IBM Corp. is in talks to buy Sun Microsystems Inc. for at least $6.5 billion in cash, a deal that would shake up Silicon Valley and the corporate computing market, The Associated Press has learned.

A person familiar with the situation told the AP of the negotiations, confirming an earlier report Wednesday in The Wall Street Journal. This person spoke on condition of anonymity because the talks are ongoing.

The Journal cited unnamed people familiar with the matter and said the deal could occur as early as this week.

The report sent Sun shares soaring $3.05, up 61 percent, to $8.02 in morning trading. IBM shares were down $2.46, or 2.7 percent, to $90.45.

Armonk, N.Y.-based IBM and Santa Clara, Calif.-based Sun both make computer systems for corporate customers. A purchase of Sun could help IBM in the finance and telecommunications markets as it tries to expand its role in digitizing key pieces of infrastructure, from electric utilities to water supplies.

While some of their technologies and customers overlap, IBM and Sun have been heading in different directions for most of the past decade.

Sun, a darling of the dot-com era, has been struggling since the tech bust of 2001 to find its place. The company has cut thousands of jobs and tried to refocus on open-source software besides the proprietary systems it built much of its wealth on.

IBM, after an enormous restructuring in the 1990s, has proven one of the technology industry’s most reliable earners. It has gobbled up dozens of companies in recent years. But a $6.5 billion deal would be its biggest to date.

It would represent a big premium for Sun, which closed trading Tuesday with a market capitalization of less than $4 billion. However, Sun’s last quarterly report shows it with more than $2.6 billion in cash and securities that could be readily converted to cash.

Cybercriminals are spreading invisible infections far and wide across the Internet by hammering hundreds of thousands of Web sites each day with so-called SQL injection attacks.

The trend started last summer and has continued to accelerate. IBM Internet Security Systems says it identified 50 percent more infected Web pages in the last three months of 2008 than it did in all of 2007.

Click on one and you won’t notice anything. Your PC gets turned into an obedient “”bot,” short for robot, deployed to attack other computers. All of your sensitive data get stolen.

SQL attacks take aim at the database layer of Web sites. They typically were manual attacks designed to pilfer customer data from merchant Web sites. But last June someone figured out how to automate the attacks, and use them to plant infections.

“”It was a brilliant tactical move. You sit back and wait for someone to visit the site, and soon you infect thousands of PCs,” says Ryan Barnett, Breach Security’s director of research.

An infected PC thereafter gets put to work delivering spam and spreading more infections. And any sensitive data, such as log-ons and account numbers, get stolen.

For the first five months of 2008 IBM ISS helped large corporations block about 5,000 SQL attacks a day. By mid-June, daily attacks spiked to 25,000; by October they topped 450,000 a day. Holly Stewart, IBM ISS threat response manager, says the infections take advantage of security flaws in cool website features, such as online-delivered video, music, photos, documents and work files.

“”Web applications are one of the most outward facing components a corporation could have, and one of the least protected,” she says. “”And SQL injection is the fastest-growing category of attacks affecting Web applications.”

Giant financial institutions and online merchants have put up strong defenses, says Phil Neray, vice president of security strategy at Guardium, a database security firm. “”The same is not necessarily true of regional banks and credit unions, smaller online retailers and state government agencies.”

Security experts say consumers must keep updates for anything to do with their browser current, though most now do not do this. This includes updates for Internet Explorer, Firefox, Safari, Opera, Chrome, Adobe Flash, Adobe Reader, iTunes, QuickTime, Windows Media Player and RealPlayer. Such updates increasingly include important security patches that can block infections from taking hold.

NEW YORK – Media companies and people with camcorders and spare time – the drivers of popular online sites including Hulu.com and YouTube – are starting to face tough new competition for the attention of Web users who like to watch videos.

Businesses, colleges and institutions are leaping into online video production as the audience for clips soars and production and distribution costs plummet.

“”It’s a gigantic business,” says Jeremy Allaire, CEO of Brightcove, an Internet video services firm. “”Every single month it’s just grown and grown, to the point where a majority of our customers now are not media companies. They are people using the Web to market, communicate, educate and inform.”

His customers include the AFL-CIO, Anti-Defamation League, Billy Graham Evangelistic Association, Archive of American Law Enforcement and The Asia Foundation. The phenomenon should continue to grow now that Brightcove and rivals, including PermissionTV, Ooyala and Maven Networks, “”are targeting (non-media) companies,” says Forrester Research senior analyst Bobby Tulsiani.

Forrester expects that 187 billion videos will be streamed over the Internet in 2009, up 24 percent from last year. The growth of speedy Internet connections and improvements in video technology are major catalysts. “”You forget how bad streaming video was a year and a half ago: the buffering and graininess,” Tulsiani says.

YouTube helped by making the Flash Video format close to an industry standard.

“”A couple of years ago you had to choose between Apple’s QuickTime, RealPlayer and Windows Media Player. It made people think too much,” says John Engberg, who manages global media and Web development for kitchen and bath firm Kohler. “”Now almost 98 percent of the world has access to Flash.”

Meanwhile, high-definition cameras and editing software became more affordable. Production costs have dropped by half, and the quality has grown dramatically, says Ian Blaine, CEO of thePlatform, an online video facilitator owned by Comcast.

That’s appealing to companies that want to engage with customers for longer than the length of a TV ad.

“”Every marketer at every company is trying to crack this nut,” says Vail Ski Resorts chief marketing officer Derek Koenig, who used to work at the Discovery Channel. Videos showcase Vail’s ski runs and offer how-to advice for novices.

Colleges also find that potential applicants often prefer video to print catalogs. Since the online “”distribution is close to free,” says Rhode Island School of Design’s Becky Bermont, the college was able to cut its admission budget by 20 percent last year. Videos from the art school profile students, faculty and their work.

Apple introduced a new iMac on Tuesday, as well as new, less expensive versions of the Mac Pro and Mac Mini.

