iPhone demand said to be ‘robust,’ recent cuts don’t reflect weak demand

Following recent reports from Nikkei and The Wall Street Journal that suggested Apple (AAPL) slashed iPhone 5 component orders in half due to weak demand,  the company’s stock fell significantly and opened below $500 for the first time in nearly a year. The reports have been called into question, however, with many believing they do not represent true consumer interest. Shaw Wu of Sterne Agee wrote in a note to investors on Tuesday, per Apple Insider, that his supply chain checks have indicated that demand for the iPhone 5 “remains robust.” The analyst believes the recent reports are a result of improved yield rates and possibly Apple’s recent supplier changes.
[More from BGR: PlayStation 4 and Xbox 720 could cost just $350, expected to launch this fall]
Despite the recent concerns, Wu expects Apple to post better-than-expected earnings for the December quarter led by sales of 47.5 million iPhones with a gross margin of 38.7%. Both estimates are above Wall Street’s expectations of between 46 to 47 million iPhones and a 38.3% gross margin.
[More from BGR: HTC One SV review]
Sterne Agee reiterated its Buy rating on shares of Apple with a price target of $840.
Wu’s expectations remain bullish compared to other Wall Street analysts. Stuart Jeffrey of Nomura is the most recent analyst to cut his outlook on Apple stock. Nomura reduced the company’s price target to $530 from $660 Tuesday morning, citing weak demand for the iPhone 5 and increased pressure on Apple’s margins.

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Facebook unveils social search feature

MENLO PARK, Calif. (AP) — Facebook CEO Mark Zuckerberg unveiled a new search feature that's designed to entice people to spend more time on his company's website and will put the world's largest online social network more squarely in competition with Google and other rivals such as Yelp and LinkedIn.
Called "graph search," the new service unveiled Tuesday lets users quickly sift through their social connections for information about people, interests, photos and places. It'll help users who, for instance, want to scroll through all the photos their friends have taken in Paris or search for the favorite TV shows of all their friends who happen to be doctors.
Although Zuckerberg stressed that "graph search" is different from an all-purpose search engine, the expanded feature escalates an already fierce duel between Google Inc. and Facebook Inc. as they grapple for the attention of Web surfers and revenue from online advertisers.
"This could be another reason not to use Google and another reason to stay on Facebook for longer periods," said Gartner analyst Brian Blau. "I don't think Google is going to lose its search business, but it could have an impact on Google by changing the nature of search in the future."
Facebook's foray into search marks one of its boldest steps since its initial public offering of stock flopped eight months ago amid concerns about the company's ability to produce the same kind of robust earnings growth that Google delivered after it went public in 2004.
Although Facebook's stock has rallied in recent weeks, the shares remain below their IPO price of $38. Investors seemed let down by Tuesday's news, causing Facebook's stock to slip 85 cents, or 2.7 percent, to close at $30.10. Google's stock gained $1.68 to close at $724.93.
If the new search tool works the way Facebook envisions, users should be able to find information they want to see on their own instead of relying on the social network's formulas to pick which posts and pictures to display in their fees, analysts said.
Until now, Facebook users were unable to search for friends who live in a certain town or like a particular movie. With the new feature, people can search for friends who, say, live in Boston who also like "Zero Dark Thirty." And Facebook's users will be able to enter search terms the same way that they talk, relying on natural language instead of a few stilted keywords to telegraph their meaning.
Only a fraction of Facebook's more than 1 billion users will have access to the new search tool beginning Tuesday because the company plans to gradually roll it out during the next year to allow time for more fine tuning.
Not all the interests that people share on Facebook will be immediately indexed in the search engine either, although the plan is to eventually unlock all the information in the network while honoring each user's privacy settings.
That means users can only see content that's available to them through other's privacy settings, Zuckerberg pledged.
"Every piece of content has its own audience," Zuckerberg said.
Though the company has focused on refining its mobile product for much of last year, the search feature will only be available on Facebook's website for now, and only in English.
Facebook's decision to make its foray into search slowly reflects the formidable challenge that it's trying to tackle. The "social graph," as Facebook calls the trove of connections between people and things, is "big and changing," Zuckerberg said. There are 240 billion photos on Facebook and 1 trillion connections.
Indexing all this, he added, is a difficult technical problem the company has been working on.
Although Facebook isn't trying to fetch information across the Web like Google does, it's clearly trying to divert traffic and ad spending from its rival. Facebook is hoping to do this by making it easier for its users to quickly find many of the things that are most important to them: movie, music and restaurant recommendations from friends and family; photo galleries of people they care about; and new connections to old friends and other people with common interests.
It's the kind of personal data that has been difficult for Google to collect, partly because Facebook has walled off its social network from its rival's search engine. Instead, Facebook has partnered with Microsoft Corp. to use its Bing search engine to power traditional Web searches done through its site. That partnership remains.
"For a certain set of searches, this is going to be far more powerful than Google," predicted Ovum analyst Jan Dawson.
Yelp Inc.'s online business review service also could be hurt if Facebook's search feature makes it easier for people to find recommendations from the people that they trust instead of relying on the opinions of strangers posting on Yelp. Facebook's search tool also will allow people to find people who worked at a specific company — one of the advantages of LinkedIn Corp.'s online service for professional networking.
Yelp's stock fell $1.36, or 6.2 percent, to close Tuesday at $20.61 while LinkedIn's stock added 39 cents to finish at $117.91.
Facebook doesn't have plans to show additional ads as people use the new search tool, but analysts said that is bound to change. "If the appropriate privacy protections are in place, this could be a significant boost in value that Facebook can provide to its users and, in time, that will provide some really valuable new advertising avenues for advertisers," Dawson said.
Google is trying to overcome its social network disadvantage with Google Plus, a service that the company launched 19 months ago in attempt to glean more insights into people's relationships and counter the threat posed by Facebook.
Helped by Google's aggressive promotion of the service, Plus boasts more than 135 million people who post information and photos on their profiles. But Google Plus users still aren't sharing as much or hanging out on its service as long as Facebook users do, raising questions about whether Google will ever be able to grasp the Internet's social sphere as firmly as Facebook does.
Facebook now must prove it can master the intricacies of search and picking the right ads to show to the right people at the right time — complicated tasks that Google has honed during the past 14 years to establish itself as the Internet's most powerful company. It currently produces 10 times more annual revenue than Facebook. Though neither company has released its 2012 financial results, analysts are projecting $52 billion in 2012 revenue for Google versus about $5 billion for Facebook.
The search tool is laying the foundation for Facebook to close the gap, said Chris Winfield, co-founder and chief marketing officer for online ad agency BlueGlass Interactive.
"They can just chip away incrementally," Winfield said. "The can start by just taking away one in every 100 Google searches, then one in every 20, then one in every 10."
In an opinion apparently shared by many investors, Forrester Research analyst Nate Elliott doubts the search feature will prove to be a boon to Facebook. He views it as little more of a way for Facebook users to find new friends online more quickly and make new connections that ensure the social network remains relevant.
"It's vitally important, but it's also unsexy," Elliott said. "If Facebook thinks people are going to start searching Facebook when they would have searched Google, then they I think they are going to wake up in a year and find they are sorely mistaken.

