Facebook earnings beat expectations

28 January 2015 Last updated at 21:40

Facebook reported fourth-quarter profits of $701m (£462m), a 34% increase on the same period a year ago.

Advertising revenue grew by 53% to $3.59bn, with nearly 70% of that coming from mobile ad sales.

The social networking giant said it now has 1.39 billion active users each month, a 13% increase from a year ago.

"We got a lot done in 2014," said Mark Zuckerberg in a statement accompanying earnings.

Total profits for the year were $2.9bn, almost double the total for 2013.

However, the amount of profit the company made on each dollar of revenue decreased from 44% to 29% from a year earlier, as the social network invested more heavily in marketing and research and development (R&D).

The amount Facebook is spending on R&D nearly tripled to $1.1bn this quarter, as the company spent considerable sums on developing its various acquisitions such as Instagram, WhatsApp and virtual-reality headset maker Oculus Rift, as well as its own in-house messaging products and video services.

Facebook also echoed a common complaint amongst US firms this earnings season, saying its revenue would have increased by 53% instead of 49% were it not for unfavourable foreign exchange rates.

Analysis: BBC technology reporter Dave Lee

When Facebook first floated on the stock market, founder Mark Zuckerberg said his firm needed to figure out how to make money from mobile users - and quick.

Well, job done. Facebook's mobile ads lack subtlety, for sure, but the tactic is working, and it hasn't put users off. Mobile advertising threatened to be Facebook's Achilles' heel, but now it can be regarded as its strongest asset.

When Wall Street looks at social network earnings reports, a massive emphasis is put on growth. If not enough new people are signing up, the share price suffers - just ask Twitter.

With big acquisitions - Whatsapp and Instagram - and its "next billion" targets for the developing world, Facebook is continuing to grow at a rate that satisfies shareholders.

So what's next? Last week I visited Facebook's new London HQ. It was lunchtime, and I saw several employees spending their break immersed in Oculus Rift, the virtual reality headset bought by Facebook last year. It is expected to launch this year. Mark Zuckerberg has already changed the way the world interacts once. Can he do it again?

Follow Dave Lee on Twitter @DaveLeeBBC

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AI won't run amok, says Microsoft

28 January 2015 Last updated at 14:54

A Microsoft Research chief has said he thinks artificial intelligence systems could achieve consciousness, but has played down the threat to human life.

Eric Horvitz's position contrasts with that of several other leading thinkers.

Last December, Prof Stephen Hawking told the BBC that such machines could "spell the end of the human race".

Mr Horvitz also revealed that "over a quarter of all attention and resources" at his research unit were now focused on AI-related activities.

"There have been concerns about the long-term prospect that we lose control of certain kinds of intelligences," he said.

"I fundamentally don't think that's going to happen.

"I think that we will be very proactive in terms of how we field AI systems, and that in the end we'll be able to get incredible benefits from machine intelligence in all realms of life, from science to education to economics to daily life."

Mr Horvitz heads up a team of scientists and engineers at Microsoft Research's main lab at its parent company's Redmond headquarters.

The division's work on AI has already helped give rise to Cortana - a voice-controlled virtual assistant that runs on the Windows Phone platform and will shortly come to desktop PCs when Windows 10 is released.

Mr Horvitz said that he believed Cortana and its rivals would spur on development of the field.

"The next if not last enduring competitive battlefield among major IT companies will be artificial intelligence," he said.

"The notion that systems that can think, listen, hear, collect data from thousands of user experiences - and we synthesise it back to enhance its services over time - has come to the forefront now.

"We have Cortana and Siri and Google Now setting up a competitive tournament for where's the best intelligent assistant going to come from... and that kind of competition is going to heat up the research and investment, and bring it more into the spotlight."

'Existential threat'

Mr Horvitz's comments were posted online in a video marking his receipt of the AAAI Feigenbaum Prize - an award for "outstanding advances" in AI research.

