Autonomy’s Lynch defends record as HP confirms Federal probe






LONDON (Reuters) – Mike Lynch, the founder of the software firm sold to Hewlett-Packard last year in a deal tainted by accusations of accounting fraud, said he would defend the company’s accounts to U.S. Federal investigators.


HP confirmed in a filing late on Thursday that the U.S. Department of Justice was investigating Autonomy‘s books.






The PC and printer maker bought the British company for $ 11 billion last year to lead its push into the more profitable software sector.


Autonomy did not deliver the growth expected, resulting in Lynch’s departure earlier this year.


But worse was to come last month when HP wrote off some $ 5 billion of the company’s value and accused its former management of accounting improprieties that inflated its value.


The Silicon Valley company said it had passed information from a whistleblower to the U.S. Department of Justice, the SEC and Britain’s Serious Fraud Office.


“On November 21, 2012, representatives of the U.S. Department of Justice advised HP that they had opened an investigation relating to Autonomy,” it said in the filing.


“HP is cooperating with the three investigating agencies.”


Lynch launched a robust defense of his track record almost immediately after HP made the accusations.


He said on Friday that he was still waiting for a detailed calculation of HP’s $ 5 billion writedown of Autonomy’s value and a published explanation of the allegations.


“Simply put these allegations are false, and in the absence of further detail we cannot understand what HP believes to be the basis for them,” he said in a statement.


“We continue to reject these allegations in the strongest possible terms. Autonomy’s financial accounts were properly maintained in accordance with applicable regulations, fully audited by Deloitte and available to HP during the due diligence process.”


Lynch said he had not been approached by any regulatory authority, but he would co-operate with any investigation and looked forward to the opportunity to explain his position.


HP has refused to concede to Lynch’s demands for more information about the allegations.


“While Dr. Lynch is eager for a debate, we believe the legal process is the correct method in which to bring out the facts and take action on behalf of our shareholders,” it said in response to an open letter from Lynch last month


“In that setting, we look forward to hearing Dr. Lynch and other former Autonomy employees answer questions under penalty of perjury.”


(Reporting by Paul Sandle; Editing by Helen Massy-Beresford)


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‘The Hobbit’ stays atop box office for third week






LOS ANGELES (AP) — “The Hobbit: An Unexpected Journey” continues to rule them all at the box office, staying on top for a third-straight week with nearly $ 33 million.


The Warner Bros. fantasy epic from director Peter Jackson, based on the J.R.R. Tolkien novel, has made $ 222.7 million domestically alone.






Two big holiday movies — and potential awards contenders — also had strong openings. Quentin Tarantino‘s spaghetti Western-blaxploitation mash-up “Django Unchained” came in second place for the weekend with $ 30.7 million. The Weinstein Co. revenge epic, starring Jamie Foxx and Christoph Waltz, has earned $ 64 million since its Christmas Day opening.


And in third place with $ 28 million was the sweeping, all-singing “Les Miserables.” The Universal Pictures musical starring Hugh Jackman and Anne Hathaway has made $ 67.5 million since debuting on Christmas.


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Brazil president, cancer survivor, pronounced healthy






BRASILIA (Reuters) – Brazilian President Dilma Rousseff, who survived lymphoma cancer in 2009, was pronounced healthy by doctors after a routine exam on Friday.


Rousseff’s health was “within normal levels,” according to a statement released by her office following the check-up at the Sirio-Libanes Hospital in Sao Paulo, one of South America‘s leading cancer treatment centers.






Rousseff underwent chemotherapy in 2009 and briefly wore a wig, but the cancer went into remission and she appeared to be in good health by the time she staged her winning campaign for the presidency in 2010.


Concerns over her health have faded since then, although a bout with pneumonia and a lengthy recovery in 2011 have kept the issue on some investors’ radar screens.


(Reporting by Ana Flor, Writing by Brian Winter; Editing by Doina Chiacu)


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Reasons to Be Scared of Microsoft Stock






The early days of January are typically a time of unbridled optimism. This will be the year we lose 10 pounds and learn to speak French; Japan will turn itself around; Microsoft (MSFT) stock will pull itself out of a decade of doldrums.


