By Jim Brown
GCN Live.com

The announcement has captivated business news publications all over the world: Facebook is going public.

It could be America’s greatest business success story — especially for a start up. Facebook has turned into a huge cash cow. Why wouldn’t I want a hunk of that?

The numbers are stunning. Last year, Facebook’s free cash flow jumped from $190 million to $470 million. Oh, to be a shareholder in 2011, when stock equity went from $2.2 billion to $4.9 billion. So now Mark Zuckerberg and Company want more cash, and Facebook reportedly expects an infusion of $5 billion in new cash from the proposed stock sale. $5 billion? What for?

Now, I’m a Facebook guy. I have 3515 Facebook friends the last time I checked. I post my weekly columns, funny videos, and general commentary with a bit of humor almost every day. As a publisher, columnist, and talk show host, I used to receive proposed topics and ideas by email. But more and more suggestions are coming in through Facebook. When I need weekend concert suggestions or cartoons and videos to post on my website, I check out Facebook.

And I do know a bit about Facebook’s founder Mark Zuckerberg. No, I haven’t met him yet, but I have talked at length with the guy who plays him in the movie. Did you see The Social Network? Actor Jesse Eisenberg was nominated for an Academy Award for his portrayal of Zuckerberg. So here’s my Zuckerberg story.

I’m in New York visiting grandsons, and I receive a last minute invitation to an uptown cocktail party with movie people. I feel a bit out of my league, so I make small talk with whoever happens to bump in to me at the crowded gathering. A kid tells me that he’s an actor. “Have I seen you in anything?” I said, continuing to check out the room. “Well, I’m up for an academy award for playing Mark Zuckerberg in The Social Network.” My interest picks up.

My new friend, Jesse Eisenberg, told me that he had met Zuckerberg once, when they both appeared on Saturday Night Live. “He didn’t have much to say,” Eisenberg told me. “I don’t think he was too fond of the movie.” And for good reason. Zuckerberg is portrayed as a ruthless young man with a big ego, who founded Facebook to increase his chances with girls.

So what’s this got to do with Facebook going public? Like many IPO execs, ego and ruthlessness can become self-serving motifs for giving enormous benefits to those who own an existing part of the company. Legitimate reasons to go public might be to add a much larger inventory, build new plants, or expand into other fields. These projections would be good reasons for investors to buy a hunk of the new stock offering – capital to support a struggling start up in getting a firmer foothold from which it can grow public shareholder value.

But in the IPO prospectus, Facebook is quite open about not needing any new cash. So what are the reasons given by The Facebook’s team for the infusion of $5 billion from a public offering? According to the Financial Times: “It intends to put the cash into US government bonds and savings accounts, and perhaps to use some to pay the tax due on converting into shares the “restricted stock units” it has given to its 3,200 employees.” So as the Times concludes, the only reason for the Facebook IPO is to generate a lot of cash for present stockholders and to pay for the taxes owed that will be triggered by, you guessed it, going public. There ought to be compelling reasons to go public other than to dump additional huge benefits into the already fat accounts of the privileged shareholders, to the likely disadvantage of the public shareholders.

If you are considering buying new Facebook stock, remember that Zuckerberg will appoint his own board and will hold on to more than one-half of the voting rights of his company. Public shareholders will have no say in how the company is run. Yes, Zuckerberg did create the company from scratch, and some investors might feel OK with his calling all the shots with no checks and balances. However, few public companies operate in this fashion; but on the other hand, few other companies have become so successful so quickly.

We will see a long list of new millionaires who have acquired stock in the current privately held company if the IPO is sold. Did you read about the graffiti artist who painted Facebook’s walls? Instead of being paid in cash, he opted to take Facebook stock for his work, and his shares in new public company are projected to be worth in excess of $200 million. One wonders how many of the present insiders will get rich, and then bail out with their new wealth?

