Prior to listing specifications, Google posted documentation for developers discussing software development for Glass. It also mentioned that the software would be called Glassware and that they'll need to use Google Mirror API 'a set of RESTful services that transmit information to and receive notifications from Glass devices'.

It also informed its developer members that it was seeing the first few devices come off the production line right now and that it wants to start delivering them, although only a portion of them were ready as of date. It mentioned that it will start shipping Glass in waves. The mail was shared by Anandtech's Brian Klug via his Twitter account.

Monday, April 15, 2013

Solar plane to head across country


A plane shaped like an immense, spindly dragonfly rests inside Moffett Field's cavernous Hangar 2.

It weighs as much as a car and flies on nothing but sunlight, tapped by 11,628 solar cells coating its wings. And in May, it will leave Moffett on a cross-country trip to New York City in a bid to prove that crazy ideas can sometimes work.


Made by Swiss company Solar Impulse, the plane is a flying experiment, testing new ultralight materials and battery technologies while pushing the limits of solar power.

It is designed to inspire. Pilot Bertrand Piccard, the son of a deep-sea explorer, sees the Solar Impulse plane as a way to motivate budding pioneers in technology and other fields.

"As soon as you start to love the unknown, love the doubts, love the question marks, life becomes an absolutely fabulous adventure, and this is what Solar Impulse is all about," he said Thursday at Moffett. "Of course, Solar Impulse is carrying one pilot and zero passengers. But it's also carrying a lot of messages."

Among those messages: renewable power can be used in ways that many people would consider impossible.

"Together, what we're going to show is that the idea that renewable energy can't fuel the world is wrong," said Tom Werner, CEO of SunPower Corp. The San Jose company supplied the plane's flexible solar cells, each as thick as two strands of hair.

'That's what we do'

"They're shattering myths," Werner said of Piccard and fellow Solar Impulse pilot André Borschberg. "They're destroying conventional thinking. And that's what we do in Silicon Valley."

The plane has already proved itself in the air. In 2010, it flew for 26 hours straight, showing that the battery pack could store enough energy from the solar cells to keep flying through the night. In 2015, Borschberg and Piccard plan to fly around the world.


First, however, they will tackle the United States.

After test flights around the Bay Area in April, the plane will take off in May for Arizona, landing in Phoenix. From there it will travel to Dallas-Fort Worth airport. In all, the team plans five legs between Moffett Field and New York's John F. Kennedy International Airport. At each stop, the plane and its makers will linger for a week to 10 days, showing off the aircraft as an educational tool.

With four propellers, the Solar Impulse plane doesn't have the speed of a jet. And the pilots don't want to fly more than 24 hours on any one leg.

"This airplane could do (the trip) nonstop," said Borschberg, who also serves as the company's CEO. "For safety reasons, the pilot is not as able as the technology, just yet."

Single-person craft

The plane was shipped to Moffett in pieces and assembled inside Hangar 2, whose vast interior was originally designed to hold blimps. The wings, stretching a total of 208 feet, look solid enough, but they're mostly fabric, with solar cells across the top. The cockpit fits one, just barely. The entire plane, pilot included, weighs about 3,525 pounds.

Together, the solar cells can generate up to 45 kilowatts of electricity. That's a little over 10 times the output of a typical home solar system. But it's enough to keep the propellers spinning and charge up the battery pack before nightfall.

The company, which has about 80 employees, is already building another version of the plane for the planned flight around the world. And it is relying on a network of partners to supply the technology that will make that flight possible. A division of the Bayer pharmaceutical company, for example, has provided specialized materials to help lower the plane's weight, including rigid foam in the wing tips and polycarbonate films in the cabin window.

Solar Impulse may not be a harbinger of aviation's future.

Most energy analysts believe aviation will rely on liquid fuels for the foreseeable future. Even the outgoing Piccard demurs a bit when asked if solar will one day be a common way to power planes.

"It would be crazy to answer yes and stupid to answer no," he said. "Because of course today, we cannot imagine having a solar-powered airplane with 200 passengers. But in 1903 (the year of the Wright brothers' first flight) it was exactly the same. And when Charles Lindbergh crossed the Atlantic, he was all alone on board, with an airplane full of gasoline."



Indian Air Force now capable of meeting twin challenge from China, Pakistan, say sources


Considering the threat perception from both China and Pakistan, the Indian Air Force (IAF) has upgraded its capabilities to meet any challenge from the two fronts simultaneously.

These capabilities were tested successfully for the first time during the recent three-week war games 'Livewire' in which over 400 fighter jets participated, IAF sources said in New Delhi today.

In the exercise, which commenced on March 18, the IAF created a simulated scenario of a challenge from both eastern and western fronts simultaneously.


Testing its capabilities to meet the challenge, the IAF swiftly mobilised its frontline fighter and transport aircraft from Pakistan border to the eastern front, particularly the recently-developed Advanced Landing Grounds (ALGs) in the Northeast, the sources said.

All the major aircraft of the IAF including the Su-30MKI, Mirage 2000, Jaguars, MiG 29, MiG 27s and the MiG 21s took part in the war games.

They said the force kept the required number of aircraft in the western front while mobilising the majority of its assets including the mid-air refuelling aircraft towards the eastern front, they said.

All the air-fields in the northeast including the eight Advanced Landing Grounds at Along, Walong, Tuting, Ziro, Pasighat, Vijay Nagar and Tawang were activated and were manned for operations of all types of fighter and transport aircraft operations.

This was the first time that such an exercise was conducted by the IAF where it tested its capabilities on both the possible war fronts, sources said.

During the exercise, the biggest aerial mobilisation of assets in the IAF was carried out with more than 2,000 tonnes of load being shifted in around 100 sorties, the sources said.