Most analysts are betting that the Redmond computer company’s time has come. The company’s fiscal-year revenue has nearly tripled to $ 74 billion in the last 10 years. At $ 27, the shares trade right at their 10-year average and yield more than it costs the company to issue debt. Redmond has Skunk-Worked an exciting new tablet and operating system it’s eager to showcase. It’s all backed by ridiculous amounts of free cash and a fortress-like balance sheet. The 12-month price target on the stock forecasts a 25 percent gain.






Still, the company has attracted at least one major detractor with a big megaphone: Barry Ritholtz, an asset manager who runs a quantitative research firm and founder of the well-trafficked blog The Big Picture. He considers the company a “classic value trap,” not unlike what its customers Dell (DELL) and Hewlett Packard (HPQ) were at the start of this annus horribilis. The problem, he says, is Microsoft Chief Executive Officer Steve Ballmer. “As long as he is running the show—he has missed every major trend in tech over the past decade—I have no confidence in the company.”


He has company. Activist investor David Einhorn has wanted Ballmer out for more than a year and was long the shares in hopes that such an ouster would boost Microsoft’s returns. The stock is up 3 percent this year, compared with the S&P 500’s 14 percent gain. The 13 years since Ballmer became CEO have included the Vista debacle, a thankfully thwarted bid to overpay for Yahoo! (YHOO), the ceding of search supremacy to Google (GOOG), and Apple’s (AAPL) envisioning and dominating much of the smartphone and tablet markets. Meanwhile, where’s that “Skype Phone” in every palm?


‘Value trap’ is a funny term, says Bill Koefoed, Microsoft’s general manager of investor relations. Microsoft, he says, is trading in line with the big-cap technology sector, which has recently been out of favor with investors.


“Enterprise tech hasn’t been as sexy to the press. But our relevance to the enterprise has grown in a huge way. Our database business is growing faster than Oracle’s (ORCL) and IBM’s (IBM).”


Koefoed says people focus on Windows, which provides a quarter of Microsoft’s overall revenue, but not on the comparable 25 percent contribution from the company’s servers and tools division, which he emphasizes that Ballmer has grown, from a $ 3 billion business, to a $ 19 billion enterprise over the past decade. ”Over time, the stock price works itself out. We’re doing a whole bunch of things to be shareholder-friendly. Over time, that will be reflected in our share price.”


Meanwhile, Koefoed says, it was under Ballmer that the company initiated and consistently increased its dividend—with Microsoft shareholders overwhelmingly backing the CEO last month.


Ritholtz is unpersuaded “Think of the difference between what is revealed by a single snapshot of Microsoft today vs. an extended video. Yes, you can see the current situation of lots of cash, a low price-earnings multiple, name recognition, enterprise usage. But what about the trajectory and changes to the underlying market for their goods and services?”


He says that other than Kinnect for Xbox 360, “it’s hard to see what Microsoft gets for its billions of [research and development] dollars.”


“The competitive landscape has been moving against Microsoft,” wrote N. Landell-Mills of Indigo Equity Research after Microsoft’s “uninspiring” latest quarterly report, which involved the company raising its dividend 15 percent. The analyst called the organization “un-innovative and complex” and “a digital dinosaur.”


The full rollout of Windows 8 could, of course, change that state of affairs. Not that early signs are promising.


With the PC replacement cycle stretched out and assailed by competition that Microsoft failed to oppose, Ritholtz has taken to comparing its fate to that of Maytag (WHR). “It was,” he says, “once hugely successful and innovative and created lots of products and markets. Now you replace your dishwasher every 10 years; that’s the only time you ever think of Maytag.”


Businessweek.com — Top News





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2 arrested after Guinea treasury chief killed






CONAKRY, Guinea (AP) — Officials in the West African nation of Guinea say they’ve arrested two suspects in the case of the killing of the country’s treasury chief, who was shot to death nearly two months ago.


Authorities paraded the pair in front of journalists Friday. Aissatou Boiro was killed as she was driving home. She had launched an investigation into the loss of 13 million francs ($ 1.8 million) which went missing from the state coffers.






The government says the suspects were found with Boiro‘s computer memory stick and mobile telephone.


The men denied any involvement in her slaying and said a friend had given them the items.


Boiro’s colleagues say she had zero tolerance for corruption and was intent on putting an end to the mismanagement of state funds.


