eBay's PayPal Scoops Up Fraud Sciences

On Monday, eBay announced that its PayPal payment-services unit would acquire Fraud Services, a privately held Israeli company, for $169 million. Based in Tel Aviv, Fraud Sciences is a venture-capital-backed startup formed in April 2006, specializing in online risk assessment. Fraud Sciences' technology is designed to ferret out fraudulent credit card purchases by verifying that the person making the transaction is in fact the cardholder. The company's technique, known as "identity proofing," builds on existing behavioral and pattern-matching tactics that many online retailers and payments processors already use to detect fraud. "At PayPal we use the same type of tools, and we feel that Fraud Sciences technology is going to be very complementary," PayPal spokeswoman Sarah Gorman told InternetNews.com. Gorman said that Fraud Sciences' technology will build on what PayPal calls its neural detection technique, which approaches identity verification from the buyer and seller side. "It literally gets smarter with every transaction," Gorman said. Fraud Sciences has claimed that its system is 99.9 percent accurate, significantly reducing acceptance rates of fraudulent transactions, as well as the false negatives that reject legitimate purchases. The technology works by evaluating a composite of the purchaser's digital history to ensure that he is both a real person and the authorized cardholder. Beyond that, Gorman won't say what's in the secret sauce. The acquisition makes good on the promise that President and CEO-in-waiting John Donahoe made on last week's earnings call. Donahoe said that he would move aggressively to improve the safety and reliability of the shopping experience at the e-commerce giant. Risk tools relating to identity verification will improve the security of online transactions executed through PayPal, but eBay's payment-services division has run into other types of fraud over the years, particularly phishing. Gorman said that the acquisition of Fraud Sciences is just the first of many security-related enhancements that eBay will make this year. Tuesday morning, eBay is expected to make a series of announcements at the annual e-Commerce Forum in Washington, D.C. Some could involve other security aspects, such as phishing and counterfeit protection, Gorman said. eBay is also expected to announce pricing changes to its listing fees, fulfilling another promise made by executives last week. eBay said that it expects the acquisition of Fraud Sciences to close within the next 30 days, and that it should not significantly alter its 2008 financial guidance. Fraud Sciences will continue to operate out of Tel Aviv, and most of the company's employees will be offered jobs with PayPal, Gorman said. Fraud Sciences' executive team will work closely with PayPal during the transition.

Stocks Fall Despite Strong Earnings

Better than expected results from a number of top technology names boosted stocks in the early going Friday, but sellers soon took over to send the market sharply lower. Despite extreme volatility, Wall Street managed to finish the week with small gains in the Dow and S%26amp;P and just a 0.6% loss in the Nasdaq, as the Federal Reserve's biggest emergency rate cut since 1982 saved stocks from much steeper losses. Microsoft, Sun Microsystems, Juniper Networks and Broadcom were among the names posting better than expected results late Thursday. All opened sharply higher Friday morning but ended the day mixed, with Microsoft and Juniper lower and Sun and Broadcom posting small gains. The selling started as the S%26amp;P 500 neared the 1370 level, the bottom of a 15-month trading range the index broke down out of last week, as traders began lowering their expectations for more rate cuts when the Federal Reserve meets next week. Expectations are for a one-quarter to one-half point rate cut, less than this week's three-quarter point emergency rate cut. E*Trade was a big gainer, up 8% on a restructuring plan, and Microchip Technology and Compuware were higher on their results. InsWeb jumped 29% after finishing its first year of profitability. Motorola rallied 6% despite an S%26amp;P credit rating cut, as the company rebounded from an 18% drubbing earlier this week. Synaptics, PMC-Sierra and Integrated Devices fell on their results. The Nasdaq lost 34 to 2336, the S%26amp;P fell 21 to 1330, and the Dow tumbled 171 to 12,207. Volume declined to 4.92 billion shares on the NYSE, and 2.65 billion on the Nasdaq. Decliners led by a 19-14 margin on the NYSE, and 16-14 on the Nasdaq. Downside volume was 73% on the NYSE, and 72% on the Nasdaq. New highs-new lows were 21-84 on the NYSE, and 42-114 on the Nasdaq.