CUPERTINO, Calif. – Apple Inc. introduced a refreshed line of desktop computers Tuesday, notable as much for their price tags as new features.

The rollout included a long-rumored update to the Mac Mini, as well as a less-expensive iMac and Mac Pro. In a significant nod to the recession, Apple pointed up the affordability of its new machines, a departure for a company used to focusing intensely on performance and design.

“Our flagship 24-inch iMac with twice the memory and twice the storage is now available for just $1,499,” Apple Chief Operating Officer Tim Cook said in a statement. Apple said the 20-inch iMac will start at $1,199

The new Mac Pro, with Intel Corp.’s “Nehalem” Xeon processor, starts at $2,499, $300 less than its predecessor.

The latest version of Apple’s top-line desktop offers “an advanced system architecture, new faster processors and our best-ever graphics options to deliver a faster, more powerful system,” said Philip Schiller, an Apple vice president.

Apple’s cheapest computer at $599, the Mac Mini, has been updated with a faster graphics processor and the ability to run more than one display at a time. Apple is also touting the Mini as the most energy-efficient desktop in the world, saying it draws less than 13 watts of power when idle, or about one-tenth of the power of a typical machine.

Apple shares edged higher after the announcement, rising $1.16, or 1.3 percent, to $89.10 in morning trading Tuesday.

SAN FRANCISCO — Yahoo Chief Financial Officer Blake Jorgensen is leaving the struggling Internet company as part of a management reshuffling by the company’s new CEO.

Jorgensen’s departure is one of several major changes to streamline operations and more clearly define roles by Carol Bartz, who promised swift action when she took over as Yahoo CEO last month.

The 49-year-old Jorgensen, CFO since June 2007, was a close ally of former Yahoo president Susan Decker, who resigned last month after she didn’t get the CEO job. Jorgensen’s exit was disclosed in a regulatory filing Thursday.

“Today I’m rolling out a new management structure that I believe will make Yahoo a lot faster on its feet,” Bartz said in a blog post Thursday.

“It means everything gets simpler,” she wrote. “We’ll be able to make speedier decisions, the notorious silos are gone, and we have a renewed focus on the customer.” Among changes:

— Technology and product groups will be combined into one entity led by chief technology officer Ari Balogh.

— Two regions – North America and international – will be responsible for delivering Yahoo products and services. Previously, those tasks were divided among four regions. Hilary Schneider will head North America.

— David Ko will lead the mobile business, strategy and monetization teams.

— The company created a customer advocacy group to improve customer relations.

News of the organizational changes sent Yahoo shares up 4 percent, to $12.98, in trading Thursday.

Bartz, 60, known for her focused leadership and direct manner, faces a number of challenges to shore up Yahoo’s flagging financial performance.

The moves are overdue, tech analysts say, because Yahoo continued to suffer from issues described in former executive Brad Garlinghouse’s so-called Peanut Butter Manifesto in November 2006. In it, he described a company spread too thin, and in need of defining its priorities.

“What she’s done is create a logical management structure that addresses the needs of advertisers and consumers,” says Kevin Lee, CEO of Didit, a search-engine marketing company that does business with Yahoo, Google, Microsoft and others.

The changes should “speed up decision making – which is what Yahoo needs,” says Karsten Weide, an analyst at IDC.

The Kindle 2 electronic reader that Amazon is now shipping has a new read-aloud feature. And for authors and publishers, that’s a potentially troublesome development.

“It’s a contractual minefield,” says Paul Aiken, executive director of The Authors Guild. “Authors often give audio rights to one entity and e-books rights to another.”

But Amazon insists there is nothing illegal in what it is doing. “People are not limited by copyright or any other law to reading silently,” writes Andrew Herdener, Amazon’s director of communications, in an e-mail. “They may also read out loud. And when they do so, either with their voices or with the help of software that vocalizes the text on the page, no copy or derivative work is created and no performance is being given – an audience would be required for that.”

Certainly, no audience will confuse the computerized voice reading to you on Kindle 2 for that of professional actors James Earl Jones or Jim Dale. And Amazon calls the text-to-speech feature “experimental.” But the technology is bound to improve.

“No, it is not the same thing as a professional reading yet, but that doesn’t change the direction it might be going,” says Seth Gershel, an independent consultant in the publishing industry who once ran the audiobooks business at Simon & Schuster. “I just think it’s an issue that needs to be explored now before text to speech gets so good that it is the same thing.”

Gershel believes the hybrid e-book/audiobook for the Kindle represents a new entity. “I’m sure there’s a way to make a revenue model that works for that, ” he says.

How might that play out? Aiken says a consumer might, for example, pay an extra $1.75 or so to be able to listen to a book. He says the guild is “in communication” with Amazon.

At its website the guild advises writers negotiating contracts to make sure Kindle’s capabilities are included in the dialogue. “Until this issue is worked out, Amazon may be undermining your audio market.”

USA TODAY columnist Edward C. Baig reviews tech products, trends and services each week.

NEW YORK — In an about-face following a torrent of online protests, Facebook is backing off a change in its user policies while it figures how best to resolve questions like who controls the information shared on the social networking site.

The site, which boasts 175 million users from around the world, had quietly updated its terms of use — its governing document — a couple of weeks ago. The changes sparked an uproar after popular consumer rights advocacy blog Consumerist.com pointed them out Sunday, in a post titled “Facebook’s New Terms Of Service: ‘We Can Do Anything We Want With Your Content. Forever.”‘

Facebook has since sought to reassure its users — tens of thousands of whom had joined protest groups on the site — that this is not the case. And on Wednesday morning, users who logged on to Facebook were greeted by a message saying that the site is reverting to its previous terms of use policies while it resolves the issues raised.

Facebook spelled out, in plain English rather than the legalese that prompted the protests, that it “doesn’t claim rights to any of your photos or other content. We need a license in order to help you share information with your friends, but we don’t claim to own your information.”