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Toys and video games hook up on new Disney game platform

SAN FRANCISCO (Reuters) - Children will be able to move plastic toys that look like pirate Captain Jack Sparrow and other movie characters into a virtual world on a computer or TV screen in a game platform Walt Disney Co unveiled on Tuesday in hopes of boosting revenue at a loss-making division.
Disney's new "Infinity" concept, to be released in June, comes with games inspired by "Monsters University," "Pirates of the Caribbean" and "The Incredibles" franchises. The toys will come to life on-screen after being placed on a small electronic portal, similar to Activision Blizzard's "Skylanders," one of 2012's top-selling games.
In Disney's "Infinity," users will transport Disney and Pixar characters into on-screen adventures by placing their toys on a flat hexagonal board. A starter pack with software, the board and three plastic figurines is priced at $75.
Other Disney and Pixar characters will also be incorporated into the platform as the platform evolves, John Lasseter, Chief Creative Officer of Walt Disney and Pixar Animation Studios, said at a launch event in Hollywood, California.
The company's Disney Interactive division, which makes video games and interactive content, has been reporting losses over the last year, and analysts say it badly needs a hit.
"We've put a big bet on this," said John Blackburn, vice president and general manager of Disney's Avalanche Software studio that developed the platform.
In 2011, Activision launched "Skylanders," which connects to consoles such as Microsoft Corp's Xbox or Sony Corp's PlayStation. Activision said this week that the Skylanders franchise hit $500 million in U.S. retail sales.
Disney's Infinity will be able to connect to computers and consoles including Xbox, PlayStation and Nintendo's Wii U.
Sterne Agee analyst Arvind Bhatia said Infinity's concept is similar to Skylanders, except that it uses better-known characters, like Jack Sparrow of "Pirates of the Caribbean."
"Activision has the lead and the head start," Bhatia said.
He said Activision's "Skylanders" is heading towards hitting a billion dollars in revenue, making it tough for Disney to compete.
Infinity also comes with a "Toy Box" mode, where users can create their own virtual worlds by mixing backdrops and characters from different Pixar and Disney franchises.

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Analysis: In battle for the car, Sirius faces fight from Pandora

NEW YORK (Reuters) - Sirius XM Radio Inc's grip on drivers is under an increasing threat as the availability of Internet connections in more cars is helping Pandora Media Inc counter some of its rival's big selling points.
In a sign of how important drivers are to the two companies, each of their top executives made the trek to Las Vegas this week to court automakers at the annual Consumer Electronics Show.
Sirius XM, which has its satellite radios in 70 percent of new vehicles, generates the vast majority of its revenue through subscriptions and derives only a fraction from advertising dollars. Streaming service Pandora is just the opposite, collecting most of its revenue from advertising and operating only a nascent subscription business.
Right now, Sirius XM is the much bigger company, with almost 24 million subscribers and more than $3 billion in annual revenue. In the third quarter, it generated average revenue of $12.14 per subscriber.
Pandora, by contrast has 60 million users, about 1 million of whom are paid subscribers, and is on track to generate $424 million in revenue this year.
But the migration of music audiences to mobile devices threatens to upend a market that Sirius current dominates. The key to both companies' futures rests on winning the battle for the listener on the go, particularly people traveling by car.
With its presence in new vehicles, Sirius XM has a first-mover advantage over Pandora. But Pandora is making a huge push to get into the car, a move that dovetails with ubiquitous wireless access that makes it easier to listen to its service.
"Internet-enabled radio in the car has already begun," Pandora Chief Executive Officer Joe Kennedy said in an interview. "It will grow as a snowball, initially small but growing exponentially."
Sirius XM declined to make its executives available for interviews.
Of Pandora's 60 million total listeners, 77 percent have tuned in with a mobile device. The problem is, the revenue per 1,000 listener hours on mobile was only $26.96 in the third quarter, up from $23.60 a year earlier, but still less than half of the $56.40 the company generated from other listeners.
"They do have to continue their mobile monetization," said Cowen and Co analyst John Blackledge, who has a "neutral" rating on the stock.
Kennedy called the third quarter a "key milestone" since the mobile revenue increase outpaced mobile usage growth.
At Sirius XM, executives have said its customers are increasingly listening to its service on mobile devices, but it has never broken out figures on that usage. It costs Sirius XM car subscribers an extra $3.50 a month to stream the service over the Internet on devices.
"They don't really promote it, and it's not really a cornerstone of the product," Gabelli & Co analyst Brett Harriss said.
Sirius XM Chief Financial Officer David Frear said at an investor conference on Wednesday that the strategy was "to capture you in the car and then allow you to extend to other platforms."
DASH FOR THE DASHBOARD
While Sirius XM touts the ability of its satellites to deliver a strong signal and high audio quality, the importance of those attributes is likely to fade because of the widespread availability of faster and better Internet connections in cars.
"From the consumer standpoint, the reception advantages of satellite radio will be marginalized or go away over time," said a former Sirius XM executive familiar with the business models of the company and its competitors.
Indeed, Liberty Media Corp, which ranks as Sirius XM's largest shareholder and is close to gaining operating control of the company, has criticized its former longtime CEO, Mel Karmazin, for not adapting to changing technologies fast enough.
Critics say Sirius XM has relied too heavily on its position in the auto market and perceived programming advantage. About 50 million cars in the United States come equipped with the satellite radios, with just under half of their owners actually subscribing to the service.
For its part, Pandora is available in just 75 vehicle models, although it also has deals with automakers like General Motors Co, Ford Motor Co, BMW and most recently Chrysler Group LLC that allow drivers to plug in their Pandora-enabled mobile devices and use the car's dashboard to control the service.
More than 1 million people have used Pandora's dashboard integration, Pandora said.
Sirius XM also believes it has an edge with its programming from the likes of shock jock Howard Stern, talk show host Oprah Winfrey and major sports leagues. Access to this type of content, Sirius contends, justifies the subscription cost of at least $14.49 per month.
In the first three quarters of the year, Sirius XM's programming and content costs were $205.2 million, while it paid $409.4 million in revenue sharing and royalties, the company has reported. This represents roughly 25 percent of its revenue in the period.
On the other hand, Pandora spends roughly 55 percent its revenue on acquiring music.
"Having music is an important thing, but having the diversity of the content, the music, the news, the talk and the entertainment content is really what sets us apart," Sirius XM CFO Frear said at a December 3 investor conference.
But as Internet access becomes more readily available in cars, people will be able to listen to podcasts and other content.
"The value of commercial-free music on Sirius could decrease," said Gabelli analyst Harriss. "There is no doubt competition from Pandora will increase in the next two or three years."
RIHANNA VS. PANDORA
Still, Sirius XM has an unlikely ally in its battle with streaming music services: the U.S. government.
As it stands, Pandora and other streaming music services pay a much bigger percentage of revenue to license songs than Sirius XM does. Plus, the more popular these services become, the more they have to shell out for music royalties.
Based on rules that U.S. lawmakers set under the Digital Millennium Copyright Act, Pandora pays more than 50 percent of its revenue to an agency called SoundExchange to license songs on a per-performance basis.
Sirius XM pays 8 percent of its revenue for song licensing, and that will increase to just 11 percent by 2017 under a new deal struck with regulators. Traditional radio pays nothing at all to SoundExchange, although it pays composers to air their music.
Pandora and its brethren are pushing for changes in how royalties for online radio are collected and are backing the Internet Radio Fairness Act, a bill that would change regulation of royalties.
But they are up against big stars like Billy Joel, Rihanna and Missy Elliott, who are opposed to the bill because they believe their royalties would be cut drastically.
"Music is a poisonous area of investment because the royalty structures are so out of whack, it's impossible to be profitable," said David Packman, a veteran of the music industry and partner in venture capital firm Venrock.

