Vodafone Agrees to $10B Deal for Kabel Deutschland

By Matthew RoccoPublished June 24, 2013FOXBusiness
Vodafone (VOD) agreed Monday to buy Kabel Deutschland, Germany’s largest cable operator, for $10.1 billion, as the U.K.-based wireless carrier looks to expand in Europe with what would be its biggest acquisition there in more than a decade.
Kabel Deutschland management and its board intend to recommend the deal to shareholders. According to German takeover law, shareholders have four to 10 weeks to tender their shares.
In order for the deal to move forward, at least 75% of Kabel Deutschland shareholders must vote in favor of Vodafone’s offer.
On a conference call with reporters, Vodafone Chief Executive Vittorio Colao said the offer is “full and fair.”
Vodafone’s formal bid comes about a week after Liberty Global (LBTYA) submitted a bid for the cable company. Kabel Deutschland did not disclose details of Liberty’s offer, but news reports indicated that Liberty bid nearly $10 billion.
Interest in European cable assets is heating up, given the bidding war over Kabel Deutschland and Liberty’s $24 billion purchase of U.K. cable television and Internet provider Virgin Media.
Liberty also acquired Unitymedia, Germany’s No. 2 cable company, in 2009 for more than $3 billion plus the assumption of debt. In 2011, Liberty bought Kabel Baden-Wuerttenberg for about $4.5 billion.
For Vodafone, the acquisition would be its largest overall since 2007. Vodafone, the world’s No. 2 wireless carrier by revenue, has struggled to combat dwindling revenue amid economic turmoil in Europe and competition from companies offering bundled packages that include television and Internet services.
A takeover of Kabel Deutschland would allow Vodafone to cut costs from using Deutsche Telekom’s network to offer broadband and TV services. The deal could also help Vodafone attract more customers.
In a statement, the wireless carrier said it “sees significant potential to accelerate the growth in Vodafone’s and Kabel Deutschland’s broadband, telephony and TV businesses by leveraging Vodafone’s leading brand and extensive distribution and by cross-selling to each company’s customer base.”
Vodafone added that a combined company would have 32.4 million mobile, 5 million broadband and 7.6 million direct television customers in Germany.
Shares of Vodafone were down 16 cents at $27.11 in early morning trading. Liberty was trading about 1% lower at $69.36.

