WEEKLY RECAP

Some iPhone to Watch Over Me

Let’s talk about privacy. Is it a violation of your privacy if your phone knows where you are at all hours of the day and keeps detailed records without your telling it to? What if the phone never tells anyone else — doesn’t beam your location to Steve Jobs or Larry Page or the Pope or anyone at all? OK, maybe it will tell your computer where you’ve been, but only when you sync up. Or maybe it will tell Apple where you’ve been, only the data’s been anonymized so they don’t know it’s you, they just know it’s somebody. Is any of this OK with you?

If you have an iPhone, this has been happening to you. Researchers Alasdair Allen and Pete Warden discovered recently that every move you make, your iPhone’s watching you. They found a file in iOS 4 that stores your location history unencrypted. And when you sync that iPhone to a Mac or PC, that information gets saved on the computer as well. They’ve even made a little application you can use to review a map of your own travels, if you want.

But beyond helping you make a pretty little map, the actual utility of this iTravel journal is still unclear. The researchers haven’t claimed the info’s being shared with anyone, but one theory is that it’s a sloppily executed function that serves Apple’s practice of anonymously tracking the locations of iDevices in order to sharpen its location services. This is based on info that appeared in a letter an Apple lawyer sent Congress last summer.

So how creeped out should you be by this? Your phone and your computer have records of where you’ve been. But considering all the other tidbits a person could get out of a thorough examination of another person’s computer and phone, a set of time-stamped geolocations probably isn’t the most private thing in there, unless you’ve been somewhere very interesting.

But what if someone does steal your phone or computer with the intent to study your movements? It’s probably a rare scenario, but this little hidden feature could definitely help that person accomplish that. Maybe the main reason this doesn’t sit well is because of how hidden it seemed to be. iOS 4 has been out nearly a year, yet in order for this part of it to come to light, it took a couple of programming experts to accidentally stumble onto the code.


Listen to the podcast (15:56 minutes).


Bad Match

Dating website Match.com has decided to be a little more choosy about who it lets through the door after a woman sued the site for setting her up with a man who allegedly raped her. The man was already a convicted sex offender, yet Match presented him to her as a guy she might really get along with.

So now Match will screen its users, both new ones and existing ones. It’ll check their identities against a national sex offender database, and if there’s a match in that regard, the user will just have to go home alone.

At first it sounds like a no-brainer. Why wasn’t Match and every other dating site on the Web doing this years ago? Match says it’s a matter of technology — in years past, databases weren’t as reliable. Now apparently they are, and I guess this lawsuit got the ball rolling.

It’s always good to see another barrier of protection placed between violent people and their potential victims, but it’s far from a perfect solution, both for the website itself and for its users.

There’s always the possibility that this could give some of the site’s users a false sense of security. It could get them thinking something like, “Oh, of course this person’s legit — it’s Match.com, and they do background checks.” But it would be very easy for a convicted offender to slip through with a false identity, and it’s likely some will.

Also, sex offender registries only contain names of people who’ve actually been caught and convicted of sex crimes — they don’t cover convictions for other serious crimes that just weren’t sexual in nature. So while this dragnet might prevent a handful of future assaults, which is good, it’s not going to mean Match is full of only cheery, delightful people all of a sudden.

There’s also some potential risk for Match.com from a purely PR perspective. Today the story is, “A woman was attacked by someone she met on the site. Now Match has promised to institute a costly background check policy, even though it’s not directly responsible. Good for them.” But once it’s assumed the responsibility of running checks, if someone slips through the barrier and something like this happens again, the story might be more like, “Match.com’s system failed, and another person was attacked.”

Aside from that possibility, Match is probably right to do something rather than nothing. Granted, when someone meets a sex offender in a place like a bar or a club and ends up victimized, the place doesn’t start doing background checks at the door the following night. But dating sites aren’t the same dynamic. It’s not like you just walk in and you’re on your own.

These sites actively put people in front of each other, telling them this man or woman in particular is a very good match for you, so why don’t you two go out? If they can take some reasonable step to lower the odds that they’re putting you on a date with a known sex felon, that sounds like a step worth taking.

Bad Beat

If you host a weekly poker game in your garage or basement and you keep the stakes pretty low, the most trouble you’ll have with the police will probably be a noise complaint, if that. But if you host an online poker service that plays for real money and allows American players to join in, you could end up like the 11 people that just got slapped with charges from the U.S. federal government.