Tens of thousands of users joined protest groups on Facebook, saying the new terms grant the site the ability to control their information forever, even after they cancel their accounts.

This prompted a clarification from Mark Zuckerberg, Facebook’s founder, who told users in a blog post Monday that “on Facebook, people own their information and control who they share it with.”

Zuckerberg, who started Facebook while still in college, also acknowledged that a “lot of the language in our terms is overly formal and protective of the rights we need to provide this service to you.”

But this wasn’t enough to quell user protests, and the site also created a group called “Facebook Bill of Rights and Responsibilities,” designed to let users give input on Facebook’s terms of use. It also apologized for what it called “the confusion around these issues.”

“We never intended to claim ownership over people’s content even though that’s what it seems like to many people,” read a post from Facebook on the bill of rights page.

The latest controversy was not the first between the rapidly growing site and its users over its five-year history.

In late 2007, a tracking tool called “Beacon” caught users off-guard by broadcasting information about their shopping habits and activities at other Web sites. After initially defending the practice, Facebook ultimately allowed users to turn Beacon off. A redesign of the site last year also prompted thousands to protest, but in that case Facebook kept its new look.

Palo Alto, Calif.-based Facebook is privately held. Microsoft Corp. bought a 1.6 percent stake in the company in 2007 for $240 million as part of a broader advertising partnership.

Twitter founders Biz Stone (left) and Evan Williams pose for a photo at their office in San Francisco. Twitter Inc. revolves around riffing in messages limited to 140 keystrokes. Revenue has been conspicuously missing from the mix so far, raising questions about whether the nearly 3-year-old service can make the leap from intriguing fad to sustainable business.

SAN FRANCISCO – Twitter Inc. has spawned a new way to communicate by limiting messages to 140 keystrokes. So here’s a way to describe the Internet’s latest craze within Twitter’s space restrictions:

It’s a potluck of pithy self-expression simmering with whimsy, narcissism, voyeurism, hucksterism, tedium and sometimes useful information.

One vital ingredient has been missing from the mix so far — revenue. That raises questions about whether the nearly 3-year-old service can make the leap from intriguing fad to sustainable business.

Twitter intends to start testing ways to make money this spring. And co-founder Evan Williams promises it won’t drive away the more than 6 million people who have set up accounts on the unconventional communications network.

“We don’t see any reason why this can’t be a very large and profitable entity,” said Williams, the San Francisco-based company’s chief executive. “We have enough traffic on our Web site that we could put ads on there and maybe we could make enough to pay our bills, but that’s not the most interesting thing we can do.”

Williams, 36, won’t say what he has in mind besides selling ads, but he and the handful of other people who own privately held Twitter seem confident the mystery strategy will pay off — even as a devastating recession destroys much-larger companies.

Just three months ago, Twitter rejected a $500 million takeover offer from an even bigger phenomenon, Facebook Inc., the owner of the world’s largest online hangout.

Although shooing away Facebook was risky, Twitter still isn’t under immense pressure to generate revenue. The 29-employee company has already raised $55 million, including a $35 million round recently completed with Benchmark Capital and Institutional Venture Partners.

Like Facebook, MySpace, YouTube and other communal Web sites that have become Internet sensations, Twitter gives people a stage where they can express themselves and connect with kindred spirits.

Twitter’s twist is a more succinct approach, which has been likened to the 21st-century version of a telegraph.

Here’s how Twitter works: After setting up a free account, people are encouraged to post frequent updates about what they are doing, seeing and feeling. The messages, known as “tweets,” must be limited to 140 characters and can be sent from a mobile phone or a computer.

Although the updates are available for anyone to see, Twitter users usually set up their accounts to monitor the tweets of people they know or admire. These “followers” are automatically fed tweets from the people they are shadowing.

With more than 265,000 people tracking his messages, President Barack Obama has the most Twitter followers even though neither he nor his staff have tweeted since he moved into the White House last month.

Many other politicians and celebrities, such as basketball star Shaquille O’Neal (more than 72,000 followers) and former rap music sensation MC Hammer (more than 55,000) regularly share tweets.

Twitter also has become a way to peek at dramas unfolding behind closed doors.

When Yahoo Inc. laid off hundreds of workers last year, some of the casualties used Twitter to provide a blow-by-blow account of their final day at the office. Surgeons at Henry Ford Hospital in Detroit recently gave a rare glimpse inside an operating room by tweeting about the removal of a tumor from a patient’s kidney.

Twitter also has proven to be a valuable source for breaking news, sometimes even beating long-established media outlets to the punch.

When US Airways Flight 1549 made an emergency landing on the Hudson River last month, a picture of the accident scene was quickly posted on Twitter by Janis Krums, a Sarasota, Fla., entrepreneur who was on one of the ferries that rescued passengers from the water. In November, Twitter provided harrowing, first-person accounts of the terrorist attacks in Mumbai that killed 164 people.

But Twitter mostly amplifies the humdrum of ordinary folks with apparently nothing better to do but share their monotony. There’s plenty of posts along these lines: “Sitting at Corner Bakery in Frisco, Texas. Lunch was good.” Or, “Another boring day at work, ugh.” Or even, “I really do enjoy picking my nose.” (A widely practiced pastime, based on recent tweets).

Finding out what’s happening on Twitter is getting easier through a search engine called Summize that the company snapped up for an undisclosed amount last summer.

Both Williams and another Twitter founder, Biz Stone, suggested the search technology could emerge as their company’s crown jewel. Its value lies in its ability to quickly sift through a steady stream of tweets to provide almost instantaneous insights about what’s going on around the corner or around the world. Not even Google’s Internet-leading search engine can match that now.

Stone relates how he used Twitter’s search engine to ease his anxiety after he recently heard loud noises around his neighborhood. A quick search on Twitter informed him it was just a local celebration down the road.

The search engine will become even more valuable if people keep flocking to Twitter.