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CES 2013: Shhh, don’t tell, but Las Vegas likes secrets, even at a trade show

LAS VEGAS—In a leather banquette in a sparkling Las Vegas club, a knockout blonde discreetly kicked the Louis Vuitton bag at her feet.
“It’s in there,” she whispered to me, conspiratorially. I followed this dame’s fishnet-clad legs down to her shoe’s pointed toe. Beautiful bag. “I call it the football,” she said. “I’m not going to bring it out yet.”
Leslie Bradshaw’s honey-colored Cali perfection brings to mind a young Cheryl Tiegs, but tonight she’s gone for broke in showgirl makeup, smoky eyes and red lipstick. I love her on sight.
'Til this moment on Wednesday night I knew only of Leslie, the co-founder and chief operating officer of JESS3, a brilliant and profitable data-visualization firm. I knew her from Twitter and tech blogs and magazines, where she’s forever featured as a top everything—woman, entrepreneur, kid genius—under 30. (She’s now 30.)
And now Leslie Bradshaw was hiding something. A new drug? A lap-dance voucher? We are in Vegas, after all.
But we’re here for the Consumer Electronics Show, the annual jamboree for the debut of new gadgets. Anyone with something to flog is flogging with gusto. Leslie is a cooler customer, raised on the idea of discretion when it comes to startups and venture capital. She’s not being a demented Qualcomm freak and overhyping stuff in a loony-bin, tone-deaf, tradeshow way. It’s all about stealth with her. A little film noir. The “football” in Leslie’s logo-spangled bag is the prototype for her latest venture.
At CES, the bellisima Leslie is not the only entrepreneur with something up her sleeveless sleeve. At the Las Vegas Convention Center, amid the neurotoxic audiovisuals of this vast trade show, I ran into two others—Sonaar Luthra, a TED global fellow, and Sarah Szalavitz, the ingenious philosopher queen of 7 Robot and the MIT Media Lab—who were keeping their most recent initiatives under wraps.
If you don’t pay up for a kissing booth or a speaking part at CES, as Qualcomm (disastrously) did this year, you mostly just stroll the floors testing stuff, exchanging gossip and being surprisingly generous about what looks cool. At nightfall you find friends and meet their friends. Cards are exchanged. Disorientation and dehydration are collectively experienced. Soft rock played loudly is heard; the clamor of slot machines and spastic LED light schemes are brooked. Oxygenated nicotine air is breathed.
It’s not bad for a day or two, but it’s extremely, extremely difficult to do business. You can’t be heard. You can’t find the right person to pitch, in a city where “adjacent” hotels can be a mile and a half apart. And there are no flat, vacant surfaces for showing off prototypes.
And that’s what Leslie Bradshaw meant. Though she doesn’t drink, or not much, she’s an expert cocktailer. She has a gift for making people feel comfortable, while also privately wowed. She could tell at a glance that the cocktail tables in front of us, jammed with cans of Red Bull and glasses of seltzer-lime on them, were not suitable for a full-dress presentation of her protoype. Which, I discovered later, is not a prototype at all—but a tablet cued up to demo the super-secret app she’s been working on, which launches on January 15.
I’ll say one thing I know about her elusive app: It transforms things into other things. Text into audio; audio into television. Text into television.
Sorry, folks. I can’t say more. Just as I can’t say more about Sonaar Luthra’s or Sarah Szalavitz’s projects, either. Though they might have something to do with Luthra’s inspiring Water Canary company, or Szalavitz’s seductive disbelief in “impossibility.”
But I promise that all three of these stealthy ideas are just as intriguing as the idea of stealth itself, right here at a circuslike trade show.

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Whitman says it will take five years to turn HP around

Whitman says it will take five years to turn HP around
To understand what an unholy mess HP (HPQ) is in right now, consider that CEO Meg Whitman says she needs more time to fix the company than she would have had to fix the entire California economy if she’d been elected governor. In a long Businessweek article about HP’s current turmoil, Whitman says that it will take her five years to execute her full plan to turn the company around. Whitman acknowledges that “some people don’t like that answer” when they ask her how long it will take, but she says it’s simply a reality at this point.
[More from BGR: ‘Apple is done’ and Surface tablet is cool, according to teens]
In the meantime, Whitman is trying to promote a new culture of thrift at the company by booting executives out of their plush office suites and forcing them to work in cubicles, Businessweek reports. Whitman tells the publication that she doesn’t want HP to be “a fancy pants kind of company” and that she aims to be more like the Marriott than the Four Seasons.
[More from BGR: Is BlackBerry back? Strong early BlackBerry 10 demand could signal RIM comeback]
Whitman also touches upon HP’s future plans for smartphones by saying the company will produce one in the future as soon as “we… figure out how to do it without losing a boatload of money.” And it’s not as though HP can simply acquire a struggling smartphone vendor like Nokia (NOK) or RIM (RIMM) at the moment since the company is woefully short on cash after writing off more than $17 billion last year related to past acquisitions.
But despite being completely clear-eyed about HP’s woes, Whitman still insists that she’s having more fun running the company than she’d had running for public office.
“Running for political office was the hardest thing I have ever done,” Whitman tells Businessweek. “When things seem challenging here, I go back to that.

