Microsoft vs. the Zombie Hordes

Microsoft did its best Woody Harrelson impression this week and set out to bag some zombies. The zombies we’re talking about here are PCs infected with malware. The bad guys spread the malware around and then remotely control victims’ computers as part of a botnet that can do stuff like send out spam email or carry out DDoS attacks.

In the real world, of course, you have to aim for the head to kill zombies, and that’s basically the new strategy Microsoft used. In order to take down Waledac, which was one really bad botnet, it was granted a temporary restraining order from a federal judge that allowed it to cut off 277 Internet domains believed to be run by Waledac’s controllers. That severed traffic to Waledac at the “.com” or domain registry level — essentially decapitating it.

Waledac’s main job was spam. It had hundreds of thousands of infected computers ready to do its dirty work, and it could send 1.5 billion pieces of junk email per day — fraudulent offers for counterfeit goods, BS jobs, worthless stock-pumping scams, questionable pharmaceuticals, all the usual stuff.

Microsoft’s strategy seemed to work, but it may not be so easy to take down all botnets this way. It was a long and expensive process to get the necessary wheels turning at the courthouse to get it done, and it’s very easy for spammers to just set up a bunch of new domains that haven’t been smashed by Microsoft’s banhammer.

Also, a lot of spammers operate outside of U.S. borders, where getting the legal permission to do this kind of thing could be difficult. So, as nice as it is to see somebody giving these guys hell, the big spam whack-a-mole game just keeps on whacking.

Google’s Turn

An inquisition at the hands of European commissioners sounds like a pretty scary ordeal, like it might well involve several implements of torture, all of them rusty. For Google, though, it may be more of a coming of age story — what kind of technology giant can you be, really, unless you’ve been investigated by the EC antitrust officials?

The commission says it’s received complaints from three companies about Google’s search engine ranking practices. One of those companies happens to be associated with Microsoft’s Bing engine, and another one also has ties to Redmond. Basically, all three companies say Google gives their Web sites unfair positions in its search rankings. All three offer services that compete in some way with Google — one’s a legal search engine, one’s a price comparison site, and then there’s the Bing associate. At this point, the European Commission has only opened a preliminary inquiry — it might go formal with the investigation, or it may choose to forget about it.

It wouldn’t surprise Ryan Radia at the Competitive Enterprise Institute to see the EC move forward on this, and he thinks that doing so would prove that the commission’s antitrust policies are driven by forces other than concern over competition policies. Said Radia, “I can’t think of any other industry where consumers can go to competitors with just one click.”

Do the complaints have any merit? First Page Sage’s Evan Bailyn doesn’t think so — not from an SEO perspective, anyway. Google may not always be fair in its algorithm calibration, he said, but it doesn’t have to be. Every time Google tweaks its system, some sites are winners and some sites are losers, but as long as Google’s not manually penalizing specific, individual companies, there’s really no foul play.

Google has said it would never, ever do that. That would just be evil, wouldn’t it?

Guilt by Association

A few Google executives might need to scrub Italy from any future vacation plans following a ruling from an Italian court that could severely stunt the development of the Internet in that country.

In 2006, before Google ponied up billions of bucks to buy YouTube, there was Google Video, and its basic purpose was the same — sharing user-generated videos. That year, someone who really ought to receive some therapy in one form or another uploaded a really offensive video to the site; it showed a kid with Down syndrome being bullied by a bunch of other kids at an Italian school.

Vivi Down, a Down syndrome support organization, was among those who complained about the video, but Google left it up for two months, pulling it only after it was contacted by local police. At that point, it moved fast and helped to ID the uploader, leading to punishment for those involved.

That should have been the end of the matter, but the Italian legal system wanted more. A court there convicted three top executives — David Drummond, Google’s senior vice president and chief legal officer; Peter Fleischer, the company’s chief privacy counsel; and George Reyes, its chief financial officer — of privacy violations. So even though they certainly didn’t upload the video or have anything to do with its production, and even though they weren’t personally responsible for reviewing content, and even though their company nixed the file and helped authorities catch the real bad-guys, they were guilty. Six-month jail sentences — luckily, suspended.