The IAF also practised special operations involving its recently-inducted C-130J Super Hercules aircraft from the US, which were used to paradrop Army Special Forces, national Security Guard commandos and its Garud security guards.

Heliborne operations were also carried out using the new Mi-17V5 choppers from Russia which allowed the force to practise internal security operations.

The IAF planes flew around 8,000 hours in the three weeks to validate its war-fighting concepts.

Barring two incidents of a mix-up with the commercial airliners, the whole exercise was hassle free, they said.

The IAF is in the process of increasing its operational strength from 34 squadrons to 42 squadrons and once that level is reached, the need for such an asset shift would not be required to a large extent, the sources said.

The IAF, which has a traditional edge over Pakistan, has been increasing its presence and strength in the Northeastern areas by deploying squadrons of its frontline aircraft Su-30MKI at Tezpur, Chabua and other bases there.

It has also upgraded the infrastructure for operations of its fighter and transport aircraft at the ALGs and air bases in the region along the China border after the Chinese side created a big infrastructure for its military on its side of the boundary.

Friday, April 12, 2013

Bitcoin: Wild, unregulated hacker currency gains following


With $600 stuffed in one pocket and a smartphone tucked in the other, Patricio Fink recently struck the kind of deal that's feeding the rise of a new kind of money - a virtual currency whose oscillations have pulled geeks and speculators alike through stomach-churning highs and lows.
The Argentine software developer was dealing in bitcoins - getting an injection of the cybercurrency in exchange for a wad of real greenbacks he handed to a pair of Australian tourists in a Buenos Aires Starbucks. The visitors wanted spending money at black market rates without the risk of getting roughed up in one of the Argentine capital's black market exchanges. Fink wanted to pad his electronic wallet.

In the safety of the coffee shop, the tourists transferred Fink their bitcoins through an app on their smartphone and walked away with the cash.

"It's something that is new," said Fink, 24, who described the deal to The Associated Press over Skype. "And it's working."

It's transactions like these - up to 70,000 of them each day over the past month - that have propelled bitcoins from the world of Internet oddities to the cusp of mainstream use, a remarkable breakthrough for a currency which made its online debut only four years ago. When they first began pinging across the Internet, bitcoins could buy you almost nothing. Now, there's almost nothing bitcoins can't buy. From hard drugs to hard currency, songs to survival gear, cars to consumer goods, retailers are rushing to welcome the virtual currency whose unofficial symbol is a dollar-like, double-barred B.

Advocates describe Bitcoin as the foundation stone of a Utopian economy no borders, no change fees, no closing hours, and no one to tell you what you can and can't do with your money. Just days ago the total value of bitcoins in circulation hit $2 billion, up from a tiny fraction of that just last year. But late Wednesday, Bitcoin crashed, shedding more than 60 percent of its value in the space of a few hours before recouping some its losses. Critics say the roller coaster currency movements are just another sign that Bitcoin is a bubble waiting to burst.

Amid all the hype, Bitcoin's origins are a question mark.

The mechanics of the virtual currency were first outlined in a research paper signed Satoshi Nakamoto - likely a pseudonym - and the coins made their online debut in 2009. How coins are created, how transactions are authenticated and how the whole system manages to power forward with no central bank, no financial regulator and a user base of wily hackers all comes down computing power and savoir faire. Or, as Nicholas Colas, chief market strategist for the ConvergEx Group, describes it: "genius on so many levels."

The lynchpin of the system is a network of "miners" - high-end computer users who supply the Bitcoin network with processing power needed to maintain a transparent, running tally of all transactions. The tally is one of the most important ways in which the system prevents fraud, and the miners are rewarded for supporting the system with an occasional helping of brand-new bitcoins.

Those bitcoins have become a dangerously hot commodity in the past few days.

Rising from roughly $13 at the beginning of the year, the price of a single bitcoin blasted through the $100 barrier last week, according to Mt. Gox, a site where users can swap bitcoins for more traditional currencies. On Tuesday, the price of a single bitcoin had topped $200. On Wednesday, it hit $266 before a flash crash dragged it back down to just over $100. By early Thursday, bitcoins were trading for $160.

The rebel currency may seem unstable, but then so do some of its more traditional counterparts. Some say Bitcoin got new momentum after the banking crisis in Cyprus pushed depositors there to find creative ways to move money. Fink, the Argentine, favors bitcoins because he believes they will insulate him from his country's high inflation. Others - from Iranian musicians to American auto dealers - use the currency to dodge international sanctions or reach new markets.

But the anything-goes nature of Bitcoin has also made it attractive to denizens of the Internet's dark side.

One of the most prominent destinations for bitcoins remains Silk Road, a black market website where drug dealers advertise their wares in a consumer-friendly atmosphere redolent of Amazon or eBay - complete with a shopping cart icon, a five-point rating system and voluminous user reviews. The site uses Tor, an online anonymity network, to mask the location of its servers, while bitcoin payments ensure there's no paper trail.

One British user told AP he first got interested in Silk Road while he was working in China, where he used the site to order banned books. After moving to Japan, he turned to the site for the occasional high.

"Buying recreational drugs in Japan is difficult, especially if you don't know people from growing up there," said the user, who asked for anonymity because he did not his connection to Silk Road to be publicly known.

He warned that one of the site's drawbacks is that the drugs can take weeks to arrive "so there's no spontaneity."

Drug dealers aren't the only ones cashing in on Bitcoin. The hackers behind Lulz Security, whose campaign of online havoc drew worldwide attention back in 2011, received thousands of dollars' worth of bitcoins after promising followers that the money would go toward launching attacks against the FBI.

A report apparently drawn up by the bureau and leaked to the Internet last year said that "since Bitcoin does not have a centralized authority, detecting suspicious activity, identifying users and obtaining transaction records is problematic for law enforcement."