The site attracted 2.7 million U.S. visitors in December, a nearly eight-fold rise from the end of 2007, according to Nielsen Online. But Twitter’s traffic increasingly is coming through mobile phones, making its usage more difficult to monitor. Nielsen estimates 666,000 U.S. users accessed Twitter on mobile devices in December.

The service is especially appealing to people between 18 and 34. About one in every five people with Internet access in that age group used Twitter or a similar service to update their status at least once, according to a survey of more than 2,200 adults in November and December by the Pew Internet & American Life Project. Meanwhile, usage of Twitter and rivals such as Jaiku, Pownce, FriendFeed and Plurk was seen in just 5 percent of respondents between 45 and 54. Only 2 percent of people older than 65 had tweeted, according to Pew.

This matters for Twitter’s financial future because most younger people don’t make a lot of money, which could make it more difficult for the company to appeal to advertisers.

Even so, corporate America is paying attention.

Several major companies, including JetBlue Airways Corp., have set up Twitter accounts to monitor what people are saying about their brands. The companies sometimes send out tweets offering to address a complaint.

All that chatter could yield a huge moneymaking opportunity if Twitter chooses to mine the data and sell the insights to marketers, said Marita Scarfi, chief operating officer for Organic Inc., an Internet advertising agency. “It could be rich vein for brand analysis,” she said.

And though Twitter hasn’t sold any ads yet, it is being used as a marketing tool. Computer maker Dell Inc., for instance, is offering exclusive discounts to its more than 18,000 followers on Twitter after holiday promotions broadcast on the service produced more than $1 million in sales.

Both Williams and Stone hinted the company is exploring ways to charge for expanded commercial access to Twitter, but emphasized that all personal accounts will remain free.

Online retailer Zappos.com is a big fan of Twitter, using it for promotions and customer feedback. But the Las Vegas-based company won’t necessarily stay on board if Twitter starts imposing fees on businesses, said CEO Tony Hsieh.

“It would depend on what they’re charging for,” said Hsieh, who has attracted more than 58,000 followers since opening his Twitter account about a year ago. “We don’t see it as a marketing channel, but as a relationship channel.”

Comments like that feed the doubts about Twitter’s future. Its prospects are clouded even further by the resistance that Facebook and MySpace have faced as they have tried to inject ads into forums where people primarily goof off or fraternize.

“It’s the same kind of challenge for these sites,” said Peter Daboll, who has studied consumer behavior on the Internet for years, including in his latest job as CEO of Bunchball Inc. “How do they build on their great audiences and keep them engaged, without alienating them with a bunch of crap?”

The new Kindle 2 electronic reader is shown at an Amazon.com news conference in New York.

NEW YORK — With Kindle 2, Amazon.com CEO Jeff Bezos hopes to avoid the back-order issues that dogged the first generation of its popular electronic reading device.

The Kindle was out of stock for the last two holiday selling seasons as Amazon underestimated demand, Bezos said. “I’m very hopeful that we’ll be able to stay in stock with Kindle 2,” he said Monday at the New York launch, while offering no guarantees.

Kindle 2 will cost $359, same as its predecessor. More than 230,000 books are available in the Kindle Store. Best sellers typically cost $9.99. Newspapers, magazines and more than 1,200 different blogs are also available.

The new Kindle ships Feb. 24. Customers awaiting back-order Kindles will receive the latest version.

A third of an inch thick, the 10.2-ounce Kindle 2 is thinner than leading 3G smartphones, Bezos said. It addresses the clumsy navigation of the first device. The screen and battery life are also improved. New syncing technology lets you start reading on one Kindle and resume on another.

It can also read out loud, though the text-to-speech technology uses a robotic-sounding voice. Eventually you’ll be able to sync Kindle store purchases with cell phones, though the company offered no time frame.

Bezos’ grand vision is for every printed book in any language, “to be available in less than 60 seconds.”

Still, he says he’s astonished at how well e-books have sold. “We already have more than 10 percent of our unit sales in Kindle form where the Kindle editions are available.”

Tech analyst Mark Mahaney at Citigroup Investment Research estimates Amazon sold about 400,000 units last year and that Kindle hardware and book sales will contribute about $1 billion to Amazon revenue in 2010.

Kindle faces competition from rivals such as Sony and upstart Plastic Logic. Its big advantage: the wireless store that lets you fetch titles in under a minute.

Still, folks hoping for a cheaper Kindle are bound to be disappointed. Indeed, for casual readers, a $359 upfront purchase might be too much in a soft economy, says Avi Greengart, Research Director of Mobile Devices at Current Analysis.

Bezos says the company couldn’t cut the price because of its advances, including more refined display technology and seven times greater storage. It can hold more than 1,500 books.

At a glance, Kindle 2 looks better than predecessor

Here’s the really quick read on Amazon’s new electronic reader: The $359 Kindle 2 ought to make it easier to curl up with a good e-book.

Kindle 2, which starts shipping Feb. 24, certainly addresses speed and the other main problem I had with the first-generation Kindle, namely navigation.

The clumsy scroll wheel has been replaced by a five-way controller for moving around the text on the screen. Amazon says you’ll especially appreciate this new controller while reading newspapers. We’ll see.

The display is crisper. And pages appear to turn faster — 20 percent faster, Amazon says. Apparently, you’ll no longer inadvertently flip pages as happens way too frequently with the buttons along the edges of the original Kindle. That always drove me nuts.

I also loathed the cheap cover on the first edition. Kindle 2 has a hinge to ensure that a cover won’t slide off, though the latest generation doesn’t even come with a cover. Amazon sells a $30 leather cover as an accessory. Others will be available from Cole Haan and Belkin.

With or without a cover, Kindle 2 is more attractive than its homely predecessor, though that’s not saying much. At a svelte 0.36 inches, Kindle 2 is about half as thick as before and thinner than most smartphones.

The power charger is also smaller. What’s more, you can charge the device using a micro USB cable. Amazon says the battery can last about two weeks off a single charge, a 25 percent improvement. Battery life on the first Kindle wasn’t a major issue.

