Online Attack Leads to Peek Into Spam Den

If he were known at all to Western security analysts who track the origins of spam, and in particular the ubiquitous subset of spam e-mails that promote male sexual enhancement products, it was only by the handle he used in Russian chat rooms, Engel.

His pleasant existence, living in obscurity, changed this summer when a court in Moscow linked Mr. Artimovich and three others with one of the world’s most prolific spambots, or illegal networks of virus-infected computers that send spam.

The ruling provided a peek into the shrouded world of the Viagra-spam industry, a multimillion-dollar illegal enterprise with tentacles stretching from Russia to India. Around the world every day, millions of people open their e-mail in-boxes to find invitations to buy Viagra or some other drug, potion or device to enhance sexual performance.

Who sends these notes and how they make money had remained a mystery to most recipients. The court put names and faces to a shadowy global network of infected computers known outside Russia as Festi and inside the country as Topol-Mailer, named after an intercontinental ballistic missile, the Topol-M. It was powerful enough to generate, at times, up to a third of all spam e-mail messages circulating globally.

Prosecutors say Mr. Artimovich was one of two principal programmers who controlled the network of infected computers in a group that included a former signals intelligence officer in the Federal Security Service, or F.S.B., the successor agency to the K.G.B.

Once they control the virus-infected computers, they are able to use software embedded on home and business computers to send persistent e-mails. The owner of an infected computer usually never knows the PC has been compromised.

More often than not these days, those infected computers are in India, Brazil and other developing countries where users cannot afford virus protection. But the high-end programming of viruses often takes place in Russia.

While the business model has been well understood — it was the subject of an extensive study by the University of California, San Diego — the individuals behind one of the largest spam gangs using it have largely avoided official scrutiny, until recently.

The Tushino Court in Moscow convicted two people of designing and controlling the Festi botnet, and two others of paying for its services, but none of them specifically of distributing spam. Instead, the court convicted the group of using the Festi network in 2010 to turn thousands of browsers simultaneously to the Web page of the online payment system of Aeroflot, the Russian national airline, crashing it in what is known as a distributed denial of service attack.

The spambot problem has vexed Western law enforcement officials, who complain the Russians ignore losses to global businesses that pay about $6 billion annually for spam filters, and to companies like Pfizer for sales lost to counterfeit pills.

Computer security experts have long been intrigued by the possibility that the Russian government has turned to so-called black hat hackers for political tasks in exchange offering protection from prosecution. But any direct evidence has been lacking, though the Festi case adds to the circumstantial evidence.

Russian authorities deny creating or turning a blind eye to botnets used to attack the Web sites of dissidents, or banks and government institutions in neighboring countries like Estonia or Georgia.

Valery V. Yaschenko, a deputy director of the Kremlin-linked Institute for Problems of Information Security, said the Russian government “condemns the practice of using strangers’ computers for attacks, or for any reason.”

For years, spam has been a very good business for Russian criminal gangs. An estimated $60 million a year is pulled in through these networks. Despite the Russian prosecutors’ victory this summer, similar networks remain active as tools for fraud and hacker attacks. Computer security experts say that suggests either the wrong men were convicted or the controlling codes were passed to somebody else.

Stefan Savage, a professor in the systems and networking group at the University of California, San Diego, studied the Festi scheme, in part by making test purchases.

‘Like’ This Article Online? Your Friends Will Probably Approve, Too, Scientists Say

But surprisingly, an unfair negative reaction will not spur others to dislike the article. Instead, a thumbs-down view will soon be counteracted by thumbs up from other readers.

Those are the implications of new research looking at the behavior of thousands of people reading online comments, scientists reported Friday in the journal Science. A positive nudge, they said, can set off a bandwagon of approval.

“Hype can work,” said one of the researchers, Sinan K. Aral, a professor of information technology and marketing at the Massachusetts Institute of Technology, “and feed on itself as well.”

If people tend to herd together on popular opinions, that could call into question the reliability of “wisdom of the crowd” ratings on Web sites like Yelp or Amazon and perhaps provide marketers with hints on how to bring positive attention to their products.

“This is certainly a provocative study,” said Matthew O. Jackson, a professor of economics at Stanford who was not involved with the research. “It raises a lot of questions we need to answer.”

Besides Dr. Aral (who is also a scholar in residence at The New York Times research and development laboratory, working on unrelated projects), the researchers are from Hebrew University in Jerusalem and New York University.

They were interested in answering a question that long predates the iPhone and Justin Bieber: Is something popular because it is actually good, or is it popular just because it is popular?

To help answer that question, the researchers devised an experiment in which they could manipulate a small corner of the Internet: reader comments.

They collaborated with an unnamed Web site, the company did not want its involvement disclosed, on which users submit links to news articles. Readers can then comment on the articles, and they can also give up or down votes on individual comments. Each comment receives a rating calculated by subtracting negative votes from positive ones.

The experiment performed a subtle, random change on the ratings of comments submitted on the site over five months: right after each comment was made, it was given an arbitrary up or down vote, or — for a control group — left alone. Reflecting a tendency among the site’s users to provide positive feedback, about twice as many of these arbitrary initial votes were positive: 4,049 to 1,942.

The first person reading the comment was 32 percent more likely to give it an up vote if it had been already given a fake positive score. There was no change in the likelihood of subsequent negative votes. Over time, the comments with the artificial initial up vote ended with scores 25 percent higher than those in the control group.

“That is a significant change,” Dr. Aral said. “We saw how these very small signals of social influence snowballed into behaviors like herding.”

Meanwhile, comments that received an initial negative vote ended up with scores indistinguishable from those in the control group.

The Web site allows users to say whether they like or dislike other users, and the researchers found that a commenter’s friends were likely to correct the negative score while enemies did not find it worth their time to knock down a fake up vote.

