Why teens are tiring of Facebook

To understand where teens like to spend their virtual time nowadways, just watch them on their smartphones. Their world revolves around Instagram, the application adults mistook for an elevated photography service, and other apps decidely less old-fashioned than Mark Zuckerberg's main kingdom.

And therein lies one of Facebook's biggest challenges: With more than 1 billion users worldwide and an unstated mission to make more money, Facebook has become a social network that's often too complicated, too risky, and, above all, too overrun by parents to give teens the type of digital freedom or release they crave.

For tweens and teens, Instagram -- and, more recently, SnapChat, an app for sending photos and videos that appear and then disappear -- is the opposite of Facebook: simple, seemingly secret, and fun. Around schools, kids treat these apps like pot, enjoyed in low-lit corners, and all for the undeniable pleasure and temporary fulfillment of feeling cool. Facebook, meanwhile, with its Harvard dormroom roots, now finds itself scrambling to keep up with the tastes of the youngest trendsetters -- even as it has a foothold on millions of them since it now owns Instagram.

Asked about the issue, a Facebook spokesperson would only say, "We are gratified that more than 1 billion people, including many young people, are using Facebook, to connect and share."

The data doesn't exist to slap a value on Facebook's teen problem. But we know -- from observing teens, talking to parents and analysts, and from a few company statements -- that age doesn't become Facebook with this group.

In recent weeks, Facebook has told us twice about its teen-appeal problem. When it filed its annual report, it warned investors for the first time that younger users are turning to other services, particularly Instagram, as a substitute for Facebook.

Then, earlier this week, Chief Financial Officer David Ebersman admitted that Instagram, an application he described as popular among the "younger generation," is a "formidable competitor" to Facebook. Which seems odd until you realize that the profit-hungry Facebook isn't yet making a dime from Instagram.

"What we do know is that Instagram is already a very popular service that continues to grow rapidly, and we believe, based on the information that we have, that it's quite popular among these kinds of users that you're asking about, the younger generation. It is very important for Facebook to build products that are useful to those users, and to build products that they feel comfortable ... they can have a good experience with. Definitely high on the list of priorities for us."

The under-13 tween crowd, including one CNET editor's daughter, technically isn't allowed to use the application, as dictated by the terms of service and a federal restriction (although the law is changing this July in ways that will make it easier for kids to join). Yet kids found Instagram anyway, largely because their parents wouldn't let them join Facebook, argues Altimeter Group principal analyst Brian Solis. Teens 13 and up joined Instagram, he said, because Facebook became "too great" a social network where they're now connected to their grandparents.

Isn't it ironic, as Alanis Morissete would say, that Facebook, the one-time underground drug of choice for college kids is now so readily available and acceptable that we all do it in broad daylight, and worse, at work? Sure, a 12-year-old skateboarder can derive some value from Facebook, but in the whitewashed kind of way that the rest of us use LinkedIn.

"We take pictures of food and landscapes," Solis said, "but teenagers use [Instagram] to share pictures of themselves ... the more you share, the greater the reaction, and the more you push outside comfort zones, the more people react."

A teen's Instagram account.

(Credit:
Screenshot by Michelle Meyers/CNET)

Tweens and teens are addicted to the idea of eliciting more reactions in the form of likes, followers, and comments, he said. They employ like-for-like photo tactics, use a myriad of hashtags to get their pictures in front of more users, and promote their desire for additional followers in their profiles.

Ascertaining the extent of Instagram's popularity with teens is particularly tricky -- until you talk to them. And some data on the phenomena does exist. Nielsen, one of the few companies to measure teens' online behavior, can only track web usage for this youngest demographic. The analytics firm told me that Instagram was the top photography website among U.S. teens ages 12 to 17 with 1.3 million teens visiting the website during December 2012. By the analytics firm's count, roughly one in 10 online teens in the U.S. visited Instagram in their browser during the month.

Anecdotally, the evidence overwhelmingly points to Instagram as the preferred social network of tweens and teens. A personal relationship provided me with a direct lens to view how two teenage boys used the application in their everyday lives. I also chatted with other kids, some the children of friends, and others I found through friends of friends.

Beth Blecherman's 14-year-old son, who lives in the San Francisco Bay Area, downloaded Instagram when he was 13 because all of his friends were using it as their social network. Marisa, a 16-year-old girl who attends Cathedral City High School in southern California, has been using Instagram for more than a year. She said that a majority of her high school friends are using the application. And a San Diego friend's 12-year-old son is so hooked on the application that he was in tears when his account was temporarily suspended earlier this year.

"Teens recognized Instagram as a social network before anyone else," Solis said. "Everyone else treated it as a camera app."

At the same time, Instagram could disappear from teen consciousness just as easily at it arrived. Remember: Instagram was only 17 months old when Zuckerberg bought it in the weeks prior to Facebook's IPO last May. Parents are starting to understand that their kids haven't developed a fascination with the application to share artistic photos of landscapes and architecture. All of the teens I spoke to have watchful parents who keep an observant eye on their Instagram accounts.

Teens searching for a cyber hangout to call their own Adam McLane, a former youth pastor who hosts educational social media seminars for parents of teens in San Diego, told me that his sessions are dominated by talk of Instagram, with frenzied parents fearful that their innocent young ones are participating in unsavory activities such as bullying or posting inappropriate photos.

This Snapchat message will self-destruct in seven seconds.

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Snapchat)

The parent factor alone could send kids fleeing to other applications such as Snapchat, Pheed, and Tumblr, all of which appear to have strong teen followings. Investors are betting on Snapchat in particular, which sends more than 60 million short-lived messages daily, because they don't want to miss out on the next Facebook.