Google’s going to appeal this with every ounce of torque in its legal engine, and it seems to be getting a lot of support from stateside legal experts as well as pretty much any Web company that hosts content of any kind. The ruling introduces the idea that an employee of a hosting platform can be held criminally liable for objectionable content that users upload. Merchant & Gould’s Raymond Van Dyke told us, “Holding Internet Service Providers criminally liable for all postings, despite a vigorous notice and takedown procedure, is astonishing,” and added that the EU is probably disgusted with the ruling and ought to do whatever it can to challenge it.

I think Google’s European spokesperson put it best. Bill Echikson said, “It’s like the mailman being prosecuted for a letter you don’t like.”

New Rules for Plastic

If you’ve noticed that there seems to be something just a little off-kilter about the world this week, that’s because a new law went into effect Monday that forces credit card issuers to start being just a little bit nicer to you. The Credit Card Accountability, Responsibility and Disclosure Act, or CARD Act, was a triumph of legislation as far as the Congressional Acronym Committee is concerned, but it’s far less than a panacea when it comes to making all credit card arrangements fair and simple all the time.

Some of the most important rule changes card issuers will have to observe include a ban on raising your interest rates if you pay your bills on time. That’s nice, but count on the credit card companies to make up for it in other ways. Let a bill go for 60 days or more, and the penalties will be ginormous. Another plus for consumers is that payment dates must now be fixed — same date each month — and statements must arrive at least three weeks before payments come due.

These laws do have a tendency to backfire, though. Credit card companies have become accustomed to making a certain level of revenue each quarter, and they’re not going to take a law like this lying down. They’ve had plenty of time since the bill was first signed to preemptively raise interest rates, and if you have a credit card, you’ve probably seen something in the mail about that in the last few months.

Also, credit card companies make more money when complex rules confuse customers, so any attempt by the government to simplify things on one end just motivates them to complicate things on another end. Get ready for some very confusing offers and rules in the future.

Without a Net

Next time you feel the urge to complain about how slowly all those pirated movies and video games are coming in over the ol’ BitTorrent, take a moment to consider the U.S.’s digital have-nots. These are people without any kind of broadband access at all, either because they live in the boonies or it’s too expensive for them or they’re just plain cranky about how the intertubes soften the heads of America’s youth.

The FCC has classified these Webless individuals into four categories. There are the Near Converts: “I have a computer but the Web’s such a scary place; please hold me.” Then you have the Digital Hopefuls: “The Web sounds cool, but the money’s just too tight.” Some are considered Digitally Uncomfortable: “Sorry, I don’t like lolcats, flamewars, free TV, Facebook, shopping, booking plane tickets, reading news or sending email. The Web has nothing for me.” And finally, there are the Digitally Distant: “It’s a series of tubes … tubes that’ll rot your mind!”

Those classifications are the result of a survey of 5,000 Americans the FCC polled late last year. It revealed its finding in the run-up to its presentation of a formal National Broadband Plan to Congress on March 17 — a plan that will hopefully make it easier and more affordable for more people to use the Internet — those who want to, anyway. Encouraging a more robust competitive landscape might be a positive step in that direction, as would unlocking licensed spectrum options for wireless broadband providers. Deciding what chunk of the tubes competing companies will have to share versus how much they can claim as their own managed pipelines — well, that’s going to be the tricky part.

Vudu’s Under Wal-Mart’s Mojo

The idea of the video rental store is not aging gracefully. For consumers today, the choice is simple. Scenario A: Leave the house, go to a strangely smelly video store, grab a copy of your third-choice movie since your first and second choices were rented out, go home, grumble because the DVD you got was scratched up a bit, then pay a ridiculous fee when you return it a day or two late.

Scenario B is to turn on the TV, pick something good, and either download it or stream it through your home Internet connection. You don’t even need to leave a horizontal position.

You’ve got Amazon, iTunes, Netflix, Hulu, and probably a half-dozen more legit online movie channels. And now Wal-Mart wants in the game too: It just bought Vudu, that online HD movie streaming service that used to sell set-top boxes. A few months ago it dropped the box in favor of streaming directly to Web-connected TVs and Blu-ray players from a few choice manufacturers. At this point, no giant changes have been announced, only that the service now belongs to the Wal-Mart empire.