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Stephen Hawking has warned of the threat AI poses

But while the Microsoft executive describes himself as being "optimistic" about how humans might live alongside artificial intelligences, others are more cautious.

The physicist Prof Hawking has warned that conscious machines would develop at an ever-increasing rate once they began to redesign themselves.

"Humans, who are limited by slow biological evolution, couldn't compete, and would be superseded," he said.

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Prof Murray Shanahan provides an introduction to artificial intelligence

Elon Musk - chief executive of car firm Tesla and rocket-maker SpaceX - has also suggested AI poses the greatest "existential threat" humankind faces.

"With artificial intelligence, we are summoning the demon," he told an audience of students in October.

"In all those stories where there's the guy with the pentagram and the holy water, it's like yeah he's sure he can control the demon. Didn't work out."

The Spectrum computer's inventor Sir Clive Sinclair has gone even further, saying he believes it is unavoidable that artificial intelligences will wipe out mankind.

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WATCH: Sir Clive Sinclair discussed AI as part of a wider interview

"Once you start to make machines that are rivalling and surpassing humans with intelligence, it's going to be very difficult for us to survive," he told the BBC. "It's just an inevitability."

Several recent and forthcoming films have also focused on how people might handle the potential threat AI poses, including Ex Machina, Transcendence, Avengers: Age of Ultron, Chappie and Terminator Genisys.

Perhaps unsurprisingly, Mr Horvitz voiced a preference for 2014's Her, charting the relationship of a flirtatious Cortana-like app and its owner.

Privacy fears

He did, however, acknowledge one concern: AI systems risk invading people's privacy, since they will become capable of making ever-deeper inferences about users by "weaving together" the mass of data generated by human activities.

But, he added, AI itself might offer a solution to this problem.

"We've been working with systems that can figure out exactly what information they would best need to provide the best service for a population of users, and at the same time then limit the [privacy] incursion on any particular user," he said.

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WATCH: Eric Horvitz spoke to the BBC about AI last year

"You might be told, for example, in using this service you have a one in 10,000 chance of having a query ever looked at... each person only has to worry about as much as they worry about being hit by a bolt of lightning, it's so rare.

"So, I believe that machine learning, reasoning and AI more generally will be central in providing great tools for ensuring the privacy of folks at the same time as allowing services to acquire data anonymously or with only low probabilities of risk to any particular person."

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Drone firm blocks White House flights

28 January 2015 Last updated at 16:56

The Chinese manufacturer of a drone that crashed into the White House lawn earlier this week is taking action to prevent repeat incidents.

DJI said it would publish a firmware update in the "coming days" that would prevent its kit flying inside Washington DC's restricted airspace.

It added that a later update would stop aircraft crossing national borders.

Last week, one of its quadcopters was found on the ground of a car park close to the Mexico-US divide.

Bags containing methamphetamine had been taped to its body, leading to the suspicion that traffickers had tried to use it to smuggle the illegal drug into the States.

Owners of the Phantom 2 family of drones will need to download the firmware and install it for the restrictions to take effect, and it is possible that programmers will be able to de-active the limitations in new models, which will come with the code pre-installed.

But the Shenzhen-based firm said it would tell customers that the update was "mandatory", making it impossible for them to add other future features if the firmware was not already in place.

"With the unmanned aerial systems community growing on a daily basis, we feel it is important to provide pilots with additional tools to help them fly safely and responsibly," said Michael Perry, a DJI spokesman.

"We will continue co-operating with regulators and lawmakers to ensure the skies stay safe and open for innovation."

He added that the firm had already intended to expand the kit's no fly zone system - which works by checking a drone's GPS location data to ensure it is not taking off from or flying into a restricted area, such as an airport runway.

But he told the BBC that the safety features were being "pushed out a bit earlier" than originally planned following the recent incidents.

