Archive for May, 2015


May 31, 2015 Leave a comment

Given that, I thought, what better way to road test a new pair of jeans than to traipse them around their ancestral home of Paris, France? (And if, according to my accountant, chronicling the experience here means that I can write off part of the trip, that’s purely coincidental.)


While denim may have French origins, the classic blue jean in this country has its spiritual home in California, HQ of the Freenote Cloth Company, founded by brothers Matt and Andrew Brodrickin historic San Juan Capistrano. They create a collection of classic American menswear, including the Rios Modern Slim jean.

I packed a pair (along with my French phrase book devoted exclusively to ordering cheese, bread, wine and chocolate), and headed for the Continent. Six days and five nights later, me and my new Freenote Modern Slims were inseparable! (This is the same word in English and French—when you read it, try to add an accent.) They’re beautifully cut with tasteful details, perhaps the most individual pair of jeans I’ve worn in quite some time. I think they’re a steal at $220.

  • Name: Freenote Cloth Company Rios Modern Slim
  • Fabric: Sanforized 100% Cotton RHT Cone Mill White Oak 1968 selvedge denim
  • Weight: 13.5oz.
  • Fit: Slim Straight
  • Unique Features:
    • Rear pocket rivet
    • Branded hardware
  • Available for $220 at Freenote Cloth


The Rios Modern Slim sits true to size—I normally wear a 34” waist and could have with these, but the cut made a 35” sit better right at my hips (I’m 6’3 and 185 lbs. and am wearing a 3.5” turn-up). To be blunt, the men in my family have no ass—it’s straight down our backs into our legs with barely a ripple.


I can’t promise the same for you, but miraculously, the cut of these jeans created the illusion of an ass (perhaps this is due to their contoured waistband)! If you’re an average build (or kinda gangly like me), these should fit you swell. The tagged size 35 has an actual waist of 37.5”, a rise of 11.375”, a leg opening of 15.75”, and a 34” inseam.



The Rios is made from a sanforized 13.5oz. 1968 Cone Mills Denim, which is usually considered a brighter, few-shades-lighter-indigo denim. The stitching (chain as well) is a consistent gold, and the seams are felled.

The feel of this denim is substantial, the hand is even, and the initial stiffness quickly surrendered with a few days of wear. (Perhaps the only thing to surrender more quickly was my willpower in the face of many a boeuf au poivre.)




All of the hardware—brushed copper rivets and antiqued button tacks—is custom and sourced in Kentucky. When I first put these jeans on, I was immediately struck by how solidly constructed they were—my pair was flawless. While they didn’t say so, as me and my Freenotes floundered our way through the arrondissements, I could sense an overwhelming sense of Parisian approval.




There are certainly some unique features to these Freenote Rios jeans…a selvedge (generously sized) coin pocket detail, a U.S. vegitan leather patch pressed in Los Angeles, thread from North Carolina, heavyweight Japanese herringbone pocket bags in a wonderful rusty sienna color, and Freenote’s signature leather backed rivet detail.




But really, like with all timeless American men’s clothing, the headline here is about fit and quality construction. Do I think the leather backed rivet detail is cool? Absolutely. Would they and fancy pocket bags make me buy these? Absolutely not. These Rios Modern Slims are going to take some time to reveal their fades within, but they feel and look so good (I have an ass!), it will be hard to not wear them.



Denim at $300…$400…almost $900 a pair can be had at your heart’s desire, but at $220, you’re getting a lot of classic American Made jean with plenty of classy bling with the Rios Modern Slim. I know that Gustin has played with the 1968 Cone Mills denim and I’ve not tried those on, but I can say that I’ve tried on way more brands than the next guy and, save for a few heavyweight Japanese brands, I’ve not felt so securely in one with a pair of jeans as I have with these in quite a long time.

I know many of you join me in mourning the loss of American manufacturing, so here’s an opportunity to celebrate a company actually making Americana in America. And for the record, the French get a bad rap for not liking Americans, but they treated me with nothing but kindness and respect. Was that due in part to my Freenotes? Je ne sais pas, but I suspect…oui.