Zuckerberg is quite open in his prospectus. “We are going public for our employees and our investors,” he writes. “We made a commitment to them when we gave them equity that we’d work hard to make it worth a lot and make it liquid, and with this IPO, we are fulfilling our commitment.”

You can’t knock Zuckerberg and his team for wanting to reap bountiful rewards for their work. The question for proposed investors is whether or not the upward spiral will continue. The present growth of Facebook has slowed down, and Inside Facebook reported that some 6 million users departed the company in a single month last year. You might wonder just how much growth potential is there for a company that already has 845 million users.

Is this widely successful company for real as to future growth, or are we witnessing another Silicon Valley bubble, with “friends” getting bored and moving to a new start up? Are you willing to roll the dice and take a chance? As for me, I think I’ll pass on the opportunity to become a rich guy. I might just call my new friend Jesse, and take in a movie.

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“I started the site when I was 19. I didn’t know much about business back then.”
- Mark Zuckerberg

Peace and Justice
Jim Brown

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Jim Brown is the host of Jim Brown’s Common Sense talk radio show, which airs on GCN Sundays 9:00am-11:00am Central Time. Listen to the show On Demand.

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Madison Ruppert
End the Lie

Governments never seem to be satisfied with what they have, particularly when it comes to offensive technology or anything that can be used against their people, especially those who can be identified as dissenters.

Of course the United States is no different, in fact it might be the worst offender when it comes to developing technology to be used against the American people, like the dirt cheap miniature spy computer funded by DARPA or the new ShockRounds produced by Colorado-based SmartRounds Technology, LLC.

The defense industry seems to be quite fascinated with the concept of smart munitions, evidenced by the massive taxpayer dollars poured into programs like the self-guided bullet development at Sandia National Laboratories, although the concept of smart less-lethal munitions is a bit newer.

SmartRounds Technology (SRT) is developing a round which carries liquefied compressed gas and then activates a high-powered “shock wave” which, upon impact, rapidly expands and “attacks three of the five human senses.”

Generally, one unit volume of the liquefied compressed gas will expand to around 800 unit volumes at standard temperature and pressure, meaning that a relatively large amount of gas (like a chemical irritant) can be carried in quite a small package.

The ShockRounds are designed to be fired from SRT-approved rifle launchers modeled on the Colt M4 carbine while the pistol launcher is modeled after an unnamed “popular semi-automatic handgun.”

SRT says that the choice of the payload carried on the projectile is what determines the stopping power of the particular round and there are many options in terms of payloads.

According to Wired’s Danger Room, they already have developed “around 10” of the payload combinations including chemical irritants, expanding foam, gel and explosives.

The ShockRounds are different from any previous less-lethal munitions because they employ a micro-mechanical system (MMS) which acts as an accelerometer.

This allows the round to detect when it is fired and when it makes contact with its target, then triggering the activation of the payload just a millisecond before the round can penetrate the body.

Previous rounds which were billed as less-lethal often proved to be quite lethal indeed, with a history of deaths from around the world with some studies actually concluding that certain types of rubber bullets “kill and maim too often to be considered a safe method of crowd control.”

Most recently America witnessed the serious damage these rounds can do during Occupy Oakland when Scott Olsen, a Marine veteran was hospitalized in critical condition after he was struck with a police projectile, which resulted in a fractured skull and brain swelling.

The MMS in the ShockRounds will supposedly lessen the damage these types of rounds can do, although it is still far from an appealing thing to be struck with.

When the round hits, a loud noise is emitted as the compressed gas is released and it has been designed to create a bright flash in order to obscure the vision of the target, all while delivering a payload of possibly toxic chemicals backed up by the punch of the bullet itself.

Nick Verini, the president of SRT says that his company’s new rounds have a 300-foot range and while law enforcement agencies are already interested in the ShockRound, Verini says he has not had much contact with military officials, although I doubt this is necessarily accurate due to the fact that many contracts cannot be discussed publicly.

Furthermore, given the Department of Defense’s obsession with technology like this, I find it highly unlikely that they wouldn’t be at least keeping tabs on the development in order to snap it up once it is ready.

