Hack of Tech Journalist Reveals Flaws in Cloud Security

Story first reported from USA Today

SEATTLE – The security community is on alert for hackers who might try to emulate the simple trickery used to breach a prominent technology journalist's Amazon, Apple, Google and Twitter accounts. That hacking caper has rekindled concerns about whether Apple's iCloud, Google Apps, Amazon's Cloud Drive, Microsoft's Windows Live and other Internet-delivered services do enough to authenticate users, security analysts say.

"People are being urged to trust their data to the Internet cloud, but then you find that the operational security is alarmingly lax," says Stephen Cobb, security analyst at anti-virus firm ESET.

Hackers devastated Wired reporter Mat Honan's digital life. In doing so, they highlighted how Web companies have been slow to embrace more robust systems for ensuring that users who log into online accounts are who they say.

Merchants, banks, media companies and social networks require varying amounts of information to open and access online accounts. Many ask for only a few bits of information to make changes, such as resetting a password. That makes it easy for hackers to abuse the prevailing systems, which rely on asking users to answer questions.

Many banks and Google Gmail offer an optional service that sends to your cellphone a single-use PIN code that you must enter at their websites, along with your username and password, before you can complete certain transactions.

Such multifactor authentication systems are considered more difficult for the bad guys to subvert but less convenient for account holders to use. Yet the need for wider deployment of stronger systems is intensifying, argues Todd Feinman, CEO of database security firm Identity Finder.

Honan detailed how hackers tricked an Amazon rep over the phone into revealing the last four digits of his credit card number. Next, they used that information to persuade an Apple rep to reset his Apple ID password, which enabled them to wipe clean Honan's iPhone, iPad and MacBook, destroying all of his files, including irreplaceable photos of his daughter. Apple has suspended its phone password-reset service and launched a security review, says spokeswoman Natalie Kerris. Amazon did not respond to interview requests.

Web firms are unlikely to switch to one-time PIN systems anytime soon. "Many … are expensive and difficult to manage," says Chris Brennan, CEO of security firm NetAuthority. "And companies are concerned they could frustrate the user."

Meanwhile, consumer awareness remains low, says Gregg Martin, FishNet Security's directory of mobile security. Consumers will have to demand stronger authentication systems and be prepared to accept "a slight level of inconvenience," Martin says.

ESET's Cobb argues that Web companies should take the initiative. "Improving security is 100% the responsibility of the cloud service providers because they are the ones trying to sign people up to the cloud model."

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Amazon Drops T-Mobile G2 Smartphone Price To $99

Information Week

The HTC-manufactured device comes with a two-year agreement and free shipping for new customers.

Online retail giant Amazon is offering the recently released T-Mobile HTC G2 Android-based smartphone for $99.

The hitch is you have to agree to a new, two-year contract to take advantage of the deal. In exchange, users won't have to deal with mail-in rebates like they would if they were buying the phone directly from T-Mobile, and can take advantage of Amazon's free two-day shipping offer. The offer is ideal for new customers, since those who want to upgrade have to pay $199.

Both T-Mobile and Best Buy are charging $199.99 with a two-year contract for the G2, or customers can opt for no contract and pay $499.99. Radio Shack recently cut the price of the device to $149.99 with an instant rebate and two-year agreement.

On Tuesday, the carrier reportedly released an over-the-air update for the device with Wi-Fi calling added, along with Internet tethering and some performance upgrades. The upgrade also may include a new radio and the ability to update Google Goggles, according to reports.

The T-Mobile G2 has reportedly had some recent issues surrounding hacking into and rooting the phone in order to make modifications. Reports have said the phone has an "internal cop" that detects when it is rooted, and once that happens, the modifications are undone and phone is restored to its original condition because the system has been corrupted.

The G2 has a 3.7-inch display and runs on Android 2.2 OS over T-Mobile's 4G HSPA+ data network. It has a full QWERTY keyboard and an 800MHz Snapdragon processor, support for 32GB microSD cards, a 3.5mm headset jack, Wi-Fi, GPS, and Bluetooth. It also features a 5-megapixel camera with LED flash and autofocus. The device's dimensions are 4.7 x 2.4 x 0.06 inches and it weighs 6.5 oz. It provides talk time of up to 6.5 hours.