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NORAD Santa trackers draw record number of phone calls, social media followers






PETERSON AIR FORCE BASE, Colo.NORAD says it drew a record number of phone calls and social media followers during its NORAD Tracks Santa operation on Christmas Eve.


The North American Aerospace Defence Command said Friday volunteers answered more than 114,000 calls, up 12,000 from 2011.






NORAD’s Santa Facebook page had more than 1.2 million followers, up from about 1 million last year. More than 129,000 people followed on Twitter, up from 101,000 last year.


NORAD got 11,000 emails, up from 7,700 in 2011.


More than 1,250 volunteers answered phone calls, including first lady Michelle Obama.


NORAD Tracks Santa began in 1955 when a newspaper listed the wrong number for children to call Santa. They wound up calling the Continental Air Defence Command, NORAD’s predecessor.


The operation is based at Peterson Air Force Base, Colo.


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Matt Damon tackles “fracking” issue in the “Promised Land”






LOS ANGELES (Reuters) – The hot-button topic of “fracking” has finally made its way to Hollywood in the new movie “Promised Land,” out in U.S. theaters on Friday, with actors Matt Damon and John Krasinski teaming up to further the debate on the energy drilling technique.


The film explores the social impact of hydraulic fracturing drilling technique, or “fracking,” which has sparked nation-wide environmental and political battles over its impact on drinking water, U.S. energy use, seismic activity and other areas.






“Promised Land” will see Damon, 42, reunite with director Gus Van Sant for the third time, following their success with 1997 film “Good Will Hunting and 2002′s “Gerry.”


In their latest film, Damon plays a corporate salesman who goes to a rural U.S. town to buy or lease land on behalf of a gas company looking to drill for oil. He soon faces opposition from a slick environmentalist, played by Krasinski.


In real life, Damon hasn’t shied away from getting involved in political and social issues, working with charities and organizations to eradicate AIDS in developing countries, bringing attention to atrocities in Sudan’s Darfur region, providing safe drinking water and stopping trees from being chopped and used for junk mail.


Yet “Promised Land,” which Damon also co-wrote and produced, doesn’t take a noticeable stance on “fracking.” The actor would not publicly state his own views, telling Reuters that he didn’t think his opinion had “any bearing” on the film.


“The point is that the movie should start a conversation. It’s certainly not a pro-fracking movie, but we didn’t want to tell people what to think,” Damon said.


The actor said he and Krasinski never set out to make a socially conscious film, and “fracking” was added in later, as a backdrop to the story.


“It wasn’t that we said we wanted to make a movie about ‘fracking’ as much as we wanted to make a movie about American identity, about real people. We wanted to make a movie about the country today, where we came from, where we are and where we are headed,” Damon said.


“‘Fracking’ was perfect because the stakes are so incredibly high and people are so divided. It asks all the questions about short-term thinking versus long-term thinking.”


Hydraulic fracturing entails pumping water laced with chemicals and sand at high pressure into shale rock formations to break them up and unleash hydrocarbons. Critics worry that “fracking” fluids or hydrocarbons can still leak into water tables from wells, or above ground.


FROM ‘ADJUSTMENT BUREAU’ TO ‘PROMISED LAND’


At first glance, the pairing of Damon with Krasinski may not come across as the perfect fit, as Damon has primarily been associated with longtime friend and collaborator Ben Affleck, both of whom won Oscars for writing “Good Will Hunting.”


Damon later become a colleague and friend to a number of key Hollywood players, including George Clooney and Brad Pitt, with whom he co-starred in the “Ocean’s Eleven” franchise.


Krasinski, 33, is best known for playing sardonic Jim Halpert on NBC’s long-running television series, “The Office,” and has had occasional supporting roles in films such as 2008′s “Leatherheads.”


Damon and Krasinski came together after meeting through Krasinski’s wife, Emily Blunt, who co-starred with Damon in the 2011 film “The Adjustment Bureau.” Damon said he and his wife started double-dating with Krasinski and Blunt, through which their collaboration on “Promised Land” came about.


The duo’s busy work schedules forced them to moonlight on weekends to make “Promised Land.”


“John showed up at my house every Saturday at breakfast and we would write all day until dinner,” Damon said. “Then we’d do it again on Sunday. I have four kids so he would come to me.”


But Damon’s determination to make the film his feature directorial debut fell through when his acting schedule changed, making it impossible to direct “Promised Land,” so he turned to Van Sant.