'The eagle has crash-landed'

On Monday, the US Secret Service launched an investigation after one of DJI's Phantom drones was found on the grounds of the White House in the early hours of the morning.

It later emerged that the device had been flown by another government worker - an unnamed member of the National Geospatial-Intelligence Agency - while drunk, operating the device through the window of a nearby apartment.

He was not arrested, but the incident prompted calls for new rules to safeguard the President and others.

"The eagle has crash-landed in Washington," declared Senator Charles Schumer. "There is no stronger sign that clear FAA guidelines for drones for needed."

The Federal Aviation Administration is currently working on controls to govern the commercial use of small drones, but there have been reports that it might not be ready to issue them until 2017 or later.

In the meantime, DJI's firmware should prevent at least some of its drones from being able to take flight within the 25km (15.5 mile)-radius zone of restricted airspace centred on the Washington Monument.

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'Sanction tech firms', says Hollande

28 January 2015 Last updated at 17:21 By Kevin Rawlinson BBC News

Tech firms will be "considered complicit" in spreading hate speech if they allow it on their sites, the French President has said.

Francois Hollande called for a legal framework and sanctions to make them "face up to their responsibilities".

The French Interior Minister said he was due to discuss combating terrorist propaganda with US tech companies.

But a French free speech group said it amounted to asking the firms to act as privatised police.

Mr Hollande said: "We must act on a European and even an international level so that a legal framework can be defined, and that the online platforms that run the social networks are made to face up to their responsibilities, and that sanctions are imposed when they do not."

'Plan of action'

He added that he wanted the French government to draw up a "global plan of action" to deal with racism and anti-Semitism by the end of February.

And, speaking at a service marking 70 years since the liberation of the Nazi death camp Auschwitz on Tuesday, he said he would ask other world leaders for their support when he met them later that day.

The BBC's Paris Correspondent Lucy Williamson said: "The Interior Minister Bernard Cazeneuve has confirmed that he will travel to the United States to meet major internet operators like Google and Facebook, to talk about new ways of combating what he called 'terrorist propaganda' on the internet."

'Complicit'

Mr Hollande said that France supported an appeal from the Union of Former Deportees and the Union of French Jewish Students, against online Holocaust denial.

"It is aimed at the big operators - we know who they are. They can no longer close their eyes, otherwise they will be considered complicit in what is spread," he said.

The President added that he wanted the country's government to present "between now and the end of February, a global plan of action against racism and anti-Semitism".

Jeremie Zimmermann of French online freedom group La Quadrature du Net told the BBC: "Removing the judiciary from the equation by asking private companies based in the US to surveil and sanction their users - like an automated, privatised police force - goes contrary to the most fundamental principles of our democracies, and against fundamental freedoms.

"Destroying our own democracy and freedom is playing the terrorists' game - and letting them win it - a very dangerous and counterproductive trend. "

'Concerns'

In the aftermath of the three days of attacks in Paris, which began on 7 January, the French government has moved to tackle extremism online.

In a cabinet meeting a week after the attacks, ministers said that the intelligence services' ability to deal with the "terrorist menace" online, and particularly on social networks, had diminished in recent years.

They said that they would be given extra resources to be used specifically to counter the threat online.

And they said that a partnership with the technology giants would be "indispensable" as they sought to create the "conditions for rapid reporting of content inciting racial hatred and terror".

The French government also launched a video campaign on social media to try to dissuade would-be jihadists under the headline "you will die alone, far from home".

The video, which is visually similar to some Islamic State propaganda films, seeks to counter the arguments put forward by extremist groups.

'Committed'

Social networks such as Facebook are known to meet regularly with government officials in order to address various concerns, and particularly those around terrorism, since the Paris attacks.

A Google spokesman said the firm was "committed to assisting the French and other governments in their fight against terrorism and crime, both in times of emergency and at other times."

He added: "We have clear policies banning incitement to violence or promotion of hatred on our platforms, and we remove such content whenever our users or law enforcement flag them to us. We are always at the French Government's disposal if they want to meet us to discuss this topic."