"Teens are looking for a place they can call their own," Danah Boyd, a senior researcher that studies how young people use social media for Microsoft, told me. "Rather than all flocking en masse to a different site, they're fragmenting across apps and engaging with their friends using a wide array of different tools. ... A new one pops up each week. What's exciting to me is that I'm seeing teenagers experiment."

This experimental nature puts Facebook in the tricky position of reacting to the whims of transitory teens. Take Facebook's impromptu release of Poke, a mobile phone application, modeled after Snapchat, for sending messages that self-destruct moments later. The company's most reactionary move, however, was its surprise purchase of Instagram, an impulse buy that ultimately cost about $715 million.

Now that Instagram has more than 100 million active users, Facebook's impulsive pickup looks like a smart one. But the dangerous reality is that Facebook is bleeding attention to an application with no advertising model, nor does the social network even understand how Instagram ties in with its own applications.

Facebook doesn't know what teens want. Ebersman said as much, albeit in less direct terms:

"Facebook is a very young company in terms of the age of our employees, and I am hopeful that continues to be an asset for us in terms of having our finger on the pulse of what matters to that particular constituency of users and how we can provide products to satisfy them."

Put that way, Facebook's saving grace might be that its employees are also tiring of Facebook.

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Google's European conundrum: When does privacy mean censorship?

Google's New York City headquarters.

(Credit:
Zack Whittaker/CNET)

How Google and other American Internet companies operate in Europe could come down to a link that, depending on what side of the Atlantic Ocean you're on, should or should not be deleted.

A case heard Tuesday before the European Court of Justice (ECJ) hinges on a complaint submitted by a Spanish citizen who searched Google for his name and found a news article from several years earlier, saying his property would be auctioned because of failed payments to his social security contributions.

Spanish authorities argued that Google, other search engines, and other Web companies operating in Spain should remove information such as that if it is believed to be a breach of an individual's privacy. Google, however, believes that it should not have to delete search results from its index because the company didn't create it in the first place. Google argued that it is the publisher's responsibility and that its search engine is merely a channel for others' content.

The ECJ's advocate-general will publish its opinion on the case on June 25, with a judgment expected by the end of the year. The outcome of the hearing will affect not only Spain but also all of the 27 member states of the European Union.

In principle, this fight is about freedom of speech versus privacy, with a hearty dash of allegations of censorship mixed in. In reality, this could be one of the greatest changes to EU privacy rules in decades -- by either strengthening the rules or negating them altogether.

The European view is simple: If you're at our party, you have to play by our rules. And in Europe, the "right to be forgotten" is an important one.

"Facebook and Google argue they are not subject to EU law as they are physically established outside the EU," a European Commission spokesperson told CNET. In new draft privacy law proposals, the message is, "as long as a company offers its goods or services to consumers on the EU territory, EU law must apply."

While Europe has some of the strongest data protection and privacy laws in the world, the U.S. doesn't. And while the U.S. has some of the strongest free speech and expression laws in the world, enshrined by a codified constitution, most European countries do not, instead favoring "fair speech" principles.

Google is also facing another legal twist: Spanish authorities are treating it like a media organization without offering it the full legal protection of one.

The European view is simple: If you're at our party, you have to play by our rules. And in Europe, the "right to be forgotten" is an important one.

Newspapers should be exempt from individual takedown requests to preserve freedom of speech, according to Spanish authorities, but Google should not enjoy the same liberties, despite having no editorial control and despite search results being determined by algorithms. Though Google is branded a "publisher" like newspapers, the search giant does not hold media-like protection from takedowns under the country's libel laws. This does not translate across all of Europe, however. Some European member states target newspapers directly and are held accountable through press regulatory authorities in a bid to balance freedom of speech and libel laws.

One of Spain's highest courts, the Agencia Espanola de Proteccion de Datos (AEPD), found in favor of the complainant in early 2011 and ruled that Google should delete the search result. This case is one of around 180 other ongoing cases in the country.

Google appealed the decision and the case was referred to the highest court in Europe, the ECJ, which will eventually determine if the search giant is the "controller" of the data or whether it is merely a host of the data.

The case will also decide on whether U.S.-based companies are subject to EU privacy law, which may mean EU citizens' have to take their privacy cases to U.S. courts to determine whether Google is responsible for the damage caused by the "diffusion of personal information."

In a blog post on Tuesday, Bill Echikson, Google's "head of free expression," said the search giant "declined to comply" with a request by Spanish data protection authorities, as the search listing "includes factually correct information that is still publicly available on the newspaper's Web site."

"There are clear societal reasons why this kind of information should be publicly available. People shouldn't be prevented from learning that a politician was convicted of taking a bribe, or that a doctor was convicted of malpractice," Echikson noted.

"We believe the answer to that question is 'no'. Search engines point to information that is published online - and in this case to information that had to be made public, by law. In our view, only the original publisher can take the decision to remove such content. Once removed from the source webpage, content will disappear from a search engine's index."

EU's latest privacy proposal: The 'right to be forgotten'
Should the ECJ finds in favor of the Spanish complainant, it will see the biggest shakeup to EU privacy rules in close to two decades and would enable European citizens a "right to be forgotten."

In January 2011, the European Commission lifted the lid on draft proposals for a single one-size-fits-all privacy regulation for its 27 member states. One of the proposals was the "right to be forgotten," empowering every European resident the right to force Web companies as well as offline firms to delete or remove their data to preserve their privacy.

The European Parliament in Strasbourg, France, where the new data and privacy law will be voted on later this year. A vote by the Parliament's Civil Liberties (LIBE) committee in June will determine whether the Commission can push the draft proposals into law.