“My first inclination was to send the script to somebody I’d worked with before,” he said. “Gus seemed like the most obvious choice and I realized later that I’d never written anything that anyone else had directed, except Gus. I have a real comfort level with him.”


Damon said he has not given up on his dream of directing movies and has his eye on a project at movie studio Warner Bros., which has a deal with Damon and Affleck’s joint production company, Pearl Street Films.


With Affleck’s third directorial effort “Argo” becoming an awards contender, Damon joked that the film’s success can only be a good thing for his own budding directing career.


“I now happen to be partnered with the hottest director in Hollywood!” he said, laughing.


(Reporting By Zorianna Kit, Editing by Piya Sinha-Roy and Paul Simao)


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House sets Sunday session as “fiscal cliff” deadline nears






WASHINGTON (Reuters) – The House of Representatives will return to Washington on Sunday night, just over a day before income tax rates are set to spike higher, in a last-ditch chance to avert the year-end “fiscal cliff.”


Senior Republican aides confirmed that House Speaker John Boehner on Thursday told members to be back in Washington in time for a 6:30 p.m. EST (2330 GMT) legislative session on Sunday.






The House may then stay in session until January 2, the final day of the current Congress, according to a Twitter message from House Majority Leader Eric Cantor.


That is the day that another component of the “fiscal cliff” – $ 109 billion in automatic spending cuts to military and domestic programs – is set to start.


The House went on recess a week ago amid a deadlock over how to resolve ways to avoid the $ 600 billion in tax increases and spending cuts that could throw the U.S. economy back into recession.


Some media outlets reported that Obama would meet with congressional leaders on Friday, but several congressional aides said no such meeting had yet been arranged.


If a meeting occurs, Obama is not expected to offer a new “fiscal cliff” solution and he is instead likely to stick to the outline he set out a week ago for a stop-gap fix, according to a senior Democratic aide.


That would include legislation to shield most Americans from any income tax increase starting on January 1, except for those households with net incomes above $ 250,000 a year. Obama also wants an extension of expiring benefits for the long-term unemployed.


So far, the Republicans who control the House have refused to go along with any measure that would raise income taxes on anyone.


Meanwhile, House Republican leaders held an approximately 35-minute telephone conference call with rank-and-file members on Thursday, according to one Republican aide.


“There were a lot of different members who spoke on the call. All had questions. All had comments,” the aide said, refusing to elaborate.


(Reporting By Richard Cowan and David Lawder; Editing by Will Dunham)


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China tightening controls on Internet






BEIJING (AP) — China‘s new communist leaders are increasing already tight controls on Internet use and electronic publishing following a spate of embarrassing online reports about official abuses.


The measures suggest China’s new leader, Xi Jinping, and others who took power in November share their predecessors’ anxiety about the Internet’s potential to spread opposition to one-party rule and their insistence on controlling information despite promises of more economic reforms.






“They are still very paranoid about the potentially destabilizing effect of the Internet,” said Willy Lam, a politics specialist at the Chinese University of Hong Kong. “They are on the point of losing a monopoly on information, but they still are very eager to control the dissemination of views.”


This week, China’s legislature took up a measure to require Internet users to register their real names, a move that would curtail the Web’s status as a freewheeling forum to complain, often anonymously, about corruption and official abuses. The legislature scheduled a news conference Friday to discuss the measure, suggesting it was expected to be approved.


That comes amid reports Beijing might be disrupting use of software that allows Web surfers to see sites abroad that are blocked by its extensive Internet filters. At the same time, regulators have proposed rules that would bar foreign companies from distributing books, news, music and other material online in China.


Beijing promotes Internet use for business and education but bans material deemed subversive or obscene and blocks access to foreign websites run by human rights and Tibet activists and some news outlets. Controls were tightened after social media played a role in protests that brought down governments in Egypt and Tunisia.


In a reminder of the Web’s role as a political forum, a group of 70 prominent Chinese scholars and lawyers circulated an online petition this week appealing for free speech, independent courts and for the ruling party to encourage private enterprise.


Xi and others on the party’s ruling seven-member Standing Committee have tried to promote an image of themselves as men of the people who care about China’s poor majority. They have promised to press ahead with market-oriented reforms and to support entrepreneurs but have given no sign of support for political reform.


