US-China cyber-battles intensify


The United States has accused some Chinese of hacking into American companies’ computers but the US itself has been engaging in massive spying of foreign companies and trade officials.

Reports of US spying have sparked anger in many countriesUS spying vs China

WE live in a world where “spying” by electronic means is now pervasive and practically no one or institution that uses telephones, smart phones, emails and the internet is protected from intelligence gathering.

This much we know, from the media revelations emerging from files leaked by Edward Snowden, a former contractor with the US National Security Agency.

They showed that the US has been tapping the telephones and emails of Americans and others around the world in a sweeping and systematic way.

It was revealed that even the top political leaders of Germany, Indonesia and Brazil had their mobile phones tapped, leading their countries to protest against such a bold intrusion of privacy and national security.

Last week, the intelligence issue was highlighted again when the US Justice Department indicted five individuals who are members of the Chinese People’s Liberation Army.

They were accused of hacking into the computers of American companies in the nuclear power, steel, aluminium and solar power industries to obtain trade secrets for the benefit of Chinese state owned enterprises.

A Chinese foreign ministry spokesman denounced the allegations as baseless and said China “never engages in the activity of stealing commercial secrets through the internet”, and accused the US of hypocrisy.

It is common knowledge that intelligence agencies use all kinds of devices to gather information and spy on foreigners as well as their own citizens.

The US has the most sophisticated system with the broadest coverage, as the Snowden files revealed.

By charging China of spying on specific American companies for the commercial benefit of Chinese enterprises, the US was trying to draw a very fine line.

It would have been clearly double standards to accuse other countries of spying on government personalities or agencies or on civilians, as the US itself has been shown to be more systematically doing this than any other country.

In announcing the indictment on the five Chinese, the US Attorney General said the hacking was conducted to advantage Chinese enterprises, a tactic that the US denounces.

“We do not collect intelligence to provide a competitive advantage to US companies, or US commercial sectors.”

But in fact the US does spy on companies and trade policy makers and negotiators of other countries, presumably in order to obtain a commercial advantage.

Two articles by David Sanger in the New York Times last week commented on the “fine line” the US attempts to draw between spying for the benefit of specific companies, and for overall commercial advantage.

He gave examples of revelations of US agencies targeting foreign companies.

These include Huawei, a major Chinese internet and communications company.

According to his article, the Snowden documents showed that one purpose of this spying was to “get inside Huawei’s systems and use them to spy on countries that buy the company’s equipment.

“Huawei officials said they failed to understand how that differed meaningfully from what the United States has accused the Chinese of doing.

The US agency also hacked into the computers of Petrobras, Brazil’s national oil company, which has data on Brazil’s offshore oil reserves and perhaps its plans for allocating licences for exploration to foreign companies. State owned oil companies in Saudi Arabia, Mexico, Africa are also intelligence targets.

The NSA also went into the computers of China Telecom, one of the largest providers of mobile phone and Internet services in Chinese cities, and Pacnet, the Hong Kong-based operator of undersea fibre optic cables.

“Once inside those companies’ proprietary technology, the NSA would have access to millions of daily conversations and emails that never touch American shores,” said Sanger.

The NSA spied on Joaquín Almunia, the antitrust commissioner of the European Commission, who had brought charges against several US companies.

In each of these cases, American officials insist the US was never acting on behalf of specific American companies, but the government does not deny it routinely spies to advance American economic advantage as part of national security, said the Sanger article.

This includes spying on European or Asian trade negotiators, using the results to help American trade officials and thus the American industries and workers they are trying to bolster.

According to Sanger, the United States spies regularly for economic advantage when the goal is to support trade talks. When the US was negotiating in the 1990s to reach an accord with Japan, it bugged the Japanese negotiator’s limousine and the main beneficiaries would have been US auto companies and parts suppliers.

The US is also “widely believed to be using intelligence in support of trade negotiations underway with European and Asian trading partners. But in the view of a succession of Democratic and Republican administrations, that is fair game.”

An earlier New York Times article, citing Snowden documents, also revealed that the US and Australian agencies gathered intelligence on Indonesia and a law firm acting for it during US-Indonesia trade negotiations.

This line the US is attempting to draw between what is illegitimate (spying to benefit particular companies) and legitimate (spying to broadly benefit companies and the economy) is not appreciated nor accepted by other countries.

The views expressed are entirely the writer’s own.