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Selling flak jackets in the cyberwars

SAN FRANCISCO (Reuters) - When the Israeli army and Hamas trade virtual blows in cyberspace, or when hacker groups like Anonymous rise from the digital ether, or when WikiLeaks dumps a trove of classified documents, some see a lawless Internet.
But Matthew Prince, chief executive at CloudFlare, a little-known Internet start-up that serves some of the Web's most controversial characters, sees a business opportunity.
Founded in 2010, CloudFlare markets itself as an Internet intermediary that shields websites from distributed denial-of-service, or DDoS, attacks, the crude but effective weapon that hackers use to bludgeon websites until they go dark. The 40-person company claims to route up to 5 percent of all Internet traffic through its global network.
Prince calls his company the "Switzerland" of cyberspace - assiduously neutral and open to all comers. But just as companies like Twitter, YouTube and Facebook have faced profound questions about the balance between free speech and openness on the Internet and national security and law enforcement concerns, CloudFlare's business has posed another thorny question: what kinds of services, if any, should an American company be allowed to offer designated terrorists and cyber criminals?
CloudFlare's unusual position at the heart of this debate came to the fore last month, when the Israel Defense Forces sought help from CloudFlare after its website was struck by attackers based in Gaza. The IDF was turning to the same company that provides those services to Hamas and the al-Quds Brigades, according to publicly searchable domain information. Both Hamas and al-Quds, the military wing of the Palestinian Islamic Jihad, are designated by the United States as terrorist groups.
Under the USA Patriot Act, U.S. firms are forbidden from providing "material support" to groups deemed foreign terrorist organizations. But what constitutes material support - like many other facets of the law itself - has been subject to intense debate.
CloudFlare's dealings have attracted heated criticism in the blogosphere from both Israelis and Palestinians, but Prince defended his company as a champion of free speech.
"Both sides have an absolute right to tell their story," said Prince, a 38-year old former lawyer. "We're not providing material support for anybody. We're not sending money, or helping people arm themselves."
Prince noted that his company only provides defensive capabilities that enable websites to stay online.
"We can't be sitting in a role where we decide what is good or what is bad based on our own personal biases," he said. "That's a huge slippery slope."
Many U.S. agencies are customers, but so is WikiLeaks, the whistle-blowing organization. CloudFlare has consulted for many Wall Street institutions, yet also protects Anonymous, the "hacktivist" group associated with the Occupy movement.
Prince's stance could be tested at a time when some lawmakers in the United States and Europe, armed with evidence that militant groups rely on the Web for critical operations and recruitment purposes, have pressured Internet companies to censor content or cut off customers.
Last month, conservative political lobbies, as well as seven lawmakers led by Ted Poe, a Republican from Texas, urged the FBI to shut down the Hamas Twitter account. The account remains active; Twitter declined to comment.
MATERIAL SUPPORT
Although it has never prosecuted an Internet company under the Patriot Act, the government's use of the material support argument has steadily risen since 2006. Since September 11, 2001, more than 260 cases have been charged under the provision, according to Fordham Law School's Terrorism Trends database.
Catherine Lotrionte, the director of Georgetown University's Institute for Law, Science and Global Security and a former Central Intelligence Agency lawyer, argued that Internet companies should be more closely regulated.
"Material support includes web services," Lotrionte said. "Denying them services makes it more costly for the terrorists. You're cornering them."
But others have warned that an aggressive government approach would have a chilling effect on free speech.
"We're resurrecting the kind of broad-brush approaches we used in the McCarthy era," said David Cole, who represented the Humanitarian Law Project, a non-profit organization that was charged by the Justice Department for teaching law to the Kurdistan Workers' Party, which is designated by the United States as a terrorist group. The group took its case to the Supreme Court but lost in 2010.
The material support law is vague and ill-crafted, to the point where basic telecom providers, for instance, could be found guilty by association if a terrorist logs onto the Web to plot an attack, Cole said.
In that case, he asked, "Do we really think that AT&T or Google should be held accountable?"
CloudFlare said it has not been contacted about its services by the U.S. government. Spokespeople for Hamas and the Palestinian Islamic Jihad, told Reuters they contracted a cyber-security company in Gaza that out-sources work to foreign companies, but declined to comment further. The IDF confirmed it had hired CloudFlare, but declined to discuss "internal security" matters.
CloudFlare offers many of its services for free, but the company says websites seeking advanced protection and features can see their bill rise to more than $3,000 a month. Prince declined to discuss the business arrangements with specific customers.
While not yet profitable, CloudFlare has more than doubled its revenue in the past four months, according to Prince, and is picking up 3,000 new customers a day. The company has raked in more than $22 million from venture capital firms including New Enterprise Associates, Venrock and Pelion Venture Partners.
Prince, a Midwestern native with mussed brown hair who holds a law degree from the University of Chicago, said he has a track record of working on the right side of the law.
A decade ago, Prince provided free legal aid to Spamhaus, an international group that tracked email spammers and identity thieves. He went on to create Project Honey Pot, an open source spam-tracking endeavor that turned over findings to police.
Prince's latest company, CloudFlare, has been hailed by groups such as the Committee to Protect Journalists for protecting speech. Another client, the World Economic Forum, named CloudFlare among its 2012 "technology pioneers" for its work. But it also owes its profile to its most controversial customers.
CloudFlare has served 4Chan, the online messaging community that spawned Anonymous. LulzSec, the hacker group best known for targeting Sony Corp, is another customer. And since last May, the company has propped up WikiLeaks after a vigilante hacker group crashed the document repository.
Last year, members of the hacker collective UgNazi, whose exploits include pilfering user account information from eBay and crashing the CIA.gov website, broke into Prince's cell phone and email accounts.
"It was a personal affront," Prince said. "But we never kicked them off either."
Prince said CloudFlare would comply with a valid court order to remove a customer, but that the Federal Bureau of Investigation has never requested a takedown. The company has agreed to turn over information to authorities on "exceedingly rare" occasions, he acknowledged, declining to elaborate.
"Any company that doesn't do that won't be in business long," Prince said. But in an email, he added: "We have a deep and abiding respect for our users' privacy, disclose to our users whenever possible if we are ordered to turn over information and would fight an order that we believed was not proper."
Juliannne Sohn, an FBI spokeswoman, declined to comment.
Michael Sussmann, a former Justice Department lawyer who prosecuted computer crimes, said U.S. law enforcement agencies may in fact prefer that the Web's most wanted are parked behind CloudFlare rather than a foreign service over which they have no jurisdiction.
Federal investigators "want to gather information from as many sources as they can, and they're happy to get it," Sussmann said.
In an era of rampant cyber warfare, Prince acknowledged he is something of a war profiteer, but with a wrinkle.

