Bebe stores confirms card card breach

Bebe Stores Inc said it detected a hacking attack on its payment processing system that could have compromised data from cards swiped in its stores in the United States, Puerto Rico and US Virgin Islands. 

The exposed data may have included cardholder names, account numbers, expiration dates and verification codes, the women's apparel retailer said. 

Bebe, which also operates stores in Canada, said the affected transactions were made between November 8 and November 26, the day before Thanksgiving. 

Security blog KrebsOnSecurity said that hackers may have stolen credit and debit card data from bebe during Thanksgiving and Black Friday. 

Bebe is the latest retailer to fall prey to hackers. 

Previous victims included Home Depot Inc, Target Corp, Sears Holdings Corp and Michaels Stores Inc. 

Bebe said online transactions were not affected. 

"We moved quickly to block this attack and have taken steps to further enhance our security measures," chief executive Jim Wiggett said in a statement. 

Bebe operates 175 retail stores and 35 outlet stores in the United States, US Virgin Islands, Puerto Rico and Canada.

Google, Microsoft and others take on ad-blockers

Imagine being able to surf the web and watch videos online without having to swat away pesky pop-up ads?

These days you can, thanks to small programs like Adblock Plus that are available free for download and that arm your browser to defend against ads.

Flashing banner ads, "pre-roll" ads (short ads that play before a video), pop-up notices that cover the whole screen — few of them make it past ad blocking software.

In the beginning, the applications acted under the radar, and were known mainly only to young people or the really tech-savvy. But now they're catching on.

Adblock Plus has nearly five million active users in France, with a further two million in the United Kingdom and 1.5 million in Spain.

Worldwide, they have amassed about 144 million active users, up 69% in a year, according to a September report from Adobe software developer and PageFair, a company that helps publishers see which ads are being blocked.

Depending on the website, the percentage of viewers equipped with ad-blocking software ranges from 10 to 60%.

Internet users may dream about ad-free surfing, but for advertisers and web publishers, who rely on ads to fund content, ad-blocking applications are the stuff of nightmares.

"This is no small matter; it affects all publishers. Our members have lost an estimated 20-40% of their advertising revenue," Laure de Lataillade, CEO of GESTE, an association of web publishers in gaming, media, music and other domains, told AFP.

The growing popularity of ad blockers comes as companies plough more and more money into internet advertising. A quarter of the 545 billion dollars spent on global advertising this year went on digital ads.

To protect that investment, a group of publishers in France, including Google, Microsoft and Le Figaro newspaper, have threatened legal action against the developers of ad blocking software.
In Germany, too, publishers are alarmed at the success of the anti-ad workarounds. "There have already been some companies that have lodged a formal complaint," Oliver von Wersche, head of digital marketing at Gruner + Jahr, publishers of Stern news magazine and several other leading titles, told AFP.

Websites, meanwhile, are experimenting with a range of strategies to placate ad-addled audiences. French sports daily l'Equipe's website is using a carrot-and-stick approach.

Users with ad-blocking software who attempt to watch videos receive the message: "Unauthorized access. L'Equipe.fr is funded by advertising, which allows us to offer you free content."

Once they deactivate the software they can gain access to the video. "We have to find a viable economic model. Either the user pays for a premium model or he accepts advertising," said Xavier Spender, deputy managing director of L'Equipe group.

Sean Blanchfield, CEO of PageFair, compared the campaign against ad blockers to the music industry's takedown of the file-sharing program Napster a decade ago.

"They should instead learn from the Napster story that the users will ultimately get what they want," said Blanchfield, whose company works with publishers to devise ads that "respect users' privacy".

For Helene Chartier, head of French web developers' union SRI, the big mistake was to let users believe the internet was free in the first place, considering "there was never a problem with ads on television or radio."

Industry professionals said the growing rejection of ads — and the shrinking space for them on mobile devices — should spur advertisers to come up with less intrusive messages.

In a sign of how seriously the problem is being taken in the industry, Google has launched an alternative to web advertising.

Called Google Contributor it charges users between 1 and 3 dollars a month to be spared ads, with the fee going to the affected websites.

In levying the fee Google urges users to "support" their favourite websites. The idea is currently being tested on around a dozen US websites, including The Onion, Science Daily and Mashable.

Great Google mystery: The missing Nexus

Nexus 6 is launched but, as ever, legions of Indian fans won't get their hands on one.