(Credit:

European Parliament/Flickr)

For Europeans, privacy is a fundamental right to all residents, according to Article 8 of the European Convention of Human Rights, in which it states: "Everyone has the right to respect for his private and family life, his home and his correspondence." It does however add a crucial exception. "There shall be no interference by a public authority with the exercise of this right except... for the protection of the rights and freedoms of others." 

Because U.S.-based technology giants like Google, Facebook, and Twitter have users and in many cases a physical presence in Europe, they must comply with local laws. The "right to be forgotten" would force Facebook and Twitter to remove any data it had on you, as well as Google removing results from its search engine. It would also extraterritorially affect users worldwide outside the European Union who would also be unable to search for those removed search terms.

Such Web companies have said (and lobbied to that effect) that the "right to be forgotten" should not allow data to be removed or manipulated at the expense of freedom of speech. This, however, does not stop with republished material and other indexed content, and most certainly does not apply to European law enforcement and intelligence agencies.

Two continents, separated by 'free' and 'fair speech'
The U.S. and the EU have never seen eye-to-eye on data protection and privacy. For Americans and U.S.-based companies, the belief is that crossover between freedom of speech and privacy overlaps in "a form of censorship," according to Google's lawyers speaking during the Spanish court case.

In the U.S., you can freely say the most appalling words, so long as they don't lead to a crime or violence against a person or a group of people. In European countries such as the U.K. words can lead to instant arrest. Europe's laws allow for "fair speech" in order to prevent harassment, fear of violence, or even alarm and distress. It's a dance between the American tradition of protecting the individual and the European tradition of protecting society.

Google is fundamentally so very American in this regard. That said, Google already filters and censors its own search results at the behest of governments and private industry, albeit openly and transparently. Google will agree to delete links that violate copyrights under the Digital Millennium Copyright Act, which seeks to remove content from Google's search results that may facilitate copyright infringement.

Google also complies, when forced by a court, with numerous types of government requests, not limited to subpoenas, search warrants, and National Security Letters, or so-called 'gagging orders'. It also discloses those requests and when it complies with them. And it's a system not that dissimilar to what it's being asked to do in Europe.

Whose jurisdiction is Google under: U.S., EU, or both?
While Europe's privacy principles apply to the Web, it's unclear whether they apply to data "controllers" established outside of the European Union. But several European court cases have sided with local law. A German court found that Facebook fell under Irish law because the social networking company had a physical presence in Ireland, another EU member state. In Google's case, Spanish authorities are making a similar argument, claiming that Google is processing data in a European state and therefore EU law should apply.

Many American companies have voiced their objections to the proposed EU privacy law, including Amazon, eBay, Yahoo, according to a lobbying watchdog. It could still take a year or two for the law to be ratified.

"Exempting non-EU companies from our data protection regulation is not on the table. It would mean applying double standards," said Europe's Justice Commissioner Viviane Reding, the top politician in Europe on data protection and privacy rules in the region, in an interview with the Financial Times of London.

The new EU Data Protection Regulation, proposed by the European Commission and currently being debated in the European Parliament, will likely be voted on by June.

But this fight isn't as much about censorship as one might think. It's about a cultural difference between two continents and perspectives on what freedom of speech can and should be. It's also about privacy, and whether privacy or free speech is more important.

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Barnes & Noble's earnings slide on declining Nook business

The Nook is having some trouble.

(Credit:
James Martin/CNET)

Barnes & Noble had a rough fiscal third quarter -- the three-month period ended January 26 -- due mainly to its ailing Nook operation.

During the period, Barnes & Noble snagged $2.2 billion in revenue, down 8.8 percent compared to the same period last year. The company's earnings before interest, taxes, depreciation, and amortization slumped 63 percent from $150 million last year to $55.5 million this year.

The big decline in its operation during the period was its Nook business. Revenue in its Nook division, which includes its e-reader and related services, hit $316 million, down 26 percent compared to the prior year. That division's losses widened by 130 percent from $82.8 million to $190.4 million.

Barnes & Noble has been indicating that its Nook business is in trouble for months. The company in January reported that its Nook operation "fell short of expectations" after a relatively strong
Black Friday weekend.

In an attempt to improve its Nook business, Barnes & Noble and Microsoft signed a deal that made them joint owners of the Nook operation. Pearson earlier this year signed up for the joint venture with 5 percent ownership. Still, the division is in a state of flux.

Another part of Barnes & Noble that's in a state of flux is its retail business. Just yesterday, the company announced that its founder Leonard Riggio, offered up a plan to purchase all of the assets in its retail operation. In a statement today on the matter, Barnes & Noble said that it's planning to evaluate the proposal, but cautioned that there "can be no assurance" that a deal might happen.

Barnes & Noble's retail operation was another troublesome operation in the third quarter. Revenues were down 10.3 percent year-over-year to $1.5 billion. Earnings, however, jumped 7.3 percent to $212 million.

Barnes & Noble's shares are down 2.2 percent in pre-market trading following today's earnings announcement.

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Lily Cole's social network Impossible starts granting wishes in April

Model Lily Cole attends a photo call to announce the winners of the Gatwick Runway Models competition at Gatwick Airport North Terminal on Aug.6, 2010, in London.

(Credit:
Photo by Chris Jackson/Getty Images)

A social network based on making wishes and helping others, backed by Lily Cole and Jimmy Wales, is to launch in April -- but first, it's helping Oxbridge students help each other.

I caught up with the folks behind 'altruistic social network' Impossible at mobile industry bunfest Mobile World Congress in Spain. Before it launches to the public in April, Impossible will run as a closed beta among students of Oxford and Cambridge Universities, Britain's most august seats of drinking learning.