The G2 price cut isn't one of Amazon's better cell phone deals; over the summer, the retailer offered the Samsung Vibrant for a penny.

Microsoft in Patent Deal with Amazon

The Wall Street Journal

Microsoft Corp. said it reached a patent licensing agreement with Amazon.com Inc. that gives the online retailer rights to use open-source software in its Kindle electronic book reader and servers based on the Linux operating system.

Under their agreement, Microsoft said Seattle-based Amazon will pay it an undisclosed sum. Microsoft, Redmond, Wash., said in a statement that the deal was a patent cross-license agreement under which it will also gain rights to Amazon patents that it didn't identify.

The statement from Microsoft said Kindle uses both open-source and proprietary software components made by Amazon.

Open-source programs allow users to view and modify their "source code," or underlying instructions. Linux and other programs that are created with the technique have been among the most effective competitors against Microsoft products.

The licensing deal was viewed with suspicion by open-source advocates, who believe Microsoft has sought to stir legal uncertainty about the technology for competitive reasons. Microsoft has for years said its broad portfolio of intellectual property includes patents that are violated by elements of Linux and other forms of open source software.

Companies that incorporate open-source software in everything from mobile devices to corporate applications could, in theory, face legal challenges from Microsoft, though Microsoft must tread carefully because so many of its customers and business partners use open source technologies.

"If the strategy isn't to create uncertainty around Linux, it's hard to say what it is," said Jim Zemlin, executive director of the Linux Foundation, a non-profit Linux organization.

A Microsoft spokeswoman declined comment. In the company statement, Horacio Gutierrez, corporate vice president and deputy general counsel at Microsoft, said the agreement with Amazon "demonstrates our mutual respect for intellectual property as well as our ability to reach pragmatic solutions" patent issues regardless of whether they involve proprietary or open source software. An Amazon spokesman declined comment.

Microsoft noted that it has reached similar deals with many companies since launching a patent licensing program in 2003, including Apple Inc., Hewlett Packard Co., and Novell Inc.

But Microsoft also took a more aggressive stance with a lawsuit it filed early last year against TomTom NV, in which it alleged that the Dutch maker of GPS navigation devices violated a collection of Microsoft patents in TomTom's Linux-based devices. TomTom countersued Microsoft for alleged patent violations, and the two companies later settled their disputes for undisclosed terms.

Amazon Removes All Macmillan E-Books

The Wall Street Journal

Amazon.com Inc. has removed all e-book titles published by Macmillan from Amazon and its Kindle e-reader site in a battle over pricing, according to a statement issued by Macmillan late Saturday.

The move follows this week's launch of Apple Inc.'s new iPad device, which is expected to shake up the publishing industry by competing directly with Amazon's Kindle reader and by enabling publishers to set their own retail prices on their books.

Macmillan CEO John Sargent said he visited Amazon on Thursday in Seattle to discuss "new terms of sales for e-books" and that by the time he returned to New York, he'd been informed that Macmillan's e-books would only be for sale on Amazon.com "through third parties," according to the statement, which appeared as an advertisement on publishing industry Web site PublishersMarketplace.com.

An Amazon spokesman didn't respond immediately to a request for comment regarding Mr. Sargent's statement.

People familiar with Amazon's action said the move by the online retailer signals its unhappiness with the prospect that e-book prices may be rising in coming months. Amazon has made discounted e-book prices a cornerstone of its digital strategy.

Macmillan, a unit of Germany's Verlagsgruppe Georg von Holtzbrinck GmbH, and one of the largest publishers in the U.S., boasts such top sellers as "Sarah's Key" by Tatiana de Rosnay and "Wolf Hall" by Hilary Mantel.

Neither was available for purchase on Amazon's Kindle e-reader on Saturday. Instead, customers saw this message: "Tell the publisher! I'd like to read this book on Kindle."