It’s not the first major retailer to try this: Best Buy and Blockbuster have also attempted their own movie-streaming services, to varying degrees of success. Parks Associates Kurt Scherf says he wouldn’t be surprised if Target is the next one to try something similar.

However, there may be a hitch — there aren’t actually that many people who have the kind of Blu-ray players and TVs that can stream Vudu content. Vudu’s old set-top boxes could be hooked up to any dumb TV, but the service might not find as big an audience if it requires you to use new, high-line hardware. Dan Rayburn at Frost & Sullivan is pessimistic about the deal. He expects that about six or seven million Internet-ready TVs will sell this year in the U.S., and at most only a fifth of those will actually be hooked up to the Web, leaving a maximum growth audience of less than one and a half million. I guess the salespeople in Wal-Mart’s electronics department should get ready to put in some overtime.

Gadgets Go to Hell

There’s nothing quite like obtaining brand-new, fresh-off-the-shelf gadgetry. Seriously, some people actually record videos of themselves taking a new laptop or phone out of the box, though I’m not entirely sure what they do with those videos afterward. Well, as exciting as it is to get new stuff, it usually means the old stuff gets thrown out, and the sad truth is that not all laptops go to heaven. In fact, a lot of them get shipped off to places where they’re disassembled and melted down in ways that severely harm the environment.

The United Nations Environment Program has issued a report predicting that by the year 2020, e-waste will increase by 500 percent in India and between 200 and 400 percent in South Africa and China. A lot of that e-waste comes from two major sources: Currently, China produces over 2 million tons of e-waste a year, and the U.S. — the No. 1 waste-maker — makes about 3 million tons.

Plenty of people are aware that they should recycle, but sometimes even a seemingly OK recycler will just toss all the discarded material it gets onto a boat bound for China or India. From there it goes to these e-waste hellhole towns where people burn off the plastic to scavenge the metal inside, and everyone breathes poisonous fumes 24/7.

Some countries have tried enacting laws banning the importation of e-garbage, but importers find ways around them. And computer makers are trying to use fewer toxic materials in their hardware, but unless they can figure out a way to make a Macbook Pro out of twigs, leaves and spring water, I still don’t want to be anywhere near it when someone tries to melt one down.

The UN report says developing nations need to act quickly to implement programs to collect and manage e-waste. They need to strengthen laws concerning what can and cannot be brought in, and regulate exactly how imported e-waste is collected and disposed of. Meanwhile, EU and North American countries should create laws regulating e-waste disposal and banning e-waste exports.

Juice Box

A few years ago, an Irish outfit named Steorn announced it had built a real-deal perpetual motion machine. As I recall, that claim aroused plenty of skepticism, but it did manage to get the company lot more media attention than your average crank. Despite the failure of several public demonstrations to draw anything but raised eyebrows, Steorn is now offering a select group of developers access to its secrets — for a fee. I’m sure fantastic products will be popping onto the market any day now.

For a minute there I thought we were seeing the same thing this week with the Bloom Box, this refrigerator-sized power generator from Bloom Energy that made its public debut on 60 Minutes last Sunday. But the Bloom Box — official name: Bloom Energy Server — actually is based on sound scientific principles. It’s a fuel cell power generator that uses natural gas or biofuel to pump out something like 100 kilowatts of electricity, enough to run a small office building without the aid of a power grid. Just put fuel in one end and get electricity out of the other with little to no pollution. These kinds of fuel cells already exist, in fact — but Bloom says its design is super-duper efficient.

And unlike those perpetual motion folks, Bloom managed to line up a handful of corporate somebodys to stand at its side when it officially unveiled its product later in the week: eBay, Bank of America, Coca Cola, Google and Wal-Mart are among the company’s first customers. Bloom hopes to scale down the Bloom Box to the size of a brick capable of running an entire household. For now, though, the large-scale units ring up at around $800,000. Bloom says they pay for themselves in three to five years.

Whether or not we’ll all be living off the grid on our own pocket-size power plants by 2030 is open to debate, but the big-time attention Bloom has drawn to the concept of fuel cells could give the entire industry a boost, according to Stuart Adler, associate professor at the University of Washington’s department of chemical engineering. He told us, “I’m glad there’s visibility for this area, which has needed visibility for a very long time. [Bloom’s] going to lift the boat for everybody.”

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