Pentagon to focus more on hack-proofing weapons

Cyber attacks on U.S. weapons programs and manufacturers are a "pervasive" problem that requires greater attention, the top U.S. arms buyer said Thursday, saying that he would add cybersecurity to the Pentagon's guidelines for buying weapons.

"It's about the security of our weapons systems themselves and everything that touches them. It's a pervasive problem and I think we have to pay a lot more attention to it," Defense Undersecretary Frank Kendall told Reuters after a speech to the American Society of Naval Engineers in Washington.

Kendall said he planned to add cybersecurity to the next phase of his "better buying power" initiative, and was also working on a special section on cybersecurity requirements to be added to the Pentagon's guidelines for buying weapons.

President Barack Obama's fiscal 2016 budget proposal requested $14 billion for cybersecurity efforts to better protect federal and private networks from hacking threats, including $5.5 billion for the Pentagon alone.

The Defense Department's chief weapons tester told Congress in January that nearly every U.S. weapons program showed "significant vulnerabilities" to cyber attacks, including misconfigured, unpatched and outdated software.

Kendall echoed those concerns on Thursday and said he was trying to raise awareness about what he described as a "big problem" that affected the Pentagon and all layers of industry, including the larger supply chain involved in weapons systems.

Increased funding and focus on cybersecurity could result in more work for Lockheed Martin Corp, General Dynamics Corp and other firms that already play a big role in cybersecurity, encryption and analysis for government agencies.

Kendall said some measures had already been adopted to defend U.S. weapons systems and the companies that build them against escalating cyber attacks, but more work was needed.

In January, when Kendall released the latest version of the Pentagon's acquisition guidelines, called Department of Defense Instruction 5000.02, he said he had started work on a new section to deal with designing for and managing cybersecurity.

National Security Agency Director Admiral Mike Rogers told a House Armed Services Committee subcommittee on Wednesday that the Pentagon needed a new approach that allowed rapid, recurring updates to cyber protections for weapons, rather than locking in designs five to 10 years before they were fielded.

Kendall told the conference that the latest version of his Better Buying Power initiative would be released later this month. It too will include a section on cybersecurity, he said.

UK Firm Develops Search Engine For Dark Web

Digital Shadows claims its search engine is the most comprehensive to date - but why develop it in the first place?

The dark net and the deep web are sometimes called the parts of the internet that you cannot Google. But a British cyber security firm has developed its own search engine for both, as well as for IRC (basically, chatrooms).

Alistair Paterson, CEO of Digital Shadows, demos the tech in the corner room of his company’s 42nd-floor office in Canary Wharf. “Basically, it’s a Google for Tor,” he explains.

There are similar efforts. DARPA, the experimental labs of the US Department of Defence, is developing something called Memex and there is Flashpoint, which focuses on extremism on the dark web. There is also Grams, which indexes dark web marketplaces.

But Mr Paterson says his search engine is the most comprehensive to date. He types in 'money laundering' and it instantly returns 2,603 results, displayed just like a Google page except each page also gets a thumbnail screenshot alongside.

One result is a page called "Money Laundering and You-an Introduction", and you can see comments left in the chat forum ("When tumbling BTC, use Helix"). Mr Paterson enters another term, "AK-47", and gets 2,533 results.

Mr Paterson says the search engine "sucks in pages in real time and analyses them. We have some analysts direction. It’s helpful we have two Russian speakers as well. So the system is running all the time, but it’s directed by humans."

Why search the dark web? Digital Shadows is not trying to run down drug or arms dealers and unmask them. Instead, it is protecting companies.

In one instance, the system automatically found a bank employee who was offering customers’ log in details for online banking for £50 a pop. Digital Shadows took that information to the bank, which tracked down the employee.

A company’s digital footprint now extends far further than its servers. It includes employees' social media accounts, contractors’ websites, internet-connected devices like cars, and so on.

Digital Shadows tries to monitor all of these. The dark web is just another source.

That sort of proactive approach to cyber security is becoming more common.

The old mentality in cyber security was not too far away from hiding behind the walls of a castle, repairing the original breach.

The new generation of cyber security companies actively manage threats, whether inside the network, like the Mike Lynch-backed start up Darktrace, or looking out from the walls like Digital Shadows.

Peugeot's blue-chip index comeback spurs recovery

PSA Peugeot Citroen will return to France's benchmark CAC-40 index, stock market operator Euronext said on Thursday, delivering a likely boost to the French carmaker as it emerges from a prolonged European sales slump and bailout.

Peugeot will replace Gemalto, which had already been identified as a possible exit candidate before reports last month that millions of its mobile phone SIM cards had been hacked by U.S. and British intelligence.

CAC-40 re-entry could boost Peugeot's shares - up 49 percent so far this year - by triggering automatic buying on behalf of exchange-traded and tracker funds.

It may also further increase liquidity and put the carmaker firmly back on the radar for foreign investors - as well signalling to customers, staff and competitors that the company's turnaround strategy is gaining traction.