Microsoft Gives Tech Stocks Reason to Rally

After leading the tech sector higher during the day, Microsoft kept the rally going after hours Thursday with another quarter of better than expected results and guidance. Microsoft shares rose 4% in late trading on top of a 4% rise during the day after the company posted a 30% sales increase to $16.37 billion, beating out the $15.95 billion that analysts expected, according to Thomson Financial. Microsoft's earnings of 50 cents a share were four cents better than expected, and the company's current quarter and full-year guidance were also as good or better than Wall Street analysts anticipated. Microsoft cited strong sales of Windows Vista for the results. The report was welcome news for a tech sector reeling from disappointing results from bellwethers like Intel and Apple, and added to a dramatic two-day rally on hopes for an economic turnaround. Juniper Networks was another big gainer in late trading, rising 8% on a 73% jump in earnings, and that coming on top of a 7% rise ahead of the report. The latest good news for the economy was a quick agreement by congressional leaders on a $145 billion economic stimulus package, the latest government effort to rescue the market and economy from the subprime mortgage market meltdown. eBay was left out of Thursday's market rally, falling 6% after lowering its current quarter outlook and announcing the retirement of CEO Meg Whitman. Qualcomm and Symantec were big winners after beating estimates, up 10% each, and Nokia soared 12% on its results, a sharp contrast to Motorola's 18% drop a day earlier. F5 and LSI rose more than 20% each on their earnings news, while Mercury Computing fell 32% on its results. AT%26T shed 3% after the company met estimates. Internet stocks were strong, with Yahoo, Google and Amazon up 5% or more, and HP, Dell and Cisco gained 4% each. The Nasdaq rose 44 to 2360, the S%26P gained 13 to 1352, and the Dow rose 108 to 12,378. Volume declined to 5.7 billion shares on the NYSE, and 3.05 billion on the Nasdaq. Advancers led by a 21-12 margin on the NYSE, and 17-13 on the Nasdaq. Upside volume was 64% on the NYSE, and 73% on the Nasdaq. New highs-new lows were 16-79 on the NYSE, and 43-130 on the Nasdaq.

HP-UX Version 12? Don't Hold Your Breath

Some pieces of software seem to jump version numbers with every minor revision, while others seem to never change. In the case of HP's flagship Unix offering HP-UX 11i, HP is in no rush to move to version 12. That doesn't mean that the company isn't continuing to improve its Unix offering, however. Yet while the product receives updates, it won't get a new number in the near future because HP wants to communicate that applications will continue to run smoothly on any 11-series release, even on the newest versions. "If we move to a version 12, that would be a flag that something has changed and that users and developers need to recode or re-compile," Brian Cox, worldwide director of BCS software marketing, HP told InternetNews.com. "As it is, you can take any application from the very first HP-UX version 11 up to the recent HP-UX 11i Update 3 and it will run." "Our customers and partners hold compatibility of their applications to be at such regard that we don't want to violate that trust," Cox said. Though HP has shied away from moving its major version numbers forward, it hasn't stopped from putting out major releases. The most recent major update of HP-UX 11i was Update 3, which was released nearly a year ago in February 2007. HP's updates also have lengthy supported lifespans, with Update 3 set to be supported by HP until 2017. Cox explained that with HP-UX 11i version 1 and Update 2, the emphasis was on scalability. With Update 3, HP started building out the foundation for virtualization. In Update 4, which isn't expected until at least 2010, the plan is to provide better manageability of virtualized environments and even higher uptime levels than currently possible, Cox said. HP has also been busily producing interim enhancement releases between major updates. The interim releases, which come out every six months, provide bug fixes and other small tweaks. Following the Update 3 release in February 2007, HP issued a interim update in fall, codenamed "Vitality," Cox said. "Then, coming out this spring, we have another enhancement codenamed 'Versatility,' and then six months after that, the update is codenamed 'Vibrancy,'" Cox said. "We'll continue to march that forward until version 4, which will be a major new release." HP's release schedule has entailed some massive changes for the operating system. With the HP-UX 11i release, for instance, HP embraced the new Unix03 standard which aims to provide application portability across Unix03-certified operating systems. To date, IBM's AIX 5L V5.3, Sun Solaris 10 as well as Apple's OS X version 10.5 (AKA "Leopard") have been certified to be Unix03-compliant. HP's joining the ranks marked a significant development not just for HP-UX -- for which Unix03 was just the latest in a long wave of Unix certification efforts over the years -- but for the industry. "Standardization for the API's makes it easier for software developers to write and port code and it lowers their cost of maintenance," Cox said. "It's in classic contrast with the mainframes of the past where portability didn't exist."

Thank Warner Bros For Blu-ray Sales Spike?