Contributed by Global Trends Martin Khor
Martin Khor is the Executive Director of the South Centre since 1 March 2009. He replaced Dr. Yash Tandon who was the Executive Director of the South Centre from 2005-2009

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CICA Shanghai

The fourth summit of the Conference on Interaction and Confidence Building Measures in Asia (CICA), under the theme of “enhancing dialogue, confidence and coordination, and on jointly constructing a new Asia with peace, stability and cooperation,” was held in Shanghai Wednesday. Chinese President Xi Jinping delivered a keynote speech calling for a proactive outlook on Asian security and a new security cooperation framework. The intertwined key words have sketched the contours of this summit.

When it comes to Asia, scholars from all around the world will focus on two phenomena: economic growth and security dilemma. The economic development of Asia has promoted the interdependence and integration of interests among nations in this region, which constitute the resources of Asian security at the present stage. Meanwhile, many Asian countries feel insecure, which has little to do with a country’s size and strength. Though it is a large and powerful Asian state, China doesn’t have a better sense of security than smaller countries.

With a myriad of leftover conundrums, Asian countries have become interest-conscious as quickly as economic growth. Nonetheless, Asia is in dire need of an efficient security mechanism as well as common consensus to achieve it.

Asia has long been affected by external forces and in particular the US to a large degree. Washington has forged military alliances with several Asian countries and sometimes targeted a third party, making it all the more difficult for Asia to entirely cast off the specter of the Cold War. The US “rebalancing to Asia” policy conforms to its global strategy, inevitably increasing the cost of achieving Asian security.

Across the fairly intricate tapestry of Asian security, there is no difference between small and big powers in terms of security guarantee. Various messages further fuel contradictions and disorders in the region and add to strategic uncertainty.

Asian countries need to distinguish between realities and wishes and learn to compromise. It is unrealistic for some countries to quit counting on Washington in the short term but all Asian nations should recognize Uncle Sam cannot tide them over the security dilemma. Therefore, they should divert more attention to coordinating security concerns among themselves.

Security in Asia will eventually be realized through increasing mutual trust and cooperation in this region. We welcome external powers to play a constructive role in this process but object to their biased interference that will only increase the possibility of regional conflicts.

China is a rarely patient country in the world and spares no efforts to promote peace, which is a starting point and pillar for permanent peace in Asia. Resolution to safeguard peace may constitute the invisible bottom line despite numerous potential flashpoints in Asian security. – Global Times

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The Obama government will now be forever remembered not just as the “we spy” government but as the “we spy and lie” government. Spy charges expose U.S. cyber hegemony mentality

The United States has indulged in its cyber hegemony mentality again as it filed ungrounded commercial cyber espionage charges against five Chinese military officers.

Chinese Ambassador CuiTiankai on May 20 accused the United States of hypocrisy for charging five Chinese nationals of alleged commercial espionage, citing EdwardSnowden’s revelations of US spying operations worldwide.
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“Chinese dream” speaks to the whole world, offers global inspiration


“Chinese dream” speaks to the whole world, offers global inspiration

When President Xi Jinping articulated a vision of prosperity, national rejuvenation and happiness for the people at the UNESCO headquarters in March, he added the best footnote yet to the notion of the “Chinese dream.”

Dream

No other words about China in recent years have captured the world’s attention and imagination as those two have.

The phrase, first mentioned during a speech by Xi two weeks after he was elected general secretary of the Communist Party of China (CPC) Central Committee in November 2012, has been echoed repeatedly by Chinese leaders and is considered a central mission of the new leadership.

The latest reaffirmation came on Sunday, when Chinese Vice President Li Yuanchao called on young people to work for the “Chinese dream” to integrate their personal dreams with the bigger dream of the Chinese nation’s revival.

Although the country might still be years, if not decades, away from living its dream for real, the Chinese dream has provided global inspiration.

Bulgarian President Rosen Plevneliev said in January during a visit to Beijing that he admired China for its great achievement of development and that he believed the Chinese dream of national rejuvenation will benefit the whole world as well as the Chinese people.

Asha-Rose Migiro, a former UN deputy secretary-general, also said last year that the “Chinese dream” resonated with the dream of Africa, as China and Africa can achieve common development through common efforts.

This is no accident and not difficult to understand. For one thing, the Chinese dream does not run contrary to the common aspirations worldwide, but is compatible with them.

Peace, prosperity, happiness and social stability, which are the essence of the Chinese dream, are also the most fundamental components of the shared pursuits of people worldwide.