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Creating the Internet of Your Things

May 31, 2015 Leave a comment


Barb Edson

General Manager Microsoft Corp


Where is your business going? How are you going to make it thrive? How will you make the most of what you have, and incorporate today’s and tomorrow’s technology breakthroughs to ensure your business is set up for the long term? How are you going to help your employees become more efficient? How are you going to reduce costs yet improve customer service? The answers to these questions—and many more—likely already exist in your business with the data and systems you have today. You may need ideas, inspiration, and technology partners to help you stop running your business and start making it thrive. Microsoft recognizes that buzz about new technology can be exciting but also challenging to assess from a business perspective. The Internet of Things, also known as IoT, is one such trend. The Internet of Things provides vast opportunities, but it can also pose a challenge to enterprises. The Internet of Things has kept plenty of technology journalists busy during the past year, but few have answered the most important questions of how to make it relevant to your business today. Instead, it often seems overwhelming, complicated, and expensive. It’s no wonder many companies are uncertain about implementing an IoT strategy. In this paper, we explain how to look beyond the hype and start on a path that will unlock the potential of the Internet of Your Things. Real, transformative results in your organization await, and it’s easier than you think.

See this link:


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The Coolest Everyday Outfits From The Gals of Freda Salvador

May 31, 2015 Leave a comment
 (Your BlogMaster’s disclosure… Hillary,  Assistant Designer at F/S, is my younger granddaughter and a proud USC Trojan!)

Street Style


My Granddaughter Hillary between the founders/owners of Freda Salvador Fashion Shoes

At the Reward Style conference, I was so pleased to meet Megan, Cris, and Hillary of Freda Salvador.  Freda Salvador is a small footwear company based in San Fran (you’re looking at the entire company right here) who uses a family-owned factory in Spain to produce their line of cool, edgy, and, to quote Megan, “infinitely walkable” shoes and boots.

That’s a big statement, infinitely walkable.  So as cute young bloggers teetered around us on their impossibly high heels, I fixed her with a skeptical look.  “No really!” Megan laughed.  “I’m a mom – I totally get it!”

So we bonded – they were all great fun.  And I will say this:  The shoe leather is very soft.

In addition to their shoes (which I did cross the conference room to ask about – I mean seriously, white oxfords, black laces?  I’m drooling) they were each(!!) wearing an outfit worth copying.  Love when I see a perfect mix of comfort and edge.  And y’all – I learned that in Dallas –  know how my heart beats fast whenever destroyed denim or camo is involved.


On Cris:

(BTW, there’s a baby bump underneath her chambray shirt)

headscarf: vintage Gucci….I’d probably try this Turban Headband at Anthropologie since I can’t tie anything

shirt: MiH Simple Shirt in Chambray

necklace: Pamela Love Dagger Rosary

denim: Citizens of Humanity Maternity Skinny Jeans

shoes: Freda Salvador White Oxford with Cut-Outs

On Hillary:

glasses: Oliver Peoples

necklace: old…try Bauble Bar’s black beaded necklace

jacket: Wilfred Free Rayder Jacket at Aritzia

top: from Planet Blue (now gone)…try Gap’s Fitted Floral Shirt

denim: from Urban (gone)…try One Teaspoon’s Freebird Skinny Jean (destroyed)

shoesFreda Salvador White Oxford with Cut-Outs

On Megan:

top: Madewell (gone).. try the  Lace Collage Tee at Anthropologie

necklace: J.Crew (gone)…try Bauble Bar’s Crystal Feather Bib Necklace

pants: Sanctuary Camo pants (gone)…try Current/Elliott’s Army Buddy Camo Pants…or maybe eventhese camo pants at LOFT?

denim top (wrapped around waist): Madewell Denim Shirt

shoes: Freda Salavador Ivory Snake Sandal

Megan, Cris and Hillary – so nice meeting you, and thank you again for being such good sports!



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Nike seen avoiding charges in soccer bribery probe – lawyers

May 29, 2015 Leave a comment

Nike Inc may be able to avoid U.S. charges over any involvement in bribery payments to win soccer sponsorships, but could face penalties if U.S. prosecutors decide to clamp down on the global sportswear giant, lawyers with expertise in the subject said.

Although Nike has not been named or charged with any wrongdoing, the company was swept into the corruption scandal that engulfed soccer’s governing body FIFA when a U.S. indictment released on Wednesday described apparent kickback payments linked to a landmark 1996 Nike deal in Brazil.

In a statement on Thursday, Nike said that the charges did not allege that it engaged in criminal conduct or that any Nike employee was aware of or took part in a bribery scheme. On Wednesday, in another statement, it did not confirm or deny that it was the company in the indictment, but said it was cooperating with authorities.