There was much celebrating and gloating from the Blu-ray community across the Internet this week as weekly numbers from market researcher NPD Group seemed to indicate the near-even split in sales between Blu-ray and HD DVD had become completely one-sided. However, NPD cautions not to start dancing on HD DVD's grave. First off, HD doesn't have a grave yet, secondly, one week of numbers do not a trend make. Blu-ray and HD DVD are two competing formats battling it out for the chance to replace your DVD player as the next generation home media playback format. Both are fairly similar, with the only real difference being capacity. A single layer HD DVD disc holds 15GB of data while a single layer Blu-ray disc holds 25GB. HD DVD was developed by Toshiba while Blu-ray is a Sony creation. The two have been battling for the market for almost a year now, with the slight edge going to Blu-ray but not enough to put away HD DVD. Then it all seemed over in a flash when on the eve of CES, Warner Bros announced it would go exclusively Blu-ray. The HD DVD Consortium cancelled its CES events while the Blu-ray camp spent the entire conference gloating. The figures were not officially disclosed by NPD, a subscriber with access to the numbers let them out. NPD doesn't disclose weekly numbers because it says such short term data can give an inaccurate picture. "Weekly data can be very volatile and is designed to be used tactically," Stephen Baker, vice president of NPD, explained to InternetNews.com. "Because of that, brands and retailers can do all sorts of things in one week to change the direction of a category for a week. That's typically not a hard thing to do." However, Baker admitted he'd never seen a change this bad. For the week ending January 5, 2008, Blu-ray Disc player sales were at 15,257 units, while HD DVD player sales were at 14,558 units, for a near 50-50 split. One week later, after the Warner decision to stop supporting both Blu-ray and HD DVD and support Blu-ray only, the numbers went totally lopsided. Blu-ray sales were 21,770 units, a 42 percent gain, to HD's 1,758, an 88 percent plunge. On top of that Nielsen VideoScan reported the top selling high definition DVDs for the week of January 13, and it was entirely Blu-ray titles, with the critically-praised film "3:10 To Yuma" topping the list and three from the "Harry Potter" series making up the listing. Those "Harry Potter" titles are also available on HD DVD, as they are Warner titles and Warner does not go exclusive until the summer, but it reflects the difference in unit sales between the formats. "It was obviously a big shift, and I'm not saying %26#91;the Warner decision%26#93; didn't have anything to do with it," said Baker. "It likely did but there were other things to do with it as well." The following week, Toshiba made drastic cuts to its HD DVD players, slashing the prices by half, and that data is not in yet. Baker said NPD doesn't plan on releasing it, but added with a laugh "who knows what ends up out there again," in reference to DVD fan sites. Van Baker, research director with Gartner, said he was inclined to think the Warner deal did cause the huge shift. "It all depends on what films have been released recently and what promotions took place," he said. "That said, the Warner announcement and Microsoft comment, when they came out and said they could shift to a Blu-ray based Xbox easily, kinda pulled the rug out from under HD DVD." Microsoft's Xbox 360 console has an add-on HD DVD drive for $149. The company was asked at CES if a similar Blu-ray drive would be possible and company officials said it was easy enough to do. It just didn't say it would make a drive any time soon. Van Baker doesn't think HD DVD owners are abandoning their players, but it might be making people get off the fence. "What could be giving rise to this is some people who have been reticent, maybe they have a PS3 in the house, are now saying 'oh it's over now, I can buy movies.' So people who may have been on the fence are feeling justified in buying movies now." He said his bet is that the Blu-ray/HD format war "will be over by this Christmas. But we'll have to wait and see."

