NBN rolled-out on mainland

Prime Minister Julia Gillard has switched on a glimpse of the future in Armidale, the first mainland community to receive national broadband network (NBN) services.

The NBN roll-out in the northern NSW city will ultimately bring super-fast broadband to 4882 premises, including the University of New England, but the first to benefit are the Presbyterian Ladies College Armidale and seven others.

'This is a transformative infrastructure for our nation's future,' Ms Gillard told a ceremony at the private girls' school on Wednesday.

'It stands to radically change the way we live, the way we work, the way we study, especially in rural and regional Australia, which has so often been forced put up with second best.'

Of the Armidale premises taking part in the NBN program, 88 per cent have agreed to a connection but not necessarily to a paid service.

The NBN is already operating in the Tasmanian towns of Smithton, Scottsdale and Midway Point.

Another connection is being rolled out in a growth corridor of Adelaide.

The Armidale service will give users access to internet speeds of 100 megabits a second, five times faster than existing ADSL2 copper connections.

'Unlike the old copper-based internet service, slow connections will be a thing of the past,' Ms Gillard said, adding the NBN would be a boon for teaching in rural and regional areas.

Communications Minister Stephen Conroy said the Armidale launch was a landmark moment for the nation.

'It is a significant milestone in our vision to deliver affordable high-speed broadband to every Australian home, school and business,' he told the ceremony.

Independent MP Tony Windsor, whose electorate of New England includes Armidale, said the NBN had plenty of critics, but the project would reduce the gap in living standards between cities and regional areas.

It had the capacity to overcome the disadvantages of distance and remoteness that country Australians had lived in for many decades.

'Distance will be irrelevant in terms of education, health, aged care, business opportunities, location.'

But not everyone is impressed with the planned $36 billion fibre-optic network.

Opposition communications spokesman Malcolm Turnbull said there were cheaper ways to deliver fast broadband across Australia.

Mr Turnbull said it would be cheaper to bring fibre within a kilometre of homes and use the existing copper network to bridge the gap.

'You can deliver very, very fast broadband for at least half the cost, if not more, of fibre-to-the-home,' he said.

Nationals senate leader Barnaby Joyce suggested the Armidale NBN roll-out was political payback for Mr Windsor's support of federal Labor's minority government.

But Ms Gillard rejected the suggestion, saying the decision was made by NBN Co.

'What they wanted to do was to have release sites of different types around the country so they could learn some lessons about the broader roll-out,' she said.

NBN Co boss apologises for mistake

The head of the company behind the national broadband network (NBN) has apologised for mistakenly misleading the public about his previous responsibilities at communications firm Alcatel-Lucent.

Alcatel-Lucent was fined $US137 million ($A130 million) after a US Securities and Exchange Commission (SEC) and Department of Justice (DOJ) investigation found it had paid bribes to government officials in Costa Rica and other countries to secure contracts.

NBN Co Ltd chief executive Mike Quigley was Americas president and then president and chief operating officer of the firm between 2001 and 2006 when the events took place.

Mr Quigley had previously stated Costa Rica fell outside his jurisdiction but on Monday he confirmed to a joint parliamentary hearing in Sydney this was not the case, and apologised.

'I clearly was advised by one of my previous colleagues in North America, who's currently still with Alcatel-Lucent, to check for me whether Costa Rica was within my area of operation and control,' he said.

'On the basis of that advice I stated that it was not.

'This was an error for which I unreservedly apologise.'

NBN Co had issued a statement on Friday saying that contrary to previous advice, Costa Rica was among the many countries in North, Central and South America that were part of Mr Quigley's 'wide-ranging portfolio of responsibilities' between March 2001 to January 2003.

Federal opposition communications spokesman Malcolm Turnbull said Communications Minister Stephen Conroy and the government should have been more aware of Mr Quigley's role with Alcatel-Lucent.

'Nobody is suggesting any impropriety or dishonesty on the part of Mr Quigley,' Mr Turnbull told reporters on Monday.

'He's clearly made a number of mistaken or false statements which he has now corrected and apologised for.

'There's no effort to impugn his integrity but as representatives of the people whose taxes are paying for this NBN, we are entitled to ask questions and try to get to the facts.'

Mr Quigley said it would be better for him to refrain from making further comments about the US investigation into Alcatel-Lucent, which operates in about 130 countries.

'There's a hearing taking place in early June in the US which is a settlement between Alcatel-Lucent, and the SEC and the DOJ and I don't know the details,' he said.

'I don't believe it is my job to start defending Alcatel-Lucent in light of this investigation.

'I am not going to be involved in a situation in which if I say something in response to a question I could then... get it wrong - the best thing to do is to stop answering detailed questions.'

Mr Quigley earlier said at no time had the SEC sought to interview or question him about those matters.

Alcatel-Lucent agreed last December to pay $US137 million in fines and penalties to settle the US charges relating to bribes paid in countries in Latin America and Asia between December 2001 and June 2006.

Why Do Affluent Consumers Connect with Brands on Social Networks?