Model, actress, and occasional Time Lord-bothering sea creature Lily Cole conceived the selfless social network. Members 'make a wish', publishing something they need or want to do, like learning Spanish. Other members in the local area then offer to help.

It doesn't have to be reciprocal -- if someone teaches you los lingo, you don't necessarily have to do anything for them. Instead, they're rewarded with the warm glow of a selfless act, and within Impossible they're awarded a 'thank you'.

I saw a rough demo version of the site and mobile app, in which a wish, represented by a block of text, is converted to a thank you, represented by a lovely picture. Collecting a thank you forms a sort of currency or rating -- like your eBay feedback number -- although there's no plans to make it possible to spend them. Instead you rack up the thanks just to show what a jolly wonderful person you are.

One could argue that putting a number on how much you help people isn't entirely altruistic. Still, it's a noble idea, and we like the idea of meeting new people based on a desire to help others. If you're feeling helpful, click play on the video below to see Lily explain more, or sign up for email alerts at Impossible.com.

For the latest smartphones,
tablets and other cool stuff -- including a Wi-Fi coffee machine, a 21st century walking stick, and a Spotify app with a car attached -- check out our in-depth news, previews and videos from Mobile World Congress.

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Windows 8 $15 upgrade registration ends Thursday

Registration for the Windows 8 $15 upgrade offer expires this Thursday.

(Credit:
Screenshot by Lance Whitney/CNET)

Those of you who recently bought a Windows 7 PC can score Windows 8 for just $15 but you'll have to register before Thursday.

To drum up interest in its latest OS, Microsoft cooked up a couple of upgrade deals last year.

The first one allowed any user of Windows 7, Vista, or XP to upgrade to Windows 8 for $39.99. That deal ended on January 31.

The second one lets people who bought a
Windows 7 PC between June 2 of last year and January 31 of this year get
Windows 8 Pro for just $14.99. Though that deal expired last month, you can still register for it, but you'll have to act before this Thursday, February 28.

The registration process prompts you for your contact information as well as the brand and model of your Windows 7 computer, the retailer, and the date on which you bought it. The process may also ask for your Windows 7 license key.

Assuming your PC checks out, you then receive an e-mail with a promo code and a link for the Windows 8 upgrade. The link downloads the Windows 8 Upgrade Assistant, which you run on your Windows 7 PC to pay for the product and install the software.

What if you want to take advantage of the $14.99 deal but don't want to upgrade to Windows 8 right now?

You can download the upgrade and simply store the installation files on a USB stick or burn them onto a DVD from an ISO file. You can then install the upgrade anytime you want and on any PC you want. One of my previous articles explains the entire process for creating the Windows 8 installation media.

Following Thursday's registration cutoff, Windows 8 jumps in price for virtually everyone -- $119.99 for the regular edition and $199.99 for the Pro version. Only students will still be able to score a discount.

So even if you're on the fence about the new OS, those of you who qualify for the $14.99 deal may want to register for it while you still have time.

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Android steals U.S. smartphone lead from iOS, says report

Samsung's Galaxy S3 helped Android win more sales in the U.S.

(Credit:
Josh Miller/CNET)

Android has pulled ahead of Apple's iOS in U.S. smartphone sales, according to data out today from Kantar Worldpanel ComTech.

During the three months ending January, Android scored 49.9 percent of all U.S. smartphone sales, a 6.4 percent gain from the same period last year. Over the same time, iOS took second place with a 45.9 percent cut of smartphone sales, a drop of 4.7 percent from a year ago.

Microsoft's Windows Phone eked out its own slice of growth, taking home 3.2 percent of U.S. smartphone sales.

For the three months ending December, the iPhone won 51.2 percent of all U.S. smartphone sales, leaving
Android with 44.8 percent and Windows Phone with 2.6 percent, Kantar said last month.

Android phone makers can thank Sprint for much of their sales gains, according to Kantar.

For the three months ending October 2012, smartphone sales through Sprint were divided almost equally between Android and iOS. But for the last three-month period, Android's share of Sprint sales jumped to 71.9 percent from 49.3 percent previously.

Sprint customers are also paying less money for their Android phones.

"The 50/50 split we saw in the period ending October 2012 was a result of both iOS and Android sharing similar levels of average price paid (iOS at $130 and Android at $127)," Kantar analyst Mary-Ann Parlato said in a statement. "Yet this latest period saw a significant price drop to $95 for Android, while iOS increased slightly to $146."

Samsung's Galaxy S3 proved a hot seller thanks in part to a more tempting price tag. In the October period, the S3 grabbed only 14 percent of all smartphone sales through Sprint. But after a subsequent price drop to $99 from $199, the S3 surged to win 39 percent of all Sprint smartphone sales.

Overall, Samsung accounted for 60.3 percent of all the smartphones sold by Sprint over the January period. And that number could rise this spring. Samsung is set to unveil the Galaxy S4 at a special launch event on March 14.

Kantar's stats come from its U.S. consumer panel, which interviews more than 240,000 people each year about mobile phone purchases, usage, and bills.

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ZTE at MWC 2013: Join us Monday (live blog)

ZTE CEO Shi Lirong during his keynote address at Mobile World Congress in Barcelona, Spain, last year.

(Credit:
Roger Cheng/CNET)

BARCELONA, Spain--Get all the details of ZTE's Mobile World Congress press conference right here.

CNET's Brian Bennett, photographer Stephen Shankland, and I will be bringing you the news, photos, and commentary from the event.

