EBay Inc. on Tuesday named Electronic Data Systems Corp. Chief Financial Officer Bob Swan, a dot-com refugee who was once a top executive at bankrupt online grocer Webvan, as CFO.

Swan replaces Rajiv Dutta, who is moving to Europe to become president of Skype, eBay’s recently acquired Web phone-calling business.

Swan takes over as CFO at the San Jose, California-based company on March 16.

Near the peak of the dot-com frenzy in October 1999, Swan joined Webvan, where he was chief financial officer, chief operating officer and chief executive for about 18 months. Webvan filed for bankruptcy protection in mid-2001.

Goldman Sachs analyst Anthony Noto said in a note to clients that Swan was an “excellent choice,” crediting him as the chief architect of a recent turnaround at Electronic Data Systems Corp. and for solid leadership at Webvan.

“During the failure of Webvan, Mr. Swan, in our view, displayed the utmost professionalism and financial acumen, while also portraying strong leadership ability upon the departure of the CEO,” Noto said.

EBay’s top executives stand out from other major Internet companies in the breadth of their corporate experience as opposed to their technology or entrepreneurial credentials.

Separately, EDS said it named two interim co-chief financial officers, effective March 15. Tom Haubenstricker has worked for the company for 21 years, while Ron Vargo was hired in 2004 after working for what became TRW Automotive Holdings Corp. and for General Electric Co..

Swan joined EDS three years ago, part of a new executive team that was charged with turning around the troubled computer services company, which has revenue of more than $20 billion and 117,000 employees.

“I thought it was going to be the hardest job in the world,” Swan said during an EDS meeting with Wall Street analysts on Tuesday in New York. “On that point … it really hasn’t disappointed,” he said.

Following the detour at Silicon Valley-based Webvan Group Inc. and before joining EDS, Swan was CFO and executive vice president at TRW. Swan began his career with GE in 1985 and spent 15 years in a variety of positions.

After bursting on the scene in the middle of 1999, Webvan burned through more than $1 billion in cash it raised with the backing of Goldman Sachs and Sequoia Capital, among others. It attracted corporate heavyweights such as former Andersen Consulting chief George Shaheen as its first CEO.

The heavy spending to create these online supermarkets depended on a rapid shift in purchasing habits by customers for food and other household goods that failed to materialize.

“We made the assumption that capital was endless and demand was endless,” Swan told Business Week in June 2001, a month before the company declared bankruptcy.

In a regulatory filing, eBay said it had made an offer to Swan on February 10, which was executed on February 18. Swan will be paid an annual base salary of $600,000, and be eligible for an annual bonus of 85 percent of his base salary, it said.

He will also be eligible for a special retention bonus of up to $1.0 million of which $200,000 will be payable within two payroll periods of his commencement of employment, and the remaining $800,000 to be paid in installments on the anniversary of his hiring over the next four years.

EBay also agreed to help defray Swan’s relocation expenses from Plano, Texas to the San Francisco Bay Area.

Shares of eBay closed down 51 cents, or 1.2 percent at $40.80 on Tuesday on Nasdaq amid a broad decline in U.S. shares.

Source-Reuters

Criminals are using the Internet to sell increasing quantities of counterfeit medicines, including fake versions of bird flu drug Tamiflu, a senior U.N. health expert said on Tuesday.

Vitamin and health supplements, so-called “lifestyle medications” like erectile dysfunction drugs, and steroids bought over the Internet were especially likely to be false.

Antibiotics, anti-malarials and pain killers were also susceptible to fraud because of the huge demand, while Tamiflu, made by Swiss firm Roche, had also entered the market amid rising avian flu fears.

“Yes, there have been cases reported in counterfeit Tamiflu,” said Howard Zucker, the World Health Organisation’s assistant director general for health technology and pharmaceuticals.

But he declined to give details on the quantity or where the fake drugs had been found.

The WHO has estimated as many as 10 percent of drugs on the world market are mislabeled or fake, with the phoney medicines sometimes causing illness and even death in consumers.

Speaking to reporters after a high-level meeting in Rome, where pharmarceutical industry and health experts agreed to set up a task force to fight the counterfeit drug trade, Zucker said better oversight of online drug sales was essential.

At the meeting, the U.N. health body said it would help set up an international expert group to raise awareness about fake drugs and to improve cooperation between governments, industry groups and international agencies on the issue.