The distortion of ratings through herding is not a novel concern. Reddit, a social news site that said it was not the one that participated in the study, similarly allows readers to vote comments up or down, but it also allows its moderators to hide those ratings for a certain amount of time. “Now a comment will more likely be voted on based on its merit and appeal to each user, rather than having its public perception influence its votes,” it explained when it unveiled the feature in April.

Duncan J. Watts, a scientist at Microsoft Research, said the overall findings fit with “cumulative advantage,” the idea that something that starts slightly more popular will build upon that popularity until it is far ahead of its competitors — and conversely, something that does not catch on will usually fade away whether or not it is good.

He cited the new crime novel “The Cuckoo’s Calling,” by Robert Galbraith, which received good reviews but tiny sales when it was released in April. When it was revealed that Galbraith was a pseudonym for J. K. Rowling, the book suddenly had the cumulative advantage conferred by the Harry Potter series and jumped to the top of best-seller lists.

“The biggest obstacle to success is just being noticed,” Dr. Watts said.

But opinions do not invariably follow popularity. In an earlier experiment by Dr. Watts, people listened to a list of songs ranked by popularity and were asked to rate them. But for some, the list was inverted — what they were told was the most popular song was actually the least popular.

The incorrect list did affect how listeners rated the songs — the good songs never achieved the same popularity as among listeners who were given the correct list, and the bad songs did better than they would have otherwise.

“But we also found, in a result that was somewhat consistent with the result here, that sometimes the songs were able to recover their sort of real ranking in spite of the manipulation,” Dr. Watts said. The listeners, he said, “in effect noticed that the song was better or worse than we had made it seem.”

Bits Blog: Coursera, an Online Education Company, Raises Another $43 Million

Ramin Rahimian for The New York Times Daphne Koller, a co-founder of Coursera, at the company’s offices in Mountain View, Calif. Over the next few months, Coursera plans to double its employees to about 100.

Coursera, a year-old company offering free online courses, has raised another $43 million in venture capital from investors active in both domestic and international education.

The new investors include the International Finance Corporation, the investment arm of the World Bank, and Laureate Education, an international higher education company with dozens of profit-making universities around the world, as well as GSV Capital, Learn Capital and Yuri Milner, an individual entrepreneur.

“We hope it’s enough money to get us to profitability,’’ said Daphne Koller, a co-founder of Coursera. “We haven’t really focused yet on when that might be.’’

Coursera, based in Mountain View, Calif., previously raised $22 million from Kleiner Perkins Caufield & Byers; New Enterprise Associates; and the University of Pennsylvania and California Institute of Technology, two of its university partners.

Over the next few months, Coursera plans to double its employees to about 100, and expand in several areas, including mobile apps and its Signature Track offerings, which charge a fee to students who want an identity-verified certificate upon successful completion of Coursera’s free courses. Since January, when the Signature Track option was first offered in five courses, Signature Track fees have produced more than $800,000, Ms. Koller said — and in the long run, she said, such revenue may be enough to make the company sustainable.

The company also plans to invest in international expansion, through localization, translation and distribution partnerships, and techniques for blended learning, in which Coursera’s online materials are used alongside classroom sessions with a professor.

“We see great potential for using some of the Coursera materials in our universities, so there is a strategic element to this investment,’’ said Douglas L. Becker, chairman and chief executive officer of Laureate. “The I.F.C. made the largest education investment they ever made in Laureate, and they’re joining us in this investment. Coursera allows us to invest in something we see as a rising technology impacting higher education, and gives us access to their content and curriculum.”

Coursera has grown with stunning speed since it began in April 2012, with four university partners. Now, the company works with 83 educational institutions on four continents, offering about 400 free college-level courses to more than four million students from every country in the world.

But after the initial burst of enthusiasm last year about massive open online courses, or MOOCs, and their potential for democratizing higher education worldwide, this year has brought some pushback. Faculty members at several institutions have expressed concern about how the courses may change higher education, how quickly university administrators signed on to work with MOOC providers, and whether the aim is more to save money than improve the quality of education.

So far, most of the students who have completed Coursera MOOCs have been college graduates, and it is still unclear how well the format will work to help students without degrees earn college credit for their online work. Coursera has recently started to market its materials for use by public universities in blended on-campus classes. Universities that use the materials will pay licensing fees, which Coursera will share with the universities that produce the courses.

Disruptions: Social Media Images Form a New Language Online

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Why Haven't I Gotten on the Online Jury Research Bandwagon?

It?s all the rage. It is pretty darn cool and it is much less expensive than the old, archaic way of doing things. Online mock trials. The technology now even has avatars that look like jurors sitting around a discussion table talking about your case. Really, how cool is that? There are myriad new and interesting ways to get juror feedback about your case and you don?t even have to leave the comforts of your office. Sorry to say, I am not yet convinced.

On the Road: Hotel Industry Deals With Its Online Critics

Now there are scores of major online travel and social media sites sprouting hundreds of thousands of customer reviews. And the hotel industry is frantically trying to stay on top of the commotion.

What appeared to be one such effort by a hotel executive drew attention last week. Tnooz.com, a site that specializes in travel technology, reported that an executive based in Sydney, Australia, with the worldwide hotel chain Accor, had anonymously posted more than 100 reviews on TripAdvisor.com, the consumer travel site that features millions of customer reviews of travel services, including hotels around the world.

The reviews of various Accor hotels were positive. A few took shots at competing hotels. Tnooz said that the executive, Peter Hook, admitted posting the reviews in a statement in which he explained that most of his reviews were for tourism activities and restaurants rather than just hotels. I could not reach Mr. Hook for comment.