Judging by how frivolously this type of technology has been used against the American people in recent history, I do not find this development encouraging. When police are pepper spraying peaceful protesters for no reason whatsoever, why would we trust them with even harsher technologies?

Given that pepper spray can actually kill people and some still defend it as a harmless food product, I can’t even imagine what these new weapons would be capable of and the unforeseen damage they could cause.

I am sure that if this comes into widespread use there will also be a chorus of talking heads constantly blabbering about how they are actually totally safe and whatever damage they do is either a freak accident or somehow the fault of the victim.

However, it is quite clear that this technology can and likely will be exploited by less-than-scrupulous law enforcement in order to oppress the American people and stifle legitimate dissent as they so happily did in the case of the Occupy Wall Street protests.

The fact that this is a multi-sensory assault and not just the pain from being struck by a projectile or assaulted by caustic chemical irritants is especially troubling. I am sure it will be much easier to intimidate the public and stifle completely legal peaceful protest with the threat of such technology.

Based on the fact that so many police departments are happily becoming militarized through programs like the Pentagon’s 1033 program, I think that technology like the ShockRounds will likely be gleefully embraced and used against the American people whenever possible, no matter how illegitimate it might be.

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Keith Johnson
American Free Press

Supreme Court rules rogue use of electronic tracking devices violates 4th Amendment.

Many are celebrating a recent decision by the Supreme Court, which ruled that law enforcement must get a warrant before attaching a Global Positioning Satellite (GPS) device to a vehicle for the purpose of tracking someone. But Tom Goldstein, the owner of the popular website SCOTUSblog.com, which monitors the Supreme Court, claims this is a misreading of the court’s decision and insists that many questions still remain.

By unanimous vote, the court decided in U.S. vs. Jones that the government’s attachment of a GPS tracking device on a suspect’s vehicle constitutes a “search” under the Fourth Amendment.

But does this mean all police will now be required to get a warrant before attaching a GPS to a car in order to track an individual? That’s a question constitutional scholars are mulling.

“The court’s only holding is that the installation of a GPS monitoring device is a search,” says Goldstein. “That is different from whether it requires a warrant and whether it requires probable cause, as opposed to a lesser standard like reasonable suspicion. The court in Jones did not decide [on] the government’s argument that this ‘search’ [installing the GPS device] did not require a warrant.”

Goldstein further opines that the court’s ruling “strongly suggests that long-term monitoring of that device will require a warrant,” but that short-term monitoring over a period of a day or two might likely be deemed permissible in court.

It wouldn’t be surprising if the Supreme Court purposely made a vague ruling that granted law enforcement leeway to continue this unconstitutional practice, particularly in light of other moves by the government—such as the National Defense Authorization Act—that were designed to strip the American people of their constitutional protections from unreasonable search and seizure.

Also, it remains to be seen if the ruling will curtail the use of GPS devices by federal agencies that have been targeting people because of their political views. In October 2010, 20-year-old Arab student Yasir Afifi found a GPS tracking device on his car and had photos of it posted online. Within 48 hours, half a dozen FBI agents and police appeared at his door demanding that he return their tracking device.

The FBI has not been forthcoming as to why they were following Afifi, but according to his attorney, Zahra Billoo, “He fit the profile—an Arab-American male, young, lives by himself, travels frequently to the Middle East to visit his family.”

A similar thing happened to animal activist Kathy Thomas, who found a GPS monitoring device under her car in 2005. According to published reports, after Ms. Thomas discovered the GPS device, her lawyer called a U.S. attorney to ask about it. The prosecutor reportedly admitted that it belonged to law enforcement and said he wanted it back. When Ms. Thomas refused, the FBI dropped the matter.

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Andor Jakab
AndorJakab.blog.hu

Another great piece by Hungarian blogger Andor Jakab about the state of piracy in his socialist Hungary.