ZTE is expected to build upon its expanded presence at last year's show and go big with the smartphone announcements. The company has in the past unveiled phones here that don't make it to the U.S., although it has made progress in its relationships with the U.S. carriers.

You can tune in to the live blog here:

ZTE's Mobile World Congress press conference

ZTE has quickly grown into a major force in the smartphone business, although the company has yet to really make a dent in the U.S. market. In the U.S., ZTE largely supplies low-cost smartphones to the prepaid carriers, although some of its phones have made it to the larger national carriers.

ZTE unveiled the Grand S at the Consumer Electronics Show, a high-end phone it believes will make its way to one of the larger U.S. carriers later this year.

Let's hope ZTE is shooting to top itself with its MWC announcement.

As usual, we'll be using ScribbleLive to bring you live text and photos, blow by blow. We'll start the live blog about an hour before ZTE officially kicks off its event.

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Pentagon grounds entire F-35 Joint Strike Fighter fleet

A crack in an engine blade has suspended airborne testing on the $396 billion Joint Strike Fighter program.

(Credit:
Department of Defense)

The U.S. Department of Defense has suspended airborne testing of its Joint Strike Fighter because of a crack in an engine turbine blade discovered during routine inspection, the Pentagon said this week.

The grounding covers every one of the three versions of the F-35 involved in the $396 billion program -- 51 fighter jets that had hitherto been active for testing and training and have been described by the Pentagon as "the most affordable, lethal, supportable, and survivable aircraft ever to be used."

Just 10 days ago, one of the three versions of the fighter, the F-35B, designed for the Marines, was cleared to resume tests after a monthlong suspension having to do with a fuel line defect.

To understand the specific cause of the current issue -- the cracked turbine blade discovered February 19 -- the engine is being returned to the manufacturer: United Technologies unit Pratt & Whitney. The Pentagon said it hopes to return the fleet to the air as soon as possible.

Eventually, there will be more than 2,400 of the next-generation fighter jets, which will come in three models: the Air Force's agile F-35A, the Marines' VTOL model F-35B, and the Navy's F-35C, which has a larger wing surface and reinforced landing gear to withstand catapult launches and deck landings on an aircraft carrier.

The Pentagon stressed yesterday that the grounding is precautionary and that it's not possible to know the impact of the crack on the low pressure turbine blade until the investigation is complete.

Additional delays aside, the warplane is currently expected to formally take to the skies and be battle-ready in 2018 or 2019.

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Apple's App Store, iTunes back online after outages

Apple's online services were down for many users yesterday.

(Credit:
Screenshot by CNET)

Apple users unable to access the App Store or iTunes yesterday should find those sites alive and well today.

The App Store, iTunes, iCloud, and the Mac App Store were inaccessible to many people throughout yesterday, according to 9to5Mac.

Following a series of user complaints via Twitter, Apple eventually acknowledged the problem on its system status page, which indicated outages at various times for its online stores, Mail and Contacts via iCloud, and the Calendar app across different devices.

The status showed the iCloud outage ending at 1:40 p.m. PT. But some people continued to bump into issues even beyond that point, 9to5Mac added.

Today, Apple's status page shows all of its online sites and services up and running again. The page doesn't offer any details as to the cause of the outage.

CNET contacted Apple for comment and will update the story if the company responds.

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Saverin: Facebook's rapid growth is its 'biggest risk'

Facebook co-founder Eduardo Saverin.

(Credit:
Facebook)

Facebook co-founder Eduardo Saverin isn't convinced that the social network's fast-growing strategy is a good one.

Speaking at a conference in Singapore today, Saverin said that while growth is a "huge asset," it can lead to a very real problem that shouldn't be overlooked.

"The biggest risk is growing too fast," he said, according to Bloomberg, which was in attendance at the event. "When you grow too fast, it's hard to iterate, educate."

Facebook is making no secret that it wants to grow as quickly as possible. Last month, the company's CEO Mark Zuckerberg said that he planned to increase spending by 50 percent, or $1.4 billion. That came after the company boosted spending by 67 percent in the previous year. Facebook plans to spend a bulk of its cash on mobile initiatives and advertising -- two elements that will prove extremely important for future growth.

Still, there's a problem. As Wedbush analyst Michael Pachter told CNET last month, the social network needs to see revenue grow by 28 percent "just to keep net income flat" if it actually increases spending by 50 percent. And that might prove difficult.

Saverin, who netted a huge sum in Facebook's IPO, and has a net worth that exceeds $1 billion, has had his fair share of trouble with the company. Saverin years ago sued Facebook for his stake in the company. After a drawn out fight, the case was settled out of court and he was given a co-founder credit on Facebook's site.

Despite the risks, rapid growth is not something new for Facebook. The company currently has 1.1 billion active users and continues to see huge growth in several countries around the world. Perhaps that's why Facebook's plan for rapid growth isn't concerning the company -- it's the same old thing it's been dealing with since its founding.

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Backblaze shares third-gen storage server design

The Backblaze Storage Pod 3.0 contains three rows of 15 hard drives.

(Credit:
Backblaze)

Backblaze, a startup offering online backup service, has released the designs for its newest Storage Pod, a low-budget storage server with 180TB of capacity.

It was something of a PR stunt when the company shared its first-gen Storage Pod design back in 2009, but the 67-terabyte system proved useful to organzations including the Vanderbilt University Institute of Image Science, which stores medical imaging data, ad agency Crispin Porter + Bogusky, and and the Geographic Information Network of Alaska. Netflix was inspired to share its Open Connect Appliance Hardware design, and Backblaze also showed its Storage Pod 2.0 design, which could accommodate 135TB of data.