In that sense, people across the world have all dreamt of the “Chinese dream” in their own way. It is no wonder that foreigners understand the notion upon first hearing it.

The Chinese dream also offers huge potential opportunities for cooperation and mutual benefit for other countries, both economically and politically.

China’s rapid economic growth has produced enormous “bonuses,” not only for the Chinese people, but also for the whole world.

According to figures from the National Statistics Bureau, China has topped the list of contributors to the global economy, with up to 19.2 percent of world economic growth coming from China in 2007, compared to only 2.3 percent in 1978.

China is not only the main engine of global economic growth, but also the defender of regional peace and stability.

Unlike certain troublemakers in the region, China has the resolve to create with Asian countries a peaceful and bright future for East Asia and the rest of the continent.

The realization of the Chinese dream does not entail fracturing the dreams of other countries. On the contrary, it helps them to realize their own dreams of peace and prosperity. – Xinhua

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‘Panther 911’ : Digistar is bullish on new central monitoring system (CMS)


Digistar_Pather 911Digistar chairman Tan Sri Mohd Zaman Khan (left), Inspector -Gener al of Police Tan Sri Khalid Abu Bakar and Lee during Pan ther 911’s official launching on April 25, 2014.

Information and communications technology (ICT) and property company Digistar Corp Bhd is bullish about the prospects of its newly-launched central monitoring system (CMS) called ‘Panther 911’.

Chief executive officer Datuk Wira Lee Wah Chong says the company targets 100,000 users for its hi-tech product in the first year.

A CMS is security-based system that includes aspects such as CCTV monitoring and alarms.

Digistar’s medium term goal is to secure a subscription base of 500,000 for its CMS in five years.

“The margins are good, about 20% to 30%. And this would be reflected from our current financial year (ending September 30, 2014) onwards,” he tells StarBizWeek.

“The first year may be slower than what we target but once our CMS gains visibility in the market, we expect a jump in take-up rate among business owners and individuals,” Lee says.

Digistar had spent RM5mil over the past two years to develop the CMS.

The company intends to use a multi-level marketing strategy to push the product into the market. “To incentivise the sales staff, they will get monthly a commission of 5% from the subscriptions they secure.”

In addition, the police force is also looking at the installation of closed-circuit television (CCTV) cameras at resorts and islands off Sabah’s east coast.

Last week, the police was reported to have asked Digistar to send them a proposal on installing the ‘Panther 911’ security system in Sabah.

The Inspector-General of Police Tan Sri Khalid Abu Bakar said to have the system linked directly to police stations would help security forces respond faster.

Khalid said the Eastern Sabah Security Command (Esscom) was planning to place security teams at 11 private resorts and islands that were the furthest away from Semporna and Lahad Datu. This was in light of recent killing and kidnapping events highlighted in the news.

If successful in this tie-up with the police, it would be Digistar’s first collaboration with the public sector for its CMS business. Right now, its target is on the mass market and commercial buildings.

Entering the Sabah market would not come as a surprise as Lee has always wanted to expand into Sabah and Sarawak.

That would be the second phase of Digistar’s security system business and the company estimates another RM5mil of investments for the expansion in the next two years. However, Lee notes that there needs to be better Internet connectivity in order for Internet-based surveillance systems to thrive in the country.

Digistar has a few competitors in the local CMS space.

But it seeks to differentiate itself by the attractive features of its system.

Digistar’s Panther 911 CMS system offers 24-hour monitoring services via an internet protocol-based platform. It can switch to run on 3G, 4G and LTE networks during power disruptions.

Banking on property sector

Lee says the company has plans to be among the top 100 companies in Malaysia in terms of market capitalisation in the next five years.

To do that, Lee says the company needs to further expand its property business. For Lee, property is Digistar’s next phase of growth as he opined that the growth trajectory for an ICT company has its boundaries.

“We are still focused on our ICT business but to achieve bigger goals, we will expand our property division,” he says. “We are looking for pockets of land around the Klang Valley now for small scale projects.”

Digistar already has a serviced apartment project in Malacca called The Heritage, with a gross development value of RM150mil. It is already 70% sold and is targeted to be opened this November.

Lee says the company intends to rent out the remaining 30% of apartments for recurring income.

“We plan to rent out like a hotel.

“The project will be a ‘condotel’, a combination of condominium and hotel,” he says.

Digistar is already speaking to hospitality partners to rope in for the management of the hotel component at The Heritage.