It went on to warn that bitcoins might become "an increasingly useful tool for various illegal activities beyond the cyber realm" - including child pornography, trafficking, and terrorism.

The FBI did not immediately respond to an email seeking comment.

Late last month, the U.S. Treasury's Financial Crimes Enforcement Network, or FinCen, announced it was extending its money-laundering rules to U.S. bitcoin dealers and transfer services, meaning that companies that trade in the cybercurrency would have to keep more detailed records and report high-value transactions.

Many in the Bitcoin community are frustrated at the attention paid to the shadier side of the virtual economy.

Atlanta-based entrepreneur Anthony Gallippi said the focus on drugs and hacking misses the "much bigger e-commerce use for this that's growing and that's growing rapidly."

Very few businesses set their prices in bitcoins - the currency swings would be too jarring - but an increasing number are accepting it for payment. Gallippi's company, BitPay, handles Bitcoin transactions for some 4,500 companies, taking payments in bitcoins and forwarding the cash equivalent to the vendor involved, which means that his clients are insulated from the cybercurrency's volatility.

Gallippi said many of the businesses are e-commerce websites, but he said an increasing number of traditional retailers were looking to get into the game as well.

"We just had an auto dealership in Kansas City apply," he said.

In March, BitPay said its vendors had done a record $5.2 million in bitcoin sales - well ahead of the $1.2 million's worth of monthly revenue estimated to have coursed through Silk Road last year.

Even artists accept bitcoins. Tehran-based music producer Mohammad Rafigh said the currency had allowed him to sell his albums "all over the world and not only in Iran."

Gallippi said the cybercurrency's ease of access was its biggest selling point.

With Bitcoin, "I can access my money from any computing device at any time and do whatever the heck I want with it," he said. "Once you move your money into the cloud why would you ever go back to putting your money in the bank?"

Many Wall Street veterans are skeptical - and they may feel vindicated after Bitcoin's latest tumble.

"Trading tulips in real time," is how longtime UBS stockbroker Art Cashin described Bitcoin's vertiginous rise, comparing it to the now-unfathomable craze that saw 18th century Dutch speculators trade spectacular sums of money for a single flower bulb.

"It is rare that we get to see a bubble-like phenomenon trade tick for tick in real time," he said in a note to clients last week.

One Bitcoin supporter with a unique perspective on the boom might be Mike Caldwell, a 35-year-old software engineer based in suburban Utah. Caldwell is unusual insofar as he mints physical versions of bitcoins at his residence, cranking out thousands of homemade tokens with codes protected by tamper-proof holographic seals - a retro-futuristic kind of prepaid cash.

Caldwell acknowledges that the physical coins were intended as novelty items, minted for the benefit of people "who had a hard time grasping a virtual coin."

But that hasn't held back business. Caldwell said he'd minted between 16,000 and 17,000 coins in the year and a half that he's been in business. Demand is so intense he recently announced he was accepting clients by invitation only.

Some may wonder whether Caldwell's coins will one day be among the few physical reminders of an expensive fad that evaporated into the electronic ether - perhaps the result of a breakdown in its electronic architecture, or maybe after a crackdown by government regulators.

When asked, Caldwell acknowledged that bitcoin might be in for a bumpy ride. But he drew the analogy between the peer-to-peer currency enthusiasts who hope to shake the finance world in the 2010s with the generation of peer-to-peer movie swappers who challenged the entertainment industry's business model in the 2000s.

"Movie pirates always win the long game against Hollywood," he said. "Bitcoin works the same way."

Never mind Facebook: Winklevoss twins rule in digital money


The Winklevoss twins, Cameron and Tyler - Olympic rowers, nemeses of Mark Zuckerberg - are laying claim to a new title: bitcoin moguls.

The Winklevii, as they are known, have amassed since last summer what appears to be one of the single largest portfolios of the digital money, whose wild gyrations have Silicon Valley and Wall Street talking.

The twins, the first prominent figures in the largely anonymous bitcoin world to publicly disclose a big stake, say they own nearly $11 million worth.

Or at least $11 million as of Thursday morning - when trading was temporarily suspended after the latest and largest flash crash left a single bitcoin worth about $120 and the whole market worth $1.3 billion. At one point, the price had plummeted 60 percent.

To skeptics, the frenzy over the bitcoin network created by anonymous programmers in 2009 looks more like the mania for Dutch tulip bulbs in the 1600s than the beginnings of an actual currency.

"To say highly speculative would be the understatement of the century," said Steve Hanke, a professor specializing in alternative currencies at Johns Hopkins University.

Whatever else it is, bitcoin has become the financial phenomenon of the moment.

In addition to the identical twins, Silicon Valley investment firms, while not holding bitcoins, are starting to show interest in the technology.

On Thursday, a group of venture capitalists, including Andreessen Horowitz, announced that they were financing a bitcoin-related company, OpenCoin.

The Winklevosses say this week's tumult is just growing pains for a digital currency that they believe will become a sort of gold for the technorati.

"People say it's a Ponzi scheme, it's a bubble," said Cameron Winklevoss. "People really don't want to take it seriously. At some point that narrative will shift to 'virtual currencies are here to stay.' We're in the early days."

While little is known about the creator of bitcoin, or if it even was a single person, the work involved serious programming chops, building a system that could live on borrowed computer space around the world. It was determined that only a finite number of bitcoins could be created - the count is currently around 11 million. New coins are "mined" by programmers who solve mathematic riddles and can sell their coins on upstart exchanges.

For now, there are few places where bitcoins can be used. One marketplace is an online bazaar, Silk Road, where narcotics are reportedly the main wares for sale. But bitcoin believers imagine a future where the e-cash can be used at their local Starbucks. The Winklevosses have paid in bitcoin for the services of a Ukrainian computer programmer who has worked on their website.