A spokesman for Facebook refused to comment.

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Coder creates smallest chess game

28 January 2015 Last updated at 20:18 By Leo Kelion Technology desk editor

A French coder has developed what is thought to be the smallest-sized chess computer program.

BootChess is only 487 bytes in size, and the code can be run on Windows, Mac OS X and Linux computers.

That makes it smaller than 1K ZX Chess - a Sinclair ZX81 computer game, which contained 672 bytes of code and had held the record for 33 years.

The new title's creator told the BBC that the challenge had seemed impossible at first.

Olivier Poudade added that he hoped his achievement would now inspire other programmers to get involved in the "sizecoding" scene.

"[It] demonstrates why assembly language is still the language of choice to excel [at] in programming," he said.

"[And it] reminds others that optimising in computer programming is not only about speed, but also about size."

He said that he had also wanted to pay tribute to the craft of David Horne - 1K ZX Chess' creator - as well as other unsung heroes of the 1980's English and Russian ZX81 and ZX Spectrum coding community.

The ZX81 only had 1K - or 1,024 bytes - of RAM memory, limiting what it could do.

Today's computers typically ship with chips that can store millions of times that amount.

For comparison's sake, even a couple of image-less tweets take up roughly the same amount of data as Mr Poudade's complete program.

Pawn promotion

To achieve his goal, Mr Poudade - a member of the Red Sector Inc coding group - had to make the look of his game even more basic than its 1982 predecessor.

The board and pieces of BootChess are represented by text alone, with P representing pawns, Q used for the queens and full stops put in the place of empty squares.

Some critics have carped that it cannot be called a "complete" chess program because it does not allow castling - a defensive move in which a king and castle/rook shift positions simultaneously.

However, Mr Poudade noted that 1K ZX Chess shared the same limitation, and highlighted that his program allowed pawns to be turned into queens when they reached the opponent's side of the board, something that was not possible in Mr Horne's game.

Even so, for those seeking a code-anaemic version of the centuries-old game that uses graphics rather than letters to represent the board and supports castling, then the 1,251 bytes-sized Tiny Chess, written in Javascript by Mexican developer Oscar Toledo G, may be the preferred option.

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Nintendo halves annual profit target

29 January 2015 Last updated at 03:53

Nintendo's operating profit grew nearly 50% in the last quarter but it was not enough to keep the video game-maker from slashing its full year target.

The firm's operating profit hit 31.8bn yen ($269m; £177m) from October to December, but it still cut its earnings target for the fiscal year to March.

It now expects to make 20bn yen down from 40bn yen, which is also well below market expectations.

The profit warning sent its shares down nearly 9% in Tokyo on Thursday.

The Japanese tech giant also slashed its annual console sales target by 25% to 9 million after sales of its 3DS consoles fell nearly 40% in the period from a year ago.

Consoles face competition

Sales of the 3DS consoles, with the latest version launched in October, got off to a good start in Japan, the company said in a statement.

"However, as sales of the Nintendo 3DS hardware in the United States and in Europe did not grow sufficiently, the global sales of the Nintendo 3DS family hardware were 7.08 million units."

The maker of hit games like Super Mario Bros has facing stiff competition from console rivals such as Sony and Microsoft at a time when mobile games are gaining popularity.

But a sharply weaker yen is expected to inflate its net income this year, because over 70% of Nintendo's sales happen outside of Japan.

The company is still hoping to post its first annual operating profit in four years.

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Samsung profits hit by mobile sales

29 January 2015 Last updated at 11:12

South Korean tech giant Samsung Electronics has reported its first annual earnings decline in three years, in part due to a sharp drop in sales of mobile phones.

Net profit fell to 23.4 trillion won ($21.3bn; £14bn) last year, a 27% fall from 30.5tn won in 2013.