Now the Storage Pod 3.0 design is out, too. Backblaze uses 450 pods to hold more than 50 petabytes of customer data, it said.

The third-generation pods use 4TB drives -- up to 45 of them -- which increases the total capacity. Instead of being held in place by a band, they're now squeezed by an anti-vibration panel that also shaves an hour off storage pod assembly time and makes it easier to replace failed drives.

The new design also switched to a Supermicro MBD-X9SCL-F motherboard, upgraded to a second-generation, lower-power Intel Core i3-2100 processor, improved airflow to keep components cool. The total cost for the pod -- without drives -- dropped to $1,942.59, $37.41 less than the second-gen Storage Pod.

"The real influencer in the total cost will be the hard drives. The lingering effects from the Thailand drive crisis and consolidation in the drive industry have meant that even today hard drive prices are higher than they were when Pod 2.0 was introduced back in July of 2011," Backblaze said.

The company has been hurt by the hard drive shortages in Thailand and, perhaps, by consolidation in the industry that's slowing the ordinary pace of price cuts. Indeed, the cost per gigabyte is somewhat higher for new 4TB drives than for the earlier 3TB models it's been using. But lower costs for power consumption, rack space, and installation mean the 4TB drives work out to be the same cost.

Anyone interested in actually building the Storage Pod 3.0 can check Backblaze's description for parts listings, assembly instructions, and other details.

Backblaze's Storage Pod 3.0

(Credit:
Backblaze)

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Apple pulls Mac Pro from online stores in Europe

Apple's Mac Pro

(Credit:
Apple)

Consumers in Europe looking for a Mac Pro are now out of luck, at least when trying to buy one online.

Apple's online stores in the U.K., Italy, Germany, France, and other European countries show all three editions of the
Mac Pro as "currently unavailable."

The news isn't exactly a surprise. Apple told European retailers and distributors last month that it would stop selling the Mac Pro come March 1 due to new safety regulations. The regulations impose certain electrical requirements, and the Mac Pro's ports and fans aren't in compliance.

The regulations affect 27 different countries in the European union. Apple did have until March 1 to curtail sales of the Mac Pro across Europe, so it's not clear why the company jumped the gun a bit early. The new safety regulations affect only Europe, so the Mac Pro is still available at Apple's online stores in the U.S, Japan, and other non-European countries.

The Mac Pro is the only Apple product that runs afoul of the new safety regulations. Beyond a couple of minor changes last year, Apple hasn't updated the Mac Pro in more than two years. Last June, Apple CEO Tim Cook teased an update for the high-powered desktop in 2013, saying that we're "working on something really great for later next year.".

Apple could even have a Mac Pro refresh in store sooner than later. Earlier this month, two online publications in France reported that a French reseller received word from Apple that a new Mac Pro lineup would debut this spring.

CNET contacted Apple for comment and will update the story if the company responds.

(Via 9to5Mac)

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Get a Logitech Harmony 700 universal remote for $59.99

The Logitech Harmony 700.

(Credit:
Logitech)

This is an update of a deal I posted last summer.

Juggling is meant for circus folk, not home-theater owners. Yet that's exactly what you're doing if you have more than one device and, ergo, more than one remote.

Regular Cheapskate readers know I'm a fan of Logitech's Harmony series of universal remotes. One of the better models, the 700, has a list price of $119.99 (or used to -- it's been discontinued). Ouch.

For a limited time, and while supplies last, TigerDirect via Ebay has the refurbished Harmony 700 universal remote for $59.99 shipped.

What's so great about the Harmony series? Thanks to Logitech's wizard-driven software, they're significantly easier to program than most universal remotes. Just choose your gear from a mammoth database and presto: you're good to go. They're also blissfully user-friendly, with guided onscreen help in case one component didn't turn on or switch modes or something.

The Harmony 700 features a color LCD, a rechargeable battery (though not a charging dock), and support for up to six devices.

The user reviews on this model average four stars out of five at , both at Amazon's product page.

And CNET editor John P. Falcone gave it four stars out of five in his full review of the remote. You can see his First Look video below.

Because this is a refurb, the warranty expires after 90 days. (That's a guess: Although the duration isn't specified in the Ebay listing, TigerDirect lists a 90-day warranty on its own product page for the same remote.) For what it's worth, I've had the same Harmony One for over four years, and it's humming along just fine. If you're still juggling multiple remotes, I think you'll find this is $60 very well spent.

Bonus deal: Another good rerun: Staples has the Kindle Fire HD 8.9" Wi-Fi tablet for $269 shipped (plus sales tax where applicable). That's $30 off the regular price, making it a match for the similarly sized Barnes & Noble Nook HD+. I like the latter a teensy bit better, but for $269 for an 8.9-inch
tablet, you win either way.

Deals found on The Cheapskate are subject to availability, expiration, and other terms determined by sellers.

Curious about what exactly The Cheapskate does and how it works? Read our FAQ.

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Russian meteorite: The conspiracy theories

A strange time for a military attack?

(Credit:
CNN; screenshot by Chris Matyszczyk/CNET)

A good hearty conspiracy theory can shine a sharp light on two of humanity's most enduring traits.

One, of course, is humanity's boundless imagination. The other is humanity's essential suspicion of humanity.

So while you might be deeply immersed in Bill Nye's explanation of the Russian meteorite, those with darker sensibilities have filled the Web with their fears and hauntings about the phenomenon.

There are few nations with greater awareness of dark sensibilities than Russia. The fact that there seems to be little evidence of meteorite fragments on the ground has encouraged some Russians to offer their own suspicions.

As the Toronto Globe and Mail reports, nationalist leader Vladimir Zhirinovsky hasn't been slow to offer something of a Hot War perspective.