"We have elected to put our money and faith in a mathematical framework that is free of politics and human error," Tyler Winklevoss said.

This is not the brothers' first gamble on an unproved technology. As students at Harvard College, the twins founded a social networking site, ConnectU, and enlisted their schoolmate, Mark Zuckerberg, to help them build the company. After Zuckerberg went off to start Facebook, the brothers sued him, accusing him of stealing their idea - a story that was dramatized in the movie "The Social Network." The case was settled with the brothers being given $20 million in cash and Facebook shares that are now worth more than $200 million.

They have parlayed that fortune into Winklevoss Capital. Their first two investments were in Hukkster, a startup shopping website and SumZero, an online community for professional money managers.

The brothers began dabbling in bitcoin last summer when the dollar value of a single coin was still in the single digits. To keep their holdings secure from hackers, they have taken the complex codes that represent their holdings off networked computers and saved them on small flash drives, putting the drives, in turn, in safe deposit boxes at banks in three different cities.

It's hard to verify how the Winklevoss holdings compare with other bitcoin players given the anonymity of accounts, and the twins say they believe that some early users of the system probably have holdings that are at least as large.

A Maltese company, Exante, started a hedge fund that the company says has bought up about 82,000 bitcoins - or about $10 million as of Thursday - with money from wealthy investors. A founder of the fund, Anatoli Knyazev, said his main concern was hackers and government regulators, who have so far mostly left the currency alone.

These investments were all in an uncertain state Thursday after the big price swings and the shutdown of trading on Mt. Gox, a Japanese-based company that claims to handle 80 percent of all bitcoin trades. Mt. Gox said in a statement that the problems were a result of the currency's popularity, making it impossible to process all the incoming orders. It added that it was not the victim of hackers but "instead victim of our own success!"

The 6-foot-5 Winklevoss brothers are unfazed by the tumult. The brothers said they took advantage of the low prices to buy more.

"It has been four years and it has yet to be discredited as a viable alternative to fiat currency," Tyler Winklevoss said. "We could be totally wrong, but we are curious to see this play out a lot more."

Government hopeful of $15 billion Rafale fighter jet deal going through


Earlier this month, in a rather unusual move, the Indian Air Force (IAF) strongly refuted a report that it was working on a Plan B should its negotiations fail to buy 126 combat jets from Dassault Aviation.

"The CNC (Contract negotiations committee) process for acquisition of 126 MMRCA (Medium, multi-role combat aircraft) is underway and there is no thought process for any procurement  as a 'back up' as reported," the Air Force said.

The statement was unusual for two reasons. Usually, it's the Defence Ministry that handles clarifications and responses to reports about acquisition of equipment and technology. Also, this is the first time that a press note has been officially issued about plans for procurement.


The deal for the fighter jet is estimated to be worth 15 billion dollars. But even when Dassault Aviation won the hotly-contested bidding war with rival manufacturers for exclusive negotiations with India, neither the government nor the Air Force announced the news. It was left to the company to declare itself the winner in January 2012.

The press statement issued earlier this month, sources say, was triggered by concerns in the Defence Ministry and the Air Force that rumours were being spread by those with 'vested' interests or rival manufacturers to prevent the deal with Dassault Aviation from being signed.

Under the initial terms of the proposed deal, Dassault was expected to provide 18 Rafale fighter jets in "fly-away" condition, and then let the state-run Hindustan Aeronautics Limited  or HAL manufacture the rest in India.

However, Dassault now wants two separate contracts to be signed - one for the ready-made ones, and another for the rest to be built by HAL, but India opposes that proposal.

Dassault reportedly has concerns about whether HAL has the capacity and capability to assemble the aircraft and therefore wants to rope in other private Indian firms to manufacture the jets.

Sources involved in the negotiations say that the deal is a complex one which requires careful understanding on both sides of commercial factors, logistics, and the ability of HAL's staff and equipment to assemble the Rafale.

An official shared this example. The radar on the Rafale jet is to be manufactured by Bharat-Electronics Ltd (BEL) at its facility in Bangalore. The Radome (the protruding snub nose on the aircraft) is, however, manufactured by HAL at its Hyderabad facility. Dassault wants clarity on how the two units will coordinate their activities.

Sources expect the kinks to be ironed out within the next six months. French and Indian government officials are simultaneously working on an Inter-Government Agreement that will oblige Dassault to continue to supply, service and maintain Rafale jets to India over the next 40 years. India wants this feature to ensure manufacturers don't renege on their commitment.

Thursday, April 11, 2013

Mark Zuckerberg launches political group


Teaming up with other Silicon Valley leaders, Facebook CEO Mark Zuckerberg has formally launched a political group aimed at revamping immigration policy, boosting education and encouraging investment in scientific research.

Zuckerberg announced the formation of Fwd.us (pronounced "forward us") in an op-ed article in The Washington Post late Wednesday. In it, he said the U.S. needs a new approach to these issues if it is to get ahead economically. This, he wrote, includes offering talented, skilled immigrants a path to citizenship.

"We have a strange immigration policy for a nation of immigrants," Zuckerberg wrote. "And it's a policy unfit for today's world."

The move comes as a bipartisan Senate group is expected to roll out on a comprehensive immigration bill in the coming days. Zuckerberg's goal echoes the proposed legislation. He said he wants "comprehensive immigration reform that begins with effective border security, allows a path to citizenship and lets us attract the most talented and hardest-working people, no matter where they were born."

Zuckerberg also calls for higher standards and accountability in schools and increased focus on learning about science, technology, engineering and math. Today's knowledge and ideas-based economy, the 28-year-old Harvard dropout wrote, is very different from the economy of the 20th century that was based on natural resources, industrial machines and labor.

