Weekend news round-up: Snowden’s hacking tools, Twitter’s growing pains

10 Feb 2014

In our round-up of the weekend’s tech news, former CIA contractor Edward Snowden used cheap software to bypass the US National Security Agency (NSA)’s defences and scrape data, Twitter’s growing pains, and US net neutrality wars.

Cheap, cheerful and devastating

The New York Times reported that rogue operative Edward Snowden used low-cost web crawling software to beat the most expensive and sophisticated software the National Security Agency (NSA)had in order to scrape data from the NSA’s networks.

“The findings are striking because the N.S.A.’s mission includes protecting the nation’s most sensitive military and intelligence computer systems from cyberattacks, especially the sophisticated attacks that emanate from Russia and China. Mr. Snowden’s “insider attack,” by contrast, was hardly sophisticated and should have been easily detected, investigators found.

“Moreover, Mr. Snowden succeeded nearly three years after the WikiLeaks disclosures, in which military and State Department files, of far less sensitivity, were taken using similar techniques.”

Twitter’s growing pains

Re/code reported that Twitter’s true online growth problems revolve around keeping the 241m active users it has already won.

“According to people close to the company, Twitter has seen more than one billion registrations to its service over the past seven and a half years. Stack up that figure against the most recent active user number — 241 million — and you’ve got a retention rate somewhere in the mid-20 percent range.

“Caveat: This billion-plus stat is complicated by Twitter’s massive spam problem and the subsequent purge that occurred last year. But suffice to say, registrations are still high compared to the number of current active users.

“It’s called the ‘leaky bucket’ in product terms, and Twitter needs to figure out how to patch it.”

Return of Icahn

Corporate raider and icon of 80s business acumen Carl Icahn has fixed his sights firmly on Silicon Valley and has been using his billions to shake things up at players like Netflix, Dell, eBay and Apple, according to The Verge.

What exactly does he want? That depends on the situation. With Apple, he is eager to loosen the purse strings on its massive stockpile of overseas cash. With Dell, he was fighting to prevent the company from going private unless it paid a higher premium to shareholders. He wanted Netflix to sell itself to the highest bidder and he hopes eBay will take his advice and spin out PayPal into a separate company. In every case he’s looking for a major shakeup that will “unlock value” for shareholders, himself included.

“To understand Icahn’s seemingly unending appetite for high level corporate confrontations, you need to go back to his roots. In the 1980s, a class of high-profile investors rose out of the world of leveraged buyouts (LBOs). Typically this meant they were finding companies with strong balance sheets, borrowing heavily against that cash flow to buy up stock, then attempting a forced takeover of said company.”

Throttled in America

GigaOM reported that there is something rotten in the state of video streaming and the data is starting emerge that ISPs are throttling video streaming players as the realities of net neutrality begin to unfold.

“The problem is peering, or how the networks owned and operated by your ISP connect with networks owned and operated by content providers such as Amazon or Netflix as well as transit providers and content deliver networks. Peering disputes have been occurring for years, but are getting more and more attention as the stakes in delivering online video are raised. The challenge for regulators and consumers is that the world of peering is very insular and understanding the deals that companies have worked out in the past or are trying to impose on the industry today is next to impossible.

“Which is why we need more data. And it’s possible that the Federal Communications Commission has that data — or at least the beginnings of that data.”

Inside Bitcoin’s alleged money-laundering scandal

The Verge painted a picture of what exactly happened inside an infamous money-laundering scandal involving digital currency Bitcoin and Winklevoss-backed BitInstant.

“For the first wave of users, buying Bitcoin felt like a game you played with an elite group of people who knew something everyone else didn’t. It was an incredibly complex world that grew more sophisticated by the week, but it felt protected and separate from reality, to say nothing of the world of regular finance.

“But that’s no longer true: Bitcoin’s part of the system now. Any money transmitter, from Western Union on down, is required to register with the US Treasury’s Financial Crimes Enforcement Network (FinCEN) and install compliance officers whose sole purpose is to sniff out money launderers. BitInstant is no exception. Shrem registered as a chief compliance officer in March of 2012, obligating him to report potentially illegal activity back to the government. The US attorney says he was negligent in those duties, but the larger issue of BitInstant’s independence was already settled: in the libertarian battle between the state and free enterprise, money exchanges are already occupied territory.”

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John Kennedy is a journalist who served as editor of Silicon Republic for 17 years