The description of the $160 million, 10-year deal signed by “Sportswear Company A” matched exactly the details of Nike’s agreement to become the footwear and apparel supplier and sponsor of the world’s most successful national soccer team.

Still, the U.S. Justice Department is likely to take a tougher stance against those who solicited bribes than those who paid them, especially if a company did not have a long history of paying bribes, said former U.S. federal prosecutor Michael Volkov.

“Where the case is going, it’s not focusing as much on the people who were shaken down as it is on the people doing the shaking,” Volkov said.

While the 14 defendants in the indictment are being charged with crimes such as money laundering and wire fraud, the United States has normally prosecuted U.S. businesses for foreign bribery under the 1977 Foreign Corrupt Practices Act (FCPA).

That law’s anti-bribery provisions apply to dealings with governments and government officials and may not be of much use in the soccer world because soccer associations are typically not government agencies. The Brazilian Football Confederation (CBF), which signed the 1996 deal with Nike, is a private organization.

“The FCPA does not prohibit private bribery,” said Homer Moyer, who specializes in FCPA cases at the law firm Miller & Chevalier in Washington.

If Nike is thought to have paid bribes by transferring funds from a U.S.-based account, the Justice Department might consider charging the company with “international promotional money laundering,” said a former official with the Justice Department’s money laundering section.

While seldom used in the past, prosecutors have made increased used of this charge in recent years, said the source, who spoke on condition of anonymity due to his private sector work.

Prosecutors could employ a provision of the FCPA that requires companies to keep accurate accounting records. If the sportswear company in the Brazil deal disguised or hid wrongdoing in its books, it may have violated the law, lawyers said.


The indictment came less than three weeks after U.S. President Barack Obama co-opted Nike’s “just do it” slogan in a speech promoting a Pacific free-trade deal at the company’s headquarters in Beaverton, Oregon.

The charge sheet said that “Sportswear Company A” agreed to pay an additional $40 million in “marketing fees” that were not in the initial contract to the Swiss bank account of an affiliate of Brazilian sports marketing firm Traffic.

Traffic’s founder Jose Hawilla, whose guilty plea to U.S. corruption charges was revealed at the same time as the indictment, agreed in 1996 to pay half of everything he made from the deal to an unidentified senior member of the CBF, according to the Department of Justice.

That amounted to “millions of dollars, as a bribe and kickback,” the indictment said.

U.S. prosecutors have used the FCPA to extract massive settlements, often with foreign businesses.

In 2009, the U.S. engineering company KBR Inc agreed to a $579 million settlement over bribes paid to Nigerian government officials.

Separate from the FCPA, foreign and U.S. banks have paid billions of dollars in settlements with U.S. authorities over sanctions-busting activities and anti-money laundering failures in recent years. A number of non-banks have also been targeted by regulators or the Justice Department over anti-money laundering failures.

The indictment also alleged that a New Jersey-based “Sports Marketing Company A” paid bribes to the head of South American soccer association CONMEBOL in exchange for gaining exclusive marketing rights to the Copa Libertadores tournament.

Asked Wednesday if companies that had won soccer marketing rights faced criminal liability or were being investigated, Attorney General Loretta Lynch said she could not comment on specific investigation targets. (Additional reporting by Brett Wolf.; Editing by Noeleen Walder and Stuart Grudgings)

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Why Physicists Love Super Balls

May 29, 2015 Leave a comment

May 29th, 2015

by Joel N. Shurkin, Inside Science

Super Balls are toys beloved by children because of their extraordinary ability to bounce. Physicists love them for exactly the same reason.

Drop a baseball on the floor and it will hardly bounce at all. Drop a Super Ball from shoulder height, and it will bounce back 92 percent of the way to the drop-off point. Super Balls also are just as bouncy vertically as they are horizontally, and they spin oddly.

“Physicists love it because it has interesting physical properties,” said Rod Cross, retired professor of physics at the University of Sydney in Australia, whose latest paper on Super Balls appears in the American Journal of Physics. His research also demonstrated the odd way all balls roll.

The Super Ball was invented and patented in 1964 by chemist Norman Stingley. The ball is made of a synthetic material he called Zectron, using a polymer polybutadiene and other materials, a form of artificial rubber. It was sold to toy stores by the Wham-O company and was, for a while in the 60s, a great fad. The NFL decided to call its championship game the “Super Bowl” because a sports executive blurted out the name during a meeting, likely inspired by this favorite toy of his children.