I do not want to talk about piracy, trolls, viruses, worms, spam and scams on the internet. That would be boring. We are all fed up with all the discussion about it. But how do you deal with real trolls standing at the reception counter of your company? How do you handle a DDoS attack that isn’t targeted against your web server but against your whole personal life? What do you think about piracy when people ‘download’ your restaurant? What do you think about the methods of cyber-crime when it happens in the real world? And no, you don’t have to be a geek to understand any of this. I’m going to talk about my offline reality as it happens in a physical domain — Hungary.

Hungarians have learned to use methods of cyber-crime in the real world. I’ll only show you a couple of examples to illustrate my point.

1.) Piracy

Online piracy is when people download movies, software, music, books without paying for it. Yeah, it’s illegal, but who cares. They say downloading isn’t stealing. It’s like stealing your car, but you look out of the window and your ‘stolen’ car is still there in front of your house. They say they didn’t steal anything. Most people agree, some people don’t. Nevertheless, online piracy is there and we couldn’t yet do anything effective about it.

Online piracy – of course – is very advanced in Hungary. The absolute majority of people don’t even consider buying stuff. But I don’t want to bore you with stats, I’ll just show you one recent example from my life.

You know what copyright is about. It means it’s not okay to steal my writing from my blog without my permission. I wrote a post that become a huge hit. It was re-blogged all over the world more than 100 times, it got translated to more than a dozen languages and re-posted in many different countries.

People who asked for my permission:

In Hungary: 0 out of 10
Other countries: 9 out of 10

In fact I got so many requests from all around the world, that I decided to put out a creative commons license – that means it’s free to copy with some limitations. But people from around the world still feel the need to ask for my permission. It didn’t happen in 1 case in Hungary. No Hungarian has asked for a permission. They aren’t even aware of the fact, that it’s not okay. They think it’s normal. If I would whine about it, people would say I’m an asshole. Come on, it’s in your interest, it’s free promotion for you, bla-bla-bla.

Let me show you just one screenshot:

This is my blog-post re-blogged by a mainstream political party called Jobbik. It’s a party in the Parliament. They are far-right extremists, the opposite of my political preference. They didn’t ask for my permission to use my text for their purposes. I’m just showing this to illustrate the concept of how much they don’t care about it. I’m sure that they didn’t even want to hurt me with this in any way. On the contrary, I guess they wanted to ‘help’ me spreading the word. But you see, even a political party in the Hungarian Parliament doesn’t care about my rights as an author. Maybe you think I should sue them. But that’s because you don’t know how these things work out in Hungary. And also, I do not want to sue anybody because of a silly blog.

But restaurants are also stolen the very same way:

This is a Subway restaurant operated the Hungarian way. The Hungarian franchise operators think they have learned everything they need from Subway, now they are better off without the owner of the brand. So they changed the logo to Myway and that’s it. They continue without them. I have nothing to do with Subway, but it also happened with EVERY business I used to own. They were all stolen from me until the point I couldn’t compete any more with the competition who used my know-how but didn’t respect any of the quality guidelines, nor any laws and regulations or just generic decency is business. I went to court and lost ALL cases. I didn’t win a single case, although I spent a fortune on legal proceedings that took 5 years. It’s annoying, because my cases weren’t as ‘questionable’ as the “Myway” thing you see on the photo.

2.) Troll tactics

The interesting part of the above detailed ‘piracy’ case is that in Hungary we have EU conform law. It isn’t China where the law is different. It is a criminal case in Hungary too as much as in the USA. I had all the physical evidence of people stealing my 1) logo without any change 2) software 3) know-how 4) advertising materials. It’s a clean-cut legal case, but I still didn’t win any of the numerous cases at the courts. Not a single case, not even partially.

How is it possible?

It wasn’t just clever legal defense from their side. In fact law doesn’t have anything to do with it. They used troll tactics. In case you didn’t know what it is:

In Internet slang, a troll is someone who posts inflammatory, extraneous, or off-topic messages in an online community, such as an online discussion forum, chat room, or blog, with the primary intent of provoking readers into an emotional response or of otherwise disrupting normal on-topic discussion.