“Counterfeiting medicines should be distinguished from other types of counterfeiting which do not affect human health and should be combated and punished accordingly,” the conference participants said in a statement at the end of their meeting.

Harvey Bale, director general of the International Federation of Pharmaceutical Manufacturers Associations, said fake medicines remain more prevalent in developing countries than in places like Western Europe.

Still, Bale stressed patients in the rich world were increasingly vulnerable to counterfeit drugs distributed online. He said the new task force would look into that growing sector.

“The Internet needs to be addressed, clearly,” he said.

Source-Reuters

A new computer worm targeting Apple Computer Inc.’s Macintosh computers has been identified for the second time in one week, security experts said.

The new worm, called OSX.Inqtana.A, spreads through a vulnerability in Apple’s OS X operating system via Bluetooth wireless connections, antivirus company Symantec said.

“We have speculated that attackers would turn their attention to other platforms, and two back-to-back examples of malicious code targeting Macintosh OS X … illustrate this emerging trend,” said Vincent Weafer, senior director at Symantec Security Response.

The latest virus follows OSX/Leap-A, which was identified last week and believed to be the first such virus targeting the Mac platform. That worm attempts to spread via Apple’s iChat instant messaging program, which is compatible with America Online’s popular AIM instant messaging program.

Symantec said the latest worm attempts to use Bluetooth connections to spread by searching for other Bluetooth-using devices that will accept requests for a connection when the computer is restarted.

Bluetooth is a wireless technology used to transmit data among devices at short distances.

The worm spreads via a vulnerability in the OS X operating system called the Apple Mac OS X BlueTooth Directory Traversal Vulnerability.

If a Bluetooth connection is made, the worm attempts to send itself to those remote computers. However, the worm itself does not appear to pose an immediate threat.

“While this particular worm is not fully functional, the source code could be easily modified by a future attacker to do damage,” Weafer said, adding that Mac users should install available software patches to their operating systems to prevent such attacks.

The latest worm was identified on Friday. Both worms are ranked a Level 1 threat on a scale of 1 to 5, with 5 being the most severe, Symantec said.

Source-Reuters

Internet giant Google, which has agreed to block politically sensitive items on its new China site, rejected Chinese newspaper reports on Tuesday that the new platform does not have the correct license.

The Beijing News reported on Tuesday that Google.cn, the recently launched service that accommodates China’s censorship demands, “has not obtained the ICP (Internet content provider) license needed to operate Internet content services in China”.

The Ministry of Information Industry, which regulates China’s Internet, was “concerned” and investigating the problem, the paper said.

“Under China’s policy framework for the Internet, Google.cn is clearly unlawful,” said the China Business Times.

A Google spokeswoman said the newspaper reports were groundless. The company’s licensing was “totally within the legal framework”, she said.

Google used the ICP license of another, local company, Ganji.com, under a business partnership — a practice followed by many international Internet companies in China, the spokeswoman said. She requested her name not be used.

“It’s not unusual for companies to do this,” she said, noting that Google.cn notifies users of its license number at the bottom of its search screen.

“If we had anything to hide, we wouldn’t have posted it.”

Yahoo Inc. and EBay Inc. have similar license arrangements.

The spokeswoman said the Ministry of Information Industry had not contacted it about any license problems.

A spokesman for the ministry was not available for comment. But another official in his office said he had neither seen the report nor heard of any problems with Google.cn’s license.

The Chinese government blocks foreign investors from directly operating Internet services in China.

Foreign investors have usually become minority shareholders in joint ventures with local Internet companies, or signed deals so the foreign investor receives payment for technical support to a Chinese client.

Google has weathered recent criticism from United States lawmakers and Chinese dissidents for accepting Chinese censors’ demands that its new Chinese service block links about sensitive topics, such as the 1989 anti-government protests in Tiananmen Square.

But the China Business Times, a business paper with a sometimes nationalist slant, blasted Google for even telling users that links are censored.

“Does a business operating in China need to constantly tell customers that it’s abiding by the laws of the land?” it said, adding that Google had “incited” a debate about censorship.

The paper likened Google to “an uninvited guest” telling a dinner host “the dishes don’t suit his taste, but he’s willing to eat them as a show of respect to the host”.

Source-Reuters

Fiddling around with in-car satellite navigation systems is causing motorists to lose concentration on the road, according to a survey on Tuesday.

The new technology, rather than helping motorists, could be even more distracting than trying to read a map at the wheel, it added.