As before, you can shop for books directly from the wireless Kindle Store, using Amazon’s Whispernet. It runs on Sprint’s fast EV-DO network. I didn’t get to download any books on the new device (I got to hold Kindle 2 only for a moment), but Amazon ensures it will work much the same, with books arriving in less than a minute.

With 2 gigabytes of internal memory, you can store more than 1,500 books. The original had 256 megabytes of internal storage (about 200 books). But the original also had an SD memory card slot. There’s no such slot on Kindle 2.

I’m looking forward to trying out the new Whispersync wireless syncing feature. It lets you start reading on one Kindle and resume where you left off on another Kindle. Where it could get interesting is when Amazon will let you sync with a cell phone, something it says is in the works.

Kindle 2 also can read out loud, perhaps while you are cooking or riding in a car. Based on the small sample I heard, it’s a good thing Amazon calls this an “experimental” feature. The voice is robotic and nowhere near the quality of a book recorded, say, on Amazon’s own Audible service.

Of course, not all books have audio versions, and Kindle 2 can read aloud anything that is on the device, including your own documents. The page automatically turns when content is being read aloud, raising intriguing possibilities, perhaps, for children’s books.

On first impression, Amazon appears to have made a good device better, if not dramatically so. But I’ll reserve my verdict until I’ve had a chance to put a Kindle 2 to the test. By curling up with it.

The new Google phone, dubbed the G1, has been touted as a working man’s smartphone — a cheap, Web-friendly wireless device that can make life easier for millions of consumers.

The G1, as it turns out, also stands to make life a whole lot easier for Google — by making it a snap to track your movements on the mobile Web and send you ads as it does on the desktop. The device, sold exclusively by T-Mobile, gives Google access to your e-mail, instant messages, contact lists, Web-search history and geographic location. By keeping tabs on your mobile life, Google can quickly figure out what sort of ads to send your way, and when.

“It’s like a walking surveillance device,” says Jeffrey Chester, executive director of the Center for Digital Democracy, a consumer watchdog group.

It’s never been easier to get information on the run. Smart devices such as the G1 and Apple iPhone let you put the Internet in your pocket and go — down the block or across the country. But this convenience could cost plenty in lost privacy, consumer advocates and tech analysts say. Once data have been collected and warehoused, you lose control of it forever.

“The Big Brother aspect of it is troubling,” says Rep. Edward Markey, D-Mass., former chairman of the powerful House Subcommittee on Telecommunications and the Internet.

Mobile consumers are especially vulnerable, Markey says. Unlike PCs, cell phones tend to be used by one person exclusively. The information they telegraph — on Web browsing, lifestyle and more — tends to be “highly personalized.”

That’s the main reason mobile data are so prized: The information is incredibly accurate. It’s also why Markey and other privacy advocates say the debate about online privacy will become even more intense as advertising migrates to the mobile Web.

Mobile advertising is still relatively new — G1 users, for now, get ads only through search results, for instance — but it’s clearly a hot spot. The market is expected to reach $2.2 billion by 2012, from about $800 million now, according to JupiterResearch. Ultimately, it could surpass the traditional Web, now a $20 billion ad market.

Yahoo, Microsoft and other ad-supported search engines collect information as Google does. But the sheer size and scope of Google’s data-mining operation — the Web giant performs more than 80 percent of all desktop searches worldwide — makes it a uniquely pervasive presence, says Chester.

Google and Yahoo, the two biggest players in search advertising, say their self-imposed privacy policies are sufficient to protect consumers, noting that they do not collect or store information in a way that can be directly tracked to an individual.

Peter Fleischer, global privacy counsel for Google, says Google tries to make privacy language as “transparent” as possible. Anne Toth, head of privacy for Yahoo, says, “Trust is a fundamental part of our business.”

Privacy policy smorgasbord

Both companies have one master privacy policy and individual ones for each product. Google currently has more than two dozen, including a separate one for the G1.

To help people make sense of it all, Google devotes a video channel to privacy at its YouTube subsidiary. The videos, just three to five minutes each, feature Google employees talking about the sorts of information that Google collects and why. Generic safeguards, such as how to manage cookies, are also discussed.

Fleischer says the videos are Google’s attempt to make privacy policies more accessible. “The average consumer is not going to read them,” he says. “We might as well face that fact as an industry.”

Joseph Turow, professor of communications at the University of Pennsylvania’s Annenberg School for Communication, says privacy policies, in general, are nearly impenetrable for average consumers.

“It’s crazy,” Turow says. “I don’t think anybody could possibly go through these multiple layers and understand” them.

The new Congress might pass an electronic bill of rights this year, which would likely include tough, new privacy rules for Internet companies, Markey says. Now, Internet companies must abide by certain privacy rules — regarding children, for example — but their privacy policies are largely voluntary.

“We cannot make a national privacy policy based on the current pledge of the current CEO of a company,” Markey says.

Markey wrote the landmark 1999 law that requires phone and cable TV companies to give consumers an “opt-in” choice for deciding whether their personal data can be used for commercial purposes. He says Google, Yahoo and other companies should be held to the same standard.

With mobile becoming an integral part of day-to-day life, he also thinks other changes are in order, such as: An individual should have the right to see the data a company has amassed on him or her and be able to have that record expunged. And, he says, a company should not be allowed to deny a service — say, mobile search — just because a consumer doesn’t want personal data collected.

One thing everybody agrees on: The mobile Web is exploding.

According to Forrester Research, about 54.4 million people — consumers and business users — surf the mobile Web. By 2013, that number is expected to more than double to 110.7 million, Forrester estimates. Total number of wireless devices worldwide: about 3 billion.

The desktop Web, in comparison, took more than a decade to take root. There are about 66 million broadband households in the United States; one household can have more than one user.

Once a clunky, hard-to-reach cyberbackwater, the mobile Web is now a destination spot. Thanks to the arrival of Facebook, YouTube and other popular Web sites, it’s quickly becoming a parallel universe to the desktop Web — only better, because it’s 100 percent mobile.