Accor hotels around the world include the brands Sofitel, Novotel, Pullman, Mercure and Ibis. Kerrie Hannaford, an Accor spokeswoman, told me Friday she was unaware of the controversy involving the anonymous reviews. She did not respond to further calls for comment.

Knowing how busy most hotel managers are, I’m somewhat sympathetic to the pressures they have come under in recent years because of the tsunami of online reviews. Many hotel companies expect managers to respond personally to negative reviews, a time-consuming chore.

Olery, a company that offers brand reputation management for hotels, said in a report that about 78 percent of travelers used online reviews to help decide which hotel to book.

As the importance of online customer evaluations grows, an increasing number of hotel reviews are suspect. Big travel review sites like TripAdvisor say they try to monitor reviews to weed out the ones from customers clearly acting in bad faith, or from competitors simply out to torpedo a rival.

One global hotel company, Small Luxury Hotels of the World, not long ago created its own review system open to members of its loyalty program, called The Club. It allows review privileges only to members who have had more than one stay at a given hotel. Still, the reviews are open to honest evaluation, including criticism, said Paul Kerr, chief executive of Small Luxury Hotels, which represents more than 520 boutique luxury hotels in about 70 countries around the world.

Members overwhelmingly say that reviews are an important consideration in booking a hotel, he said. But for his group’s hotels, which do about 25 percent of their trade in business travel, it is important to cull the rampaging herd, he added.

“I didn’t believe that TripAdvisor provides a necessarily very good indicator of quality for high-end hotels because some of the people writing reviews may have only been to a luxury hotel once or twice, and don’t really know what they are talking about,” he said.

That can cut both ways, because an uninformed rave has minimal value to a discerning customer. “Someone might say, ‘Oooh, it’s so great; they have these fluffy towels’ — but that’s the sort of thing you expect in a luxury hotel,” he said. “On the other hand, you can get some unfair and unfounded criticism from people who don’t understand what a luxury hotel is about.”

He added: “We have about 450 reviews at about 250 of our hotels now. The customers love it. The hotels don’t. Some hotels don’t understand that it’s so important to have these reviews because it increases your rankings in Google. Your search-engine utilization is much better when it’s honest and transparent.”

I compared online reviews, chosen at random from the TripAdvisor and Small Luxury Hotels Web sites, for two of the group’s high-end hotels, the Huntington in San Francisco and Le Pavillon de la Reine in Paris.

Both hotels got mostly rave reviews, many using the word “superb.” The few criticisms were similar, but different in tone.

A review of the Huntington on the group’s Web site said, “I didn’t enjoy that Wi-Fi was charged ... really? Also, I thought the room could have used fresh paint, and the furniture looked a bit tired.” On TripAdvisor, an otherwise favorable review of Pavillon said, “Our room was in need of a thorough update.” It added, “The bathroom makeup mirror was held to the stem by duct tape.”

Mr. Kerr said that there was genuine value in providing reliable reviews, including those with criticism, for discerning and knowledgeable customers — even on a Web site managed by an organization that represents hotels, not the general public. “Our customers are not stupid people at all. They know what it’s all about,” he said.

On the other hand, he added, there is a desire for perspective. “If a hotel has only one review and it’s not a great one, that’s really not fair to that hotel,” he said. “So to make sure there are balanced reviews, we’ve got to have at least five reviews of a hotel before we put it all up on the system.”

Online Service Is Accused in Laundering of $6 Billion

The organization, Liberty Reserve, was responsible for laundering over $6 billion over the last seven years, with millions of customers around the world, according to the indictment. Prosecutors said that the company “facilitated global criminal conduct” and that the case, which involved law enforcement agencies in 17 countries, is believed to be the largest international money laundering prosecution in history.

The charges detailed a complicated system designed to allow people to move sums of money both large and small around the world with virtual anonymity, according to a three-count indictment announced by the United States attorney’s office in Manhattan.

“This was really PayPal for criminals,” a senior law enforcement official said, calling the company and a system of related businesses “a shadow banking system for criminal conduct” that was “able to facilitate all sorts of criminal conduct that would not otherwise happen.”

The indictment charges seven of the company’s principals and employees. Five of them were arrested Friday in Spain, Costa Rica and Brooklyn.

“Liberty Reserve was in fact used extensively for illegal purposes, functioning in effect as the bank of choice for the criminal underworld,” the indictment states.

Liberty Reserve, an online currency exchange, has surfaced as a preferred vehicle to transfer money between parties in a number of recent high-profile cybercrimes, including the indictment of eight New Yorkers for their role in looting $45 million from bank machines in 27 countries.

Liberty Reserve was incorporated in Costa Rica in 2006 by Arthur Budovsky, who renounced his United States citizenship in 2011, and was arrested in Spain on Friday.

Preet Bharara, the United State attorney in Manhattan, was expected to announce the charges at a Tuesday afternoon news conference along with officials from the Justice Department, the Secret Service, the Internal Revenue Service and the Department of Homeland Security.

In addition to the criminal charges, five domain names were seized, including the one used by Liberty Reserve, and officials seized or restricted the activity of 45 bank accounts.

The charges outlined how the money transfer system operated, offering a glimpse into the murky world of online financial transactions that bounces money between far-flung accounts from Cyprus to New York in the blink of an eye.

In order to transfer money using Liberty Reserve, a user needed to provide a name, address and date of birth. But they were not required to validate their identity.

“Accounts could therefore be opened easily using fictitious or anonymous identities,” the indictment states. Prosecutors cited “blatantly criminal monikers” used by Liberty Reserve clients like “Russia Hackers.”

Essentially, all a customer needed to open an account was an e-mail address.

The senior law enforcement official, who spoke on the condition of anonymity because the charges had not yet been announced, said that one undercover agent was able to register accounts under names like “Joe Bogus” and describe the purpose of the account as “for cocaine” without questioning. That no-questions-asked verification system made Liberty Reserve the premier bank for cybercriminals, facilitating a broad range of illegal online activity.