 This tale from a technology sector CEO illustrates an unusual thing about an iconic global technology giant. Vijay Shekhar Sharma, CEO of Paytm, is a devoted fan of Google's Nexus smartphone. Sharma is waiting to upgrade to Nexus 6 and has to wait patiently till it's available online on Flipkart, which is the only Indian outlet, online or offline, for the phone. 

The Paytm CEO's frustrating experience is shared by many, many Nexus smartphone fans. Google, as formidable a marketing machine as any globally, has put its weight behind low-cost Android One phones in India, spending Rs 100 crore in the project. Nexus, on the other hand, is not marketed by Google and is rarely marketed by its hardware partners LG, Motorola and HTC either. 

Even as Android One had a tepid start, market analysts and retailers say Google is missing a trick by not promoting the pricier Nexus phone more. "Instead of focusing on Android One, it would be a good call for Google to sell Nexus offline as it is a flagship product that has a good pull," says Satish Babu, founder of Chennai-based retail store chain UniverCell Mobiles, one of several large format chains willing to stock Nexus 6.

"There are takers for Nexus even at the high price," Babu said. He compared this with cheaper Android One phones, which have had a not-so-impressive run since their launch a few weeks back. 

Other mobile brick and mortar retailers — for example, Himangshu Chakravarti of MobileStore — agree with UniverCell Mobiles' Babu. They say there's a lot of latent demand for the high performing Nexus phone but supply is a problem, and Google can tap that by selling offline. 

Some Nexus fans are switching loyalty, not wanting to wait long for an upgrade to arrive. Paytm CEO Sharma says Xiaomi is one of the favourite options of those abandoning Nexus. "I've been waiting for it for some time now, but many Nexus 5 users waiting to upgrade to Nexus 6 have moved to Xiaomi's Mi 3 which offers almost the same specifications at roughly half the cost," Sharma says. 

Xiaomi's Mi 3 was launched in July at Rs 14,999. Nexus phones are in the Rs 20,000 to Rs 30,000 price band. The LG-made 4.95-inch Nexus 5 was launched in November last year, the fifth successor to Nexus 1 introduced in 2010. Nexus 5 is priced between Rs 22,000 and Rs 33,000 on e-commerce sites. Nexus 6, powered by Google's Android Lollipop operating system, has been made by Motorola. 

Nexus 6 was listed for pre-orders in the US late in October and all variants were reported to be sold out within a few hours. 

The story was the same in the UK. In India, initial stocks were pre-booked within a day or two. When asked by ET, Flipkart did not share the number of pre-orders. Nexus 6 may be available in Google's 3-day online sale beginning December 10. 

Hong Kong-based research firm Counterpoint Technologies estimates that around 2,00,000 Nexus 5 phones were shipped to India this year. Compare that with the 1.6-1.8 million Android-based smartphones that were sold in India this year in the same Rs 20,000-Rs 30,000 price band. Clearly, say analysts and retail traders, Google can sell far more Nexus phones than it is selling now — if it wants to. 

On the other hand, in just two and a half months since mid-September, a little under 500,000 Android One phones have been shipped to India, more than double the year-long total for Nexus 5 phones. 

But despite this, Android One hasn't quite taken off. In all 7 million smartphones in the Rs 6,000-Rs 8,000 price band, the range in which Android One phones are available, were sold in four months till October. With less than a half a million shipments, Google's low-cost smartphone was obviously a slow seller in this category. 

That Nexus is a story of untapped potential in India is also clear from the fact that India accounts for just 3,00,000 of the 9.9 million Nexus phones sold globally since 2010, according to data from Counterpoint Technologies. 

Android, both technology and mobile retail experts say, is a hugely popular operating system in India and Google's Nexus phones are ideally situated to exploit that popularity. Nexus, experts say, is the benchmark setting Android-based smartphone. 

Just a showpiece? 

Google responded to ET's query on undermarketing Nexus by saying: "We always introduce Nexus devices alongside our platform releases (such as Lollipop), as advances in computing are always driven at the intersection of hardware and software." 

Other explanations from analysts and experts were more detailed. Google works with hardware partners to build Nexus devices, and the idea is to help push boundaries of what's possible, say analysts tracking the sector. Nexus serves as a reference for the Android ecosystem. 

"Ideally, it would have been a good business case had Google entered into devices," said a Bangalore-based analyst who did not want to be named. He added that Google perhaps wants Nexus to simply serve as a reference point, a showcase for the power of hardware. 

Counterpoint's telecom analyst Tarun Pathak says Google may not want to scale up Nexus distribution to "avoid stepping into its manufacturing partners' toes" and that Nexus phones "may be mostly a showcase that's meant for developers first and then consumers."