Fwd.us, he said, was created to "to build the knowledge economy the United States needs to ensure more jobs, innovation and investment."

Also backing the group are tech leaders such as LinkedIn Corp. CEO Reid Hoffman, venture capitalists John Doerr and Jim Breyer, as well as Ruchi Sanghvi of Dropbox, who was Facebook Inc.'s first female engineer. Joe Green, founder of Causes.com, a social network for community organizing, serves as the group's president and founder.

Major contributors include Google Inc. chairman Eric Schmidt, Netflix Inc. CEO Reed Hastings, Yahoo Inc. CEO Marissa Mayer, SpaceX and Tesla Motors CEO Elon Musk, Zynga Inc. CEO Mark Pincus and former Groupon Inc. CEO Andrew Mason.

The formation of Zuckerberg's group was reported by The Associated Press and other outlets last month.

Sunday, April 7, 2013

Nuclear capable Agni-II missile successfully test-fired


The medium-range, nuclear capable Agni-II missile was today successfully test-fired with a strike range of more than 2,000 kms from the Wheeler Island off Odisha coast.

"The trial of the surface-to-surface missile was conducted from a mobile launcher from the Launch Complex-4 of Integrated Test Range (ITR) at around 10.20 am," defence sources said.

"Agni-II Intermediate Range Ballistic Missile (IRBM) has already been inducted into the services and today's test was carried out by the Strategic Forces Command (SFC) of the Army as part of training exercise with logistic support provided by the Defence Research and Development Organisation (DRDO)," the sources said.


The two-stage missile equipped with advanced, high-accuracy navigation system, guided by a novel state-of-the art command and control system, was propelled by solid rocket propellant system, they said.

"The entire trajectory of the trial was tracked by a battery of sophisticated radars, telemetry observation stations, electro-optic instruments and naval ships located near the impact point in the down range area of the sea," said a DRDO scientist.

The 20-metre-long Agni-II is a two-stage, solid-propelled ballistic missile. It has a launch weight of 17 tonnes and can carry a payload of 1,000 kgs over a distance of 2,000 kms.

The state-of-the-art Agni-II missile was developed by Advanced Systems Laboratory (ASL) and integrated by the Bharat Dynamics Limited (BDL) in Hyderabad.

Agni-II is part of the Agni series of missiles developed by DRDO which includes Agni-I with a 700 km range, Agni-III with a 3,000 km range, Agni-IV with 4,000 km range and Agni-V with a more than 5,000 km range.

The last trial of the Agni-II conducted on August 9 last year from the same base was a total success.

"Today's test fire was successful. It met all the parameters. It was 100 per cent successful," MVKV Prasad, the director of Integrated Test Range (ITR), told PTI.

Thursday, April 4, 2013

Apple's 60-inch 'iTV' coming this year with 'iRing' remote: Analyst


It's no secret that Apple wants to get into the living room by making its own TV set, and there have been plenty of rumors and reports about how and when it's going to happen.
Now, an analyst says he's learned that the set will go on sale late this year, for $1,500 to $2,500.

In a research note Wednesday, Brian White of Topeka Capital Markets says the "iTV" will be 60 inches on the diagonal, but could also come in 50- and 55-inch versions. Apple will also release a small "iRing" that fits on the viewer's finger, allowing the user to control the screen by pointing, White says.

In addition, the set will come with tablet-like "mini iTVs" with 9.7-inch screens, the same as the full-size iPad, White said. The "iTV" will be able to send video to the smaller screens wirelessly around the house. The concept is similar to the way in which cable and satellite TV companies are starting to let their set-top boxes send video to iPads and other tablets.

White says his report is based on gleanings from visits with unnamed Chinese and Taiwanese companies that supply Apple with components.

Apple doesn't comment on future products before its launch events, but late company co-founder Steve Jobs told biographer Walter Isaacson that he wanted to remake the TV and had figured out a way to do it. Last year, there were numerous analyst reports that said Apple would launch a TV set in 2012.

Apple does sell an "Apple TV," but it's a small box that connects to a TV to display movies and shows from iTunes.

Apple shares rose $2.20 to close at $431.99 Wednesday, as the tech-dominated Nasdaq index fell 1.1 percent. Apple's stock is still close to the 52-week low of $419, which it hit a month ago.

Wednesday, April 3, 2013

China's aviation 'supermarket' flies under restrictions


Gleaming new helicopters and small planes worth millions of dollars are on show at Beijing's first "aircraft supermarket", but some wealthy private buyers will still face curbs when taking to the skies.

"Selling airplanes in China is as easy as selling cabbages," said Zhang Changyi, a manager at the "supermarket", standing beside an imported French helicopter.

The dealership opened this week in a cluster of buildings surrounded by farmland on the edge of the capital, offering a range of small aircraft aimed at business executives and priced at up to 50 million yuan (Rs. 43.5 crore).


Zhang hopes to profit from the growing ranks of wealthy Chinese aspiring to own private aircraft, even though airspace restrictions mean some customers will be flying in the face of the law.

"We've sold three aircraft in the last four days," he said, walking through a warehouse filled with gliders and light aeroplanes. "Our ideal customers are the heads of listed companies."

Private plane ownership in China is still miniscule compared to countries like the US. State media reported only 150 such aircraft registered in 2011, despite an estimated one million millionaires as a result of the nation's economic boom.

Facilities at the dealership are still basic despite the buyers' wealth. Instead of a high-tech control tower, the grassy runway - a recently converted field - is flanked by a tractor and several rabbit hutches.

Overseas aviation companies are itching to break into the emerging market, Zhang added. "I get calls from foreign air firms almost every day, they are desperate to sell in China," he said.

Chinese airspace is controlled by the military and only open to private fliers who pass through a complex approval system, although some buyers are happy to risk fines of 10,000 to 100,000 yuan for violating the rules.