The senior law enforcement official said the case was significant because it attacked the financial infrastructure utilized by many cyber criminals in much the same way that drug money laundering prosecutions have sought to target the financial underpinnings of the narcotics trade.

“They’re not going to have this kind of fluid system that allows them to work globally in the same way,” the official said, noting that federal authorities were unaware of any other such system that operates on a similar scale. “It’s not the end of it,” the official said, referring generically to such cyber money laundering schemes, “but it’s a big deal.”

Novelties: Estate Planning Is Important for Your Online Assets, Too

But you may want to provide for your virtual goods, too. Who gets the photographs and the e-mail stored online, the contents of a Facebook account, or that digital sword won in an online game?

These things can be important to the people you leave behind.

“Digital assets have value, sometimes sentimental, and sometimes commercial, just like a boxful of jewelry,” said John M. Riccione, a lawyer at Aronberg Goldgehn Davis & Garmisa in Chicago. “There can be painful legal and emotional issues for relatives unless you decide how to handle your electronic possessions in your estate planning.”

Many services and programs have sprung up to help people prepare for what happens after their last login.

Google has a program called Inactive Account Manager, introduced in April, that lets those who use Google services decide exactly how they want to deal with the data they’ve stored online with the company — from Gmail and Picasa photo albums to publicly shared data like YouTube videos and blogs.

The process is straightforward. First go to google.com/settings/account. Then look for “account management” and then “control what happens to your account when you stop using Google.” Click on “Learn more and go to setup.” Then let Google know the people you want to be notified when the company deactivates the account; you’re allowed up to 10 names. You choose when you want Google to end your account — for example, after three, six or nine months of electronic silence (or even 12 months, if you’ve decided to take a yearlong trip down the Amazon).

Google has ways to make sure that your electronic pulse has really gone silent; it checks for traces of your online self, for example, by way of Android check-ins, Gmail activity and Web history. Then, a month before it pulls the plug, Google alerts you by text and e-mail, just in case you’re still there. If silence has indeed fallen, Google notifies your beneficiaries and provides links they can follow to download the photographs, videos, documents or other data left to them, said Nadja Blagojevic, a Google manager.

And if you just want to say goodbye to everything, with no bequests, you can instruct Google to delete all of the information in your account.

Naomi R. Cahn, a professor of law at George Washington University Law School in Washington, says Google’s new program is a step forward in digital estate planning. “People should carefully consider the fate of their online presences once they are no longer able to manage them,” she said.

Other companies may also be of help in planning your digital legacy. Many services offer online safe deposit boxes, for example, where you can stow away the passwords to e-mail accounts and other data. Accounts like this at SecureSafe, are free for up to 50 passwords, 10 megabytes of storage and one beneficiary, said Andreas Jacob, a co-founder. Accounts can be accessed from a browser, or from free iPhone, iPad and Android apps. The company also offers premium services for those who need a larger storage space, more passwords or more beneficiaries.

There is always your sock drawer or another physical repository to store a list of your user ID’s, should you be deterred from online lockboxes by fear of cyberattacks or the risk that computer servers that may not be there in a few decades, said Alexandra Gerson, a lawyer at Helsell Fetterman in Seattle.

“Make a private list of all your user names and passwords for all the accounts in which you have a digital presence, and make sure you update the list if you change login information” Ms. Gerson said. “Don’t put user names and passwords in your will, though, as it becomes a public record when you die.”

Make sure that your executor or personal representative understands the importance of preserving these digital assets, and knows how to find them, said Laura Hoexter, a lawyer at Helsell who also works on inheritance issues. “Preferably the person should be tech-savvy,” she said, and know about your online game accounts, your PayPal account, your online presence on photo storage sites, social media accounts and blogs, and even your online shopping accounts where your credit card information is stored so that the information can be deleted.

AFTER you die, an executor or agent can contact Facebook and other social media sites, establish his or her authority to administer the estate, and request the contents of the account.

“Most accounts won’t give you the user name and password, but they will release the contents of the account such as photographs and posts” to an executor, Ms. Hoexter said.

Transfer at death can depend on the company’s terms of service, copyright law and whether the file is encrypted in ways that limit the ability to freely copy and transfer it. Rights to digital contents bought on Google Play, for example, end upon the person’s death. “There is currently no way of assigning them to others after the user’s death,” Ms. Blagojevic said.

Encryption is a common constraint, but there are exceptions. Apple’s iTunes store, for example, has long removed its anti-copying restrictions on the songs sold there, and Ms. Gerson advises people to take advantage of this in their digital planning. “Get your music backed up on your computer,” she said.

Up to five computers can be authorized to play purchases made with one iTunes account, and a company support representative advises that users make sure that their heirs have access. At Kindle, too, family members with user ID information for the account can access the digital content.

Professor Cahn in Washington says the time to prepare for the digital hereafter is now, particularly if serious illness is a factor. “If someone is terminally ill,” she said, “in addition to getting emotional and financial issues in order, you need to get your Internet house in order.”

E-mail: novelties@nytimes.com.

As Culture Moves Online, France Tries to Follow It With a Tax

PARIS — France’s “cultural exception” — the policy that creative works like books, music and movies deserve protection beyond what is accorded ordinary goods — is in line for a digital update.

A government adviser has suggested that manufacturers pay a 1 percent levy on the price of smartphones and tablet computers to help keep funding for such works alive, as more and more end up online and beyond the reach of existing taxes.

The tax, “painless for the consumer,” could also be used to ensure that artists are remunerated at a time when so much is downloaded free, said the report, which was presented Monday to President François Hollande and his culture minister, Aurélie Filippetti.