The company has also a 15-year concession for the construction and asset management of the Malaysian National Technology Advancement Centre in Alor Gajah, Malacca.

The project is a tie-up with the Works Ministry for the minstry to carry out training programmes for engineers and architects.

Its concession consists of RM174mil for the construction of facilities and infrastructure, and RM66mil for the provision of ICT and lab equipment.

Lee says the margins for this project would likely be in the double-digit range as well.

Digistar is also in talks to develop its telecommunications segment as it owns three individual licenses from the Malaysian Communications and Multimedia Commission to provide network and facilities services for five years.

Lee says discussions are on-going and declined to reveal any details.

All these efforts, says Lee, are aimed at steering the company back into profitability.

For the 2013 financial year (FY13), Digistar made a net loss of RM11mil compared to a profit of RM6mil in FY12.

The company had said that the loss was due to a higher operating cost, commencement of projects where revenue was yet to be recognised as well as the business expansion for its CMS and telecommunications divisions. Lee reckons that Digistar’s CMS as well as other initivatives would help turnaround the company and generate long-term recurring income.

A booming WhatsApp posts mixed message as strong rivals emerge in Asia; War of the Apps heats up in China



What’s inside WhatsApp?

WhatsApp: A booming smartphone message service

SAN FRANCISCO – WhatsApp was launched five years ago as a shot at doing to text messaging what Skype did to telephone calls.

If Facebook’s move to buy the startup in a cash-and-stock deal valued as high as US$19 billion (S$24 billion) is any indication, the California-based WhatsApp may have hit the mark.

The firm founded by former Yahoo employees Brian Acton and Jan Koum in 2009 took its name from a play on the phrase “What’s Up,” according to its website.

They also devoted themselves to a credo of “No Ads. No Games. No Gimmicks.”

A note stating just that and signed by Acton remains taped to Koum’s desk, according to venture capital firm Sequoia, which invested in the startup early and stands to cash in big time on the Facebook take-over.

The “contrarian approach” of gathering no information about users for targeting ads was shaped by Ukraine-born Koum’s aversion to tactics of secret police in communist countries, Sequoia partner Jim Goetz said in an online note.

“Jan’s childhood made him appreciate communication that was not bugged or taped,” Goetz said.
“When he arrived in the US as a 16-year-old immigrant living on food stamps, he had the extra incentive of wanting to stay in touch with his family in Russia and the Ukraine.”

Koum remained true to those ideas when, after working at Yahoo with his “mentor” Acton, he turned to building WhatsApp, according to Goetz.

The stated mission was to build a better alternative to traditional SMS messaging in a world where smartphones were clearly becoming ubiquitous.

The founders jokingly described themselves at the website as “two guys who spent combined 20 years doing geeky stuff at Yahoo! Inc.”

WhatsApp is a platform for sending images, video, audio, or text messages for free over the Internet using data connections of smartphones.

The application is free, but after using it for a year, there is an annual subscription fee of 99 US cents.

“We feel that this model will allow us to become the communications service of the 21st century, and provide you the best way to stay in touch with your friends and family with no ads getting in the way,” the startup said in a blog post discussing pricing.

WhatsApp is reported to have grown stunningly fast to more than 450 million users and said to handle 50 billion messages daily.

As of the start of this year, WhatsApp had 50 employees, more than 30 of them engineers. While the company has its headquarters in the California city of Mountain View, where Google has its main campus, most of the engineering work is reportedly done in Russia. – AFP

In Asia, WhatsApp posts mixed message for Facebook

Singapore: WhatsApp may be hugely popular but its forays into Asia, the world’s biggest mobile market, have had mixed success, raising questions about whether it can sustain the explosive growth Facebook Inc cited to justify its $19 billion price tag.
Data from app metric company App Annie, for example, shows that WhatsApp ranks as the top communications app in only three of 13 Asian countries tracked – Hong Kong, India and Singapore.
“WhatsApp has been a strong player in Asia, but in the past year has faced strong competition from LINE and WeChat,” said Neha Dharia, India-based analyst for Ovum, a technology consultancy. “WhatsApp has not been displaced by these players, but has seen stiff competition in growing its market share.”