Mobile phone sales for the year fell 21% to 107.41tn won.

Analysts said that competition in the Chinese market was eating into Samsung's profits.

Battleground

Samsung's mobile phone division saw profit in the final three months of 2014 fell to 1.96tn won compared with 5.47tn won a year earlier.

The world's biggest mobile phone maker has been facing stiff competition from Apple and cheaper Chinese rivals.

China is a key battleground for mobile firms. The country has the world's largest smartphone market, and Samsung's sales decline was evident there.

Apple contributed to Samsung's latest reversal in fortune, launching iPhones with bigger screens that robbed Samsung's Galaxy phones of a key selling point.

Samsung was already battling competition in low-end phones from upstart manufacturers such as China's Xiaomi.

Samsung is struggling in countries such as China because "they're sort of being eaten from the bottom up by regional players" including Huawei and Xiaomi, said Ben Bajaran, an analyst at Silicon Valley research firm Creative Strategies.

"And now with Apple being competitive in larger phones, you're seeing Samsung losing any edge they had at the high end," he said.

Chip sales

Despite its earnings coming within market expectations, Samsung's shares closed down 1.3% in Seoul on Thursday.

Demand for its smartphones and tablets will continue to fall in the first quarter of this year compared to the last because of seasonal factors, said Samsung in its results statement.

"The mobile business will focus on increasing sales and improving business performance through new product line-ups, such as the Galaxy A series," it said.

The company's lacklustre earnings come just a day after rival Apple reported the biggest quarterly profit ever made by a public company.

On the positive end, a boom in Samsung's high-margin chip sales helped offset the downturn in its mobile business. Its semi-conductor division's operating profit jumped almost 36% in the final quarter of 2014.

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Virtual reality takes to the sky

29 January 2015 Last updated at 11:43

First-class passengers flying between Australia and the US will soon be able to watch content via a virtual reality headset, airline Qantas has announced.

In the first tie-up of its kind, the airline has teamed up with Samsung to provide the headsets for in-flight entertainment.

The Samsung Gear VR headsets will show a variety of tailored content.

Experts have questioned how much content will be available and what the impact on fellow passengers might be.

Qantas said the headset would offer new experiences for passengers.

"Whether the user wants a virtual tour of our new Los Angeles First Lounge or to experience an A380 landing from the tarmac, this technology gives us a completely new way to connect with our customers," said Qantas group executive Olivia Wirth.

"It's also a fantastic tool to feature our network's destinations, inspiring travel and promoting tourism."

She also promised "the virtual worlds of favourite Hollywood blockbusters," although it is unclear how much film content is currently available in the format.

Qantas said that it was working with production company Jaunt to develop more content for the device.

Immersive experience

Ben Wood, director of research at the telecoms consultancy CCS Insight, said that getting good content would be the biggest challenge for Qantas.

He was also not convinced that an aircraft was the best place for virtual reality.

"I couldn't think of anything worse than sitting next to someone wearing this on a plane," he said.

"They would be fidgeting, looking behind them - it would drive me mad."

He also questioned how safe the experience would be.

"It is such an immersive experience, people would be completely unaware of what is going on around them and presumably it would not be linked in to the in-flight safety announcements."

Initially the trial will last for three months and will be made available to customers on certain flights between Australia and Los Angeles from mid-March. The headsets will also be available in the first-class lounges at Sydney and Melbourne airports, from February.

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US firms object to source code rules

29 January 2015 Last updated at 14:35 By Kevin Rawlinson BBC News

US business groups are seeking "urgent discussions" over new Chinese rules requiring foreign firms to hand over source code and other measures.

The groups wrote to senior government officials after the introduction of the cybersecurity regulations at the end of last year.

The US Chamber of Commerce and other groups called the rules "intrusive".

The regulations initially apply to firms selling products to Chinese banks but are part of a wider review.