“Considering the weight of cultural content in connected devices, it is legitimate that those who make and distribute the equipment contribute to the financing of its creation,” according to the report, produced under the guidance of a former television executive and journalist, Pierre Lescure.

“L’exception culturelle” is no trifling matter: Nicole Bricq, the French trade minister, warned in March that it was “a red line” that could not be crossed in talks with the United States on a proposed free-trade area. France and 13 other European Union member nations insisted in a letter this week that the audiovisual sector must be left out of those talks, setting up a possible confrontation with the British prime minister, David Cameron, who has said that everything should be on the table.

In practice, the cultural exception means broadcasters must meet quotas for French music and television programming, for example, and prices for books are set by regulators. The effort stretches throughout the economy, requiring a system of taxes and subsidies for its upkeep, perhaps most visibly in the country’s film industry, which gets hundreds of million euros each year in subsidies — raised from taxes on movie tickets, television stations and Internet service providers — to defend itself from the Hollywood juggernaut.

But technology threatens to render such measures irrelevant, the report noted. The nature of Internet commerce means foreigners can have access to the French market without having to pay the levies that support French culture. And as more content is streamed online or stored in the cloud, a tax on recording media like blank compact discs and memory sticks will raise less money — and that is where the smartphone tax comes in.

Gilles Vercken, an intellectual property lawyer, acknowledged that streaming and the cloud would bring down those levies, which he estimated currently raise about €200 million, or $260 million, a year to support French authors, composers, actors, musicians and the like. But he expressed skepticism that the smartphone tax would see the light of day.

“I wonder what could be the legal grounds for such taxes,” he said, noting that the connection between hardware manufacturers and end users might prove a difficult one to defend in court. “I really don’t see it.”

Monica Horten, a visiting fellow at the London School of Economics who studies the politics of intellectual property rights, said that, in principle, such levies were possible under E.U. law, but that “the problem is in the implementation.”

The first issue would be drafting a law acceptable to the European Court of Justice, while another would be in actually getting device makers on board to pay the tax. “I think you can expect them to filibuster,” she said.

The report seeks to address a problem that is as old as the Internet, which has shifted the balance of power away from content creators in favor of newer actors like Google, Amazon and peer-to-peer downloading services, even as it gives creators previously unimagined opportunities to be seen or heard.

In addressing such matters, France has sometimes chosen to fight battles that other governments have shied away from. For instance, Google agreed in February to set up a €60 million fund to help French newspaper and magazine publishers develop their digital business, though it managed to fend off demands that it pay for the right to link to their content.

And the Lescure report comes less than two weeks after Arnaud Montebourg, the minister for industrial renewal, put the kibosh on a sale to Yahoo of a majority stake in Dailymotion, a French rival to YouTube, because the government had singled out the company as a national champion and did not want control falling into foreign hands.

The Lescure report also suggests that France throw out a “three-strikes” anti-piracy law that Nicolas Sarkozy, Mr. Hollande’s predecessor, had held up as one of his signature achievements and one that had been hailed by the global entertainment industry. Under the Hadopi Law, as it is known, illegal downloaders were to have their Internet access cut off if they failed to heed three warnings; violators were also to be subject to criminal sanctions and large fines. In practice, there has been little enforcement action, though proponents credit the law with helping to reduce Internet piracy.

If Mr. Lescure’s recommendations are followed, law enforcement will focus on the worst violators, and most people would face minimal fines. A proposed “Hadopi authority” would be eliminated, and responsibility for enforcement would revert to the national media regulator, the Conseil supérieur de l’audiovisuel.

Media Giants Chase Online Ads With Original Shows

Digital and traditional media companies, including newspapers and magazines, have for years been building a video presence on the Internet. But until now the offerings have largely been low-budget, single-camera affairs featuring talking heads.

Last week, however, major media companies like Condé Nast, The Wall Street Journal and Univision presented ambitious slates of original programming to advertisers for the first time.

Companies that were already producing Web content, like Yahoo and Hulu, also announced greatly expanded offerings.

As a result, viewers are being bombarded with an array of new Internet programs — 11 from Yahoo, 14 from AOL and a whopping 30 from Condé Nast, including one that will let viewers watch a Vogue editor, Hamish Bowles, as he shops around the world.

Hulu’s four new original offerings include one called “Behind the Mask,” a show it describes as a “comedic docu-series,” which looks at the world of sports mascots.

These companies are moving rapidly because they believe viewers are now so accustomed to watching programs on devices like mobile phones and tablets that the lines between traditional television and Internet video will blur.

But the companies are also acting out of desperation because many of them can command higher prices for video ads than traditional online banner ads, which are increasingly being undermined by fast-paced algorithmic buying technologies.

Advertisers are also shifting dollars from traditional display advertising to sites like Facebook that can deliver huge audiences. Media companies were wooing ad executives in New York last week during an advertising event called Digital Content NewFronts that is trying to imitate the success of the network television upfronts, which are being held later this month. At lavish open-bar parties, companies not previously known for programming tried to convince advertisers to sponsor shows, or better still, whole channels.

Yet even with the amount of so-called premium content booming, it is not clear ad dollars are following. According to data from the research company eMarketer, spending on digital video — while growing — is expected to reach only $4.14 billion in 2013, a far cry from the $66.35 billion expected to flow into the television market.

Many advertisers say they worry that with so much new content being thrown at the market on so many different platforms, audiences for individual shows will become even more fragmented and microscopic than they already are.

“I don’t care how good your attention span is,” Rino Scanzoni, chief investment officer of Group M, said of the crush of new offerings, “I think it becomes all a blur.” Group M is one of the world’s biggest media-buying and planning agencies.

Ben Winkler, chief digital officer of the advertising agency OMD, which represents brands including Pepsi and Nissan, called it “cable to the nth degree.”