Facebook said on Wednesday it would buy WhatsApp for $19 billion in cash and stock, in a deal worth more than Facebook raised in its own IPO. [ID:nL3N0LO52J]

For sure, WhatsApp has been phenomenally successful. For many users it has replaced sending costly texts, or SMS messages. Since its launch in 2009 it has built an active monthly user base of 450 million users.
A survey by marketing and research company Jana found WhatsApp to be the most used messaging app in all the countries it surveyed – India, Kenya, Nigeria, South Africa, Brazil and Mexico – beating competitors by a huge margin.
The reason: users most prize the basic functions it offers – ad-free chat and photo sharing.
WhatsApp subscribers sent 18 billion messages a day in January. The overall market is growing rapidly: According to Ovum, 27.4 trillion such messages were sent last year; this year that figure will be close to 69 trillion.
CHINA CALLING
By hooking up, Facebook and WhatsApp may be able to take on those markets that have been elusive to Facebook so far. With Facebook blocked in China, and lagging Twitter Inc and Naver Corp’s LINE in Japan, WhatsApp “is a potential avenue for Facebook” into those markets, said Vincent Stevens, a senior manager for telecoms consultancy Delta Partners.

Forrester, a consultancy, forecasts that China will have more than 500 million smartphones this year.

And in the fast growing smartphone market of India, says Neil Shah, research director of devices and ecosystems at Counterpoint Research, local users now account for almost 9 percent of total active WhatsApp users around the world – some 40 million of them.

But Facebook and WhatsApp face formidable foes. Where once messaging apps were simply about messaging, now Tencent Holdings Ltd’s WeChat, LINE and KakaoTalk offer a slew of additional services, from icons and games to buying goods and services.

“LINE and the others are very different to WhatsApp. They’re much more innovative in the business models they engage in,” says Michael Vakulenko of VisionMobile, a UK-based consultancy. “They are innovating much faster than WhatsApp and going in a different direction.”

This could prove decisive in Asia – the biggest battleground for social messaging apps – where no single player dominates.
Data from market research company Nielsen, for example, showed BlackBerry Messenger as the most downloaded messaging app in Indonesia last October, the latest data available, while Viber, bought by Japanese online retailer Rakuten Inc for $900 million last week, was the most popular in the Philippines, and LINE in Thailand.
WhatsApp was third in Indonesia, second in Malaysia and not in the top-10 in the Philippines or Thailand. And while locals say WhatsApp remains the default messaging app in Indonesia, some notice a shift.

FICKLE FORTUNES

Jerry Justianto, who runs a radio station network in Jakarta, says he’s noticing fewer of his friends using WhatsApp than before. “I think it’s reached a plateau in Indonesia,” he said. “I see a lot of WhatsApp accounts in my list are inactive.”

A survey by market research firm On Device Research late last year found that while nearly two thirds of Indonesians surveyed had installed WhatsApp, less than half used it at least once a week, compared to three quarters of Brazilians who had installed it.

Part of the problem, Justianto says, is that WhatsApp’s approach of linking accounts to a phone number doesn’t suit Indonesians who change their SIM card frequently. “Some of my early adopter friends are moving to Telegram messenger, where you can activate multiple devices with one number.”

Telegram, which offers much the same features as WhatsApp, is evidence of the fickleness of users. The app is free and heavily encrypted, and is popular in some countries. In Spain, for example, it has risen from its launch last year to be the No.1 communications app in Google’s Play store, at the expense of WhatsApp, according to App Annie data.

This, said one executive at a handset company in Spain, was partly because of a viral campaign among users to switch, and partly because many users dumped WhatsApp before they were charged at the end of their first, free year.
GETTING USERS TO USE MORE
Across Asia, the fragmentation is evident to users such as Martin Tomlinson, Asia Pacific director for On Device Research, who says he has installed at least six messaging apps for work: “I need to have at least three of these on my phone because that’s how my clients communicate.”
LINE, for example, considers its top markets as not only Japan but also Taiwan, Thailand and Indonesia. Now, says Simeon Cho, general manager at LINE Plus, which handles LINE’s ex-Japan business, the goal is less about winning new users than getting existing ones to use the app more frequently.
Kakao, which started the KakaoTalk messenger service in 2010 and has since grown rapidly to 130 million users, said it was also focusing heavily on Southeast Asia, where there is relatively low smartphone penetration and no dominant messenger service.
And for China’s Tencent, KakaoTalk and LINE are more of a threat overseas than WhatsApp, as the company’s WeChat expansion is focused on Southeast Asia.
WhatsApp would only pose a serious threat if the likes of Tencent were to expand farther west. “This means it’s now going to be more difficult for LINE to win in North America and Europe,” said Serkan Toto, a Tokyo-based technology consultant.