The hosts of three of the Web’s biggest backroom poker games are looking at charges from the U.S. Department of Justice, and many of them relate to the way they took money from U.S. participants. Under the Unlawful Internet Gambling Enforcement Act, it’s illegal for gaming sites to knowingly accept payment in connection with the participation of another person in illegal Internet gambling. Because of this law, most banks and credit cards in the U.S. will refuse to make transactions with sites like Pokerstars and Full Tilt Poker, which are based in other countries.

In order to get around that, according to the DoJ, these virtual card rooms would disguise the money they received from U.S. customers and pass it off as payments made to bogus vendors for nonexistent merchandise like jewelry and golf balls. So they’ve allegedly been tricking banks and card processors into brokering transactions that in truth were illegal.

As the feds describe it, the scheme sounds pretty elaborate — phony corporations, decoy websites, shady payment processors acting as middlemen, so forth. That sounds a lot like money laundering, which is one of the many charges these 11 defendants are up against.

In addition to the charges, the U.S. government also seized several domains used by these operations: PokerStars.com, FullTiltPoker.com, AbsolutePoker.com, Ub.com and Ultimatebet.com. A couple have re-opened, after striking deals with the feds to return U.S. players’ money.

This incident aside, though, the future of online poker in the U.S. is far from certain. It’s clearly illegal now, and I’m sure operators of traditional, real-life casinos want to keep it that way. But there has been some interest from certain members of Congress over the last couple of years to make online gambling a legitimate — and highly regulated — part of e-commerce.

New Order

This month, Google cofounder Larry Page came to his first day at work as the company’s CEO, taking the reins from Eric Schmidt, who was brought in a decade ago to at least create the appearance that the company’s young management had some kind of adult supervision. But it seems that Page has reached what the board would consider adulthood, so now he’s in the pilot’s seat, and within a couple of weeks he got his first chance as CEO to go at-bat during Google’s quarterly earnings call.

So how’d it go? If you ask analysts and the company’s more influential investors, they’ll say Page whiffed it. He didn’t lay out a grand Google scheme, didn’t explain any strategies for conquering new worlds and new civilizations, didn’t even take any questions.

And the people on the other end of the line probably had some big questions they wanted answered. Google may seem like it owns the world, but for investors, watching a company’s operational expenses rise from $1.8 billion to $2.8 billion in a year is something of an attention-grabber. It caused the company to miss Wall Street’s profit estimates by about three cents per share. Analysts wanted to hear promises, plans, sweet nothings — anything to make them think everything’s just fine. Instead they got a hello, a short speech and a cold shoulder.

So they gave Google the hose, soaking their outlooks and sending shares downhill the following day, due to what they saw as Page’s minimalist effort toward disclosure. It’s their job to assume the worst when nothing’s being said at all, and they do enjoy listening to a powerful CEO try to justify his company’s existence from time to time.

Google’s problems don’t exist only in the imaginations of Wall Street analysts. Those ballooning expenses are very real, and they’re due in part to a hiring binge it’s been on. So unless the company immediately sheds as many jobs as it just created, that expanded payroll will have to be dealt with well into the future. Investment watchers might also be worried about the various side projects Google puts its money into — everything from green energy to self-driving cars.

But what’s really changed? Analysts may have been a little chafed by the difference in style between the new guy and the former CEO, at least as it applies to a single phone call — but so far, Google under Page looks very similar to Google under Schmidt, at least from the outside. The big hiring move was a decision made on Schmidt’s watch, and those side projects have been going on for years — why start worrying about them now?

There’s also been criticism of Page’s age and level of experience, though I wonder when 38 years old came to be considered young in the world of technology CEOs. As far as experience, there’s exactly one person on the face of the Earth who has as much experience with Google as Page does: Sergey Brin, the other cofounder. If there’s anything related to Google that Page doesn’t have much experience in, I guess it’s in handling an earnings call as CEO, for whatever that’s worth.

No By-the-Book Launch

Though we’ve known about Research In Motion’s PlayBook tablet for months, the thing’s actual rollout was one of the most jittery, uncomfortable-to-watch launches in recent memory. Early reviews were harsh, and one of the company’s two CEOs had an on-camera temper tantrum. The other one stepped into the spotlight a couple of days later to try and smooth things out, though he didn’t quite throw a last-minute touchdown.