“We are talking narrow, narrow television, niche television if you will,” he said. “If you are reaching just 100 people, is it worth our time and energy?”

AOL is one of the companies making a big bet on “premium video,” or video it hopes will generate greater ad revenue because of higher production values. Tim Armstrong, the company’s chief executive, said in an interview: “Consumers are adopting video very quickly: big investment in devices and networks, big investments by the most talented creative people to get involved in this medium; and big investment in measurement. So I think this industry is about to explode.”

Many online sites are citing the success of “House of Cards,” the Netflix series that drew critical praise this winter, as proof that the moment for video content has arrived. But “House of Cards,” with top-flight talent and sophisticated production values, was hugely expensive. And Netflix relies on subscriptions, not advertising.

For now, most digital companies are looking to produce programming that, while more expansive than one-camera fare, is still cheaper than TV.

Bill Carter contributed reporting.

Zynga Reports Fewer Players of Its Online Games and Shares Drop

Shares fell 10 percent to $2.99 in extended trading.

The San Francisco-based publisher behind games like "FarmVille" and "Words With Friends" said its number of monthly players continued its decline to 253 million, the lowest figure since the number peaked at 331 million at the end of the third quarter of 2012.

On an adjusted basis, Zynga reported earnings of 1 cent per share, beating analyst expectations of a loss of 4 cents per share. But the company also projected that its second-quarter loss would be between 3 to 5 cents per share, exceeding the 1 cent per share loss analysts had expected.

"The second quarter guidance is light," said Sterne Agee analyst Arvind Bhatia. "We continue to think that any hope for real growth for this nebulous company really depends on what it can do in real-money gaming."

Zynga has struggled to keep users, who once flocked to its games on Facebook Inc's website. In recent months, Zynga and Facebook have revised their business partnership, as Zynga has sought to establish itself as a more independent gaming network at the risk of receiving less visitor traffic from Facebook.

Zynga has promised investors that it could tap into a potentially lucrative new revenue stream by launching real-money casino games around the world.

The company reported revenues of $263.6 million, down 18 percent from the year-ago quarter but above Wall Street's depressed expectations as the online game maker wrung more sales than expected out of its shrinking user base.

Zynga's quarterly bookings of $229.8 million also topped estimates but represented a 30 percent decline from a year ago.

(Reporting By Gerry Shih; Editing by Leslie Adler and David Gregorio)

Zynga Reports Fewer Players of Its Online Games and Shares Drop

Shares fell 10 percent to $2.99 in extended trading.

The San Francisco-based publisher behind games like "FarmVille" and "Words With Friends" said its number of monthly players continued its decline to 253 million, the lowest figure since the number peaked at 331 million at the end of the third quarter of 2012.

On an adjusted basis, Zynga reported earnings of 1 cent per share, beating analyst expectations of a loss of 4 cents per share. But the company also projected that its second-quarter loss would be between 3 to 5 cents per share, exceeding the 1 cent per share loss analysts had expected.

"The second quarter guidance is light," said Sterne Agee analyst Arvind Bhatia. "We continue to think that any hope for real growth for this nebulous company really depends on what it can do in real-money gaming."

Zynga has struggled to keep users, who once flocked to its games on Facebook Inc's website. In recent months, Zynga and Facebook have revised their business partnership, as Zynga has sought to establish itself as a more independent gaming network at the risk of receiving less visitor traffic from Facebook.

Zynga has promised investors that it could tap into a potentially lucrative new revenue stream by launching real-money casino games around the world.

The company reported revenues of $263.6 million, down 18 percent from the year-ago quarter but above Wall Street's depressed expectations as the online game maker wrung more sales than expected out of its shrinking user base.

Zynga's quarterly bookings of $229.8 million also topped estimates but represented a 30 percent decline from a year ago.

(Reporting By Gerry Shih; Editing by Leslie Adler and David Gregorio)

Online Betting Site Intrade Faces Liquidation

The online betting Web site Intrade, which gained widespread notice for serving as a predictions platform for elections and events not related to sports, is facing liquidation because of a $700,000 cash shortfall, a development that comes a month after it halted trading and froze its customer accounts.

Intrade’s director, Ronald Bernstein, said in a statement that the shortfall resulted from unspecified actions by two other parties, whom he did not name. The potential liquidation was first reported late Friday by Business Insider.

“We are now very confident about the reasons which caused the current circumstance of the company; however, for legal reasons we are not yet at liberty to document them to you,” the statement said. “I can confirm that the company, if it is able, intends to vigorously pursue two substantial monetary claims against two distinct parties for an aggregate amount greater than $3,500,000.”

“If the company is not able to rectify this cash shortfall position very quickly, the company will become insolvent and therefore is very likely to go into liquidation,” the statement said.

The 14-year-old company’s Web site functioned as a gambling hub for professional and amateur investors, letting customers buy and sell contracts tied to the outcome of a future event. It had often been cited for its predictive abilities on matters including the outcomes of American presidential elections and the probability of developments like an Israeli airstrike against Iran.

Last month, the company announced that it had halted trading after auditors found potential financial irregularities involving more than $1.5 million in payments to Intrade’s founder, John Delaney, and other unnamed third parties. Mr. Delaney died in 2011 as he tried to reach the summit of Mount Everest.

The move to halt trading came just months after Intrade shut its Web site to United States residents after the Commodity Futures Trading Commission filed a complaint accusing the company of offering contracts outside traditional exchanges and without regulatory approval. The commission also accused the company of filing false forms with regulators.

In its statement Friday, the company asked for “forbearance” from its remaining account holders so that it could resume “limited operations” as it tries to sort out its finances and recover money through its claims.

“If sufficient forbearance has not been achieved, it seems extremely likely that the company will be forced into liquidation,” the statement said.