Almost 50 years later, it is still sold by Wham-O and it is possible to imagine that many of those sales go to physicists and physics students. A Google Scholar search of “Super ball” returned 460,000 entries, including scientific papers, poster presentations, dissertations, and books.

Bouncing Super Balls has become a standard physics demonstration, Cross said, and the papers are crammed with formulas, charts, and drawings.

What entrances scientists is how well the balls bounce, an ability described in jargon as the coefficient of restitution, which depends on the elasticity of the surface. The Super Ball is almost perfectly elastic in both the horizontal and vertical directions. The Super Ball has an almost perfect coefficient of restitution and does things other balls do not.

Baseballs, for example, hardly bounce at all. Tennis balls bounce better, but they are limited by the rules of the game. Under those rules a tennis ball dropped from 100 inches can bounce no higher than 58 inches, just more than half. Golf balls have a much higher coefficient of resolution because under their plastic skin resides a small, slightly harder, Super Ball.

Part of a Super Ball’s uniqueness is its ability to bounce in all directions equally. If you shoot a Super Ball obliquely at the ground with an angle of 20 degrees, it will bounce out at the same 20 degree angle.

In his study Cross aimed a Super Ball obliquely at a horizontal blackboard which he covered with chalk lines to show what happens when the ball hits the surface. He videotaped the event at 300 frames per second. The ball lost only a little velocity, meaning the Super Ball conserved almost all its kinetic energy, and what kinetic energy it lost was converted to heat, raising the ball’s temperature about a quarter of one degree Celsius.

In the blackboard experiment he was also able to demonstrate a little-known fact about all rolling balls: At one point when a ball rolls forward, the bottom comes to a standstill while the ball is still moving.

On a rolling ball, the top of the ball spins forward while the bottom of the ball spins backwards, a phenomenon caused by friction with the surface. Because Super Balls have rough exteriors, the effect of friction is pronounced.

For example, if you dropped a Super Ball from the top of the Empire State Building, it would only bounce seven stories high because wind friction would lower the ball’s terminal velocity. It wouldn’t be going very fast when it hit the pavement.

For a brief moment, while the ball is still rolling forward, the bottom is moving backwards with respect to the center. Since the whole ball itself is moving forward, that means the bottom “is actually at rest on the surface relative to the center,” he said.

“Physicists understand this. It confuses physics students,” he said.

Throwing a Super Ball with a backspin between two horizontal surfaces, such as the floor under a table, produces several bounces during which the ball reverses spin and direction with each bounce. Eventually, it bounces back to the hand that threw it.

The Super Ball picks up spin from the friction of the roll on the first surface it hits. The second surface reverses the spin by the same process, according to Michael Vollmer, professor of experimental physics at the Brandenburg University of Applied Sciences, in Germany, who has used high-speed cameras to record what happens.

The use of modern, inexpensive high-speed cameras has made demonstrating all this to students much easier, said Vollmer.

“In the last two years, we have developed a series of teacher-training seminars dealing with high speed imaging, which were successfully tested in Switzerland, Austria, and Germany,” he wrote. His team also produced videos of exploding balloons, karate hits, deformed balls, strange reflections, and breaking rods (spaghetti).

Why bother with something as trivial as watching a ball bounce?

“As a physicist, if I say something they [students] don’t understand, I feel happy if at the end of the day they can understand it,” said Cross.

Top Image: via Shutterstock.

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Public Views of FTA Impacts Improving Ahead of U.S. Pacts with Europe and Asia-Pacific

May 29, 2015 Leave a comment


Monday, June 01, 2015
Sandler, Travis & Rosenberg Trade Report

U.S. efforts to conclude and implement free trade agreements with the European Union and nearly a dozen nations around the Pacific Rim could be bolstered by a recent study finding an increasingly favorable public view of the economic and financial impact of FTAs. A recent survey of 2,002 adults conducted by the Pew Research Center found that a majority believe FTAs are good for the U.S. and that a smaller but growing percentage think FTAs have had a positive impact on their personal finances. However, many still believe that FTAs lead to lower wage and job losses.

Highlights of the report’s findings include the following.