One in 10 motorists with navigation systems set off on their journeys without bothering to program their route, and more than half admitted they had then had to take their eyes off the road to input the details whilst driving.

Nearly one in eight did not even bother to check out a route they were unfamiliar with and simply relied on the technology to get them to their destination.

In addition, almost one in four motorists said they had read maps while driving although research suggested that this might not be quite so distracting.

The survey of almost 2,000 people by Privilege Insurance found 19 percent of drivers who used their navigation system lost concentration compared to 17 percent reading a map.

The survey said most motorists who used either resource while driving would take their eyes off the road for 10 seconds, which at 60 mph, would equate to traveling twice the length of a football pitch.

“Our research shows even satellite navigation equipment, if used incorrectly, can lead to driver danger,” said Ian Parker, Privilege’s managing director.

Source-Reuters

Rupert Murdoch saw a Web site with monster growth potential in MySpace.com, the online music and dating phenomenon that makes it easy for teens to find friends and express themselves.

The media mogul’s News Corp Inc. paid $580 million for MySpace last July. And even as he figures out how to turn more than 56 million MySpace members into higher Internet revenue for News Corp., there is another concern: the safety of its teen denizens.

The phenomenal growth of the Web site and popularity among youngsters has made it a magnet for adult sexual predators, authorities say.

Recent headlines that rival those in Murdoch’s tabloids, such as “Man arrested in MySpace.com teen-sex case,” “Sex predators are stalking MySpace; is your teenager a target?” and “Space Invaders” have dotted airwaves, newspapers and television news across the United States, triggering a nationwide backlash against the site.

Connecticut Attorney General Richard Blumenthal is investigating a number of sexual assaults with links to MySpace.

“What’s troubling is the pornography and the access by children,” Blumenthal said in a telephone interview.

Teenagers have fueled MySpace’s growth by using it as a virtual hangout, like video-game arcades and malt shops that once were gathering places for young people.

“There are a percentage of kids that put up way too much information on MySpace about themselves,” said Monique Nelson, executive director of Web Wise Kids, a nonprofit Internet safety organization based in Santa Ana, California.

News Corp. and MySpace turned down repeated requests for interviews. MySpace said in an e-mailed statement that its users’ safety is of “paramount importance” and that it is continuing to work with parents and authorities on improving safety.

Emerging in 2004, MySpace’s network of sites now ranks fourth in total U.S. audience, neck-and-neck with Google.com, but behind Yahoo and Microsoft, according Web measurement firm Hitwise.

The growth of MySpace in speed and scale has outpaced previous Internet phenomena such as music-sharing site Napster and pioneering social networking site Friendster.

The MySpace network has nearly 50 percent of the market share of all U.S. Web community sites — 10 times more than any single rival site, including Yahoo, Facebook, Craigslist and LiveJournal, according to Hitwise.

TEEN CRAZE, PARENTAL CRISIS

Authorities in Santa Cruz, California, last week arrested 26-year-old Nathan Contos for felony child molestation after he met a 14-year-old high-school student on MySpace.

Contos claimed he was 15, 17 and 26 years old in online conversations that led to several meetings, according to a spokesman for the Santa Cruz County sheriff’s office.

Blumenthal said the arrest underscored a key vulnerability in policing Internet communities, especially those targeting young people: verifying a user’s age is extremely difficult.

He said he expects to reach a settlement “in the next couple of weeks” under which MySpace agrees to tighten access to the site, with an aim for a better age verification system.

“My hope is that what we do here will serve as a model for others,” Blumenthal said.

MySpace, which has operated below the radar of many Internet industry analysts to preserve its “cool factor,” said in a statement that its users have to be at least 14 years old and are required to fill out an online form that includes their date of birth.

From there, MySpace employs an automated search engine, along with a team that they claim sifts through “tens of millions” of profiles to identify potential minors.

The company said it employs a third of its 175-person work force to “process customer care requests.”

MySpace also clearly advises members on its Web site to avoid posting too much personal information.

But many youngsters include photos, names, addressees and the names of schools and hangouts.

A hi-tech executive, whose 14-year-old daughter attends a high school in Seattle that now bars its teenage students from having a MySpace site, said he was unaware that his daughter was on the site until alerted by a friend of his.

“These kids have opened themselves up to the world and yet isolated themselves at the same time,” Web Wise Kids’ Nelson said of how individual MySpace sites can be viewed by anyone “passing by,” but they restrict the ability to post to friends who must invited in.