"Returning to the CAC-40 will increase our international exposure, which is an important part of the plan," Peugeot spokesman Bertrand Blaise said.

Spiralling losses led Peugeot to a 3 billion euro ($3.31 billion) bailout last year, in which the French government and Chinese state-controlled carmaker Dongfeng took matching 14 percent stakes in the Paris-based company.

New Chief Executive Carlos Tavares, appointed during the bailout negotiations, has since begun cutting inventory, production costs and the group's model lineup in pursuit of a 2 percent operating margin by 2018.

Gemalto's CAC-40 exit and Peugeot's return, after a two-and-a-half-year absence, will take effect on March 23, Euronext said. Index membership decisions reflect the size of a company's free-floating market capitalisation and trading volumes.

Peugeot shares closed 2.9 percent higher in Paris ahead of the announcement, with Gemalto down 2.6 percent. ($1 = 0.9069 euros)

For the 'unbanked', mobile money still has some way to go

Globally, an estimated 2.5 billion people don't have a bank account, but many own a cellphone, fuelling a race to turn these phones into bank books for the 'unbanked' to store cash, manage their accounts, make purchases and send and receive money - part of so-called 'financial inclusion'.

In a report this week, the GSMA, the association of mobile phone companies, said mobile money "has been growing at a dizzying rate." The Boston Consulting Group said last month mobile money transfers in sub-Saharan Africa alone could generate fees of up to $1.5 billion by 2019.

However, consultants and others working at banks, government agencies and even the phone companies note that, while many people have mobile money accounts - usually with the phone companies - few are actively used. While money flows through these networks, nearly two thirds of the volume comes from users merely topping up prepaid mobile accounts in transactions averaging less than a dollar.

"If you take out air-time, you have a true view of mobile money, and it's not a good story, more than a decade on," says South Africa-based Johan de Lange, who works with banks and phone companies.

And, when people do make remittances, those receiving the money tend to cash it in, taking the money out of the system and limiting the potential for mobile money to become a medium of exchange - a mobile wallet for buying things or to provide banking services over mobile networks.

A GSMA spokesperson said air-time top-ups were decreasing as a proportion of overall transactions, and domestic money transfers via mobile were cheaper or safer than other options, and so were "a key piece of the financial inclusion story."

POLICE PAY

Use of mobile money, indeed, is spreading and there are success stories, but these are few relative to the number of projects, and consultants and others question just how successful they are.

In Afghanistan, for example, much has been made of a service to send police salaries direct to their cellphones via a code they present to an agent or bank for cash. This has reduced corruption, where police pay was often halved as it made its way through the bureaucratic chain.

But the service last year reached less than 1 percent of the police force, and cost the Law and Order Trust Fund For Afghanistan more than $10 per transaction - much of which goes to Roshan, the phone company which runs the service with Vodafone. The fund said last year it was exploring cheaper options.

The poster child for telco-driven mobile money services is M-Pesa, set up by Vodafone and run by Kenya's Safaricom Ltd . Mobile money accounts for more than a fifth of its 145 billion shillings ($1.59 billion) annual revenue.

Daniel Maison, a consultant in Kenya, uses M-Pesa to buy petrol, pay restaurant bills or shop at the supermarket. "It's a part of our lives. We wonder what we did without it. I don't need to physically have cash. The beauty is you can even have a savings account on your mobile phone," he told Reuters.

But some note the M-Pesa service owed much of its take-off to the electoral violence in 2007-08 that displaced many Kenyans and made it hard for others to travel. Sending money by phone was the next best thing. Consultants also say the company's figures hide the fact that mobile money transactions involve sending notifications via short service message (SMS), a cost the operator effectively subsidises.

"If everyone had to pay for these messages, I wonder how many (telco) 'rock stars' there would be," said Malcolm Vernon, a London-based mobile money consultant who works in Africa, Asia and Europe.

TAKING WING

This is not to say that mobile money has no future in emerging markets.

After six years, Wing in Cambodia made a modest profit last year with fewer than 50,000 active accounts, many of them held by farmers and shopkeepers paying their suppliers remotely.

Anthony Perkins, CEO of Wing, once part of Australia and New Zealand Banking Group, says the secret is to think more like a bank than a phone company, such as nurturing a network of agents who can receive and dispense cash. Some of these 'human ATMs' can earn eight times the average national income.

"Running an agent network is really no different than running a branch network," Perkins said.

He and others say that while phone companies, with their reach and flexibility, are good tools for rolling out networks, they aren't necessarily the best to move mobile money beyond simple transactions into becoming a nationwide, or international, digital money system.

The telcos' main priorities, they point out, aren't so much the social goals of financial inclusion, but to reduce churn - keeping customers from jumping to a rival firm - and to maximise the amount users spend on their network.

"I don't understand why it's being left to telcos to bring this financial inclusion to the masses," said Perkins. "Even in a small country like Cambodia you can make money out of this."