Motivations differ from general population

Luxury marketers take note, according to a February 2011 Affluence Collaborative survey, wealthy internet users connect with brands on social networks for significantly different reasons than the general population. The social networks they use to do so are different, too.

Among the general population, the main reason cited for connecting with brands on social networks was to receive deals and discounts. This result from the Affluence Collaborative survey backs up earlier research from several sources on why consumers follow brands on social sites.

But according to Affluence Collaborative, this was a much lower priority for the wealthy. Their top reasons for following brands were due to a preexisting affinity for and a desire to be kept informed about the brand. The least-cited reason mentioned by all groups surveyed was to be entertained, suggesting that social media marketers still need to provide fans with value, even if it isn’t directly in the form of a coupon or sale.

These findings coincide with earlier research from ExactTarget, which showed that a huge component of liking a brand on Facebook was due not just to an affinity, but as a means of self-expression for others to see. This promotional desire was more pronounced in Facebook users than Twitter followers or email subscribers. Affluents then, in their “love of the brands” they connect with, are largely acting as brand ambassadors.

On the surface, a November 2010 L2 Think Tank survey might appear to contradict these findings. Affluent members of Gen Y (ages 19 to 33) cited promotions and offers as the main reason for engaging with brands on social media. Women were more likely than men to engage with brands in general and to want to receive offers. However, the survey included those who were “projected to earn $100,000 in the next two years”—meaning the respondents were more aspiring than actually affluent. The second biggest motivator was still an affinity for the brand.

Data from the Affluence Collaborative study also reveals that the affluent aren’t using the same social networks as the general population. Facebook was the No. 1 social network used by all groups surveyed, but LinkedIn and Twitter attracted affluent internet users at nearly double the rate of the general population.

Any marketer targeting affluent consumers needs to know not only where to reach that audience, but what appeals to them. For wealthy internet users, connecting with a brand is largely about the brand itself, not gimmicks and offers. Affluents need to see a consistent message that makes following a brand meaningful for self-expression, just like when buying a brand in real life. Watering down the brand in order to gain a large social following may drive away the very people trying to be reached.

7.5 million Facebook users are under 13

Some 7.5 million of the 20 million minors who used Facebook in the past year were younger than 13, and a million of them were bullied, harassed or threatened on the site, an American study shows.

Even more troubling, more than five million Facebook users were 10 years old or younger, and they were allowed to use Facebook largely without parental supervision leaving them vulnerable to threats ranging from malware to sexual predators, the State of the Net survey by Consumer Reports found.

Facebook's terms of service require users to be at least 13 years old but many children, or their parents, get around that rule by giving a false birth date when they sign up for the social networking site.

Parents of kids 10 and younger who use Facebook 'seem to be largely unconcerned' by their children's use of the site, possibly because they think a young child is less vulnerable to internet risks, the study says.

But while a 10-year-old might not download pornography on the internet, he or she does 'need protection from other hazards that might lurk on the internet, such as links that infect their computer with malware and invitations from strangers, not to mention bullies,' the study says.

More than five million US households have been exposed in the past year to 'some type of abuse' via Facebook, including virus infections, identity theft and bullying, says the study, for which 2,089 US households were interviewed earlier this year.

Consumer Reports urged parents to delete their pre-teens' Facebook accounts -- or ask Facebook to do so by using the site's 'report an underage child' form -- and to monitor teenage kids' accounts by friending them or keeping an eye on their activity via siblings' or friends' Facebook pages.

It also called on Facebook to 'beef up its screening to drastically reduce the number of underage members.'

Facebook spokesman Andrew Noyes said in a statement that the social networking site encourages 'communication between parents/guardians and kids about their use of the internet.

'Just as parents are always teaching and reminding kids how to cross the road safely, talking about internet safety should be just as important a lesson to learn,' Noyes said.

But he also stressed 'just how difficult it is to implement age restrictions on the internet' and said there is 'no single solution to ensuring younger children don't circumvent a system or lie about their age.'

Microsoft buying Skype for $US8.5bn

Microsoft has announced plans to buy internet phone service company Skype for $US8.5 billion ($A7.9 billion) in a move aimed at carving out a bigger presence in an online arena dominated by Google and Facebook.

The acquisition of Skype, which had reportedly also attracted interest from Cisco, Facebook and Google, is the largest ever by the US software giant.

'Skype is a phenomenal service that is loved by millions of people around the world,' Microsoft chief executive Steve Ballmer said in a statement on Tuesday announcing the purchase.

'Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.'

Microsoft said Skype will become a new business division within Microsoft with Skype CEO Tony Bates assuming the title of president of the Microsoft Skype Division, reporting directly to Ballmer.

Tens of millions of people use Skype to make low-cost or free phone calls over the internet using their computers or smartphones. Skype bypasses the standard telephone network by channelling voice and video calls over the web.

Buying Skype could be a way for Microsoft to shed some of its business software image and gain momentum in a hot smartphone market at a time when internet lifestyles are going mobile.

Microsoft's Windows is the dominant computer operating system but its Bing search engine lags far behind Google and its Windows Phone mobile platform has been losing market share to Apple's iPhone, Google's Android and Research In Motion's Blackberry.