How long Amazon will continue not to sell Macmillan titles – and whether the move will spread to other publishers who also want Amazon to charge more for e-books – remains unclear. The move could be only temporary. Amazon has marketed its Kindle e-reader by trumpeting its wide selection of books.

Macmillan was one of five major publishers which announced they would begin selling their e-books on Apple's new iBooks store, a key feature of the iPad. Publishers have agreed to a new pricing model with Apple, under which they will set their own e-book prices, with Apple taking 30% of the revenue. They are expected to price many e-book titles at $12.99 and $14.99, with fewer carrying the $9.99 price that Amazon currently charges on most best-sellers.

It is expected that publishers will now seek to do business with Amazon and other e-book retailers on the same terms as with Apple. By setting their own prices, publishers would be able to eliminate discounting on Amazon and elsewhere that they believe threatens the long-term business model of publishing.

Macmillan e-books were still available for sale on Saturday at the e-bookstore at Barnes & Noble.com, a unit of Barnes & Noble Inc. Kobo, Inc., a Toronto-based e-book retailer, also said that it is continuing to sell Macmillan's e-book titles. Added Bob LiVolsi, the founder and CEO of independent e-book retailer BooksOnBoard.com, based in Austin: "As a matter of policy we won't do anything to shut down a publisher because of pricing."

Amazon Adds Apps to Kindle

Wired

Amazon has announced that it will open up the Kindle e-reader to third party developers, allowing applications, or what Amazon calls “active content”, to run on the device.

What kind of apps could run in the low-fi Kindle? Well, you won’t be getting Monkey Ball, but interactive books, travel guides with locations data, RSS readers and anything that brings text to the device would be a good candidate. This could even include magazine and newspaper subscriptions.

The key is the revenue split. Right now Amazon takes a big chunk of the selling price of Kindle e-books. The terms of the new Kindle Development Kit (KDK) specify a 70:30 split, with the large part going to the developer. This is the same as the iTunes App Store, which is surely no coincidence — with an expected e-reading Apple tablet announcement next week, Amazon may be showing its hand now to pre-empt Apple.

It might appear that Amazon is going head-to-head with Apple on this, but we see it a little differently. Apple sells hardware, and while the App Store brings in a nice chunk of change, it is there primarily to sell more iPhones and iPods. Amazon sells books, and the Kindle is a way to make sure you buy Amazon’s e-books. That’s why there is a Kindle app for the iPhone, and why there will be a Kindle app on the tablet: it benefits both companies.

“Active content” will certainly make the Kindle more compelling, especially against other e-readers, although it will also make the Kindle more distracting. One of the nice things about an e-reader is that you can’t use it to check your email every five minutes. Or perhaps you can. The KDK allows the use of the wireless 3G connection. If the application uses less than 100KB per month, the bandwidth comes for free. If it uses more, there is a charge of $0.15 per MB which can (and surely will) be passed on to the customer as a monthly charge.

This model could, interestingly, also make its way into Apple’s tablet. Instead of trying to sell us yet another data plan, the tablet could have a Kindle-style free 3G connection used only for buying iTunes Store content, with the bandwidth price built in to the purchase. That is just speculation, however.

What we are sure of is that the next year will be an interesting one, and the e-book is set to take off in the same way that the MP3 took off before it. The question is, who will be making the iPod of e-books? Given its relatively low price, its appeal to an older, book buying demographic and its ascetic simplicity, the surprise winner might actually be the Kindle.

Digital Piracy Hits E-Book Industry

CNN

When Dan Brown's blockbuster novel "The Lost Symbol" hit stores in September, it may have offered a peek at the future of bookselling.

On Amazon.com, the book sold more digital copies for the Kindle e-reader in its first few days than hardback editions. This was seen as something of a paradigm shift in the publishing industry, but it also may have come at a cost.

Less than 24 hours after its release, pirated digital copies of the novel were found on file-sharing sites such as Rapidshare and BitTorrent. Within days, it had been downloaded for free more than 100,000 times.