Reports of "black flights", as the clandestine trips are known in Chinese media, reveal a wealthy elite paying out for the privilege of zooming to work in a private plane or helicopter.

"If I'm fined, then I'll pay up," said Dai Xiang, a 43-year-old businessman from the southwestern province of Sichuan, after buying a two-seater Slovenian "Pipistrel" plane.

He expects the days of "black flights" to end soon. "Regulations on low-altitude flying are becoming more relaxed... and I hope that continues," he told AFP.

As an initial move authorities will ease a ban on low-altitude flying in seven cities starting this year, state media reported.

Zhang said his customers can fly inside a four-kilometre area surrounding the brokerage - run by a Beijing flying club - at heights of up to 500 metres (1,650 feet), under an agreement with a local air force base.

"We all know that the skies need to be opened up, but some departments are reluctant," said a pilot at the school wearing a dark uniform and black aviator sunglasses, who asked not to be named because of his military connections.

"Things are becoming more open, it's an unstoppable trend," he added, before climbing into a pristine green helicopter, sending dust flying and rabbit ears twitching as he took to the air for a test flight.

There are also other challenges, such as imported aircraft rarely coming with Chinese documentation.

"The instruction manual is in Russian," the pilot said of a helicopter recently arrived from Ukraine. "We don't understand a word of it."

Analyst: 60-inch Apple iTV to launch this year


It's no secret that Apple wants to get into the living room by making its own TV set, and there have been plenty of rumors and reports about how and when it's going to happen.

Now, an analyst says he's learned that the set will go on sale late this year, for $1,500 to $2,500.

In a research note on Wednesday, Brian White of Topeka Capital Markets says the "iTV" will be 60 inches (1.5 meters) on the diagonal, but could also come in 50- and 55-inch versions. Apple will also release a small "iRing" that fits on the viewer's finger, allowing the user to control the screen by pointing, White says.


In addition, the set will come with tablet-like "mini iTVs" with 9.7-inch (24.6-centimeter) screens, the same as the full-size iPad, White said. The "iTV" will be able to send video to the smaller screens wirelessly around the house. The concept is similar to the way in which cable and satellite TV companies are starting to let their set-top boxes send video to iPads and other tablets.

White says his report is based on gleanings from visits with unnamed Chinese and Taiwanese companies that supply Apple with components.

Apple doesn't comment on future products before its launch events, but late company co-founder Steve Jobs told biographer Walter Isaacson that he wanted to remake the TV and had figured out a way to do it. Last year, there were numerous analyst reports that said Apple would launch a TV set in 2012.

Apple does sell an "Apple TV," but it's small box that connects to a TV to display movies and shows from iTunes.

Apple shares rose $4.91, or 1.1 percent, to $434.70 in midday trading, as the tech-dominated Nasdaq index fell 0.3 percent. Apple's stock is still close to the 52-week low of $419, which it hit a month ago.

Apple iTV 4K television rumoured to launch in next 12 months


Apple may have shown no public interest in the television industry, but rumours of a TV designed by Cupertino refuse to die down. Every year we hear reports of Apple planning to launch its much-anticipated (at least by the rumour blogs) iTV, and true to the tradition, Apple Insider quotes a report in DigiTimes that states that Apple plans to release its TV in the next 12 months.

According to supply chain sources of DigiTimes, the television, to be called 'iTV', will sport 3,840x2,160 pixel resolution and come with voice and motion controls, as well as Internet connectivity. As the report notes, the mooted resolution would put the television in the category of 4K televisions, that were quite the rage at this year's CES in Las Vegas.

The report goes on to state that Apple is reportedly looking for a fresh supplier for the TV panel, as its own suppliers are working at full-capacity manufacturing displays for iPhone and iPad. The report says that Apple may look at LG display as the partner who can manufacture the panels starting end of this year, or early 2014, giving the iTV a likely release date in the next 12 months.


According to the sources, Apple and manufacturing partner Foxconn have been discussing the mass production of UHDTVs for "quite some time," but the Cupertino company is said to be looking for a reliable panel supplier. The publication noted that most firms capable of building the high-resolution displays will already be at near full capacity in 2013 to satiate demand from Chinese vendors.

While Apple's own display suppliers are capable of producing panels for a standalone television, they are reportedly focused on making components for the iPhone, iPad and iPad mini. LG Display will likely be able to mass produce the necessary panel sizes by the second half of 2013. This means a 4K iTV could launch by year's end, the sources say, but is more likely to happen in early 2014.

Apple set to launch new iPhone this summer: Report


Apple is set for a possible summer launch of the next iPhone, rather than a fall launch like the last two models, according to a report Tuesday in The Wall Street Journal.
Apple Inc. is also working on a cheaper iPhone model that could win it some market share in developing countries, the paper said. It cited unnamed people "familiar with the device's production."

The report is in line with the expectations of company watchers and Wall Street analysts. The iPhone 5 costs around $600, and while Apple maintains older iPhones in production, even those aren't cheap enough to compete effectively against low-end smartphones running Google Inc.'s Android software.

Apple doesn't comment on future products before its launch events. Its executives usually emphasize that the company's goal is to make the best products, not the cheapest ones.

The Journal said Apple is set to start production of the new iPhone within the next three months. It's apparently relying on sources among the Asian companies that supply components for the phone and assemble it.

Monday, April 1, 2013

'Facebook phone' may ring true April 4


Facebook fueled fresh talk Friday about its own mobile phone after the leading social network scheduled a press announcement for next week.
Shortly after the Facebook invitation went out for the April 4 event, the technology news site TechCrunch reported the announcement would be a modified version of the Google Android operating system with "deep native Facebook functionality."

Another report on "9 to 5 Google" said Facebook designing the software for the new smartphone, which would be made by Taiwan's HTC.