Tech’s Quiet Revolution: The Industrial-Strength Internet

By Steve TobakTech ConnectPublished FOXBusiness
More than 20 years ago on a business trip to Japan, I experienced something that really captured my imagination: A smart highway display that gave Tokyo’s frustrated commuters information on which routes were the most and least congested.
Around the same time, global positioning systems were being widely deployed as options in upscale Japanese automobile brands like Acura and Lexus. Finally, I remember thinking, some cool futuristic stuff. Not “Beam me up Scotty” cool, but I’ll take it.
Today, the convergence of low-cost computing power, smart wired and wireless sensor networks, big data storage, software analytics, and of course, the Internet, is bringing about a technology revolution of such import and magnitude that it makes smartphones and tablets seem like nothing but toys.
GE recently coined the phrase the “Industrial Internet,” but the concept or variations on the theme has come under the heading of The Internet of Things, Smartdust, Smart Systems, Machine to Machine (M2M), and IBM’s Smarter Planet.
Basically, it’s the ability to monitor, analyze, and control just about anything on the planet. Not anyone; anything. Machines, buildings, highways, cities, infrastructure – anything.
The way it works is trillions of low-cost sensors capture and transmit all sorts of real-time information over smart networks to data centers where sophisticated computer software can analyze it, make determinations, and instruct other machines to take action.
Take transportation, for example. Using smart technology, every aspect of air, freight, and automotive transport can be made safer, more efficient, and more cost-effective. Self-driven and sensor-equipped cars can minimize accidents and improve highway efficiency. Key component failure-prediction can improve transportation safety.
We’re already improving our energy efficiency with intelligent power grids, self-managed office buildings and industrial plants, and smart meters. There’s even a smart, sensor-aware thermostat from Nest Labs, the brainchild of former Apple iPod developer Tony Fadell.
IBM says it has thousands of Smart programs in the works, including one that’s designed to monitor heavy rainfall, predict floods and mudslides, and evacuate areas before tragedy occurs. Another monitors home water usage and patterns, enabling communities to consume less, become aware of possible leaks, and better manage draught conditions.
What if you had an iPhone app that could locate vacant parking spots in a crowded city? Or better still, the vacant spot sends a signal to your car’s smart GPS navigation system.
What if hospital operating room doors locked if sensors detected an unacceptable level or type of bacteria on a surgeon? Or if hospital personnel could locate doctors in real-time?
GE CEO Jeff Immelt appears to be betting big on the Industrial Internet.” At All Things D’s D11 conference last month, Immelt said, “There is a massive business opportunity” in using big data and software analytics to “anticipate industrial equipment maintenance needs,” reduce downtime, and create what he calls, “guaranteed outcomes.”
According to a report by Wikibon, the Industrial Internet is supposed to generate $514 billion in revenue by 2020, up from just $20 billion last year. To capitalize on that opportunity, GE recently announced a common platform for intelligent machines, sensors, and software analytics called Predictivity.
The conglomerate also announced a new partnership with Amazon Web Services for cloud data storage and expanded partnerships with consulting giant Accenture and Pivotal, an Enterprise Platform-as-a-Service (PaaS) company run by former Microsoft, EMC and VMware executive Paul Maritz. GE recently invested $105 million in Pivotal.
With all these companies so heavily invested in the future of the Industrial Internet, it’s certainly worth exploring what kind of world this technology can eventually lead to.
Years ago, I spent a few months consulting for a Silicon Valley startup. The company, Dust Networks, developed groundbreaking technology in the field of wireless sensor networks. That’s how I became immersed in the world of Smartdust and The Internet of Things.
After countless PowerPoint presentations, an afternoon with Dust co-founder and U.C. Berkeley professor Kris Pister, and who knows how many articles, I was still confused about what it all meant. That’s when I came upon an explanation that finally resonated with me, from an article in The Economist:
“What if there were two worlds, the real one and its digital reflection? The real one is strewn with sensors, picking up everything from movement to smell. The digital one, an edifice built of software, takes in all that information and automatically acts on it. If a door opens in the real world, so does its virtual equivalent. If the temperature in the room with the open door falls below a certain level, the digital world automatically turns on the heat.”
That incredibly prescient vision came from an early 1990s book called “Mirror Worlds” by Yale University Computer Science professor David Gelernter. The real and digital worlds are indeed converging. And while many will almost certainly look at it fearfully – thoughts of The Matrix swirling around in their imaginations – consider this:
In our endless search for the next big thing, we’ve consistently created technology that’s made our lives more and more complicated. Isn’t it about time we create technology that reduces that complexity and makes our lives easier, safer, and more comfortable?
Call it whatever you want; I think this planet needs it.
Steve Tobak is a Silicon Valley-based strategy consultant and former senior executive of the technology industry.

Rivals Microsoft and Oracle team up on push into cloud

(Reuters) – Microsoft Corp said on Monday it would support Oracle Corp software on its cloud-based platforms, a tie-up aimed at improving the rivals’ chances against nimbler Web-based computing companies chipping away at their traditional businesses.

The two industry leaders have competed for decades to sell technology to the world’s largest companies. But they face growing pressure from new rivals selling often-cheaper services based in remote data centers, and they are rushing to adapt.

The two companies have long collaborated out of the public eye to meet customers’ needs, Microsoft Chief Executive Steve Ballmer said on a conference call. “In the world of cloud computing, I think behind-the-scenes collaboration is not enough.”

The tie-up does not resolve major competitive challenges the two tech pioneers face in the cloud market, but their cooperation was seen as a symbolically important step.