 – By Jeremy Wagstaff Reuters

Facebook deal sends message to WhatsApp’s Asia rivals

HONG KONG – Facebook’s stunning US$19 billion (S$24 billion) deal for messaging service WhatsApp places the social network in an arena where competition is fierce, particularly in Asia, where fast-growing chat rivals dominate their home markets.

The multi-billion dollar valuation of WhatsApp is based on expectations that its 450 million monthly users will eventually pass one billion, powering the social network’s drive into the fast- growing mobile space – particularly in emerging markets, where the simplicity of the messaging app can thrive on less expensive phones.

But it is not the only service gaining traction around the world, particularly in parts of Asia, where players such as WeChat in China, Kakao Talk in South Korea and Line in Japan dominate – and, according to analysts, show greater potential for making money given their different products and strategies.

While WhatsApp, which is free to download but charges users US$1 per year, is popular in some Asian markets such as Hong Kong and Singapore, services such as Line, WeChat and Kakao have also expanded around the region and beyond.

“Mobile-messaging apps are growing fast in Asia,” noted Elinor Leung and Seung-Joo Ro in a report for regional brokerage CLSA.

“While Facebook dominates the US, mobile-messaging apps such as WhatsApp, Line and WeChat have rapidly taken over Asian SNS (social networking service) markets, especially in the emerging markets.”

WhatsApp currently has a larger base than each of the three Asian services but they are growing fast, particularly when it comes to emerging markets, where smartphones or less expensive “feature” phones are seeing explosive growth.

CLSA noted that “Asian mobile-messaging apps like Tencent’s WeChat and Naver Corp.’s Line should be valued at a premium to WhatsApp with their wider service offerings and higher revenue potential from games to e-commerce and payment.”

WeChat is currently valued by CLSA at US$35 billion and Line at US$14 billion.

Global social messaging volumes are expected to reach 69 trillion and subscribers to such services 1.8 billion by the end of 2014, according to data from market research firm Ovum.

“In SouthEast Asia there is a huge tussle for market share,” Neha Dharia of Ovum told AFP.

“WhatsApp will be able to claim the Facebook share of those markets as well, making it hard for these other guys to grow.”

WeChat

WeChat, or “Weixin” in Chinese, is a free instant messaging and social media mobile application developed by Chinese Internet giant Tencent and officially launched in January 2011.

It has not only become a popular mobile communications tool in China – where Facebook is mostly blocked and WhatsApp usage is comparatively low – but has also attracted tens of millions of users in overseas markets.

The Facebook deal values active WhatsApp users at US$42 a piece. According to analysts with Japan’s Mizuho bank, WeChat is worth twice that amount “on the back of its gaming, [commerce] and mobile payment potential”.

WeChat’s number of monthly active users worldwide reached 272 million by the end of September last year, more than doubling from a year earlier amid a drive to attract more users in countries such as India, Spain and South Africa.

WeChat provides text, photo, video and voice messaging services on major mobile platforms. It also offers games, online payments and taxi booking.

Line

Launched in 2011 as an instant message and free voice call app, Line – whose parent company is South Korea’s Naver Corp. – has grown to 350 million users worldwide and aims to hit 500 million this year.

Its user-friendly interface and voice communication capacity have helped it become one of most successful apps in Japan, while also seeing popularity in Thailand, Taiwan, Spain and Latin America.

The app is best known for “stickers” – cartoon-like images purchased by users, sales of which are core to Line’s revenues.

Kakao Talk

Launched in 2010, Kakao Talk is used by 95 per cent of South Korea’s smartphone users and boasts 130 million users worldwide. It is reported to be preparing for an initial public offering next year that could value it at US$2 billion.

The free app allows users to send messages, pictures, soundbites and video via the Internet, either on WiFi or through cellphone networks.

Gifts can be bought using Kakao’s online shopping facilities, a feature that helped push revenue last year to 230 billion won (US$215 million) from 46 billion won a year ago.

It is eyeing Southeast Asian markets including Malaysia, the Philippines and Indonesia where it is fighting for market share against Line and WeChat.

Viber

Developed by Cyprus-based Viber Media, which was founded in 2010, the service boasts 280 million users and was recently purchased by Japanese IT firm Rakuten for US$900 million – or roughly US$3 per user. It allows free text messages and phone calls as well as video messaging. It recently launched a service allowing desktop users to call non-Viber users’ mobile phones, in a challenge to Skype, owned by Microsoft.