Facebook's invitation said only "Come See Our New Home On Android."

The reports, if accurate, could explain the long speculation about a "Facebook phone" to help the social network better monetize its mobile platform by featuring Facebook prominently on the phone.

Facebook has long held firm it has no intention of building its own smartphone, saying instead it would rather weave access to the social network into software running the gamut of handsets.

News of the April 4 event at social network's main campus in the Silicon Valley city of Menlo Park came as the research firm IDC released a Facebook-backed study showing that smartphones have become people's close friends in the US.

US smartphone owners tend to be connected from the instant they rise until they fall sleep and revel in every minute of it, according to the study.

A weeklong IDC survey of more than 7,000 people ranging in age from 18 to 44 years old with iPhones or Android-powered smartphones showed that four out of five check their handsets within 15 minutes of waking.

The top three applications used were for messaging; Web browsing, and Facebook, in that order, according to IDC.

"People have a universal need to connect with others, especially those they care deeply about," IDC researchers said.

"This coupled with mass market adoption of smartphones means that social engagement via phones has become mainstream."

At a TechCrunch Disrupt conference in San Francisco in September, Facebook co-founder Mark Zuckerberg said the social network giant is focused on mobile devices.

"It is really clear from the stats and my own personal intuition that a lot of energy in the ecosystem is going to mobile, not desktop (computers)," Zuckerberg said during an on-stage interview.

"That is the future," he continued. "We are going to be doing killer stuff there."

Facebook has made a priority of following its more than one billion members onto smartphones and tablet computers, tailoring services and money-making ads for mobile devices.

"Now, we are a mobile company," Zuckerberg said at the conference.

Zuckerberg rejected suggestions that Facebook would make its own smartphone, adamant that the company had no intention of stepping into the fiercely competitive handset hardware arena.

"Apple, Google, everyone builds phones we are going in the opposite direction," Zuckerberg said at the time.

"We want to build a system deeply integrated in every device people want to use."

Warren Buffett and his 5-bedroom home: Why it pays to be frugal


Quick-quiz. Match the place of residence given below to the following men.

World's richest man: Carlos Slim
World's second richest man: Bill Gates
World's third richest man: Amancio Ortega
World's fourth richest man: Warren Buffett
Where do they stay?

World's largest house
World's second largest house
World's third largest house
World's fourth largest house
Answer: None of the answers match the place of residence of the men given above. Isn't that so odd? The richest men don't live in the biggest houses. So what is the use of having so much wealth?

The shocker: Warren Buffet lives in a five-bedroom house brought in 1958, today valued at around $700,000. Today, almost 10 per cent Indians would be living in a house more expensive than that.

So, does that mean that Warren Buffet is a miser? With over $50 billion in wealth, he still stays in a 55-year-old house that too with "just" five bedrooms. He surely must be bluffing about his wealth, because we know for sure he is not bluffing about the house. Or is he? Well not at all. His known public wealth is $53 billion and growing.

So why does the world's fourth richest man stay in such a small house?

No, Warren Buffet is not stingy or miserly by any means, not anyone who donates $30 billion to charity can be. Rather, he has mastered the art of creating wealth.

Wealth is not created just by investing, but also by avoiding unnecessary expenses. It does not make one stingy; rather, it makes one frugal. This frugality has helped him grow his wealth year on year.

His logic is simple: An extra 10 rooms in the house is not going to create any major difference to him. However, the same money, if invested rightly -- of which he is a master -- can be made to grow to probably 10 times the same amount.

Yes, it is not easy for all of us to be like him. Others might say that he can "afford" to be frugal because he already has so much wealth and does not need to worry about anything else. True, but he has stayed the same way even when he was poor.

If Warren Buffett can do it on such a large scale, we can at least do it on a smaller scale. The secret lies in falling in love with growing wealth. If you can fall in love with the happiness that one gets by seeing wealth grow, you will automatically start repelling the evil twin: spending.

Initially, it may be very difficult and you may not even be able to follow. But once you get accustomed to it, you realize that the pain of sacrificing current consumption is much smaller as compared to the thrill of creating long-term wealth. The Rs. 20,000 saved by going for a simple phone can in the coming years grow into Rs. 200,000 and give you the power to be a giver.

The fundamental is to make sure we give priority to the needs and minimize the wants. Happy frugality.

Whatsapp the unlikely challenger to Facebook's domination


Create personal profiles. Build networks of friends. Share photos, videos and music.
That might sound precisely like Facebook, but hundreds of millions of tech-savvy young people have instead turned to a wave of smartphone-based messaging apps that are now sweeping across North America, Asia and Europe.

The hot apps include Kik and Whatsapp, both products of North American startups, as well as Kakao Inc's KakaoTalk, NHN Corp's LINE and Tencent Holdings Ltd's WeChat, which have blossomed in Asian markets.

Combining elements of text messaging and social networking, the apps provide a quick-fire way for smartphone users to trade everything from brief texts to flirtatious pictures to YouTube clips - bypassing both the SMS plans offered by wireless carriers and established social networks originally designed as websites.

Facebook Inc, with 1 billion users, remains by far the world's most popular website, and its stepped-up focus on mobile has made it the most-used smartphone app as well. Still, across Silicon Valley, investors and industry insiders say there is a possibility that the messaging apps could threaten Facebook's dominance over the next few years. The larger ones are even starting to emerge as full-blown "platforms" that can support third-party applications such as games.

To be sure, many of those who are using the new messaging apps remain on Facebook, indicating there is little immediate sign of the giant social media company losing its lock on the market. And at a press event this week, the company will unveil news relating to Android, the world's most popular smartphone operating system, which could include a new version of Android with deeper integration of Facebook messaging tools or possibly even a Facebook-branded phone.