“Is it a game changer today? Not at all. It shows both companies are serious about their cloud endeavors. The fact that historical competitors are now friends speaks to how big the cloud opportunity is. And it opens up potential avenues of growth down the road,” said Daniel Ives, an analyst at investment bank FBR.

Under the agreement, customers will be able to run Oracle software on Microsoft’s Server Hyper-V and on Windows Azure platforms, the companies said.

Microsoft will offer Oracle’s Java, Database and WebLogic Server to Windows Azure customers, while Oracle will also make Linux available to Windows Azure customers, the companies said in a news release.

Ironically, the pact means Microsoft is effectively promoting Linux and Java-based software, longtime rivals to its own Windows platform. But the software maker stands to benefit from getting any customer to pay for its datacenter services, regardless of the underlying software being used.

No. 3 software maker Oracle last week missed expectations for software sales for the fourth quarter, sending its shares plunging. Investors worried that the company may have trouble competing with software providers like Salesforce.com and Workday, as well as Amazon.com, which has also become a major player in cloud computing infrastructure.

Top software maker Microsoft’s large-scale cloud computing initiative, called Azure, has failed to catch up with Amazon’s cloud offering, called AWS (Amazon Web Services), which blazed the trail in elastic online computing services in the cloud.

The rivalry between Oracle and Microsoft dates back several decades and has been marked by a personal rivalry between the companies’ best-known cofounders: Larry Ellison and Bill Gates.

In 1995, as the Windows franchise was taking off, Ellison began a high-profile but unsuccessful effort to promote a less expensive competitor to the personal computer known as the Network Computer. Gates began aggressively attacking Oracle’s core database business in the late 1990s, infuriating Ellison as Microsoft’s less-expensive SQL Server gained market share.

In recent years, both have come under attack from a wave of younger companies, like Workday and Salesforce, which charge a single subscription fee for software and support, at far lower margins than for Oracle’s traditional products.

Ellison told analysts on last Thursday’s quarterly conference call that Oracle had forged alliances with Microsoft and Salesforce.com, which uses Oracle’s technology, and said he would announce details this week.

Over the past five years, shares of Amazon.com, which rents remote computing and storage to other companies, have surged 237 percent. Salesforce.com, founded by former Oracle executive Marc Benioff, has risen 105 percent.

During the same half decade, Oracle’s stock has risen 38 percent and Microsoft’s shares are up 21 percent.

(Reporting by Noel Randewich Additional reporting by Jim Finkle in Boston,; Editing by Richard Chang)

LinkedIn: How it’s changing business (and how to make it work for you)

Shortly after Sallie Krawcheck got pushed out of Bank of America, the high-profile banker found herself in need of a professional makeover. As she tried to figure out what to do next, she wrote a few newspaper opinion pieces to build her reputation. She didn’t get much response. When she published something, she’d hear from a friend or two, but that was about it. Then, last fall, LinkedIn recruited her to be a member of its Influencer program, which publishes blog posts and promotes them to the social network’s members. In an early piece she offered advice on being fired. “No one cares about it nearly as much as you do,” she wrote.
LinkedIn readers loved it. The piece has garnered 212,000 page views to date, and several other publications have excerpted it. More than 1,300 people have commented on it, and for the most part their comments are civil, because they have logged on to LinkedIn with their real, professional identities. Not all of Krawcheck’s posts were so popular, but her writing consistently found a large audience, and so far 200,000 LinkedIn users have signed on to “follow” her. So in May, when she purchased the Wall Street women’s network 85 Broads, she broke the news on LinkedIn. Says Krawcheck: “I was really interested by the engagement that occurred. I just can’t beat the professional audience I find there.”

Apple looking at bigger iPhone screens, multiple colors: sources

(Reuters) – Apple Inc is exploring launching iPhones with bigger screens, as well as cheaper models in a range of colors, over the next year, said four people with knowledge of the matter, as it takes a cue from rival Samsung Electronics.