Falling prices on cool new devices have helped. The G1, sold by T-Mobile with a two-year service contract, costs $199. The 3G iPhone — sold by AT&T with a two-year contract — starts at $199. That’s less than half the $500 sticker price of Web-enabled mobile devices a few years ago.

Another factor: Consumers are dumping land lines by the millions, creating a new generation of wireless-only homes and users. According to the government, about 16 percent of U.S. homes are mobile-only — up from 6 percent in 2004 — and thousands of wireless converts are snipping the cord daily.

The combination — cool devices, cheap prices, a friendly mobile Web and the rise of wireless-only users — is redefining the broadband game, says Forrester analyst Doug Williams. “Now, there are plenty of consumer-friendly applications that provide for a unique consumer experience when you connect to the mobile Web,” he says.

The G1, in many ways, embodies the best and the worst of the mobile Web. The device is based on the new Android operating system, whose development was overseen by Google. More than 30 companies participated in the development of Android, but Google had decision-making authority over design, engineering and more.

The G1 is high-performance and incredibly easy to use. It comes preloaded with familiar Google applications, allowing users to reach, with one click, some of its most popular services — Google Maps (MyLocation, satellite, traffic and Street View), Gmail (e-mail), YouTube, Google Calendar and Google Talk (IM service).

It also has a touch-screen, traditional qwerty keyboard and a 3.2-megapixel camera. Music player? Of course. You can also add and subtract applications.

On the downside, once you fire up the G1, you’re on Google’s radar — whether you like it or not.

To use the device, users must set up a Google account. The registration process creates a “personal identifier” — basically, a number that Google uses to store information about you, which Google does not consider to be personal information.

It enables Google to field your search queries quickly when you’re on the run. It also gives Google access to your contact lists, IMs, e-mails, personal calendar, social networking and video downloading — the videos you’d fess up to publicly, as well as the ones you might not. As for all those “personal photos” swapped with pals on Facebook, MySpace and Twitter: Google can grab those, too.

Everything gets crammed into your personal “file,” so to speak, along with a lot of other stuff — such as where you bank, shop and cruise on the Web when you’re lonely, bored or just in the mood for a little fun.

You can’t see what information is collected

Once your information has been collected and stored, there’s no way to get rid of it. You can’t see what’s been collected or have it expunged. It’s Google’s for as long as it wants to hold onto it.

Cole Brodman, T-Mobile’s chief technology officer, says some of the privacy concerns around the G1 highlight the challenge of trying to “blend the Web world with the mobile world in a way that doesn’t violate” consumer privacy, particular in the area of mobile advertising.

Carriers for years shied away from mobile advertising, in part because they were limited by law and in part because they didn’t want to risk offending customers. But the world is changing, he says.

Brodman says the mobile world is in flux right now, noting that ad-based companies like Google didn’t exist until fairly recently. Neither did the concept of “contextual” advertising — Google’s mantra — which is the idea of providing users with advertisements that are relevant to their day-to-day lives.

How to determine what’s relevant? By keeping close tabs on your online life, of course. Figuring out what’s helpful, and what’s just plain intrusive, is the real trick, Brodman says.

“There are a lot of new business models out there,” he says. “Some of them are exciting, and some will probably be a little scary, just like the Internet.”

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HOW IT WORKS

How a user’s actions help Google phone build a data profile

The new G1 smartphone offers a variety of consumer-friendly features, such as unfettered Web browsing. But at what cost to privacy? You decide:

— Turn on G1 phone

What Google does: Requires creation of Google account at start-up. (If you don’t already have one.) Process creates a unique “identifier” for that user. (1)

— Search the Internet with built-in Google search box

What Google does: Captures and records search queries. Interactions with Google-supported Web sites also logged.

— Arrange an event with G1′s Calendar and Contacts function

What Google does: Stores all e-mail contacts and saved phone numbers.

— Send mail to friends through Gmail

What Google does: Copies and stores contents on Gmail servers. Mail also scanned for viruses.

— View documents

What Google does: Stores viewed documents/attachments on Google servers. Also scanned for viruses.

— Find a restaurant with Maps and get directions with Street View and MyLocation

What Google does: Search results, including your location information, are recorded and stored on Google servers.

— Watch a friend’s video on YouTube, also owned by Google

What Google does: Keeps list of videos.

1 — Information Google collects is associated with the user’s unique registration information and can be cross-referenced with non-G1 data that may become available.

—

Sources: Google/USA TODAY research

Californians may have a lot to say about the way the rest of America drives.

That’s not just because the Obama administration may allow California to set auto mileage standards higher than the federal government’s. California also is developing its own rules for the fuels motorists use.

The new rules, known as a low-carbon fuel standard, are intended to reduce carbon emissions by 10 percent in California. The state needs federal approval to regulate auto mileage but doesn’t need it to impose carbon standards on fuel.

“We need to actually do much better in terms of making cars go farther on a gallon of gasoline at the same time we need to make sure that the fuel we do burn is a lot cleaner and less carbon-intensive,” said Emily Figdor, who follows climate policy for Environment America, an advocacy group.

Biofuel companies are worried about the impact California’s low-carbon standard could have in that state and elsewhere.

The key to the carbon standard, due to be implemented by next year, is an analysis of the carbon emissions of each type of fuel that motorists might use, from conventional gasoline to natural gas, soy-based biodiesel, corn ethanol and new fuels made from forest residue, crop residue and other sources of biomass.

The problem for the biofuel industry is that California officials are factoring in the impact of biofuels on land use, based on the assumption that using cropland to produce biofuels requires planting crops somewhere else to maintain food supplies.

The theory is that for every additional acre of cropland devoted to biofuels in this country, land must be cleared in Brazil or somewhere else to grow corn or soybeans.

Without those land-use considerations, corn ethanol would be rated as having two-thirds the carbon emissions of gasoline, said Brooke Coleman, executive director of the New Fuels Alliance, which represents companies developing next-generation biofuels.