Digital piracy, long confined to music and movies, is spreading to books. And as electronic reading devices such as Amazon's Kindle, the Sony Reader, Barnes & Noble's Nook, smartphones and Apple's much-anticipated "tablet" boost demand for e-books, experts say the problem may only get worse.

"It's fair to say that piracy of e-books is exploding," said Albert Greco, an industry expert and professor of marketing at Fordham University.

Sales for digital books in the second quarter of 2009 totaled almost $37 million. That's more than three times the total for the same three months in 2008, according to the Association of American Publishers (AAP).

Statistics are hard to come by, and many publishers are reluctant to discuss the subject for fear of encouraging more illegal downloads. But digital theft may pose a big headache in 2010 for the slumping publishing industry, which relies increasingly on electronic reading devices and e-books to stimulate sales.

"Piracy is a serious issue for publishers," said Hachette Book Group in a statement. The company that publishes Stephenie Meyer's wildly popular "Twilight" teen-vampire series says it "considers copyright protection to be of paramount importance."

Authors are concerned as well.

"I'd be really worried if I were Stephen King or James Patterson or a really big bestseller that when their books become completely digitized, how easy it's going to be to pirate them," said novelist and poet Sherman Alexie on Stephen Colbert's show last month.

"With the open-source culture on the Internet, the idea of ownership -- of artistic ownership -- goes away," Alexie added. "It terrifies me."

And it's not just bestsellers that are targeted by thieves.

"Textbooks are frequently pirated, but so are many other categories," said Ed McCoyd, director of digital policy at AAP. "We see piracy of professional content, such as medical books and technical guides; we see a lot of general fiction and non-fiction. So it really runs the gamut."

Piracy of digital music, thanks to Napster and other file-sharing sites, has been a threat to recording companies for more than a decade. Over the years, the record companies tried different approaches to combat illegal downloading, from shutting down Web sites to encrypting songs with digital-rights management software to suing individual file-sharers.

Although illegal file-sharing of music persists, Apple's online iTunes store is now the world's biggest seller of music.

To some industry observers, this may be where the future of the book industry is heading as well. But talk to publishers and authors about what can be done to combat e-book piracy, and you'll get a wide range of opinions.

Some publishers may try to minimize theft by delaying releases of e-books for several weeks after physical copies go on sale. Simon & Schuster recently did just that with Stephen King's novel, "Under the Dome," although the publisher says the decision was made to prevent cheaper e-versions from cannibalizing hardcover sales.

Some authors have even gone as far as to shrug off e-book technology altogether. J.K Rowling has thus far refused to make any of her Harry Potter books available digitally because of piracy fears and a desire to see readers experience her books in print.

However, some evidence suggests that authors' and publishers' claims of damage from illegal piracy may be overstated.

Recent statistics have shown that consumers who purchase an e-reader buy more books than those who stick with traditional bound volumes. Amazon reports that Kindle owners buy, on average, 3.1 times as many books on the site as other customers.

Ana Maria Allessi, publisher for Harper Media at HarperCollins, told CNN, "we have to be vigilant in our punishment ... but much more attractive is to simply make the technology better, legally."

E-book technology offers so many positives for both the author and the consumer that any revenue lost to piracy may just be a necessary evil, she said.

"Consumers who invest in one of these dedicated e-book readers tend to load it up and read more," said Allessi. "And what's wrong with that?"

Amazon Selling More E-Books Than Paper Books

Brighthand

After years of anemic sales, e-books are starting to take off. As evidence: for the first time ever, Christmas Day shoppers on Amazon.com bought more books for their Kindles than they did regular books.

Obviously, this was an unusual situation -- Christmas Day isn't typically a big day for shopping, but virtually everyone who received a new Kindle e-book reader as a gift that day needed to download at least one book to try out their new device.

An E-book Milestone
The e-book has been around for years, but until recently there were questions about whether it would ever become a main-stream product. That changed with the success of the Amazon Kindle, which allows users to wirelessly purchase books from almost everywhere, and then read them on a device with a good screen and long battery life.