"It's not meteors falling. It's a new weapon being tested by the Americans," he was quoted as saying.

We know from our recent experience of North Korea that weapons testing is an imprecise science.

But if you were an American in the mood to test a weapon, would Chelyabinsk, Russia, be your very first choice of place for the experiment?

Perhaps Tallahassee; Area 51; and Bialystok, Poland, were all unavailable due to prior commitments. Or perhaps it wasn't the Americans, but, say, the North Koreans, who mistook Chelyabinsk for, say, Chelsea.

Zhirinovsky's rather emotionally manipulative offering was countered by Russia's Emergency Ministry, which dedicated itself to an extensive rebuttal of his belief (and that of others) that this was some sort of military thing. The rebuttal? "Rubbish."

But that wasn't going to put off the local media, was it? Not only do they have papers to sell, they also have theories to expound to a troubled nation and world.

So, as The Atlantic reports, the local Znak newspaper accepted that this was a meteorite but insisted the explosion was caused by military defense blowing it up.

More Technically Incorrect

Yes, of course it has a source in the military. You thought it didn't?

Though I've watched a few movies in which exciting things happen, I don't find it easy to imagine that some sort of terrestrially created missile-laden aircraft could really explode a meteorite in such a manner.

It is easier to imagine, though, that politicians like Zhirinovsky might take the opportunity to foment a little rage.

Indeed, Alex Jones' infamously well-guarded Infowars site offered that Zhirinovsky insisted that America -- in the person of Secretary of State John Kerry -- had tried to give Russia advance notice of its "attack."

The Drudge Report led me to a piece at Foreign Policy that explained that Sergey Lavrov, Russia's foreign minister, simply hadn't called Kerry back.

Which all suggests that Russia isn't, after all, living in fear of an attack from the U.S. Especially one over Chelyabinsk.

On balance, I prefer to currently believe Nye. He is the science guy, after all. And science guys know scientific events when they see them.

I hope.

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How Apple got serious about style

Humble beginnings -- an early conceptual modular Apple tablet from 1982.

(Credit:
Harmut Esslinger, Frog Design)

When Frog Design founder Hartmut Esslinger met Steve Jobs in 1982, it sparked a chain of events that monumentally changed Apple's design philosophy forever. It wasn't just a change in how future products would look -- Esslinger ushered in a change of mindset and a unified design language across products. Esslinger's new book, "Design Forward: Creative Strategies for Sustainable Change," available today in the U.S., delivers some fascinating insights into those crucial early years at Apple.

The dialect that emerged from that period, known as the Snow White design language, influenced dozens of Apple devices starting with the Apple IIc in 1984 and lasting until the Macintosh IIfx in 1990.

Our gallery below starts off with a range of computers that earned Frog Design a hefty annual contract and a role as a leader in Apple's product design process. The two companies didn't just create computers, however; they went beyond and created a mock
tablet, computer phone, flat-screen devices, and more.

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Uh oh: Nintendo sold 57,000 Wii U units in the U.S. in January

Nintendo's Wii U had a rough January, CNET has learned.

Nintendo sold only 57,000
Wii U units in the U.S. in January, a person familiar with NPD's game industry sales data has confirmed to CNET. The leading console maker during the period, Microsoft, sold 281,000 units in January.

Gamasutra was first to report that
Wii U sales were sluggish in January. That publication's source said only that January sales were "well under" 100,000 units.

The Wii U's trouble in January stands in stark contrast to its predecessor, the Wii. In its first January on store shelves in 2007, Nintendo sold 435,000 console units.

That Nintendo is having trouble selling Wii U units is nothing new. The company's CEO Satoru Iwata last month characterized Wii U sales as "not bad." That came just days before Microsoft and Nintendo announced their console unit sales in December. During that period, Microsoft sold nearly one million more consoles.

The Wii U's troubles negatively affected Nintendo's earnings for the nine-month period ended December 31. The company said that it sold only 3 million Wii U units since its launch in November, adding that upcoming games, including new entries in the Legend of Zelda franchise, could "help Nintendo regain momentum for Wii U."

Still, that a console that has been on store shelves for just three months is selling so few units is shocking. It's something that gamers would expect from unknown game companies, but that it's a Nintendo issue, especially given its recent successes, is surprising.

CNET has contacted Nintendo for comment. We will update this story when we have more information.

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Three-deal Thursday: Pogoplug, Klipsch earbuds, and apps

Klipsch earbuds for $15? I'll take two pair, please.

(Credit:
Woot)

Happy Valentine's Day, cheeps! Here's hoping you have a day filled with love, chocolate, and, of course, deals.

That's right: deals, plural. I couldn't settle on just one today, so I've rounded up three (well, five, technically) to make your day a little sweeter.

1. Pogoplug Mobile

The Pogoplug Mobile is a small box that plugs into your home router and streams your media libraries to your
Android or iOS device.

Typical Pogoplug, right? The Mobile adds one key feature to the mix: it can automatically back up photos and videos captured with your phone or
tablet. (Here's my original write-up on the Pogoplug Mobile if you want to learn more.)

It originally sold for $79.99, but for a limited time, Rakuten.com (formerly Buy.com -- talk about a name-change for the worse) has the Pogoplug Mobile for $17.99 shipped. That's the lowest price I've seen on this handy gizmo. (Thanks to the anonymous reader who sent this in.)

2. Klipsch Image E1 Earbuds

Klipsch enjoys a stellar reputation for making some of the best audio gear on the planet -- but it's usually spendy stuff.