Analysts have questioned whether it can make more money from customers in the same way that the likes of Line and WeChat have, leading to Rakuten’s share price plunging as much as 13 per cent on the first trading day after it announced the deal.

- AFP

War of the apps heats up in China
In the Battle between the two Chinese Internet giants Alibaba and Tencent, the consumers are the real winners.
AlibabaTencentRAISING a hand to flag down a taxi by the streets could be passé in China, or at least in the eyes of the taxi booking app developers.

Two popular mobile apps, Kuaidi Dache and Didi Dache (“dache” means taking the taxi), make it possible for passengers to hail a cab without flailing an arm, but just tapping on their smart phones.

The war between the two apps, which are backed by Chinese Internet giants Alibaba Group and Tencent Holdings Ltd respectively, has gotten more intense this week.

On Monday, Didi Dache announced that it was going to revive its 10-yuan (RM5.42) rebate programme for users who book a cab and pay via Tencent’s instant messaging app Wechat.

Every passenger is entitled to receive a subsidy of 10 yuan each trip, for up to three trips a day.

For taxi drivers in Beijing, Shanghai, Shenzhen and Hangzhou, a reward of 10 yuan awaits for up to 10 bookings they successfully respond to through Didi Dache.

Cabbies in other cities will receive 5 yuan (RM2.71) for the first five trips and 10 yuan for the next five trips.

To prevent users from cheating, Didi Dache said it would block passengers and drivers who reach mutual agreements to use the app only after the passengers get into the cabs, with the motive of earning the rebates.

Didi Dache reportedly poured in 1bil yuan (RM542.18mil) for this round of subsidy.

Kuaidi Dache was quick to follow up with an “always-one-yuan-more” reward.

Users who hail a cab through its app and pay via Alibaba’s mobile payment service Alipay Wallet were promised that they would always enjoy one yuan more than users of its competitor.

It is not the first time these two apps are using these tactics to entice users.

In January, Didi Dache rolled out the 10-yuan rebate promotion, prompting Kuaidi Dache to offer the same rebate in response.

When Didi Dache reduced the 10-yuan incentive by half on Feb 10, Kuaidi Dache seized the chance to announce that it would retain the 10-yuan offer.

Now that Didi Dache has readjusted the rebate back to 10 yuan, Kuaidi Dache has decided to have the upper hand by pledging “always-one-yuan-more”.

However, just a day after these announcements were made, Didi Dache upped the rebate once again. Passengers would now receive between 12 yuan and 20 yuan (RM6.51 and RM10.84) per trip.

Kuaidi Dache followed suit to offer a subsidy of at least 13 yuan (RM7.05) per trip.

While Didi Dache offered 10,000 free trips a day to lucky passengers, Kuaidi Dache pledged 15,000 free trips a day.

It appeared that there was no end to this intense price war.

This “war” between the two apps is only one segment of the fierce rivalry between the two Internet companies, Tencent and Alibaba.

Tencent owns Wechat while Alibaba has developed a similar app known as “Laiwang”.

Alibaba bought 18% stake of the popular Twitter-like service Sina Weibo last year, which is the contender of Tencent’s Wechat.

Last week, Alibaba offered to purchase mobile mapping app AutoNavi. Tencent, meanwhile, already has a mapping service that boasts a similar function to Google’s Street View.

This latest contest in the taxi-booking app was seen as a tactic to encourage smart phone users to adopt the habit of using mobile payments.

During the just-concluded Chinese New Year holiday, Wechat users went gaga over the electronic angpao.

They had to first link their bank accounts to Wechat before they could give or receive money among their circle of friends.

According to Beijing Times, from the eve until the eighth day of Chinese New Year, more than 40 million angpao were handed out in the activity participated by more than eight million people.

Even Alibaba’s founder Jack Ma described the phenomenon as a “Pearl Harbour attack”.

In a poll on finance.ifeng.com, 70.42% of some 5,600 respondents felt that the war of taxi booking apps between Tencent and Alibaba was not a vicious competition.

Almost half of them believed that what mattered most at the end of the day was the product experience.

They were of the opinion that the company with the better service would prevail, in contrast to only 23.38% of the respondents who predicted that the one with bigger financial capability would eventually be declared the winner.

With the two giants locking horns and trying to outdo each other, many believed that the consumers are the biggest beneficiaries.

The rebates did not have a reported deadline. Until the cash rewards are withdrawn, users can continue to enjoy the subsidies to save some pennies.