This retailer says the Kindle is "the most gifted item in Amazon's history".

With the success of Amazon's e-book reader -- which is on its second generation -- Barnes and Noble entered the market late this year with the nook.

More about the Kindle
The Amazon Kindle 2 debuted earlier this year. It has a 6-inch, 600-by-800-pixel e-Ink display that offers 16 shades of gray.

This device also sports 2 GB of memory, allowing it to hold more than 1,500 books.

The Kindle Store now includes over 390,000 books, including New York Times Bestsellers and New Releases.

Kindle Now Most Popular Amazon Gift

cNet

Amazon.com on Saturday released its annual post-Christmas statement on holiday sales and made one thing clear: the Kindle was king, perhaps fueled by continued shifts in plans for shipments of Barnes & Noble's competing Nook e-reader.

"We are grateful to our customers for making Kindle the most gifted item ever in our history," said Amazon founder and CEO Jeff Bezos.

In another milestone for the e-reader, the company noted that on Christmas Day, for the first time ever, Amazon customers bought more Kindle books than physical books. The company didn't offer specific numbers for either category.

The peak shopping day for the online retailer was December 14, when customers ordered more than 9.5 million items worldwide, "a record-breaking 110 items per second."

Among those items bought between November 15 and December 19, the top electronics, following the Kindle, were Apple's iPod Touch 8GB and the Garmin Nuvi 260W GPS.

 In the video game category, top sellers were the Wii Fit Plus with Balance Board; New Super Mario Bros., and Call of Duty: Modern Warfare 2.

Among software purchases, top items were Microsoft Office Home and Student 2007, Adobe Photoshop Elements 8, and Microsoft Office 2008 for Mac (Home and Student Edition).

Top wireless purchases included the Nokia 5800 XpressMusic (unlocked), Plantronics 510 Bluetooth Headset, and BlackBerry Bold 9700 Phone (AT&T).

Other top selling gadgets included Casio's Waveceptor Atomic Dual-Time Watch, Oster's Electric Wine-Bottle Opener, Omron's HJ-112 Digital Pocket Pedometer, and Bosch's Laser Distance Measuring Device.

We'll have more comprehensive coverage on what looks to be a strong online holiday sales season as the figures come in. In the meantime, here are a few more fun gadget sales factoids from Amazon:

• If all the computers customers purchased this holiday were stacked one on top of the other, they would be more than twice as high as Mount Everest.
   

• Amazon customers bought more than 50 times more light therapy devices this holiday season than there are sunny days in Seattle the entire year.
   

• For the holiday time period alone, Amazon customers purchased enough shoot-and-share camcorders to supply 50 years' worth of nonstop YouTube watching.

• Amazon customers purchased so many Blu-ray disc players, that if you lined them up side to side, they would stretch for more than 27 miles.
   

• During the 2009 holiday season, Amazon customers bought enough 8GB iPod Touches to play 442 years of continuous music.
   

• In 2009, Amazon customers purchased enough heart rate monitor watches to put one on the wrist of everyone who finished the New York City marathons in 2008 and 2009.
   

• The last Local Express Delivery order that was delivered in time for Christmas, was placed by a Prime member and went to Seattle. It was a Kindle that was ordered at 1:43 p.m. on Christmas Eve and delivered at 4:57 p.m. that evening.

Amazon Drops Kindle Price

From PC Mag

Amazon launched its Kindle e-reader on a worldwide basis on Wednesday, discounting the price of the basic version by $40 for U.S customers.

The basic version of the Kindle is now priced at $249 in the U.S. Amazon said it launched the international version of the Kindle, complete with international wireless service, at $279. Amazon left the price of the larger Kindle DX unchanged; an international version of the Kindle DX will be launched in 2010, according to the U.K.'s Mirror.

The international version of the Kindle, of which there will be just one, will be launched in over 100 countries, including China and most of Europe, on Oct. 19.