Novelties: New Technologies Aim to Foil Online Course Cheating

But when those students take the final exam in calculus or genetics, how will their professors know that the test-takers on their distant laptops are doing their own work, and not asking Mr. Google for help?

The issue of online cheating concerns many educators, particularly as more students take MOOCs for college credit, and not just for personal enrichment. Already, five classes from Coursera, a major MOOC provider, offer the possibility of credit, and many more are expected.

One option is for students to travel to regional testing centers at exam time. But reaching such centers is next to impossible for many students, whether working adults who can’t take time off to travel, or others in far-flung places who can’t afford the trip.

But now eavesdropping technologies worthy of the C.I.A. can remotely track every mouse click and keystroke of test-taking students. Squads of eagle-eyed humans at computers can monitor faraway students via webcams, screen sharing and high-speed Internet connections, checking out their photo IDs, signatures and even their typing styles to be sure the test-taker is the student who registered for the class.

The developing technology for remote proctoring may end up being as good — or even better — than the live proctoring at bricks-and-mortar universities, said Douglas H. Fisher, a computer science and computer engineering professor at Vanderbilt University who was co-chairman of a recent workshop that included MOOC-related topics. “Having a camera watch you, and software keep track of your mouse clicks, that does smack of Big Brother,” he said. “But it doesn’t seem any worse than an instructor at the front constantly looking at you, and it may even be more efficient.”

Employees at ProctorU, a company that offers remote proctoring, watch test-takers by using screen sharing and webcam feeds at offices in Alabama and California. ProctorU recently signed an agreement to proctor new credit-bearing MOOCs from Coursera, including one in genetics and evolution offered at Duke and one in single-variable calculus at the University of Pennsylvania.

MOOC students who want to obtain credit will be charged a remote-proctoring fee of $60 to $90, depending on the class, said Dr. Andrew Ng, co-founder of Coursera, based in Mountain View, Calif.

Other remote proctoring services offer different solutions. At Software Secure in Newton, Mass., test-takers are recorded by camera and then, later, three proctors independently watch a faster-speed video of each student.

Compared with services where proctors are monitoring students in real time, this combination of recording first and viewing later “gives greater latitude for the institution to adjust the timing of exams to whenever they want,” said Allison Sands, Software Secure’s director of marketing. The cost is now $15 per exam.

Employees at ProctorU say they are well-versed in the sometimes ingenious tactics used to dodge testing rules. “We’ve seen it all,” said Matt Jaeh, vice president for operations. “After you’ve sat there a while watching people, the patterns of behavior for normal people versus the people trying to sneak in a cellphone to look up information are very clear.”

Each proctor can monitor up to six students at a time, watching three side-by-side camera feeds on each of two screens. If a student’s eyes start to wander, the proctor gives a warning via videoconferencing software, just as a classroom monitor might tell students to keep their eyes on their own papers. For an overwhelming majority of people, that warning suffices, said Jarrod Morgan, a co-founder.

With the system in place, “cheating usually isn’t a problem,” he said. But if it does occur, ProctorU follows the rules of the institution giving the exam. “Some schools ask us to cut off the exam on the spot if there’s a suspicious incident,” he said; others ask that the exam be continued and the incident reported.

Beyond the issue of proctoring, MOOCs are also addressing the problem of making sure that credit-seeking test-takers are the same students who enrolled in the course. In that effort, Coursera is offering a separate service, called Signature Track and costing $30 to $99, that confirms students’ identity by matching webcam photographs as well as pictures of acceptable photo IDs.

Students also type a short phrase, which is analyzed by a software program. It takes note of the typing rhythm and other characteristics, like how long the keys are pressed down. Then, when a student submits homework or takes a test, the algorithm compares a bit of new typing with the original sample. (And if you’ve broken your arm, there’s always your photo ID.)

Online classes are hardly new, but earlier courses typically didn’t have to handle exam proctoring on the scale required for vast MOOCs. The University of Florida in Gainesville, for example, has long offered many programs for students studying far from the campus, with some monitoring done by ProctorU, said W. Andrew McCollough, associate provost for teaching and technology.

Now the school has set up its first MOOC, on human nutrition (enrollment 47,000), and is working on four others, all through Coursera. The question of proctoring is being debated, he said, as faculty members worry about academic integrity amid the growth of open, online classes. “They don’t want any fooling around,” he said. “But as we get more experience and evidence, the faculty are getting familiar with ways technology can replicate a classroom experience.”

Media Decoder Blog: Online Piracy Alert System to Begin This Week

The Copyright Alert System, a program of escalating warnings and prods against people suspected of online copyright infringement, is finally going into effect this week, more than a year and a half after the plan was announced as part of an agreement between the entertainment industry and five major Internet service providers.

The Center for Copyright Information, the organization created to administer the system, announced on Monday that the Internet providers would begin putting it in place “over the course of the next several days,” though it gave no specifics. The Internet companies are AT&T, Cablevision, Comcast, Verizon and Time Warner Cable.

In the alert system, media companies monitor online traffic through a third party and can complain to Internet providers if a file is downloaded illegally. The suspected violator is then given the first of six warnings, some of which carry “educational” messages and must be acknowledged. After the fifth and sixth warnings, the customer’s Internet speed can be slowed to a crawl.

The Center for Copyright Information says it will not ask for repeat offenders’ Internet access to be blocked, but most service providers have the right to do that if a customer violates its terms of service. The findings can be contested for a $35 fee, to be refunded if an appeal is successful.

The introduction of the alert system has been notably slow. Nearly a year passed before the group had a leader in place, and its own prediction failed when it said in October that the system would be coming in two months. Part of the reason for that might be the relationships between media companies and Internet service providers, which in the past have often been adversarial over issues of piracy and control.