Oddly enough, the first CEO, Mike Lazaridis, actually started getting cranky before most of those murky PlayBook reviews even came out. He lamented to The New York Times that nobody loves RIM, nobody appreciates its profits, nobody understands its growth over the last few years.

Maybe that wouldn’t have sounded so cranky if it hadn’t been followed the next day by a disastrous interview with the BBC. Granted, he got hit with a screwball question: The interviewer framed the disagreements RIM’s had with certain Asian and Middle Eastern governments as a problem with security. Really, that issue regards those countries’ national security, and the problem is they think RIM’s technological security is actually too good — they want to be able to break in if necessary, but they can’t. But instead of clarifying that point and moving on, Lazaridis called the question unfair and left the room.

That was the day a lot of the early reviews were coming in, and although they weren’t universally damning, a great many of them used one term in particular: half-baked. The OS looks good, the build feels solid, there’s plenty of power — but there are no native email, calendar or contact applications. You have to tether the PlayBook to a BlackBerry phone in order to use those features. Third-party app selection is also scant, and you can’t yet run Android apps on the thing. Some reviewers suggested that RIM had panicked and rushed a product to market prematurely.

After all those lukewarm reviews started making the rounds, the other CEO, Jim Balsillie, spoke with Bloomberg to defend the PlayBook and tell viewers what makes it worth taking a look at. He touted its size, its power and its full-Web abilities, meaning it works with Flash. He also promoted RIM’s ability to add more functions through updates later down the road, or at least its ability to promise those updates.

And there’s the fact that users can bridge their existing BlackBerry phones to the tablet to give it the features it currently lacks, like those calendar and email functions. And when it’s linked to a BlackBerry phone, that cellular data comes at no extra cost. Might be a good deal if you’re a BlackBerry owner, but when asked why anyone without a BlackBerry should look at the PlayBook, that’s one of the reasons he gave: “You can pair it with your BlackBerry.” Strange.

After all the drama was over, the PlayBook had its launch, and the early sales estimates are in. RBC Capital Markets put the figure somewhere around 50,000 units sold on Day 1. Granted, that includes presales, and it’s estimated the iPad 2 moved somewhere around twice that many the day it launched. But compared with estimates for other tablets, PlayBook may well have had a better first day than the Xoom or the Galaxy Tab. At least you can probably find one if you go to a store, unlike certain other tablets I could name.

Biblio-Tech

When a company describes its new e-reader, one of the first thingsit wants to tell you about is whatever bookstore it’s associatedwith. The Kindle can buy books instantly from Amazon, iPad has theiBookstore, Sony’s readers have their own store, so on. It seems oneof the most important characteristics of any e-reader is how it’s usedas a vehicle for making more purchases.

Of course, bookstores — both online and offline — aren’t the only waypeople acquire books to read. Community libraries have more books thanyou could read in a lifetime, and all for free — provided your localgovernment isn’t so strapped for cash that it’s had to shut the placedown.

But e-readers aren’t so commonly associated with libraries. It’stotally possible to incorporate e-readers into a library’s services –just lend the user the data for a while. In fact, at least onecompany, OverDrive, specializes in setting up local libraries to offere-books for loan to people with e-readers. Only at this point itdoesn’t work with one of the most popular e-readers around, the AmazonKindle.

That’s about to change, though. Amazon and OverDrive plan to provide11,000 libraries in the U.S. with Kindle-friendly e-book lendingservices by the end of the year. They’ll work on all models of Kindle,and they’ll be free, just like checking out a book in the form of adead tree. Users will even be able to scribble away in the e-booksthey check out without fear of dirty looks from the librarian. The user’shighlights and margin notes will be saved, so when they check out thatsame e-book again — or buy it — the notes will be preserved.

In order to make this feasible, though, publishers will insist onthrowing a measure of false scarcity into the mix. Libraries lend outbooks for free, but they limit your time with them because a book is aphysical thing and they need it back to lend to the next person.

E-books are just code, infinitely copyable, so theoretically theycould just give it away for free to everyone with no due dates attached. In thereal world, that would sort of collapse the publishing industry,though, so libraries will probably only be allowed to loan out acertain number of copies at a time, and they’ll self-delete after acouple of weeks.

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