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U.S. drops China's Taobao website from "notorious" list

WASHINGTON (Reuters) - The United States on Thursday dropped a website owned by China's largest e-commerce company, Alibaba Group, from its annual list of the world's most "notorious markets" for sales of pirated and counterfeit goods.
Taobao Marketplace, an online shopping site similar to eBay and Amazon that brings together buyers and sellers, "has been removed from the 2012 List because it has undertaken notable efforts over the past year to work with rightholders directly or through their industry associations to clean up its site," the U.S. Trade Representative's office said in the report.
The move came just before an annual high-level U.S.-China trade meeting next week in Washington.
Taobao Marketplace is China's largest consumer-oriented e-commerce platform, with estimated market share of more than 70 percent. The website has nearly 500 million registered users, with more than 800 million product listings at any given time. Most of the users are in China, Hong Kong, Taiwan and Macao.
The U.S. Chamber of Commerce has called Taobao "one of the single largest online sources of counterfeits."
The Chinese Commerce Ministry strongly objected to Taobao's inclusion on the USTR's 2011 notorious markets list. A ministry spokesman said it did not appear to be based on any "conclusive evidence or detailed analysis.
Alibaba hired former USTR General Counsel James Mendenhall to help persuade USTR to remove Taobao from its list.
The Chinese company's bid to shed its "notorious" label won support from the Motion Picture Association of America, a former critic of Taobao, which praised its effort to reduce the availability of counterfeit goods on its website.
But U.S. software, clothing and shoe manufacturers urged USTR to keep Taobao on the list.
To stay off in the future, USTR urged "Taobao to further streamline procedures ... for taking down listings of counterfeit and pirated goods and to continue its efforts to work with and achieve a satisfactory outcome with U.S. rights holders and industry associations."
USTR said it also removed Chinese website Sogou from the notorious markets list, based on reports that it has made "notable efforts to work with rights holders to address the availability of infringing content on its site."
U.S. concerns about widespread piracy and counterfeiting of American goods in China are expected to be high on the agenda at next week's meeting in Washington of the U.S.-China Joint Commission on Commerce and Trade.
The 2012 notorious markets list includes Xunlei, which USTR described as a Chinese-based site that facilitates the downloading and distribution of pirated movies.
Baixe de Tudo, a website hosted in Sweden but targeted at the Brazilian market, was also put on the list along with the Chinese website Gougou.
Warez-bb, which USTR described as a hub for pre-release music, software and video games, was also included. The forum site is registered in Sweden but hosted by a Russian Internet service provider, USTR said.

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Online gambling companies struggle to clear EU hurdles

LONDON (Reuters) - A partnership stuck on Friday between bwin.party Digital Entertainment and a Belgian casino group has defused one of many disputes pitting online gambling companies against governments across Europe.
The agreement came a month after bwin.party's co-CEO was questioned by Belgian authorities in an escalating license dispute the company said was costing it 700,000 euros ($916,000) in monthly revenue.
By joining forces with Belcasinos, a unit of local casino owner Group Partouche, bwin.party neatly met a requirement to have a presence in Belgium to win a license for online poker, casino and sports betting.
The agreement is a rare bright spot in a tough regulatory environment for online gambling companies across the continent.
Betting online on sports events or playing poker on the Internet are increasingly popular pastimes in Europe, where operators say they are held back by unfair and discriminatory rules in many European Union countries.
"It is not a European Union in any way, it is a patchwork of different countries who happen to be in the EU," said Professor Leighton Vaughan Williams, director of the betting research unit at Nottingham Business School in central England.
"Different countries have different vested interests and different ideas they are trying to promote. Are they trying to protect consumers or to maximize their tax take?" he said.
The 27 EU member states retain the right to regulate their gambling sectors as they see fit, but rules must comply with EU law, broadly meaning they must be consistent and proportionate.
Some companies are scaling back activities in European markets where, they say, regulatory risks are too high or tax rates are punitive.
Betting exchange operator Betfair for instance said this week it was halting marketing and investment in unregulated markets, including EU members Cyprus, Germany and Greece.
William Hill, Britain's largest bookmaker, has joined Betfair in pulling out of Greece and has also stopped offering sports betting to German residents because of a 5 percent turnover tax.
STAKES RISE
The stakes are high. Online gambling is growing at an annual rate of almost 15 percent in the EU and will be worth an estimated 13 billion euros ($17 billion) by 2015, according to EU figures.
The European Commission, the EU's executive, stepped in to the debate in October when it published a medium-term plan to clarify regulations and promote cooperation between member states, ruling out EU-wide legislation for the time being.
"All citizens must be adequately protected, money laundering and fraud must be prevented, sport must be safeguarded against betting-related match-fixing and national rules must comply with EU law," Internal Market and Services Commissioner Michel Barnier said, setting out his approach.
The online operators accuse the European Commission of failing to follow through properly on complaints lodged about regulation in no fewer than 20 or the 27 EU member states.
Barnier has written to member states accused of breaching EU law in the way they handle gambling, seeking an update on the situation by the end of the year.
However, the industry questions whether the EU will go into battle over gambling when it is facing so many other problems.
"They will chip away at some of the most blatant ones," said Clive Hawkswood, chief executive of trade body the Remote Gambling Association. "What we really need is for them to take some to the European Court and take enforcement action."
BRITISH TAXES
Gambling companies themselves have taken advantage of different tax regimes where they work in their favor.
This is illustrated in Britain, historically the biggest betting market in Europe and a place with a well-developed gambling culture where bookmakers have operated in town centers for 50 years.
In recent years, most betting companies have moved their British online betting operations to Britain's overseas territory of Gibraltar. There they are sheltered from a 15 percent tax on gross profit faced by operators based in Britain.
New legislation will close off that loophole after 2014. The shift to a taxation model based on the location of the consumer was expected to cost gambling companies as much as 270 million pounds ($435 million) by 2016-17.
Analyst Nick Batram at brokerage Peel Hunt said smaller players would likely be picked off because of the impact of higher tax and regulatory burdens across Europe.
"It is getting more complicated and more expensive. There is more change afoot but it should ultimately play into the hands of the better-capitalized companies."
In that vein, William Hill has provisionally agreed a 485 million pound takeover of smaller rival Sportingbet, keen to get its hands on the company's regulated Australian betting business.
"I think there is a lot more M&A activity to come," said Batram.

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Internet regulation seen at national level as treaty talks fail