So-called graduated response programs like the Copyright Alert System have been tried in other countries, with mixed results. France’s Hadopi law, passed in 2009, set up a system of three “strikes,” culminating in a fine. More than a million warnings have been issued through that plan, but a recent government report said that its effects were “hard to evaluate precisely.”

Target to Match Some Rivals' Online Prices Year-Round

The move extends an online price-matching program that Target introduced over the holiday season and which was supposed to last only from November 1 to December 16. It also comes after Target last week reported flat sales growth in December at stores open at least a year.

"I think this is largely symbolic, it's akin to removing the Kindle from their stores," said Wells Fargo analyst Matt Nemer, referring to Target's decision to stop selling Amazon's tablet devices last year.

In November, Chief Executive Gregg Steinhafel said Target was not seeing a lot of price-match activity in its stores.

"It's not likely to have a huge impact on financials or customer behavior," said Nemer, who noted that customers are not likely to go to Target's guest services desk for a refund for just a small difference in price.

Also, much of what Target sells, such as apparel and accessories, is exclusive to the store, so there would be no comparable prices from competitors.

But Target will now also match prices year-round from its own website in its stores.

Nemer called that "a really important step," saying it removes confusion for customers who sometimes see different prices for products such as televisions in stores and online.

While shopping online has grown rapidly in recent years, it still represents a small fraction of overall shopping in the United States. Target's policy of matching online prices differs from policies at several chains, which match only printed advertised prices for items sold at stores.

Target said that throughout the year it will match the price when a customer buys an eligible item at one of its stores and finds the same item at a lower price in the following week's Target circular or in a local competitor's printed ad. It will also match the price if the customer finds the same item at a lower price within a week on Target's website or the websites of Amazon, Walmart, Best Buy and Toys R Us.

Amazon says it offers competitive prices and does not offer price matching when an item's price drops after a customer buys it, with the exception of televisions. Walmart matches the prices of print ads from competitors and said it has no plans to change its policy. Walmart also says it checks the prices of 30,000 items at competing chains each week to make sure it has the lowest prices.

Best Buy matches the price from a local competitor's store, a local Best Buy store or its own web site. Toys R Us matches in-store prices and certain online prices.

Shares of Target were down 60 cents at $60.70 in afternoon trading on the New York Stock Exchange.

(Reporting By Jessica Wohl in Chicago and Phil Wahba in New York; Editing by Alden Bentley and John Wallace)

Bucks Blog: My Resolution: Online Accounts for Allowances

Ingo Fast

My colleague Ron Lieber recently wrote about new ways to track your child’s allowance online. He did have some reservations: he prefers children’s early experiences with money to be more tangible so they can see the piggy bank or jar filling up with coins.

He’s got a good point. But after a couple of years of watching my children mishandle their cash in various odd ways, I’ve decided that actual bank accounts are in order. One child kept a roll of bills wadded up with an elastic in her sock drawer, and it eventually went through the washing machine. Her sister kept hers in a blue plastic bucket labeled “Money,” which she and her friends doled out to one another during play dates. We did try actual piggy banks, but the stoppers kept falling out.

So one of my New Year’s resolutions is to create online bank accounts for them. It was so simple that I’ve already done it — and wondered why I didn’t do it a lot sooner.

I opted against taking them to a local bank, as my mother did with me, and opening a passbook account. For starters, some banks don’t offer passbooks anymore. And even if they did, it wouldn’t be convenient for me, and that’s crucial if this is going to work in practice. I do nearly all of my banking online, and I didn’t foresee any extra time in my schedule for driving them to the bank each week to make deposits. Some parents transfer allowances onto reloadable debit cards for their children, but mine aren’t old enough to keep track of plastic.

I already had an online savings account through ING Direct (soon to become Capital One 360.) The direct bank makes it easy to open “sub accounts” for a designated purpose, so I created one for each of my daughters. (You can, if you want, open entirely separate “kids savings accounts,” but that’s more time consuming and isn’t necessary to do what I wanted to do.)

To open the “sub accounts,” you log onto your account. Don’t look for any heading that says “sub account,” though because there isn’t one. Instead, click “open account” and choose “savings account,” rather than “kids account.” You give your new “sub account” a nickname. (I chose “allowance.” Very creative)

With another click or two,  you can set up an automatic savings plan, which will transfer whatever amount you want from your main savings account — it can be an ING account, or an external account that you’re already using to cover your ING account — into the allowance account. (I chose $5 a week, to start.) You click that you’ve read the proper disclosures, and you’re done. Now, when I go to “My Accounts,” I see my savings account and the new ones, with their nicknames and balances.

My plan is to sit down with my daughters each week and show them the money transferred into their accounts, so they can watch the balance grow. Any extra funds they get for birthday or holiday gifts can be deposited as well. We can discuss goals they want to save for, whether for a personal item or a charitable donation. And before any cash withdrawals are made, we can discuss what it’s going to be used for, and whether it’s a good use of their funds.

It’s not perfect, I know. But I think it beats the sock drawer.

How do you handle your children’s allowance?

Superior Court Now Highlighting High-Profile Cases Online

In addition to the announcement of its plan to begin posting memorandum decisions, state Superior Court President Judge Correale F. Stevens said the court has also begun updating its website to provide easily accessible information on high-profile cases.

Netflix Streaming Service Back Online After Outage

Should drowsy driving be prosecuted like drunken driving? Or, Room for Debate asks, is nodding off simply an accident – like hitting a patch of ice?

Without proper controls, the use of unmanned aircraft could threaten privacy.

Superior Court Now Highlighting High-Profile Cases Online

In addition to the announcement of its plan to begin posting memorandum decisions, state Superior Court President Judge Correale F. Stevens said the court has also begun updating its website to provide easily accessible information on high-profile cases.