Snapdeal, Ola investors turn down SoftBank buyout offer

As SoftBank was finalizing deals to infuse capital in Snapdeal and Ola last month, it also made an offer to buyout shares of angels and some venture-capital investors in both companies.

 As SoftBank was finalizing deals to infuse capital in online retailer Snapdeal and taxi aggregator Ola last month, the Japanese internet and telecom giant also made an offer to buyout shares of angels and some early venture-capital investors in both companies, according to multiple sources familiar with the matter. Most of them said no. 

It may not have been an easy offer to refuse as some of these early investors are sitting on returns of 100 times their investment on paper. They, however, see the value multiplying further. 

"I haven't sold any shares so far. If someone is offering a valuation which I expect the company to reach in the next one-two years, then I can think about it," said People Group founder Anupam Mittal, one of the early backers of Ola. Investments like Ola come once in a lifetime, he added. 

Mittal's decision underlines what has become a norm, of early capital investors holding on to their winners in risk capital business where returns come from a few portfolio companies. According to data from financial research platform VCCEdge, Indian e-commerce and online businesses have seen 694 investments totaling $5.56 billion since 2011. But there have only been 45 exits worth $295 million in that time. 

Ola, which is competing with global giant Uber and others in India, has seen its valuation increasing more than 10 times in the last 12 months. When the company announced its second round of funding in November 2013, it was valued at $40-50 million, according to sources. In July this year, it was valued at around $180 million when Hong Kong-based hedge fund Steadview Capital led a funding round. The latest investment from SoftBank gave the four-yearold startup post money valuation of nearly $650 million, perhaps underlining why the early investors are holding on to their bets. 

Besides Mittal, Ola's early backers include investor Rehan Yar Khan, Powai Lake Ventures and Snapdeal co-founders Kunal Bahl and Rohit Bansal. These angels had together pumped in Rs 2 crore in a few months after the company was founded in 2011. These investors are said to be sitting on more than 100 times their investment, which was primarily a bet on IIT Bombay alumni Bhavish Aggarwal and Ankit Bhati's ability to execute their vision. 

"There was an offer from SoftBank to the angel investors but none of them sold. They feel that it's a multi-billion-dollar opportunity now and why should I sell even a single share today," said another person involved in Ola's fundraising. 

A SoftBank spokesperson said: "We are not able to comment on investment details beyond what has been announced." Snapdeal and Ola declined to comment. 

Sources indicated that early VC investors in Snapdeal, which had a post money valuation of nearly $2 billion in the latest round, are sitting on at least 8-10 times returns on the capital invested. These investors see potential for the company's valuation reaching $5-10 billion in the coming years. 

While none of the investors in Snapdeal is completely exiting, Bessemer Venture Partners, who invested in the company three years ago, has made a partial exit in this round. The VC firm sold less than a third of its holding. 

Bessemer had invested in the company in 2011 at a valuation of $170-180 million and could make a profit of around five-six times the investment, said sources. Bessemer managing director Vishal Gupta didn't respond to an email seeking comment. 

Sources familiar with SoftBank's deal making said it typically looks to buy 30-35% in a startup, and usually makes a secondary offer after an initial investment to meet the target. 

"Kunal (Bahl, Snapdeal co-founder) made a request to all the existing shareholders to sell some part of their shares to help SoftBank meet their shareholding requirement," said a Snapdeal investor on condition of anonymity. 

Some of the largest shareholders like Kalaari Capital are holding on to their investment."We believe in the long-term potential of Snapdeal. We are not sellers at the current valuation," said Vani Kola, managing director of Kalaari Capital. Her firm had invested in when Jasper Infotech, Snapdeal's holding company, was still in its early avatar of discount coupon startup Moneysaver in 2009. 

Limited partners, or investors in VC funds, say the venture market is just finishing its first cycle."Indian venture capital is still at the earlier stages of its evolution, with the first 10 venture-backed $1-billion-plus companies just created in India. Therefore, there are a few more years to go for us from now, before we see very good cash returns," said Anand Prasanna, managing director at Morgan Creek Capital. "This is not dissimilar to what we saw in other markets like China.
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Behind Google's Europe woes, American accents

When EU politicians call for the break-up of Google, it can sound like sour grapes, the anti-American backlash of an aging Europe envious, and fearful, of the wealth and growing power of young US tech giants.