The moves, which are still under discussion, underscore how the California-based firm that once ruled the smartphone market is increasingly under threat from its aggressive South Korean competitor. Samsung has overtaken Apple in market share through the popularity of its bigger-screen Galaxy “phablets” and by flooding the market with a range of products at different prices.

Apple is looking at introducing at least two bigger iPhones next year – one with a 4.7-inch screen and one with a 5.7-inch screen – said the sources, including those in the supply chain in Asia. They said suppliers have been approached with plans for the larger screens, but noted it is still unclear whether Apple will actually launch its flagship product in the larger sizes.

“They constantly change product specifications almost to the final moment, so you’re not really sure whether this is the final prototype,” said one person with direct knowledge of the matter.

Apple declined to comment.


Apple’s possible shift to offer what is often referred to as “phablets” – chunkier smartphones not quite big enough to qualify as tablets – comes as the long-time consumer and investor darling faces pressure to deliver more than one new handset model a year. Critics say its pace of innovation has slowed since the death of legendary co-founder Steve Jobs.

The iPhone 5 launched last September was the first to veer away from the Apple phone’s 3.5-inch screen, which Jobs famously deemed “the perfect size for consumers” and had been used in every iPhone since the iconic device was unveiled in 2007.

The current iPhone 5 has one of the smaller screens among the best-selling smartphones in the mobile market, where consumers spend more time browsing the web and streaming content. Samsung’s Galaxy S4 and Galaxy Note 2 have 5-inch and 5.5-inch screens, respectively.

For this year, Apple is expected to launch two new models, widely referred to as the iPhone 5S, with new fingerprint technology, and a cheaper version in plastic casing, supply chain sources have said. Apple plans to dress up the cheaper phone in a range of 5-6 colors to differentiate it from the more expensive model that has traditionally come only in black and white.

The U.S. firm has discussed a price of $99 for the cheaper phone, the timing of which could slip to next year, one of the people said. It’s not yet clear what the final price would be.

Apple – whose revenue growth has decelerated from the heady days of 2010 when it introduced the iPad and when the iPhone was the world’s top selling smartphone – has sought ways to re-energize its flagship line.


Analysts say the company needs a cheaper gadget to push on in growth markets in China and India, and to counter Samsung’s edge in having phones priced up and down the spectrum. China, the world’s biggest smartphone market, is set to grow 48 percent this year, outpacing the global increase of 31 percent, according to industry forecasts.

While Apple only offers a single phone model across all markets, it has successfully marketed the iPod music player and its iPad in different sizes and at varying prices. Asked at last month’s AllThingsD industry conference why Apple hasn’t launched different sized iPhones, CEO Tim Cook said: “We haven’t so far. That doesn’t shut off the future.”

He explained that the range of iPods serve different audiences and needs. “On the phone, that’s the question. Are we now at a point to serve enough people that we need to do that?”

Cook noted a larger screen comes with trade-offs on features such as battery life, resolution and brightness.

Test production for both the standard and cheaper iPhone models aims to start next month, with mass production ramping up in August to meet a September launch target, two people said.

“Trial production was originally planned to start in June, but the mixing of colors is taking longer than expected as Apple has very high and idealistic standards,” said one source in Asia, adding 20 million plastic iPhones are expected to ship in the October-December quarter.

Japan’s Sharp Corp and Japan Display and South Korea’s LG Display will supply the panels for the aluminum iPhone 5S and the plastic iPhone, while Hon Hai Precision Industry will assemble the higher-end phone and Pegatron will put together the cheaper model.

(Additional reporting by Mari Saito and Miyoung Kim; Editing by Ian Geoghegan)

Researchers, Using Light to Activate Neurons, Make Mice Obsessive, or Not

Mind-control optogenetics experiments in mice give new clarity to the neural circuitry that underlines repetitive behaviors.
By Susan Young on June 6, 2013.