"An overly broad, opaque, discriminatory approach to cybersecurity policy that restricts global internet and ICT products and services would ultimately isolate Chinese ICT firms from the global marketplace and weaken cybersecurity, thereby harming China's economic growth and development and restricting customer choice," the letter read.

The groups said that the rules would force technology sellers to create backdoors for the Chinese government, adopt Chinese encryption algorithms and disclose sensitive intellectual property.

Firms planning to sell computer equipment to Chinese banks would also have to set up research and development centres in the country, get permits for workers servicing technology equipment and build "ports" which enable Chinese officials to manage and monitor data processed by their hardware, Reuters reported.

Source code is the usually tightly guarded series of commands that create programs. For most computing and networking equipment, it would have to be turned over to officials, according to the new regulations.

Tension

In the letter, a copy of which has been seen by the BBC, the groups have asked the Chinese government to delay implementation of the regulations and "grant an opportunity for discussion and dialogue for interested stakeholders with agencies responsible for the initiatives".

They added: "The domestic purchasing and related requirements proposed recently for China's banking sector... would unnecessarily restrict the ability of Chinese entities to source the most reliable and secure technologies, which are developed in the global supply chain," the letter, which was dated 28 January, read.

The letter from the American groups, including the US Chamber of Commerce, AmCham China and 16 others, was addressed to the Central Leading Small Group for Cyberspace Affairs, which is led personally by Chinese President Xi Jinping.

It comes at a time of heightened tension between the USA and China over cybersecurity. In May last year, Beijing denounced US charges against Chinese army officers accused of economic cyber-espionage.

Pressure

It was also alleged that the US National Security Agency spied on Chinese firm Huawei, while the US Senate claimed that the Chinese government broke into the computers of airlines and military contractors.

American tech firms, such as Cisco and Microsoft, are facing increased pressure from Chinese authorities to accept rigorous security checks before their products can be purchased by China's sprawling, state-run financial institutions.

Beijing has considered its reliance on foreign technology a national security weakness, particularly following former National Security Agency contractor Edward Snowden's revelations that US spy agencies planted code in American-made software to snoop on overseas targets.

The cyber-space policy group approved a 22-page document in late 2014 that contained the heightened procurement rules for tech vendors, the New York Times reported on Thursday.

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Sky to launch mobile phone service

29 January 2015 Last updated at 16:23

Pay-TV firm Sky is launching a mobile phone service next year in partnership with O2's Spanish parent Telefonica.

Sky will use Telefonica UK's wireless network, enabling the satellite broadcaster to offer mobile voice and data services for the first time.

It takes Sky into the battle for "quad play", adding mobile to its existing services of internet, landline and TV.

Offering all four services is seen as the next big UK growth area for telecoms firms and broadcasters.

Such bundled services are already popular in much of mainland Europe

"Sky has a proven ability to launch new services, at scale," said Jeremy Darroch, the company's chief executive.

The UK's telecoms market has seen several deals in recent months, and Telefonica is in talks to sell its O2 business to Hutchison Whampoa for about £10bn. Meanwhile, BT, the UK's largest fixed-line provider, is talks to buy the UK's biggest mobile operator, EE, for £12.5bn.

Sky, 39%-owned by Rupert Murdoch's 21st Century Fox, is present in more than 10 million homes and has been successful in cross-selling services.

Sky already offers Sky Go, which enables customers to watch Sky programmes across a number of devices.

Analysts welcomed the move, which they said was unlikely to be a costly drain on capital but which took Sky into a potentially important growth market.

"We would expect take-up amongst loyal customers to be relatively quick," analysts at Citi said in a research note.

The latest announcement will not affect Sky's existing tie-up with Vodafone allowing customers to access Sky Sports or Sky's pay-as-you-go NowTV service.

Last year Sky changed its name from BSkyB after it completed the acquisition of Sky Italia and a majority interest in Sky Deutschland. The enlarged company now serves 20 million customers in three of Europe's four biggest markets.

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