Source-Reuters

The Turin Winter Olympics is proving to be more popular on the Internet than the 2004 Summer Games in Athens.

The Torino 2006 Web site had 50 million hits on Wednesday, 10 percent more than the official Athens site recorded on the same day, officials said.

The figure was also five times more than those tracked on the Salt Lake City site four years ago.

Television coverage of the first five days of the Olympics dominated ratings in Europe, especially in host nation Italy.

The United States, Japan and China all recorded big audience figures despite the time difference, while ratings in non-traditional winter sports markets such as Australia were also strong.

In Italy, the gold medal run of Italian Armin Zoeggeler in the luge last Sunday attracted 5.5 million viewers.

Olympic host broadcasters NBC had an average of 17.9 million viewers on Wednesday, almost double its average mid-week ratings this season.

Source-Reuters

Google Inc. on Friday formally rejected the U.S. Justice Department’s subpoena of data from the Web search leader, arguing the demand violated the privacy of users’ Web searches and its own trade secrets.

Responding to a motion by U.S. Attorney General Alberto Gonzales, Google also said in a filing in U.S. District Court for the Northern District of California the government demand to disclose Web search data was impractical.

The Bush administration is seeking to compel Google to hand over Web search data as part of a bid by the Justice Department to appeal a 2004 Supreme Court injunction of a law to penalize Web site operators who allow children to view pornography.

Google is going it alone in opposing the U.S. government request. Rivals Microsoft Corp. and Yahoo Inc. are among the companies that have complied with the Justice Department demand for data to be used to make its case.

Google’s lawyers said the company shares the government’s concern with materials harmful to minors but argued that the request for its data was irrelevant. They offered a series of technical arguments why this data was not useful.

The Mountain View, California-based company said that complying with the U.S. government’s request for “untold millions of search queries” would put an undue burden on the company, including a “week of engineer time to complete.”

“Algorithms regularly change. The identical search query submitted today may yield a different result than the identical search conducted yesterday,” attorneys from Perkins Coie LLP, the company’s external legal counsel, argue in the filing.

Complying with the Justice Department request would also force Google to reveal how its Web search technology works — something it jealously guards as a trade secret, the company argued. It refuses to disclose even the total number of searches conducted each day.

Google’s resistance contrasts with a deal the company has struck with the Chinese government to censor some searches on a new site in China, a move that has drawn sharp criticism from members of the U.S. Congress and human rights activists.

“Google users trust that when they enter a search query into a Google search box … that Google will keep private whatever information users communicate absent a compelling reason,” attorneys for Google said in the filing.

The legal spat also comes amid heightened sensitivity to privacy issues by the company as it recently began offering a new version of its Google Desktop service that vacuums up data stored on user PCs and makes it accessible on the users’ other computers. For customers who consent to the service, copies of their data are stored on Google’s central computers.

Privacy activists have rallied to the defense of Google for fighting the U.S. government request while some conservative and religious organizations have criticized the company for failing to help the government combat child pornography.

The American Civil Liberties Union, with other civil rights groups, bookstores and alternative media outlets filed a friend of the court brief on behalf of Google.

The hearing on the Justice Department motion to compel Google to divulge the search data is scheduled to take place on March 13 in San Jose before U.S. District Judge James Ware.

“The government must show that this request is the most relevant way to accomplish its goal,” said Perry Aftab, an attorney, privacy activist and executive director of WiredSafety.org, a popular online child safety site.

“Why would Google or anyone else turn over data that might create further risks for their customers? The public policy gains don’t outweigh the risks,” she said.

Source-Reuters

Online retailer Amazon.com Inc. is in advanced talks with four major music companies on starting a digital music service as early as this summer to compete with Apple, sources familiar with the matter said on Thursday.

Amazon is seeking to create a viable rival to Apple Computer Inc.’s iTunes music service and its fast-selling iPod music player, both of which dominate the digital music market, they said.

The Seattle-based No. 1 online global retailer is in talks to license music from Universal Music Group, Sony BMG, Warner Music Group Corp. and EMI Group Plc , according to sources briefed on the discussions. Deals have not been reached yet.

“This seems like a very robust service — It will have plenty of support from the music industry,” one source said.

The news was first reported by the Wall Street Journal on Thursday.

Amazon’s service, which one source said was originally slated for a spring launch, could become a significant new competitor and undercut Apple’s stranglehold on the nascent, but growing industry.