But with the land-use analysis included, ethanol actually comes out slightly worse than gasoline, he said.

“If they continue on the same course, you’re going to have a situation where biofuels play a very limited role, if any role, in the California economy and the California marketplace,” said Coleman.

Biofuel companies also could find themselves shut out of the Northeast, too, if those states follow California’s path, according to Coleman. Eleven states from Maryland to Maine announced plans in January to develop their own low-carbon fuel standard.

That in turn could doom Obama’s plans for a national low-carbon fuel standard, said Coleman, because agribusiness interests and oil companies could get together to fight him.

The California rules “could set us back for years,” Coleman said.

The biofuel industry argues that there isn’t enough known about impacts on land use to use them in calculating greenhouse gas emissions.

The debate over what California is doing mirrors a debate that’s been taking place within the Environmental Protection Agency. The 2007 energy bill requires refiners to use 36 billion gallons of renewable fuels by 2022, but it sets carbon-emission limits for new biofuel production. It also requires the Environmental Protection Agency to consider land-use changes in deciding whether biofuels meet the carbon caps.

The EPA drafted rules to implement the law under the Bush administration, but the Obama administration has pulled them back for further work. The Obama administration’s move extends the uncertainty already facing biotech companies and their investors, said Paul Winters, a spokesman for the Biotechnology Industry Organization.

“If these companies are able to identify any investors in the current economic climate, they’ll need the rules in place in order to keep those investors interested,” he said.

California’s low-carbon standard is due to take effect next year. The state air resources board will take up the rules in April.

Philip Brasher is a reporter for The Des Moines Register. E-mail: pbrasher@dmreg.com

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California facts

• California used 20 billion gallons of gasoline and diesel in 2006, a nearly 50 percent increase in two decades.

• If it were a country, California would be the second-largest user of gasoline and diesel in the world. Bigger than China. Bigger than India.

• California’s transportation sector is responsible for 40 percent of the state’s greenhouse gas emissions.

Source: California Air Resources Board and California Energy Commission.

Motorola inched closer to the financial edge on Tuesday, reporting a staggering fourth-quarter loss of $3.6 billion and deep deterioration of its once-storied cell phone business.

The company recorded a string of charges to write down the cost of its cell phone business, which was in the process of being spun off when the economy soured. The spinoff was put on hold last fall. The company offered no time frame for when, or even if, the cell phone business might become an independent company.

The Schaumburg, Ill.-based equipment maker on Tuesday also suspended its dividend and announced the departure of its chief financial officer, Paul Liska, who was appointed a year ago.

“We’re witnessing an American technology icon imploding,” says Roger Entner, head of telecom research for Nielsen.

Motorola invented wireless as a class of service more than 30 years ago; its engineers also created the world’s first cell phone.

Unless CEO Greg Brown can turn things around quickly, Entner says he doesn’t expect Motorola to be around two years from now. “It’s getting grimmer by the day.”

Motorola said it sold 19.2 million cell phones in the quarter, less than half what it sold in the same 2007 period. Revenue declined 26 percent year-over-year.

Trying to conserve cash, Motorola recently announced plans to cut 4,000 jobs — on top of the 3,000 reductions it announced last fall. Suspension of the dividend, a hallmark of Motorola for decades, is another cash-saving move.

One of Motorola’s biggest problems, Entner says, is its aging product line. The company scored a major hit a few years ago with the Razr, but never had a follow-up. Motorola was also slow to jump on the smartphone craze, leaving it flat-footed when the Apple iPhone stormed the market. Then the economic slowdown hit, sending ripples throughout the global wireless markets.

Other parts of Motorola were profitable. Earnings in the networks division, which makes cable TV gear, rose 34 percent. Enterprise mobility, which makes communications equipment for emergency personnel, rose 3 percent. The two units, together, account for about two-thirds of Motorola’s annual sales.

Motorola shares fell 11 percent, closing at $4.04.

Monster.com said Tuesday that it will impose a mandatory password change for all North American and Western European users of its popular employment Web site by the end of this week.

The precaution comes after Monster Friday quietly posted an online notice disclosing that its customer databases had been hacked for the second time in six months. Thieves took user IDs, passwords, e-mail addresses, names, phone numbers, birth dates, ethnicity and state of residence for an undisclosed number of job seekers and employers, said spokeswoman Nikki Richardson.

Richardson said a criminal investigation is under way. She declined to confirm or refute a report by The Times of London that 4.5 million British users of Monster had their data stolen. She noted that the thieves did not swipe Social Security numbers, resumes or customer transaction data.

The theft underscores how cybercriminals are intensifying attacks on data storehouses. Last week, Heartland Payment Systems disclosed that hackers broke into the system it uses to process 100 million payment card transactions a month. “Data is king,” says Don Leatham, senior director of solutions and strategy at security firm Lumension. “We will continue to see an uptick in targeted attacks in 2009.”

Security and privacy experts say millions of Monsters’ patrons are in a particularly vulnerable state. Typing a stolen user ID and password gives an intruder access to everything available to the member job seeker or employer. Crooks “hoover up” such data, says Avivah Litan, banking security analyst at Gartner. They then correlate it with other information, stolen elsewhere, and use it to hijack bank accounts, break into company systems and do other scams.

A data thief could type in a stolen user ID and password, gain access and then change the password to secure permanent access to the account, says Sam Masiello, vice president of information security at security firm MX Logic. “Considering many users are not always active, this leaves a huge potential for many accounts to be compromised,” says Masiello.

Los Angeles attorney and privacy advocate Mari Frank says Monster users should feel violated. “Here they are, trusting that the information they give up is going only to prospective employers, and now the criminals have it. It’s such a betrayal.”

Richardson countered that Monster strives to “provide the best practical security we can.”

Strong holiday advertising sales led Google to a successful fourth quarter, even in recessionary times, with revenue of $5.7 billion, up 18 percent from the year-ago quarter.