SAN FRANCISCO (Reuters) - The world's major Internet companies, backed by U.S. policymakers, got much of what they wanted last week when many nations refused to sign a global telecommunications treaty that opponents feared could lead to greater government control over online content and communications.
In rejecting even mild Internet language in the updated International Telecommunications Union treaty and persuading dozens of other countries to refuse their signatures, the U.S. made a powerful statement in support of the open Internet, U.S. officials and industry leaders said.
But both technologists and politicians fear the Internet remains in imminent danger of new controls imposed by various countries, and some said the rift that only widened during the 12-day ITU conference in Dubai could wind up hastening the end of the Net as we know it.
"If the international community can't agree on what is actually quite a simple text on telecommunications, then there is a risk that the consensus that has mostly held today around Internet governance within (Web-address overseer) ICANN and the multi-stakeholder model just falls apart over time," a European delegate told Reuters. "Some countries clearly think it is time to rethink that whole system, and the fights over that could prove irresolvable."
An increasing number of nations are alarmed about Internet-based warfare, international cybercrime or internal dissidents' use of so-called "over-the-top" services such as Twitter and Facebook that are outside the control of domestic telecom authorities. Many hoped that the ITU would prove the right forum to set standards or at least exchange views on how to handle their problems.
But the United States' refusal to sign the treaty even after all mention of the Internet had been relegated to a side resolution may have convinced other countries that they have to go it alone, delegates said.
"This could lead to a balkanization of the Internet, because each country will have its own view on how to deal with over-the-top players and will regulate the Internet in a different way," said another European delegate, who would speak only on condition anonymity.
Without U.S. and European cooperation, "maybe in the future we could come to a fragmented Internet," said Andrey Mukhanov, international chief at Russia's Ministry of Telecom and Mass Communications.
HARD LINE IN NEGOTIATIONS
Spurred on by search giant Google and others, the Americans took a hard line against an alliance of countries that wanted the right to know more about the routing of Internet traffic or identities of Web users, including Russia, and developing countries that wanted content providers to pay at least some of the costs of transmission.
The West was able to rally more countries against the ITU having any Internet role than agency officials had expected, leaving just 89 of 144 attending nations willing to sign the treaty immediately. They also endorse a nonbinding resolution that the ITU should play a future role guiding Internet standards, along with private industry and national governments.
Some delegates charged that the Americans had planned on rejecting any treaty and so were negotiating under false pretenses. "The U.S. had a plan to try and water down as much of the treaty as it could and then not sign," the second European said.
Other allied delegates and a U.S. spokesman hotly disputed the claim. "The U.S. was consistent and unwavering in its positions," he said. "In the end—and only in the end—was it apparent that the proposed treaty would not meet that standard."
But the suspicion underscores the unease greeting the United States on the issue. Some in Russia, China and other nations suspect the U.S. of using the Net to sow discontent and launch spying and military attacks.
Ror many technology companies, and for activists who are helping dissidents, the worst-case scenario now would be a split in the structural underpinnings of the Internet. In theory, the electronic packets that make up an email or Web session could be intercepted and monitored near their origin, or traffic could be subjected to massive firewalls along national boundaries, as is the case in China.
Most technologists view the former scenario as unlikely, at least for many years: the existing Internet protocol is too deeply entrenched, said Milton Mueller, a Syracuse University professor who studies Net governance.
"People who want to `secede' from that global connectivity will have to introduce costly technical exceptions to do so," Mueller said.
A more immediate prospect is stricter national regulations requiring Internet service providers and others to help monitor, report and censor content, a trend that has already accelerated since the Arab Spring revolts.
Jonathan Zittrain, co-founder of Harvard University's Berkman Center for Internet Society, also predicted more fragmentation at the application level, with countries like China encouraging controllable homegrown alternatives to the likes of Facebook and Twitter.
Zittrain, Mueller and other experts said fans of the open Net have much work to do in Dubai's wake.
They say government and industry officials should not only preach the merits of the existing system, in which various industry-led non-profit organizations organize the core Internet protocols and procedures, but strive to articulate a better way forward.
"The position we're in now isn't tenable," said James Lewis, a cybersecurity advisor to the White House based at the Center for Strategic and International Studies. "For us to say 'No, it's got be an ad hoc arrangement of non-governmental entities and a nonprofit corporation ... maybe we could get away with that 10 years ago, but it's going to be increasingly hard."
Lewis said the United States needed to concede a greater role for national sovereignty and the U.N., while Mueller said the goal should be a "more globalized, transnational notion of communications governance" that will take decades to achieve.
In the meantime, activists concerned about new regulation can assist by spreading virtual private network technology, which can national controls, Zittrain said.
Backup hosting and distribution could also be key, he said. "We can devise systems for keeping content up amidst filtering or denial-of-service attacks, so that a platform like Twitter can be a genuine choice for someone in China."

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Pope needs help sending out blessing in first tweet

VATICAN CITY (Reuters) - After weeks of anticipation bordering on media frenzy, Pope Benedict solemnly put his finger to a computer tablet device on Wednesday and tried to send his first tweet - but something went wrong.
Images on Vatican television appeared to show the first try didn't work. The pope, who still writes his speeches by hand, seems to have pressed too hard and the tweet was not sent right away. So, he needed a little help from his friends.
Archbishop Claudio Maria Celli of the Vatican's communications department showed the pontiff how to do it, but the pope hesitated. Celli touched the screen lightly himself and off went the papal tweet.
"Dear friends, I am pleased to get in touch with you through Twitter. Thank you for your generous response. I bless all of you from my heart," he said in his introduction to the brave new world of Twitter.
The tweet was sent at the end of weekly general audience in the Vatican before thousands of people.
The pope actually has eight linked Twitter accounts. @Pontifex, the main account, is in English. The other seven have a suffix at the end for the different language versions. For example, the German version is @Pontifex_de, and the Arabic version is @Pontifex_ar.
The tweets will be going out in Spanish, English, Italian, Portuguese, German, Polish, Arabic and French. Other languages will be added in the future.
The pope already had just over a million followers in all of the languages combined minutes before he sent his first tweet and the number was growing.
PAPAL Q AND A
Later on Wednesday after the audience was over and the television cameras turned off, the pontiff answered the first of three questions sent to him at #askpontifex.
The first question answered by the pope was: "How can we celebrate the Year of Faith better in our daily lives?"
His answer: "By speaking with Jesus in prayer, listening to what he tells you in the Gospel and looking for him in those in need."
The pope, who, as leader of the Roman Catholic Church already has 1.2 billion followers in the standard sense of the word, won't be following anyone else, the Vatican has said.
After his first splash into the brave new world of Twitter on Wednesday, the contents of future tweets will come primarily from the contents of his weekly general audience, Sunday blessings and homilies on major Church holidays.
They are also expected to include reaction to major world events, such as natural disasters.
The Vatican says papal tweets will be little "pearls of wisdom", which is understandable since his thoughts will have to be condensed to 140 characters, while papal documents often top 140 pages.
The Vatican said precautions had been taken to make sure the pope's certified account is not hacked. Only one computer in the Vatican's secretariat of state will be used for the tweets.
After Wednesday, Benedict won't be pushing the button on his tweets himself. They will be sent by aides but he will sign off on them.
The pope's Twitter page is designed in yellow and white - the colors of the Vatican, with a backdrop of the Vatican and his picture. It may change during different liturgical seasons of the year and when the pope is away from the Vatican on trips.
The pope has given a qualified welcome to social media.
In a document issued last year, he said the possibilities of new media and social networks offered "a great opportunity", but warned of the risks of depersonalization, alienation, self-indulgence, and the dangers of having more virtual friends than real ones.
In 2009, a new Vatican website, www.pope2you.net, went live, offering an application called "The pope meets you on Facebook", and another allowing the faithful to see the pontiff's speeches and messages on their iPhones or iPods.
The Vatican famously got egg on its face in 2009 when it was forced to admit that, if it had surfed the web more, it might have known that a traditionalist bishop whose excommunication was lifted had for years been a Holocaust denier.