Analyst Martin Pyykkonen of Hoefer & Arnett said that from a branding perspective, the idea makes perfect sense.

“Amazon has the potential to move up fairly quickly and become a strong brand in that space,” he said.

Although sales and rental of music online remains a small percentage of the estimated $30 billion worldwide music industry, double-digit percentage sales growth of digital music is being viewed as a beacon in a business wracked by tepid physical album sales.

Amazon is considering a subscription music service that would include a discounted portable music player bearing the Amazon brand, the sources said.

BORROWING THE WIRELESS PHONE MODEL

The player would be subsidized by the subscription service, an idea borrowed from the wireless phone industry, which sells lower-cost phones in exchange for long-term contracts for subscription services.

“That’s a sensible approach,” Phil Leigh, an analyst at Inside Digital Media, said. “It’s going to take something to successfully attack the iPod.”

What makes Amazon’s entry attractive to the music industry is its experience selling consumer goods and what the company claims are more than 55 million active customer accounts.

The big test is whether consumers would be willing to subscribe or buy anything that may not work on the iPod, Leigh said, who noted in a research report that Amazon was late in coming to the market.

A plus for Amazon would be the substantially better margins from the music download business compared with Amazon’s core retail business. Wall Street has been concerned by narrowing margins at Amazon and the shrinking pool of new product growth areas for the company.

But sales from digital music are unlikely to have a big near-term impact on Amazon’s bottom line, Pyykkonen said. The company posted $8.49 billion in sales in 2005.

“Let’s be realistic about how long (digital music) would take to make a dent in this business,” he said.

Amazon has been rumored to be in talks with independent film studios for an upcoming launch of a digital service for movies. In a January research report, Stifel Nicolaus analyst Scott Devitt wrote that Amazon’s position as the largest retailer of media products on the Internet made it “uniquely positioned to benefit from the transition to digital media,” citing the loyalty of Amazon consumers.

Amazon, EMI, Warner and Universal Music declined to comment about a music digital service and Sony BMG officials were not immediately available.

Source-Reuters

Merrill Lynch and Co. said on Friday it had agreed to pay $164 million to settle 23 class-action lawsuits related to tainted research coverage of Internet companies by former analyst Henry Blodget.

The plaintiffs, who represent individual investors, said Merrill and Blodget issued bullish research about companies in a bid to get investment banking business from them.

Privately, however, Blodget disparaged the companies. In one case, he was asked in an e-mail, “What’s so interesting about GoTo except banking fees?” Blodget replied, “Nuthin.” GoTo.com is now a wholly-owned subsidiary of Yahoo.

The settlements are subject to further agreements and court approval, the No. 1 U.S. brokerage said in a filing with the U.S. Securities and Exchange Commission.

As a result of the settlements, plaintiffs will drop appeals in 11 cases in which motions to dismiss were previously granted, Merrill said. Another 12 had not yet been ruled on. It said 16 others were previously dismissed or abandoned.

“Even though we prevailed in virtually every research class action that’s been adjudicated, we are settling these cases because we want to avoid the distraction and expense of further litigation,” said Merrill spokesman Mark Herr.

“It’s a fair settlement,” said Herbert Milstein of the law firm Cohen Milstein Hausfeld & Toll, who represented 20 of the class-action plaintiffs. “This has been litigated for more than four years and we’ve had some adverse court rulings.”

Only two class actions related to Merrill’s research coverage of Internet companies remain. Herr said Merrill expects to win these suits, including one brought by a Merrill Lynch stockbroker that is now before the U.S. Supreme Court. The broker is charging that the fraudulent advice given by Merrill and Blodget caused both him and his clients to lose money.

Merrill said it would take a litigation-related expense of $170 million, or $102 million after-tax, in the fourth quarter for the settlements. The charge equals 10 cents per share.

The litigation grew out of investigations into conflicts of interest on Wall Street by New York Attorney General Eliot Spitzer, who accused brokerages of issuing biased research to attract investment banking business.

That probe led to a $1.4 billion settlement in December 2002 between financial regulators and 10 Wall Street firms, including Merrill, who were accused of misleading investors with biased stock research.

Blodget, who joined Merrill in 1999 after his accurate prediction that Amazon.com’s stock would double in price to $400 a share, rode the technology boom until it crashed. In the settlement with regulators, he paid $4 million, and then went on to work as a journalist.

Lawyers for Blodget could not be reached for comment.

Source-Reuters