Communist leaders who see the Internet as a source of economic growth and better-paid jobs were slow to enforce the same level of control they impose on movies, books and other media, apparently for fear of hurting fledgling entertainment, shopping and other online businesses.


Until recently, Web surfers could post comments online or on microblog services without leaving their names.


That gave ordinary Chinese a unique opportunity to express themselves to a public audience in a society where newspapers, television and other media are state-controlled. The most popular microblog services say they have more than 300 million users and some users have millions of followers reading their comments.


The Internet also has given the public an unusual opportunity to publicize accusations of official misconduct.


A local party official in China’s southwest was fired in November after scenes from a videotape of him having sex with a young woman spread quickly on the Internet. Screenshots were uploaded by a former journalist in Beijing, Zhu Ruifeng, to his Hong Kong website, an online clearing house for corruption allegations.


Some industry analysts suggest allowing Web surfers in a controlled setting to vent helps communist leaders stay abreast of public sentiment in their fast-changing society. Still, microblog services and online bulletin boards are required to employ censors to enforce content restrictions. Researchers say they delete millions of postings a day.


The government says the latest Internet regulation before the National People’s Congress is aimed at protecting Web surfers’ personal information and cracking down on abuses such as junk e-mail. It would require users to report their real names to Internet service and telecom providers.


The main ruling party newspaper, People’s Daily, has called in recent weeks for tighter Internet controls, saying rumors spread online have harmed the public. In one case, it said stories about a chemical plant explosion resulted in the deaths of four people in a car accident as they fled the area.


Proposed rules released this month by the General Administration of Press and Publications would bar Chinese-foreign joint ventures from publishing books, music, movies and other material online in China. Publishers would be required to locate their servers in China and have a Chinese citizen as their local legal representative.


That is in line with rules that already bar most foreign access to China’s media market, but the decision to group the restrictions together and publicize them might indicate official attitudes are hardening.


That comes after the party was rattled by foreign news reports about official wealth and misconduct.


In June, Bloomberg News reported that Xi’s extended family has amassed assets totaling $ 376 million, though it said none was traced to Xi. The government has blocked access to Bloomberg’s website since then.


In October, The New York Times reported that Premier Wen Jiabao’s relatives had amassed $ 2.7 billion since he rose to national office in 2002. Access to the Times’ Chinese-language site has been blocked since then.


Previous efforts to tighten controls have struggled with technical challenges in a country with more than 500 million Internet users.


Microblog operators such as Sina Corp. and Tencent Ltd. were ordered in late 2011 to confirm users’ names but have yet to finish the daunting task.


Web surfers can circumvent government filters by using virtual private networks — software that encrypts Web traffic and is used by companies to transfer financial data and other sensitive information. But VPN users say disruptions that began in 2011 are increasing, suggesting Chinese regulators are trying to block encrypted traffic.


Curbs on access to foreign sites have prompted complaints by companies and Chinese scientists and other researchers.


In July, the American Chamber of Commerce in China said 74 percent of companies that responded to a survey said unstable Internet access “impedes their ability to do business.”


Chinese leaders “realize there are detrimental impacts on business, especially foreign business, but they have counted the cost and think it is still worthwhile,” said Lam. “There is no compromise about the political imperative of controlling the Internet.”


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iOS apps see Christmas sales spike shrink in 2012






Distimo just released its statistics on Christmas Day app downloads and revenue growth… and the download spike is far smaller than it was last year. Back in 2011, Christmas Day iOS app download volume spiked 230% above the December average. This year, the increase was just 87% — far below industry expectations. The revenue spike came in at 70%.


[More from BGR: Google names 12 best Android apps of 2012]






Interestingly, iPad downloads increased by 140% this Christmas, implying that the iPhone download bounce was really modest.


[More from BGR: New purported BlackBerry Z10 specs emerge: 1.5GHz processor, 2GB RAM, 8MP camera]


A few weeks ago, AppAnnie released statistics showing that iOS app revenue growth had stalled over the summer of 2012, whereas Android app revenue growth was relatively strong at 48% over a five month period. Both Distimo and Appannie are respected companies and their analytics are closely followed by app industry professionals. Could it be that the pace of iPhone app revenue growth has slowed down sharply from 2011 levels, even if Distimo and AppAnnie numbers aren’t entirely accurate?


This article was originally published by BGR


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