Two teams of researchers have pinpointed some of the neural circuitry that underlies compulsive grooming behaviors. The discoveries, reported in Science on Thursday, could guide new treatments for people with obsessive-compulsive disorder, autism, and other conditions that exhibit symptoms of repetitive and compulsive actions.

Using so-called optogenetics techniques, which precisely control neuron activity with light, one of the groups induced repetitive grooming behaviors by stimulating a neural circuit known to be overactive in OCD patients. The obsessive grooming behaviors persisted even after the light stimulation stopped. The other team used optogenetics to alleviate repetitive, compulsive grooming in a strain of mutant mice born with the behavior defect.

The neural circuits studied by each team are both part of the larger neural network implicated in repetitive behaviors in people. More broadly, understanding the structure and activity of neural circuitry could be key to understanding a variety of mental illnesses, say scientists. The U.S. government is funding a large research effort (see “Why Obama’s Brain Mapping Project Matters”) into the workings of the brain that could also bring a greater understanding to these issues.

To figure out if the circuit disruptions observed in OCD patients are a cause or effect of the disorder, Susanne Ahmari, a neuroscientist and psychiatrist at Columbia University, and colleagues used optogenetics to stimulate in mice a neural circuit known to be hyperactivated in OCD patients. They expected to see repetitive behavior in the mouse as soon as they stimulated the circuit, but they didn’t. “This was a surprise to us,” says Ahmari. “The direct activation did not lead to repetitive behaviors in the mice.” But when they repeatedly stimulated the neural circuits, the mice developed obsessive behaviors.

The stimulation lasted for only five minutes each day, but by the fifth day, that stimulation was enough to change the circuits, says Ahmari. She and her coauthors demonstrated that the repeated stimulations led to increased firing of the circuit; they suggest that the repetitions prime the circuit so that it is more likely to fire, perhaps stimulating even more circuits downstream. The repetitive grooming behavior persisted for up to two weeks after the researchers stopped the daily stimulation.

In a separate study, MIT researchers looked into the brains of a strain of mice that exhibit repetitive behaviors to find out which circuits are abnormal in the brain during compulsive disorders. The team found that when the mutant mice groomed their faces in a compulsive manner, a particular brain circuit—one related to the circuit studied by Ahmari— exhibited less neural activity. Using optogenetics, the investigators were able to boost the activity of the diminished circuit in the mutant mice. This blocked the animals’ compulsive behaviors, even in the midst of a bout of excessive grooming.

This could have implications for next-generation therapies, says senior author Ann Graybiel, a neuroscientist at MIT. In patients with hard-to-treat cases of OCD, some doctors have turned to implanted electronic devices that emit electrical pulses to reset malfunctioning neural circuitry (see “Brain Implants Can Reset Misfiring Circuits”). These devices deliver their electrical stimulation on a preprogrammed cycle throughout the day. The mouse optogenetic experiment points to a healthier option. “[That result] suggests that treatments such as deep-brain stimulators for OCD patients may not always have to be on. Maybe you can just turn it on when you feel a compulsion coming on,” she says.

The pair of “cutting-edge and insightful” studies “illuminates the neurocircuitry of compulsive behavior with unprecedented clarity,” write Harvard Medical School psychiatrist Scott Rauch and neuroscientist William Carlezon in an editorial in Science. “Although there is still far to go, these discoveries represent a major leap forward toward eventual methods for ‘flipping the off-switch’ on pathological behaviors.”

European cyber cop declares Microsoft’s Citadel bust a success

(Reuters) – Europol said a global effort led by Microsoft Corp to stop one of the world’s biggest cybercrime rings has succeeded in wiping out the malicious computer networks that the gang used, known as the Citadel Botnets.

Microsoft’s Digital Crimes Unit, with help from authorities in more than 80 countries, on Wednesday cut off the servers controlling as many as 5 million infected PCs that belonged to the Citadel cyber crime operation, which is believed to have stolen more than $500 million from bank accounts over the past 18 months.