Today only, and while supplies last, Woot has the Klipsch Image E1 noise-isolating earbuds for $14.99, plus $5 for shipping. These sell elsewhere (like at Newegg) for around $45. Sellout risk: huge.

If you've never used in-ear buds like these, they can feel a little weird at first. You really have to get them in there to create that noise-isolating seal. And once you do, every movement of the cord (to say nothing of your jaw, if you're eating) will produce unwanted noise.

But if you sit still and keep your pie hole shut, you'll enjoy vastly superior sound to what you get from traditional earbuds. Trust me on that.

3. Apps for Apple folks

Got an iOS device? Today's your lucky day. The following apps are on sale for free (or super-cheap):

• Smart Office 2, which lets you create, view, edit, and share
  Microsoft Office documents on your iDevice. Normally it's $9.99; today it's free! (Android users can snag it for 99 cents.)
• Top-rated hack-and-slash adventure game Infinity Blade normally sells for $5.99, but for today it's free!
• Remember the Apple (II) classic Karateka? It was recently reborn for iOS -- and priced at $2.99. But in honor of Valentine's Day (it is a love story, after all), Karateka is on sale for 99 cents.

There you go, cheeps! Now go forth and share some love, eat some chocolate, and buy some stuff. Cheapskate out.

Deals found on The Cheapskate are subject to availability, expiration, and other terms determined by sellers.

Curious about what exactly The Cheapskate does and how it works? Read our FAQ.

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A&E brings full-length episodes to iPhone -- for free

A look at A&E's iPhone app.

(Credit:
A&E)

Apple iPhone owners now have the ability to stream full episodes of some of the most popular A&E shows.

The network updated its iOS application earlier this week, allowing iPhone owners to watch everything from "Duck Dynasty" to "Storage Wars" and "The First 48." A&E's other networks, Lifetime and The History Channel, have also received updates supporting the iPhone.

A&E initially launched its app in December for the iPad. The company allows viewers to watch full episodes of the current season of shows for free. As with the
iPad application, only Comcast customers will have access to episodes from previous seasons.

For now, AirPlay support is not available in A&E's line of applications. However, the company noted in its App Store description that the feature is "coming soon."

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Samsung's Open Innovation Center aims at startup innovation

Samsung yesterday announced the launch of a new Open Innovation Center in Silicon Valley that aims at connecting the conglomerate with the latest and greatest software ideas.

David Eun, Samsung Electronics executive vice president and leader of the Open Innovation Center, announced its opening yesterday at the D: Dive Into Media event. He told All Things Digital's Kara Swisher that while the company's hardware efforts are going well, the Open Innovation Center is designed to deliver a "thoughtful integration" of hardware with software.

According to Eun, the Open Innovation Center is based around four ideas:

• Samsung has created an "accelerator" division that help small startups get their products off the ground while learning about the ways they can leverage Apple's products and plans.


• A venture-capital arm will give Eun and his team the ability to invest in early-stage startups that are trying to deliver the "next big things" in tech.


• The company's mergers and acquisitions team will, as the name suggests, acquire companies that could help Samsung's business.


• Finally, the Open Innovation Center will a partnerships sector that allows Samsung to find ways to work alongside startups.

For now, Samsung's Open Innovation Center is operating in temporary locations. In June, the company plans to open permanent locations in Palo Alto and the Chelsea neighborhood in New York City.

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Get a Microsoft Surface RT 32GB tablet for $424

You can grab a Surface RT for as little as $400 (if you don't mind waiting on a partial rebate).

(Credit:
Microsoft)

Microsoft's Surface RT tablet has seen its share of headlines since it debuted in October -- not all of them good.

For example, last month a patch prevented some users from accessing the Windows Store, and before that, the 32GB Surface RT was revealed to have only 16GB of available storage.

Well, hey, bugs are to be expected in any OS, and cheap microSD cards can solve your storage problems. The bigger question: Are you willing to pay $499 for that
tablet?

If not, how about this: For a limited time, and while supplies last, Staples has the Microsoft Surface RT 32GB tablet for $424 shipped (plus sales tax where applicable). That's after applying coupon code 99279 at checkout. (Note: The coupon can applied to any Windows desktop, laptop, or tablet.)

What's more, if you grab that deal via cash-rebate site TopCashback, you'll get an additional 5.5% off ($23.32, by my calculations), bringing your final price very close to $400. Now we're getting somewhere.

As you know, I've made no secret of my dislike of
Windows 8 as a desktop OS, but on a tablet, it's not too shabby. And I'd love to be able to abandon my laptop in favor of a tablet for those occasions when I travel. A Windows-powered model seems most likely to make that possible. (CNET called it "the best productivity tablet yet" -- see the full review below.)

What's more, although the Surface RT has received its share of critical lumps, users seem to really like it. Some 70 CNET user reviews average out to 4.5 stars, and 22 Staples buyers gave it a 4.6-star average rating.

Of course, to really make the most of it, productivity-wise, you'll need either the Touch or Type keyboard cover, which add $120 or $130 to your total price. Aaargh.

If you can wait awhile longer, there's a good chance we'll see even better deals on the Surface RT, especially given that sales numbers are reportedly on the low side.

For now, however, this is the best price to be had. Any takers?

Bonus deal: Roku boxes are the bestest. If you don't own one yet, or you're in the market for another, head on over to Roku to save $10 on the Roku HD, Roku 2 HD, or Roku 2 XS. But here's an even better option, IMHO: Meritline has the refurbished Roku 2 HD with HDMI cable for $64.99 shipped.

Deals found on The Cheapskate are subject to availability, expiration, and other terms determined by sellers.

Curious about what exactly The Cheapskate does and how it works? Read our FAQ.

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