Net income, however, tumbled 68 percent to $382.4 million, from $1.21 billion a year ago, as Google took a one-time charge to write down $1.09 billion in its investments in AOL and wireless company Clearwire.

“Both deals made sense to us then and make sense to us now,” said Google CEO Eric Schmidt, on a conference call with analysts.

He said Google has responded to the economic turndown with “prudent management” of the business.

Like other tech companies, Google has had some layoffs — 100 contract employees were let go this month, and Google is hiring less. Only 99 employees were added in the quarter; Google used to add more than 100 employees weekly.

To hold onto the staffers it has, Google announced a voluntary one-for-one stock-option exchange to be issued in March. About 85 percent of Google employees have some worthless options. (An option is a right to buy stock at a set price at a future date.)

Schmidt and other Google execs reiterated during the call that it intends to make it through the recession without cutting back on investment. “We’re in this for the long haul,” Schmidt said.

Google, unlike other companies, doesn’t give sales estimates for upcoming quarters, or guidance.

“The fourth quarter was the easy part, we had the holidays,” said Schmidt. He added that future quarters would be “uncharted territory. We don’t know how long this period will last, but we’re prepared to get through it.”

As always, Google generated nearly all of its revenue from the sale of online advertising, mostly those text ads that appear near search results. Paid clicks increased nearly 18 percent from the year ago quarter, Google said.

Google dominates search advertising, with a 63.5 percent market share in December, according to measurement firm ComScore Media Metrix. No. 2 Yahoo has 20.5 percent and Microsoft 8.3 percent.

“Google has obviously figured out the formula that is almost recession proof,” says Allen Weiner, an analyst with Gartner. “Companies will still need to advertise, and pay-per-click ads are affordable.”

Investors were upbeat. Google’s stock closed up $4.61 in after-hours trading, at $311.11 a share, after closing up in regular trading as well.

Electronic book readers are an emerging alternative to the bound word for some readers, especially those who like the convenience when traveling. The high-tech gadgets are still a novelty, but they appear to be taking hold. Driven by sales of the Kindle, the most iconic of the devices, shown, these handheld book readers are larger than an iPhone and, with adjustable font sizes, can make reading text easier.

Deciding what book to read next may not be the only choice you face. You may well have to pick: paper or plastic?

Electronic book readers – often made with plastic – are an emerging alternative to the bound word for some readers, especially those who like the convenience when traveling.

The high-tech gadgets are still a novelty, but they appear to be taking hold. Already, reading newspapers on a smart phone isn’t such a big deal anymore, so these book readers appear to be the next logical step in how new technology can change our reading experiences.

Driven by sales of the Kindle, the most iconic of the devices, these hand-held book readers are larger than an iPhone and, with adjustable font sizes, can make reading text easier.

Made by Amazon and touted by Oprah Winfrey, the Kindle showed up on several holiday shopping guides and is one of the few products this season that appeared to be recession-proof. Demand for the $359 device has been high, and it is sold out until February.

But the popularity of e-book devices doesn’t mean the printed page will soon become extinct.

There’s just too much to love about ink-and-paper books.

“There’s a certain pleasure in leafing through the pages,” says Mary Ann Werner, 54, who bought a Kindle last spring but still loves the heft of a good book. “I don’t think the Kindle will replace books in my lifetime.”

There are certain types of tomes that Werner still buys in printed form, like a photograph-filled memoir or a travel book with lots of maps.

But for a beach vacation or loading up on books for a plane trip, “there’s nothing better” than an electronic book, says Werner, co-founder of independent label Red Beet Records in Nashville, Tenn., and a former vice president and counsel at the Washington Post.

‘It will only grow’

At 10.3 ounces and about the size of a book, the slim Kindle is easy to hold while reading, even when reclining in bed. It’s eco-friendly, and users can download a title from the Kindle bookstore and start reading – all in less than a minute.

Werner doesn’t see electronic book readers becoming the new way we read – just a different way for some readers.

In an informal Internet survey, early adopters of electronic book reading devices tended to be book lovers over the age of 50, in large part because of its high price tag, says Bob Edington, vice president of Internet Channel at Thomas Nelson Publishers in Nashville, which offers a vast majority of its best-sellers in e-book format, including 1,300 titles in the Kindle store.

Although e-book readers have been around for years, Amazon really broke through to the next level when it introduced the Kindle, Edington says.

“We’re only in the beginning stages, and it will only grow,” Edington says.

An estimated quarter-million to 1 million Kindles have been sold since it was introduced in November 2007. In July, Amazon said that of the 130,000 titles available on Kindle and in physical form, Kindle sales made up more than 12 percent of the sales of those titles, according to Time magazine.

Industrywide, e-books are about 1 percent of overall business but could grow to 5 percent to 12 percent in five years, says Frank Daniels III, chief operating officer of Ingram Digital Group in La Vergne, Tenn.

Improvements needed

Paul Rinkes, 36, says he’s generally an early adopter of new technology and has read a lot about the Kindle, but he’s holding out.

“I’m about as technologically wired as any person you’ll meet,” says Rinkes, a Franklin, Tenn., photographer. “If it should appeal to anyone, it should appeal to me.”

Already, he and his wife read newspapers on their mobile phones, and he recently downloaded the Bible on his iPhone because he was always forgetting to bring a copy to church. “That was easier than having to remember to bring it,” he says.

But he thinks e-book devices need to be cheaper and better designed before he and other tech-savvy book lovers join the club.

He’s waiting to see whether Apple will come out with its own design or whether Amazon’s 2.0 version of the Kindle, rumored for later this year, will be less clunky.

Indeed, it may take another generation of readers to fully adopt the devices. “The younger generation is so tuned into technology and grew up with computers and high-tech toys,” says Teresa Fogarty, marketing publicity manager at the California-based Independent Book Publishers Association.

“But, books are always going to be around,” Fogarty says. E-book devices “are not something people will cuddle up with.”