Internationally, the device uses AT&T's 3G wireless service, instead of Sprint's service within the U.S. E In this case, however, AT&T contracts with local carriers to let the Kindle roam. However, neither Amazon nor AT&T will charge its customers fees for the privilege.

"With this new Kindle, you can get your books, newspapers or magazines delivered wirelessly whether home or abroad in over 100 countries," Amazon chief executive Jeff Bezos said in a note to customers. "Whether you're in Paris, Mumbai, or Sao Paolo, you can think of a book and be reading it in less than 60 seconds."

Bezos told Reuters that he was not "in principle" against making the works available on rival devices like Sony's own e-reader, but was focused on platforms with "large installed bases."

Bezos claimed that the Kindle was the most "wished for," gifted, and the highest-selling product across all of Amazon.com.

Sony And Google Drop The Slam-Dunk On Amazon

As Originally Posted to BusinessWeek.com

Amazon (AMZN) Chief Executive Jeff Bezos won't tell you how many Kindles he's sold, but he's happy to share the number of e-book titles available on the device: 250,000, at last count.

With one fell swoop, a rival has made that library look small. On Mar. 19, Sony (SNE) announced the addition of 500,000 titles to the collection of 100,000 e-books currently available to Sony Reader devices. Sony is giving away the books through a partnership with Google (GOOG), which has already scanned and stored some 7 million books for its Google Book Search project. Neither partner disclosed details of the arrangement, but Google says that more of the public domain titles it has scanned will be available to Sony Readers in the future.

In theory, the availability of more books from Sony could take momentum away from Amazon, which has benefited from buzz around its Kindle 2 reader in recent months. "Part of Amazon's shtick about the value of [the Kindle] is the size of their library," says Michael Norris, an analyst at media researcher Simba Information. Many of Sony's free titles cost money on the Kindle. Kenneth Grahame's children's classic, The Wind in the Willows, will set the buyer back $2.39, for instance.

Sony Focused on Devices

But more than anything, the partnership underscores a key distinction between the Sony and Amazon strategies that in the long run could work to Amazon's advantage. Amazon, which recently began selling e-books to users of devices other than the Kindle, including Apple's (AAPL) iPhone, has shown it's as interested in selling digital books as it is in selling machines.

Meantime, by loading its reader with free books, Sony may be more focused on devices. "Amazon's business is selling books, and Sony's business is selling hardware," says Gartner Group's (ITT) Van Baker. The company has sold more than 400,000 Sony Readers, which now cost between $300 and $350. Amazon hasn’t disclosed the number of Kindle devices it has sold, which cost $359, but Citigroup (C) analyst Mark Mahaney estimated that the company had sold 500,000 by the end of 2008.

For starters, the Amazon approach may appeal to people who are interested in newer, more expensive books, such as New York Times bestsellers, Baker says. At $10 bucks a pop through Amazon, books add up. Sure, Sony lures e-reader buyers with free books, but at some stage, sales of digital books will outweigh the revenue generated through the sale of a machine.

Missing: A Wireless Store

And even though free books enhance the appeal of the Sony Reader, its hardware still lacks one feature that's been most important to Kindle's success: a wireless store. Unlike Kindle owners, who can download books to their device wherever they are, Sony Reader users must plug into their computers. "We will launch a wireless reader," says Steve Haber, president of Sony's digital reading division, though he doesn't specify when.

Sony could see an unintended effect of releasing so many free books on its platform: downward pressure on demand for its paid books. "If you're selling a book for $9.99 and it's going to be on a virtual shelf with half a million books that are available for free, questions about value come into play," Simba's Norris says.

Sony's approach has some advantages. The company has adopted a standard for e-books called ePub that essentially means Sony e-books can be read on other devices that use that same standard. Amazon's books have to be read on devices it has approved. "Sony's ePub announcement was a terrific way for them to show that they're willing to support more open formats than Amazon is," says Joe Wikert, general manager at technology researcher O'Reilly.

Still, Amazon isn't likely to sit on the sidelines while Sony scores points with readers.