Gates Foundation makes its biggest-ever equity investment in German biotech

The Bill & Melinda Gates Foundation said it would invest $52 million in CureVac, a German biotechnology company that develops vaccines and immunotherapies, marking the foundation's biggest-ever equity investment.

Privately held CureVac uses its proprietary mRNA technology, which allows for rapid low-cost production of drugs and vaccines, to teach the human body to produce proteins capable of fighting a wide range of diseases.

The investment will support development of CureVac's technology and the construction of a production facility. CureVac and the foundation will also collaborate to develop vaccines to fight infectious disease.

"This collaboration will ensure that one of medicine's most promising new technologies is applied to the challenge of reaching all people with the affordable, life-saving vaccines they need," said Sue Desmond-Hellmann, CEO of the Bill & Melinda Gates Foundation.

The foundation will also fund multiple projects developing vaccines for viral, bacterial and parasitic infectious diseases that disproportionately affect people in the world's poorest countries, apart from the equity investment.

As part of the deal, any Gates Foundation-funded products will be made available by CureVac at affordable prices in poor countries.

Bill Gates, the billionaire co-founder of Microsoft Corp , and wife Melinda set up the Gates Foundation to fight disease and poverty around the world.

Established in 2000, the foundation distributed $3.6 billion in grants in 2013, in particular for global health and development, and had $42.3 billion in assets as of late 2014.

Oprah Winfrey prevails in 'Own Your Power' lawsuit

Oprah Winfrey has prevailed in a trademark lawsuit challenging her use of the phrase "Own Your Power" in her namesake magazine, on TV, on websites and in social media accounts.

U.S. District Judge Paul Crotty in Manhattan ruled on Thursday that Winfrey, her company Harpo Productions Inc and her publisher Hearst Corp demonstrated that the phrase "lacks the requisite distinctiveness" to deserve trademark protection.

Crotty also said Simone Kelly-Brown, a motivational speaker and business coach who said she trademarked the phrase in 2008, and her company Own Your Power Communications Inc did not show that Winfrey's use of the phrase would likely confuse consumers.

"Though they may aspire to do so, plaintiffs present no evidence indicating a likelihood of creating a global media presence capable of attracting an audience of millions," Crotty wrote.

Patricia Lawrence-Kolaras, a lawyer for Kelly-Brown, did not immediately respond to requests for comment.

Jonathan Donnellan, Hearst's deputy general counsel, said the defendants are pleased with the decision.

Crotty previously dismissed the lawsuit in March 2012, only to have a federal appeals court revive it 14 months later because the defendants did not show that their use of "Own Your Power" constituted fair use.

In Thursday's decision, Crotty said the defendants made that showing by having used the phrase in good faith, in conjunction with other words and images associated with Winfrey, and to convey an "overall message of self-empowerment."

Winfrey, 61, is one of the most popular talk-show hosts in history. She runs the cable network OWN, which she created in a joint venture with Discovery Communications Inc.

Forbes magazine on Thursday estimated Winfrey's net worth at $3 billion.

U.S. says inaction on online piracy risks public safety

The U.S. trade office on Thursday urged a crackdown on website name registrars who fail to take action against sellers of illegal goods such as counterfeit medicines and warned that turning a blind eye puts public safety at risk.

The U.S. Trade Representative also said it is keeping an eye on China's Alibaba Group Holding Ltd's consumer shopping website for sales of fake and pirated goods, but refrained from reinstating the site on its piracy blacklist.

Representatives of Alibaba, the world's largest e-commerce company, had no immediate comment.

USTR named a domain name registrar, a company which manages the registration of internet names, for the first time in its annual "notorious markets" list as an example of concern about some registrars not taking action to block or suspend sites selling illegal goods.

The registrar, Canada's Tucows Inc, said it took down dozen of sites every day but unlike some competitors, it considered all complaints carefully to ensure they were justified.

"We want to make sure that our registrants are protected and respected as well as making sure there are not bad actors on our system, and that requires striking a balance on a daily basis," said Graeme Bunton, Tucows manager of public policy.

USTR cited an Interpol report which found some drugs sold online were adulterated with rat poison and said the public faced "substantial risk" in finding safe online pharmacies.

"Registrars can play a critical public safety role in the Internet ecosystem. Ignoring that role, or acting affirmatively to facilitate public harm, is of great concern," USTR said.

It urged trading partners and ICANN, a California-based organization which oversees the introduction of new internet addresses, to "investigate and address this very serious problem."

USTR named 25 online marketplaces and 19 physical markets in the report. It decided against reinstating Alibaba's consumer-to-consumer shopping website Taobao.com, which was removed in 2012, and said it would continue to monitor the site.

Alibaba says it spent more than 1 billion yuan ($160.7 million) combating fake goods and improving customer protection from the beginning of 2013 to the end of November.

But a Chinese regulator said in January many products sold on Alibaba sites infringed trademarks, were substandard or fake.

Alibaba said in a submission for the review that it would introduce a new system in early 2015 to fast track requests to remove counterfeit items.