Contributed  by Tho Xin Yi The Star/Asia News Network

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WhatsApp deal dwarfs other high-profile Tech acquisitions


  WhatsApp_fbWhatsApp with Facebook’s $19B offer?

http://money.cnn.com/video/technology/2014/02/19/t-facebook-whatsapp-19-billion.cnnmoney/WhatsApp_fb1

In a play to dominate messaging on phones and the Web, Facebook has acquired WhatsApp for $19 billion.

That’s a stunning sum for the five-year old company. But WhatsApp has been able to hold its weight against messaging heavyweights like Twitter (TWTR), Google (GOOG, Fortune 500) and Microsoft’s (MSFT, Fortune 500) Skype. WhatsApp has upwards of 450 million users, and it is adding an additional million users every day.

Referring to WhatsApp’s soaring growth, Facebook CEO Mark Zuckerberg said on a conference call, “No one in the history of the world has done anything like that.”

WhatsApp is the most popular messaging app for smartphones, according to OnDevice Research.

Buying WhatsApp will only bolster Facebook’s already strong position in the crowded messaging world. Messenger, Facebook’s a standalone messaging app for mobile devices, is second only to WhatsApp in its share of the smartphone market.

Related: 5 key moments that changed Facebook
 
Similar to traditional text messaging, WhatsApp allows people to connect via their cellphone numbers. But instead of racking up texting fees, WhatsApp sends the actual messages over mobile broadband. That makes WhatsApp particularly cost effective for communicating with people overseas.

That kind of mobile messaging services have become wildly popular, with twice as many messages sent over the mobile Internet than via traditional texts, according to Deloitte. But most of the messaging industry’s revenue is still driven by text messaging.

On the conference call, Facebook said it is not looking to drive revenue from WhatsApp in the near term, instead focusing on growth. Zuckerberg said he doesn’t anticipate trying to aggressively grow WhatsApp’s revenue until the service reaches “billions” of users.

WhatsApp currently charges a dollar a year after giving customers their first year of use for free. WhatsApp CEO Jan Koum said on the conference call that WhatsApp’s business model is already successful.

That indicates Facebook bought WhatsApp to add value to its existing messaging services, as well as for the long-term potential of the company.

Facebook bought Instagram for $1 billion in 2012 for similar reasons: As young social network users gravitated towards photo-sharing, Facebook wanted to scoop up what could have eventually become a big rival.

Like Instagram, WhatsApp will function as an autonomous unit within Facebook, with all the existing employees coming in as part of the deal.

Facebook (FB, Fortune 500) said it will pay WhatsApp $4 billion in cash and $12 billion in stock.

WhatsApp’s founders and staff will be eligible for for another $3 billion in stock grants to be paid out if they remain employed by Facebook for four years. Koum will also join Facebook’s board of directors. To top of page 

-     @CNNMoneyTech

Educate public on changes in e-technology, CAP urged


e-technology

Warn kids against revealing personal information on FB, Govt urged

THE Consumers Association of Penang (CAP) has urged the Government to take pro-active measures in raising awareness consumers on the rapid changes in electronic technology.

“If Malaysia is truly to become a knowledge society, the citizens must be knowledgeable and be aware of the dangers and risks that come with new technology.

“It can easily be done if a part of the tax revenue from the profits of technology companies is used to educate consumers on the right use of the technology that most people have become dependent on today,” CAP president S.M. Mohamed Idris said in a statement yesterday.

“Children must also be informed on the dangers of revealing personal details on social networking sites such as Facebook and others,” he said.

Mohamed Idris said the Government should also provide facilities for encryption and decryption of data, and make mandatory for mobile phones, tablets and computers to be equipped with them.

“Encryption is the only way of communication secured enough for the military or banking, where a high level of security is de-sired,” he said.

Mohamed Idris was commenting on press reports that Singa-pore was a key partner of the 5-Eyes intelligence group that allegedly tapped telephones and monitored communication networks in Kuala Lumpur.


Is The Five Eyes Alliance watching you?

Based on information leaked by intelligence whistleblower Edward Snowden, Dutch daily NRC Handelsblad reported that Singapore was a key ‘third party’ providing the United States, Britain, Canada, Australia and New Zealand access to Malaysia’s communication channel.

Australia’s Sydney Morning Herald cited documents leaked by Snowden alleging that Singapore military intelligence was helping the US, British and Australian spy agencies tap data passing through a major undersea cable that is partly owned by Singapore Telecommunications Ltd

Sources: The Star/Asia News Network

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