“Basically the Citadel bug is now clean,” Troels Oerting, head of Europol’s European Cybercrime Center, said on Thursday.

The details are still emerging about the individual roles that dozens of countries across Europe and Asia played in bringing down the estimated 1,400 botnets that were part of the Citadel operation.

Andy Archibald, interim Deputy Director of Britain’s National Cyber Crime Unit, said on Thursday that his agency had seized “a number of servers” as part of the effort and was closely working with the FBI on its investigation into Citadel.

Archibald said forensics experts were examining the servers.

Microsoft said on Wednesday that it had collected forensic evidence from two U.S.-based Internet hosting providers, under a federal court order that the company obtained by filing a civil lawsuit against the unknown operators of Citadel.

An FBI spokeswoman said she could not immediately say whether the evidence collected had brought investigators any closer to catching the culprits behind Citadel.

Citadel was used against dozens of financial institutions by stealing passwords with key logging software. The victims include American Express, Bank of America, Citigroup, Credit Suisse, eBay’s PayPal, HSBC, JPMorgan Chase, Royal Bank of Canada and Wells Fargo, Microsoft said.

Botnets are armies of infected personal computers, or bots, which run software forcing them to regularly check in with and obey “command and control” servers operated by hackers. Besides financial crimes, botnets are also used to send spam, distribute computer viruses and attack computer networks.

Microsoft said in its court filing that it suspects the developer of the Citadel software, who goes by the alias Aquabox, lives in eastern Europe and works with at least 81 “herders,” who may be running the bots from anywhere in the world.

The Citadel software is programmed so it will not attack PCs or financial institutions in Ukraine or Russia, likely because the creators operate in those countries and want to avoid provoking law enforcement officials there, Microsoft said. (See graphic link.reuters.com/vem68t) (See legal documents here)

(Reporting by Thomas Escritt in Amsterdam and Brenda Goh in London; Writing by Jim Finkle; Editing by Tiffany Wu and Tim Dobbyn)


IBM to buy website hosting service SoftLayer

(Reuters) – International Business Machines Corp said on Tuesday that it would acquire database Web hosting company SoftLayer Technologies and create a new division for clients interested in cloud services.

The financial terms were not disclosed, but Reuters reported in March that IBM, among others, had been in talks to buy SoftLayer in a deal that could fetch more than $2 billion.

Dallas-based SoftLayer, which leases online storage space to companies, was founded in 2005 and has become what it says is the world’s largest privately held website hosting service. The company provides its 25,000 customers, including AT&T Inc and Citrix Systems Inc, with cloud infrastructure.

The company competes with Amazon.com Inc’s Web services, Rackspace Hosting Inc and Microsoft Corp.

Wells Fargo analyst Gray Powell estimated that the transaction was worth 11.1 times SoftLayer’s projected 2013 earnings before interest, taxes, depreciation, and amortization.

That compares with Rackspace, which is currently trading at 11 times 2013 estimated EBITDA, Powell noted.

Over the last few years, Web hosting companies have been considered attractive takeover candidates as technology and telecom companies look to improve the performance and cost efficiencies of their cloud computing services for businesses.

“We believe this is a solid deal strategically in helping bolster IBM’s positioning in higher-growth cloud services and providing a stronger alternative to more established vendors,” ISI Group analyst Brian Marshall wrote in a note to investors.

For IBM’s part, SoftLayer is helping the company build out its private and public cloud-based services for its clients. IBM said it expected to gain $7 billion annually in revenue from cloud services by the end of 2015.

It created a new division called Cloud Services, which will combine SoftLayer and IBM’s existing offerings into a global platform.

SoftLayer is majority held by GI Partners, which purchased all of the equity in partnership with the company’s management in August 2010.

IBM said it expected the deal to close in the third quarter.

Shares of IBM were down 0.9 percent at $207.02 in midday trading.

(Reporting by Jennifer Saba in New York; Editing by Lisa Von Ahn)