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Second verse, same as the first: Why Obama’s second term isn’t cursed

Poor Barack Obama. After fighting and spending his way to a close but clear re-election, he’s doomed to four years of agony thanks to that “second-term” curse, which afflicts just about every president who has had the misfortune to win another four years.

The litany appears compelling: the martyred Lincoln; Grant mired in scandal; FDR suffering big political setbacks; Nixon’s disgrace; Reagan’s Iran-Contra scandal; Clinton’s impeachment; George W. Bush’s collapsing popularity. A second term sounds so unappealing, it’s almost surprising Obama didn’t ask for a recount.

Except…there are two things worth remembering about this “curse.” First, it doesn’t really afflict every second-term president. Second, for many presidents, the woes are rooted in actions and decisions taken during the first term—which raises a dicey question about what might come to afflict this president.

Theodore Roosevelt was enormously popular throughout his “second” term (his “first” term was finishing the assassinated William McKinley’s second). The only reason he did not win an actual second term was that, just after his 1904 landslide, he’d declared he would not run again—a decision he regretted almost immediately. (He ran again in 1912 as a third-party candidate, finishing second.)

Calvin Coolidge, elected in a landslide after assuming the presidency when Warren Harding died, presided over four years of peace and prosperity. He stepped down after, declaring, “I do not choose to run for president in 1928.”

Dwight Eisenhower’s Republican Party did suffer serious election reversals in the 1958 mid-terms, but Ike’s personal popularity remained very high in his second term; he left with a 59 percent job approval rating, and his vice president came within a whisker of succeeding him.

What about more recent examples? Reagan’s popularity took a hit when the Iran-Contra story surfaced at the end of 1986, but by the time he left office, he had a robust 63 percent job approval rating, and his vice president won a solid popular vote victory and an electoral college landslide.

And the disgraced Clinton? It’s certainly plausible that his year-long fight to survive scandal and impeachment seriously weakened him. His dependence on his base may have made it impossible for him to reach across the aisle on entitlement reform. But he left office with a 66 percent job approval, and his vice president did win the popular vote.

It’s often said that a second-term victory gives a president an exaggerated sense of his own power, leading him to commit the sin of “hubris” that is always the precursor to tragedy. And history offers examples, from FDR’s attempt to pack the Supreme Court, to George W. Bush’s attempt to partially privatize Social Security.

But take a step back and you’ll find a surprisingly neglected aspect of this history: In many cases, it was what a president did before re-election that planted the seeds of disaster.

Look at Vietnam. The escalation of that conflict began early in 1965, with the bombing of the North and the infusion of large numbers of U.S. troops. But the foundation of that escalation came in the summer of 1964, in the Gulf of Tonkin, when an (almost certainly phantom) attack on U.S. ships led LBJ to win, from a credulous Congress, the Gulf of Tonkin Resolution, authorizing the president to use “all necessary force”—which Johnson interpreted as a virtual blank check.

Watergate? The story exploded early in Nixon’s second term, in the courtroom of Judge John Sirica. But the Watergate break-in and the allied sins of the White House “plumbers’ unit” all took place in the president’s first term—in large measure, to ensure that he’d win again.

The Clinton impeachment? Monica Lewinsky came to the White House as an intern pressed into service because of the government shutdown of 1995. Her affair with the president ended before his second inauguration.

For Bush, the central disaster of his second term was the descent of Iraq into civil war and chaos, and the collapse of the rationale for going into Iraq in the first place—those non-existent weapons of mass destruction. That invasion and the breathtaking failures of intelligence and strategy were rooted in the decisions made in 2002-03.

So, if we’re wise to look at first-term decisions that may come to haunt a second term, what’s the most likely source of future Obama nightmares?

They come, I think, mostly from abroad, where the potential for instability, violence and anti-American hostility could make presidential decisions look very bad. Imagine Egypt turning increasingly Islamist, with a besieged President Morsi—or a successor—repudiating the peace treaty with Israel that has kept the region free of all-out war for 40 years.

Imagine Iraq exploding into a new civil war, or aligning itself with a still-governing Assad in Syria, or with Iran. How would that make Obama’s decision to withdraw from the country look? Pakistan—America’s permanent “frenemy”—is always a step away from turning into a hostile, terrorist-friendly, nuclear power. That step would throw a harsh light on U.S. policy toward that nation.

Should any of those events transpire, expect to hear renewed cries that “the curse of the second term” has struck again. But before joining the chorus, take a hard look at where the trouble really began.

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Delta buys 49 percent stake in Virgin Atlantic

Delta Air Lines said it will buy almost half of Virgin Atlantic for $360 million as it seeks a bigger share of the lucrative New York-to-London travel market.

Delta plans to form a joint venture with Virgin Atlantic, where the two airlines would share money from the flights operated under the partnership. In order to coordinate the schedules of the two airlines, they'll need antitrust approval from U.S. and European regulators.

Landing rights at London's Heathrow Airport are limited. So buying part of Virgin Atlantic is a way for Delta to get a bigger piece of the travel market between Heathrow and the U.S. Currently, Delta has fewer flights from the New York area to Heathrow than either American or United, its main U.S. competitors.

If the plan is approved, Delta and Virgin Atlantic would continue to fly between the U.S. and the U.K., as they do now. However, they would market the flights together and share the costs and profits.

Delta said it expects to have 31 round-trip flights between the U.K. and North America on the busiest days, including nine round-trips a day between Heathrow and John F. Kennedy International Airport in New York and Newark Liberty International Airport in New Jersey.

Heathrow is dominated by British Airways, which works closely with American Airlines. They have a total of 14 flights a day in each direction between JFK and Newark and Heathrow.

Delta is seeking something similar with Virgin Atlantic.

"Our new partnership with Virgin Atlantic will strengthen both airlines and provide a more effective competitor between North America and the U.K., particularly on the New York-London route, which is the largest airline route between the U.S. and Europe," Delta CEO Richard Anderson said in a prepared statement.

Delta is aiming to have the joint operation running by the end of 2013.

Sir Richard Branson will still own more than half of Virgin Atlantic, which will continue to fly as a separate airline under its own name. In 2000, Branson sold a stake to Singapore Airlines for 600.3 million pounds, or about $960 million at the time. That's the share that Delta intends to buy.

Virgin Atlantic has struggled with losses and said in 2010 that it might be interested in some kind of tie-up with another airline. British media reports at that time said that Delta was interested.

Shares of Atlanta-based Delta Air Lines Inc. rose 16 cents to $10.30 in premarket trading.

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Cory Booker’s week on food stamps: political ambition amid the burned sweet potatoes

Cory Booker has been known to run into burning buildings to save his constituents. But last Thursday, the Newark, N.J., mayor's biggest challenge was whether or not he could get through a single meeting without taking a nibble of one Christmas cookie.