I experience the very same tactics that internet trolls use in online discussion forums, comment threads to dismantle any kind of online community in legal proceedings, and in everyday life too. People have mastered how to do it online, but it did not stop there.

Now I see it every day in restaurants, in real-world customer relations, and yes, even at legal proceedings. They are very clever! It’s not at all easy to protect yourself from troll tactics. I’m not sure if its possible at all. I couldn’t so far.

Show me 1 online community that is now free of trolls. I don’t know any. And it’s relatively easy to handle internet trolls. You can’t just ban, down-vote a real life troll. When they are using the same tactics in the real world, you are just screwed and that’s basically it. They will never really do anything illegal. They know the law better than anybody. But that’s the whole point. No matter what the rules are, they will always find a way to abuse them.

3.) DoS attacks

A DoS (Denial of Service) attack on the internet means that a website gets a huge amount of ‘fake’ readers from the attacker. The attacker uses a program that will read your webpage a million times a second. You get the idea. The web-server will get so much traffic that it will slow down, or stop working. It will be out of service, people will not be able to access it. It’s very difficult to protect a web-server from this kind of brute-force attack. It’s difficult to filter out the attacking traffic without making the whole site available to the ‘normal’ public too. Especially when the attack is distributed among hundreds or thousands of computers around the world. This is called a distributed denial of service attack or DDoS. The attacking computers are often part of a ‘botnet’, machines infected with malicious software. Owners of these computers aren’t even aware of the fact that they are part of such an attack.

In reality I experienced attacks in similar fashion. It has always been a national sport in Hungary. It’s in our blood to call the police on our neighbors, and report the companies we don’t like to all sorts of authorities. And of course, fighting legal battles with our competition. And there are legal battles between competitors everywhere else. There are so called ‘patent trolls’ in the international arena too. But those attacks are legal attacks. They want to win the legal case against you. And you get no more than 3-4 cases at a time. But I recently see a lot of attacks, that are very different in nature.

The real world DDoS attack:

- 50-500 different legal, bureaucratic cases, reports to authorities.
- These do NOT have any legal ground.
- The attacker does NOT aim to win the cases.
- The real aim is to OVERLOAD you and your company.

It goes like this:

- 5-10 different lawsuits are filed against you – without any legal base.
- You can’t just ‘filter’ these out, you are legally obliged to handle them. If you would fail to do so, the attacker immediately has a real case too.
- Next week you find 20 different print and online news about the lawsuits.
- 100 customers and business partners are asking what’s going on.
- Your tax authority starts an investigation on you based on anonymous claims.
- 3 other authorities will ask you to send them documents and reports.
- Your story is discussed on 200 different online forums. You can recognize 5-10 frequent commenters from their nickname choice and writing style.
- You are also charged with criminal defamation because you said that a false claim against you is ‘lie’. Now you have another case to deal with.
- By this time you had to hire a whole team of lawyers and spend money you don’t have on legal proceedings. You spend your time at the police, authorities, and courtrooms, and when you get back to your office, 10 new lawsuits wait for you.
- Your company isn’t strong enough to maintain 100% quality of service during the attack. It wouldn’t be a problem, your normal clients wouldn’t even recognize it. But your attackers are monitoring it closely. Next day 50 different claims are reported to authorities, that your service is awful and they want their money back (of course there’s no legal base for it).
- A DDoS attack is very frustrating when it’s overloading your IT infrastructure. But people have nerves too. The attacker counts on this and expects you to make a mistake out of frustration, so that new attacks can be initiated upon those mistakes.
- The generic public doesn’t have a clue about what’s happening. Nobody wants to hear your story that is too difficult and long to explain. People assume that something must be wrong with you, otherwise you wouldn’t be attacked for no reason. People assume that it must be your fault.
- Dealing with so many issues is also very expensive. If you can’t afford to pay anything in time, it’s 100% sure you will immediately have new cases.
- You don’t necessarily go out of business. But you don’t have any energy left for doing your normal work. Legal proceedings in Hungary take 3-5 years. During this time you can’t concentrate on the development of your company.
- In the meantime the attackers can do whatever they want, steal whatever you have, because they know you don’t have any resources left for another 20 legal cases. Unless you are very good at this, you just give up the fight.