But the firms that can take over the messaging world should be able to make some big inroads, investors say.

"True interactions are conversational in nature," says Rich Miner, a partner at Google Ventures who invested in San Francisco-based MessageMe, a new entrant in the messaging market. "More people text and make phone calls than get on to social networks. If one company dominates the replacement of that traffic, then by definition that's very big."

Facebook spokespeople declined to comment for this article, citing this Thursday's planned announcement.

Facebook's big challenge is reeling back users like Jacob Robinson, a 15-year old high school student in Newcastle upon Tyne in the U.K., who said the Kik messaging app "blew up" among his friends about six months ago. It has remained the most-used app on his Android phone because it is the easiest way for him to send different kinds of multimedia for free, which he estimated he does about 200 times a day.

Robinson said he trades snapshots of his homework with friends while they stay up late studying for their exams - or not.

"We also stay up in bed with our phone all night, just on YouTube searching for funny videos, then you quickly share it with your friends," he added. "It's easy. You can flip in and out of Kik."

Facebook "has really started to lose its edge over here," said Robinson, who found his interactions on Facebook less interesting than his real-time chats.

Waterloo, Ontario-based Kik has racked up 40 million users since launching in 2010. Silicon Valley entrants in the race include Whatsapp, funded by Sequoia Capital, and MessageMe, launched earlier this month by a group of viral game makers. MessageMe has received seed-stage funding from True Ventures and First Round Capital, among others, and claimed 1 million downloads in its first week.

Meanwhile, Asian companies are producing some of the fastest-growing apps in history. Tencent's WeChat boasts 400 million users - far more than Twitter, by way of comparison - while LINE and KakaoTalk claim 120 million and 80 million users, respectively. Both have laid the groundwork to expand into the U.S. market.

Mobile wave
The growth in the messaging apps reflect the dramatic shift in Internet usage in recent years, as Web visits via desktop computers have stagnated while smartphone ownership and app downloads have skyrocketed.

Chief Executive Mark Zuckerberg has publicly called Facebook a "mobile company" to emphasize the company's priorities. Last year, he splashed $1 billion for photo-sharing app Instagram, which has remained red hot, while Facebook also launched its own Messenger app, offering a suite of smartphone communication tools.

Still, Facebook has also been forced to play defense. Earlier this year, the company cut off its data integration with a young startup called Snapchat and then mimicked its feature with a new messaging tool called Poke, which sends messages that self-destruct. It has also shut off its integration with messaging apps like MessageMe and Voxer.

At the same time, Facebook has also hired graphic artists to draw emoticons and graphics for Messenger that emulate features of the wildly popular Asian apps like LINE, according to people with knowledge of the matter.

Dave Morin, an early Facebook employee who left to found the "private" social network Path in 2010, said he recognized last summer the critical role of messaging functions in smartphone apps, and quickly began working to incorporate them.

Since Path released a new version of its app earlier this month, the number of Path's daily users has risen 15 percent, which Morin attributed to the new messaging features.

"What's the number one reason why people have this thing?" said Morin, holding up his iPhone. "It's to call, to text, to communicate."

Messaging, Morin added, is "the basis for the mobile social network."

Platform threat
While established social networks move to incorporate messaging features, the new-wave messaging apps are looking to grow into social networking platforms that support a variety of features and enable innovations from outside developers.

"The tried and true approach for a social network is first you build a network, then you build apps on your own, then you open it up to third party developers," said Charles Hudson, a partner at early stage venture capital firm SoftTech VC.

The moves mirror Facebook's younger days, when its user growth and revenues were boosted by game publishers like Zynga Inc, which made popular games like FarmVille for the Facebook platform.

In the South Korean market, for instance, eight of the top ten highest grossing Android apps are games built on top of KakaoTalk. Tencent announced in November that it would introduce a mobile wallet feature enabling payment for goods with WeChat. And Tencent also makes money in China by using the app's location data to displaying nearby merchants' deals to potential customers.

If the messaging apps reach a certain scale, they could form networks that rival Facebook's "social graph," the network of user connections and activities that enable highly targeted delivery of content and advertising.

"The folks on your address book are very different from your Facebook friends and your LinkedIn contacts, and that's a natural place for a very powerful graph to be created," said Jim Goetz, a partner at Sequoia Capital.

Ted Livingston, the 25-year old chief executive of Kik, said he developed the capability for his service to support external features in November, and he plans to open the platform to outside developers in the near future.

Livingston said Kik and Whatsapp were "in a race to see who's the first to build a platform."

Whatsapp, which has been the most widely downloaded communication app for both iOS and Android in recent months, according to analysis firm App Annie, has been profitable by selling subscriptions to its service for $1 a year. Although it has remained mum about its platform plans, the company has been rumored to be in talks with Asian game publishers about hosting games, according to news reports in South Korea.

Goetz declined to address the reports, saying only that because it relied on a subscription business model, Whatsapp did not need to sell games or ads to make money.

Still, he said, the Whatsapp team "spends a lot of time thinking about the developer community."

Deal potential
Established social networking giants could also swoop in for the upstarts - and Facebook has demonstrated its appetite for acquisitions.

Indeed, investors are eyeing a round of potentially lucrative buyouts resembling the series of deals involving group messaging applications in 2011.

Facebook acquired group messaging app Beluga in March of that year, enlisting its founders to help build its own stand alone app, Messenger, which launched six months later.

In late 2010, First Round Capital, an early stage venture capital firm, invested in GroupMe, a group messaging startup that was sold to Skype just fifteen months after it launched.

Kent Goldman, a First Round partner who has backed MessageMe, said it was unlikely that the market in the long term could support numerous independent messaging startups, which by their nature become more powerful as they grow larger.

"You don't want to be the smallest one when the music stops," he said.