Zend Expands PHP Development and Deployment

For Zend Technologies, PHP is a lot more than just an open source programming language. Zend, the lead commercial backer behind PHP, is pushing its vision of PHP as a prominent platform for development and deployment of mission-critical applications with a pair of new products. Zend Studio for Eclipse is Zend's new PHP IDE(define), and Zend Platform 3.6 is the latest release of the company's enterprise-deployment platform for PHP. The new releases are part of the PHP vendor's strategy to move from point products to a complete suite for the application life cycle, as PHP continues to makes inroads against both Java and .NET. "When our customers build mission applications they take the whole Zend solution, since we deal with the whole life cycle from development to staging to production," Andi Gutmans, Zend's CTO, told InternetNews.com. "So they use Zend Core for their certified PHP, they use Zend Platform for getting performance, scalability and reliability for their production servers and then they use Zend Framework across the board to get the right methodology and best practices," Gutmans added. The Zend Platform got under way in 2005 with the last major release version 3.0 in February 2007. In the new version, 3.6, Zend has focused on further improving the performance of PHP deployments. "Performance management starts when a user clicks on a URL and until they get what they're looking for," Gutmans noted. "So we mapped that whole process and looked at where we could improve." One of the key improvements in Platform 3.6 is the ability to cache model view controller%26#150;based applications, which are increasingly popular in framework deployments. Gutmans explained that with the new MVC caching capabilities, instead of caching on a file basis Zend Platform can now cache on a URL basis. Additionally, Zend Platform allowed for high-performance sites to cache in shared memory, which further improves PHP delivery performance. While Zend Platform is available for both Linux and Windows Servers, Gutmans commented that the 3.6 release is geared toward Linux. "We're now working with Microsoft toward Windows Server 2008 and working on a road map for how to work with it," Gutmans said. Zend and Microsoft have a working partnership to make PHP run well on Windows platforms. On the development side, Zend's IDE version of Zend Studio has long been primarily used on Windows, and that's not expected to change with the new release of Zend Studio for Eclipse. The new Zend Studio for Eclipse is the first official release from Zend of its IDE based on the Eclipse PHP Development Tools (PHT) project. Gutmans noted that Zend had more than 15,000 beta testers for Zend Studio for Eclipse, and the feedback received helped to make the final release a more stable product. Because the new Zend Studio is based on Eclipse, developers can now leverage the full Eclipse ecosystem of plug-ins to further expand the capabilities of the IDE. While Zend is pushing its new Eclipse-based IDE, it's not abandoning its non-Eclipse Zend Studio 5.5 customers. Zend has not officially set an end-of-life date yet for the non-Eclipse Zend Studio and has pledged to keep it current for minor fixes in a maintenance mode. "I think right now we have a very solid story for business-critical applications," Gutmans said. "What we're seeing today at Zend is that it's changing the way we work with customers," he added. According to Gutmans, the company set out on this path two years when it began working with Eclipse and Framework. "It's a strategy we've been seeing the benefit of," Gutmans noted. That's not to say there still isn't work for Zend to do to further improve PHP development and deployment. "I'm the CTO, so I always think there should be more that we should be doing," Gutmans said. "I want to do more around RIA (Rich internet applications), methodologies and more around business critical deployments. There is always a lot of work for Zend."

Yahoo, T-Mobile Team on Wireless Advertising in U.K.

As Yahoo continues to position a greater share of its business in the mobile space, it has formed another partnership with a major wireless carrier. On Thursday Yahoo announced that it has signed an exclusive agreement with T-Mobile to provide display advertising on the carrier's Web 'n' Walk Internet service in the United Kingdom. "We are focused on extending our leadership in both display advertising and in mobile services, and this new partnership demonstrates our continued momentum," a Yahoo spokesperson wrote in an e-mail to InternetNews.com. Under the agreement, Yahoo will become the exclusive provider of graphical ads on the T-Mobile Internet service in the U.K. The two companies expect the ads to go live in the first half of this year. In November 2006, Yahoo brokered a similar ad partnership in the U.K. with Vodafone. Together, the deals give Yahoo exclusive advertising rights to two of Britain's top five wireless carriers. The advertising deal is the first major news from Yahoo on the mobile front since the first week of January, when the company outlined several initiatives for enhancing Web content on wireless devices. The announcement included a mobile-widget program aimed at bringing in more content and Web applications from third parties. "We're committed to creating the best and richest mobile experience for all consumers, making it extremely personalized to their individual style and needs while opening up the Yahoo mobile platform to allow anyone to participate," Yahoo CEO Jerry Yang said in his keynote address at the International Consumer Electronics Show in Las Vegas. Last March Yahoo signaled its commitment to the wireless market with the launch of the Mobile Publisher Services platform, a suite of services aimed at brokering deals between publishers and advertisers looking to cash in on the fast-growing mobile sector. Mobile deals don't end with advertising, however. Yahoo, long hailed as the portal king, has signed numerous agreements with wireless carriers in Europe, Latin America and Asia to make its OneSearch the default home page for subscribers who surf the Web on their handset. Yahoo does not currently have exclusive advertising or content partnerships with any wireless carrier in the United States, but the company has been working actively with all major providers to stake a claim in the U.S. market.