Booker, 43, and a rising star Democrat, has been living on just $33 of food over the last week as part of an effort to understand the plight of Americans who struggle to live on food stamps. The experiment ends Tuesday.

Booker has said he's trying to raise public awareness about the struggles of average Americans amid threats of federal funding cuts to food stamp programs around the nation. But the mayor's very public campaign comes as Booker mulls a challenge to New Jersey Gov. Chris Christie in next year's gubernatorial race.

"I am absolutely considering running for governor, as well as giving other options some consideration." Booker told CBS's "Face the Nation" on Sunday, adding that he'll make a decision in the next two weeks. He may also run for the U.S. Senate seat expected to be vacated by Democrat Frank Lautenberg in 2014.

In an interview with CNN on Monday, Booker said Christie isn't cruising to re-election despite polls showing a big spike in the Republican governor's popularity for his handling of Superstorm Sandy. Booker has worked closely with Christie in the storm's aftermath.

"Christie is vulnerable, as it should be, because there's a lot of issues in the state he's not falling in line with," Booker told CNN. "From women's issues, environmental issues, from really going in a balanced way."

Groups lobbying to protect and expand the food stamp program have praised Booker's attempt to raise awareness about the millions of Americans who struggle to survive under SNAP. But some have accused the mayor of using the experiment to simply gain more publicity for his own political ambitions.

"Food stamps are meant to be supplemental income, not ones ENTIRE income. So this challenge is bunk," a Twitter user named Samuel said in a message to Booker last week, per the Star Ledger. The paper ran an online poll last week asking readers to weigh in on whether Booker's food stamp experience was a publicity stunt.

Booker thrives on media attention. In his six years at the helm in Newark, Booker has earned the nickname "Super Mayor" for feats that have landed him in the national spotlight.

Last April, the two-term Democrat made headlines around the country when he rushed into a burning home and saved his neighbor from a fire. In the aftermath of Superstorm Sandy, he became something of a one-man disaster relief crew, allowing residents displaced by the storm to sleep at his home. In 2010, Booker helped rescue constituents who appealed to him via Twitter in the aftermath of a deadly blizzard. And just last week, the mayor rushed to the aid of victims of a car crash and directed traffic around the accident until police arrived on the scene.

The mayor has received even more attention for his attempt to complete the SNAP challenge.

According to a spokesman, Booker's office was overwhelmed by media requests, including from Yahoo News, to talk to the mayor. As of last Thursday, more than 140 reporters from around the world, including Russia, had filed requests to talk to Booker—with most denied.

Instead, Booker, more confessional on social media than other public officials, has used Twitter, LinkedIn and Instagram to chronicle his effort, which began after he got into a Nov. 18 Twitter debate with a Twitter follower who questioned the government's role in nutrition assistance. Booker  challenged the user, @MWadeNC, to join him in living on food stamps for a week.

Booker's experiment, launched Dec. 4, got off to a rocky start when he spent most of his $33 budget on several cans of beans, a large bottle of olive oil, broccoli, cauliflower, sweet potatoes and bags of salad. Posting a picture of his food for the week on Instagram, he admitted he could have spent his money better.

"I am regretting not thinking through some of my food choices for the week. In hindsight, investing more of my SNAP budget in eggs, and perhaps some coffee might have helped me later in the week. I am growing concerned about running out of food before this is over--especially as I try to resist the urge now to have another sweet potato before I go to bed tonight," Booker wrote on LinkedIn.

Throughout the week, Booker has written about his empty stomach. On his third day, he opted to eat his dinner of peas, black beans, cauliflower and broccoli in small bites late in the day to "allay some of his hunger pains." Over the weekend, as his food supply dwindled, Booker lamented accidentally burning one of his last sweet potatoes—making an already meal even smaller.

But the bakery visit, Booker wrote, was the "greatest test of my resolve yet." Taking to Twitter ahead of  an unspecified meeting at the establishment,  Booker communicated his dread to his more than 1.3 million followers.

"My bakery prayer: 'Lead us not into temptation and deliver us from evil," Booker said in a message on Twitter.

Booker survived the bakery—barely.

"After the meeting I hustled back to my car and downed more beans, cauliflower and broccoli and tried to imagine that it was Christmas cookies and cake," Booker wrote in his food diary afterwards.

Booker also made it through a fundraising gala at Cipriani in New York City, where, as the night's keynote speaker, he skipped a cocktail hour and had waiters remove his dinner, which included a goat cheese salad, steak and potatoes.

The self-described caffeine addict has also turned away cups of coffee, and has been skipping his usual fix of Diet Pepsi. Booker wrote in a LinkedIn diary that his week without coffee was the "first time" he could remember going without caffeine and apologized for being cranky.

"No coffee makes me grumpy," the mayor tweeted.

Booker isn't the first public official to attempt to live on food stamps for a week—Mayors Michael Nutter of Philadelphia and Carolyn Goodman of Las Vegas are among scores of politicos who have taken the SNAP challenge. The program is facing potential cuts as Congress debates how to rein in the nation's growing federal deficit.

But unlike Booker, those officials weren't on the brink of a potentially major political campaign sure to generate national attention. Booker has insisted he is simply focused on bringing attention to the importance of food stamp programs and their impact on the country amid threats of dangerous cuts.

On Sunday, Booker told CBS that the deprivation had been a "terrible state of human existence" but that it had been just a fleeting moment for him and a "daily reality" for others.

"I'll be honest with you. I take so much for granted, even going to Starbucks and buying a cup of coffee is more than my daily food allowance right now. And so we really need to expose the problems on a national level by denigrating programs that actually empower our economy in the long run," Booker said.

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Hawaii Sen. Daniel Inouye hospitalized

Hawaii Democratic Sen. Daniel Inouye, 88, was hospitalized late last week and transferred to Walter Reed National Military Medical Center on Monday, his office announced late Monday.

"For the most part, I am OK," Inouye said in a widely circulated statement. "However, I am currently working with my doctors to regulate my oxygen intake. Much to my frustration, while undergoing this process, I have to remain in the hospital for my own safety and to allow the necessary observation."

Inouye, the longest-serving current senator, had a portion of his left lung removed in the 1960s when he was misdiagnosed with cancer.

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Michigan expected to pass right-to-work legislation

Michigan is bracing Tuesday for union blowback over the expected passage of new right-to-work legislation.

Demonstrators are preparing to descend on the state Capitol to protest the state legislature's likely passage of the bill, which would forbid requiring employees who benefit from a labor contract to pay union dues. The state Capitol was on lockdown last week over the issue.

President Barack Obama offered his strident opposition to the legislation on Monday during a visit to the Daimler Detroit Diesel plant in Redford, Mich. "These so-called right-to-work laws, they don't have to do with economics, they have everything to do with politics," Obama said.

Republican Gov. Rick Snyder has pledged to sign the measure into law.

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