It didn’t only happen to me. I saw this happening in large scales to at least 50 other businesses in Hungary. What makes it unique is the obvious effort to overload the target. The attackers know their stuff very well. They know exactly how court proceedings, authorities work, and they are very skilled in abusing the system. If you haven’t experienced this, if you aren’t prepared for it, you have no chance. It’s just a question of time when, and how strong the attack will be, but it will come.

You can’t just put out a web-server on the internet without any security. Now if you do business in Hungary, you must protect yourself from very similar attacks, otherwise there’s zero chance to survive on the long run. It’s especially tough for small business owners. Large corporations with professional customer support, and a huge legal department are much better prepared to handle it.

What’s the moral of the fable?

I don’t know. I just wanted to describe the situation. Maybe it’s just me who thinks this is insane. Maybe it’s just how business is nowadays. I don’t know. But I think there are two things to consider about it.

1. Offline business could learn some important lessons from cyber security folks. Who have already figured out the logic of how to protect online assets in a hostile environment built on distrust.
2. Online folks could think about if it’s really okay to do this kind of stuff. Because I think we in Hungary have evidence, that this mentality doesn’t stay online forever. Once people get used to it, they start doing it in realityspace too.

Care to comment?

On my blog there are no comments. Part of the reason is that by new Hungarian law I am legally responsible for the comments you make. It would be a huge security hole on the incognito firewall. You can comment on my Facebook page though. That’s probably safe enough for now.

Reader’s note: Translated from Hungarian into English.

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Previous articles by Andor Jakab:
- This is Why I Don’t Give You a Job

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Follow Andor Jakab’s blog and his experiences in the Hungarian economic climate.

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Steve Watson
GCN Live.com
February 1, 2012

Plans to resurrect legislation in 2013.

A Hawaii politician who proposed legislation requiring Internet providers to keep records of every website their customers visit has finally acknowledged that the bill is dead in the water.

State Representative John Mizuno says he has conceded to an “incredible” national backlash against H.B. 2288 (PDF) a bill that would have required the creation of virtual dossiers on state residents.

The legislation called for “Internet destination history information” and “subscriber’s information” such as name and address to be saved by providers for two years. The records would have also included a list of Internet Protocol addresses and domain names visited.

“It’s generated a lot of national attention,” Mizuno, a Democrat from Oahu, told CNET’s Declan McCullagh, who first exposed the proposed bill.

“I’ve taken into consideration the thousands of e-mails (which were often) colorful and passionate, which is absolutely fine… This bill just isn’t ready. It needs a lot of work.” Mizuno added

Although Mizuno said that he had now recommended “that we kill this bill,” he plans to return to it in 2013.

Daniel Leuck, a software design expert told CNet “While I respect Rep. Mizuno’s attempt to assist law enforcement in catching dangerous criminals, his approach is dangerously flawed.”

“There is no question that having two years of browsing history for every resident would make it easier for law enforcement. So would warrantless searches of people’s homes.” Leuck explained.

Mizuno’s bill had absolutely no privacy restrictions written into it to specify exactly what internet providers would be capable of doing with customer information. Encryption of data for security was not considered, and neither was requiring police to obtain a court order before viewing the information.

Had the bill passed, it would have set a huge precedent for national internet legislation, given that the Justice Department has only lobbied the U.S. Congress to record origin IP address, and not destination IP addresses.

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Steve Watson is the London based writer and editor for Alex Jones’ Infowars.net, and Prisonplanet.com. He has a Masters Degree in International Relations from the School of Politics at The University of Nottingham in England.

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