But should any American take time on Thanksgiving to scoff at Thursday's non-binding vote in the European Parliament, when lawmakers may urge EU regulators to get tough with the search engine Goliath, they should know that behind the EU antitrust probe of Google stand not only Europeans but US competitors.

Indeed, to many in Brussels it is Google's fellow Americans — such as Microsoft, Expedia and TripAdvisor — whose complaints and big-money lobbying have driven a four-year-old investigation by the powerful European Commission into whether Google abuses its dominance of internet searches to push favored web sites.

"The American companies are using the European Commission as a battleground among themselves," a senior EU official told Reuters. "They are the ones coming to us with complaints.

"They are the ones who are not happy when rivals present concessions and say these are not enough."

US companies like Microsoft, hit by a $700-million fine last year for foisting its flagging Explorer browser on PC buyers, are well aware of the Commission's power in the world's biggest economic bloc. It also may seem more aggressive than its counterpart in Washington, which last year dropped its own case inquiry into Google, concluding the firm had not broken rules.

Three attempts it made to reach a settlement were turned down by EU competition commissioner Joaquin Almunia, who agreed with Google's rivals that concessions it offered to avoid a fine of up to $5 billion were not enough. The case is now in the hands of Margrethe Vestager, who succeeded Almunia this month.

US tech firms "are all playing on a little playing field", said Bert Foer, head of Washington thinktank the American Antitrust Institute. "Naturally they're going to move fastest and farthest in jurisdictions that have more favorable laws.

"While there's not a whole lot of difference between American antitrust law and European antitrust law, there is a difference in enforcement style and aggressiveness right now. So it's not surprising that a lot of the fight is over there. And it's not surprising that a lot of the companies are American."

"It's simply not about one side of the ocean against the other," said Thomas Vinje, a partner in the Brussels office of London law firm Clifford Chance. He is advising FairSearch, a group of firms including Microsoft, Oracle and Twenga in their complaint against Google with the European Commission.


"Never has a competition case brought together such a geographical or industrial breadth of concerned parties. There's just never been anything like it," said Vinje. "Probably never has any company exerted so much power on so many key markets."

Transatlantic suspicion
That is not to say that there is no anti-US animus in Europe, among the public and some politicians. It is a fact Google, which declined comment for this article, highlights in portraying itself at times as caught in Transatlantic crossfire.

Last year's revelations of US spying on the digital doings of Europeans, including even German Chancellor Angela Merkel, heightened mistrust of US power in the digital world — though Europeans still use Google overwhelmingly to search the web.

Google suffered a setback this year when the EU supreme court upheld a "right to be forgotten", ordering it to block links to information if people request it. It also faces legal challenges over copyright fees, led notably by German publishers, and over a variety of privacy concerns.

READ ALSO: US voices concern over EU's proposed plan to breakup Google

Underscoring a sense of siege following the drafting of the resolution in the European Parliament, the US mission to the EU in Brussels issued a statement appealing for objectivity so that the antitrust case was not "politicized".

Vinje, however, said talk of anti-Americanism was overdone and accused Google executives of "pushing the line that its troubles are driven by anti-US sentiments in Europe" to gloss over what he said were real concerns about its business.

Antitrust lawyer Alfonso Lamadrid at the Brussels office of Spanish firm Garrigues said the legal troubles of Google, and other US firms, simply reflected their global success: "It is mainly because in most cases US firms are the allegedly dominant players worldwide. I wish more European firms were in a position to be subject to similar investigations in the US."

Michael Marelus, at the Brussels office of Anglo-American law firm DLA Piper which is not directly involved in the Google case, also played down the political elements of the EU inquiry:

"Politics is clearly and heavily involved in any statement made by the European Parliament and very much so in the parliament's call to consider unbundling Google," he said.

"It would however be unfair to say that US companies are being targeted as such ... It seems that parliament is taking an aggressive stand in considering unbundling Google in the hope of ultimately obtaining a more realistic commitment from it."

The resolution, being debated in parliament, was proposed by a German conservative and Spanish liberal. While the legislature has no power in the matter, and it does not single out Google by name, the call for the Commission to consider separating searches from other services is intended to increase pressure on antitrust chief Vestager to act quickly.

A Danish liberal, she has sole power to decide and has kept her own counsel. Fellow commissioners with roles in the digital market have given mixed signals, voicing concern about monopoly but also rejecting a break-up.

Backed by members of the main center-right and center-left parties, the resolution was expected to pass on Thursday in a vote scheduled after noon (6 am EST)
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