The companies said Skype will support Microsoft products like the Xbox game console and Kinect motion controller, Windows Phone and a wide array of Windows devices. Microsoft will also support Skype clients on non-Microsoft platforms.

'Mobile is clearly moving to be a rich communications capability above and beyond just voice,' Bates said at a joint press conference with Ballmer in San Francisco. 'We also focus very, very heavily on video. Video is in our DNA.'

'At Microsoft we see tremendous opportunity to bring together what people want all on a single screen,' Ballmer said. 'We are committed to optimise Skype for TV with Xbox and Kinect for the phone and for the PC.'

Microsoft's biggest acquisition until now had been its 2007 buy of digital marketing firm aQuantive for $US6.3 billion ($A5.85 billion). Microsoft unsuccessfully tried to buy Yahoo! in 2008 for $US47.5 billion ($A44.13 billion).

Microsoft and Skype said the deal has been approved by the boards of both the Redmond, Washington-based Microsoft and the Luxembourg-based Skype, which is owned by investor group Silver Lake.

Magnus Rehle, managing director of Greenwich Consulting, said Microsoft is 'buying a brand and a big chunk of customers.'

'It could (also) be a defensive strategy from them... to block Facebook and Google from doing it instead,' Rehle added.

Analyst Douglas McIntyre of 247WallSt.com said Microsoft's 'real motive for a Skype buyout is likely to be to increase its mobile search engine share, something it has been unable to do so far.

'Skype may be a cheap ticket to the next huge search market,' he said.

Gartner research vice president Leif-Olof Wallin said Microsoft had been forced to pay a high price for Skype but the deal has potential.

'The acquisition price sort of indicates that there has been some kind of bidding process that drove up the price,' Wallin said.

'We see a lot of fit between the Microsoft strategy to increase consumer focus and Skype,' Wallin added. 'If this is integrated in the right way, it has a lot of potential to leverage platforms like Xbox and Windows Phone to new heights.'

Skype was founded in 2003 and acquired by online auction giant eBay in September 2005. It was sold to the investment group led by Silver Lake in November 2009 in a deal that valued the company at $US2.75 billion ($A2.56 billion).

Skype has 170 million users and logged more than 207 billion minutes of voice and video conversations in 2010.

Skype last year announced plans for an initial public offering of stock and appeared on its way to profitability, but investors are evidently eager for a payoff.

Other members of the investor group led by Silver Lake include eBay, CPP Investment Board, Joltid Limited, Europlay Capital Advisors and Andreessen Horowitz.

The acquisition is subject to regulatory approvals which the companies said they expect to obtain this year.

Four injured in iPad fight in Beijing

Four people were taken to hospital and a glass door smashed as a near-riot broke out at Beijing's top Apple store among crowds rushing to snap up the popular iPad 2 tablet computer, state press said Sunday.

Angry consumers began rushing the store on Saturday afternoon after a "foreign" Apple employee allegedly stepped into the crowd to push and beat people suspected of queue jumping, the Beijing News said.

After the employee retreated back into the store, a crowd of consumers smashed the glass front door and shoved security guards as they surged forward in anger over the alleged beatings, the report said.

Consumers have lined up for hours at Apple stores in Beijing and Shanghai since the iPad 2, the updated version of the tablet computer, went on sale in the world's biggest Internet market on Friday.

The store in Beijing's chic Sanlitun commercial district closed early Saturday because of the altercation, but according to a voice recording on the store's phone was open for business Sunday.

Apple officials were not immediately available for comment when telephoned by AFP.

Police were investigating the incident and have interviewed four people hospitalised with injuries, the Beijing News said.

Lines for the popular iPad 2 have grown so long that people have begun selling their places in the queue, while a secondary market has also developed with consumers reselling their tablet computers for profit after leaving the store, the report said.

iPads Have Big Potential for Retailers

Tablets encourage new shopping experiences

The features of Apple’s iPad and competing tablets have made them an ideal entertainment and media consumption device, but many tablet owners also have a strong interest in online shopping, and retailers are taking note.

“The iPad’s portability, tactile screen and vivid graphics foster a casual and exploratory shopping experience that leads to product discovery, impulse buying and shared purchasing,” said Jeffrey Grau, eMarketer principal analyst and author of the new report, “How the iPad Is Transforming Retail.”

Some 41% of consumers likely to purchase an iPad cited shopping as a reason for their interest, reported Vision Critical, a Vancouver-based research and technology firm, in a November 2010 survey.

This year, eMarketer estimates, the US installed base for tablet devices will reach 24 million. And research from Pew Internet and American Life Project and Forrester Research shows buyers tend to be young, educated and wealthy.

“Savvy retailers are creating iPad shopping experiences that deepen their connections with customers,” said Grau. “The iPad is like a companion. There is also a certain sense of intimacy in curling up on a couch with the device. It inspires a serendipitous shopping experience, somewhat akin to browsing a catalog.”

In addition, retailers may have an even bigger opportunity in arming in-store sales associates with the devices. Thanks to the iPad, retail’s dream of web-enabled in-store kiosks providing additional product information and access to an “endless aisle” of goods may finally be realized.