– 58 percent of respondents say FTAs have been good for the U.S., up from 48 percent in 2011, while 33 percent say they have not

– 31 percent say FTAs lead to economic growth (up from 19 percent in 2010) and 34 percent think FTAs slow the economy down (down from 43 percent)

– 43 percent say their family’s finances have been helped by FTAs (up from 26 percent in 2010) while 36 percent say they have been hurt (down from 46 percent); this shift is most pronounced among more educated and higher income Americans as well as those who have positive opinions of their own personal financial situations

– 46 percent say FTAs lower U.S. workers’ wages while 11 percent say they lead to higher wages

– 46 percent say FTAs lead to domestic job losses (down from 55 percent in 2010) and 17 percent said they create jobs (up from 8 percent)

– 36 percent say FTAs lower prices in the U.S. (up from 31 percent in 2010) and 30 percent say they increase prices

– there are few differences in overall views of FTAs by education, income or party

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Google Will Likely Remain The Default Search Engine On Apple iOS Devices

May 29, 2015 Leave a comment


 May 29, 2015 1:24 PM ET  |  5 comments  |  About: Google Inc. (GOOG), GOOGL, Includes: AAPL, MSFT, YHOO
  • Majority of Google’s revenue from mobile devices comes from iOS device users.
  • The search engine deal with Apple will expire this year.
  • Apple is allegedly working on its own search engine.
Morgan Stanley analyst Scott Devitt estimated in 2013 that Google (NASDAQ:GOOG) (NASDAQ:GOOGL) is paying Apple (NASDAQ:AAPL) around$1 billion per year to ensure it is the default search engine on iOS devices. Devitt speculated that Google is not sharing ad revenue but instead is paying straight cash per device fee on every iPhone or iPad.

Google’s negotiated Traffic Acquisition Cost (TAC) on each iOS device was also estimated to be between $3-to-$4 from 2011 to 2017. Devitt argued that the cheap TAC will prove to be advantageous to Google.

(click to enlarge)

It is 2015 and Devitt’s prediction is now a reality. The deal with Apple is proving to be a massive bonanza for Google. According to a New York Times article, out of the $11.8 billion that Google made from mobile advertisements last year, 75% came from iOS devices.

11.8 billion x .75 = $8.85 billion revenue from mobile ads on iPhone/iPad.

Apple sold more than 169 million iPhones and 63 million iPads last year. If we use Devitt’s average estimate of $3.5 TAC, Google only paid $812 million for its search engine deal with Apple in 2014. The over ten times revenue over annual total TAC is a compelling reason why Google should play nice with Apple.

The increasing disparity between the average selling prices of Android phones and iPhones is a simple explanation why Google makes so much money from iOS device users. The typical buyer of a $687 iPhone 6 is a more desirable target for mobile advertisements than a person who can only afford a $200 Android phone.

Apple’s release of phablet-size iPhones last year is helping Apple increase the average selling prices of its smartphones.

(click to enlarge)

Furthermore, I think the larger displays of phablets like the iPhone 6 Plus allows for better mobile web browsing. Google can also deliver more targeted ads on a 5.7-inch screen of iPhone 6 Plus than on the 3.5-inch display of the iPhone 4.

Apple Will Likely Retain Google As Default Mobile Search Engine

The default search engine with Apple will expire this year. There were rumorsthat Microsoft (NASDAQ:MSFT) and Yahoo (NASDAQ:YHOO) are courting Apple. Greg Sterling of Search Engine Land predicted earlier this year that Apple will not renew the search engine deal with Google.

However, I do not believe that Apple will drop Google as default search engine for mobile Safari. Google has a 90% share in global smartphone/tablet search engine usage, while Bing only has 2.4%. Android smartphones only has 78% market share. Millions of iPhone users are therefore also prolific users of Google’s default search engine.

(click to enlarge)

Source: NetMarketShare

I also disagree with Mr. Sterling’s reason that Google might also be amenable to discontinuing the search engine deal with Apple as a way to save money. Like I mentioned previously, Google makes 10x more money than what it pays to Apple. Google will do everything not to lose its default search engine status on iOS devices.

Google knows very well that mobile advertising clients are willing to pay more for ads delivered to iPhone/iPad users. The middle-income and higher-income people who own iPhones are highly desirable to mobile advertisers.

Marketers are willing to pay 65-75% more for ads delivered to iOS devices.


The iOS mobile search advertising business is too lucrative for Google to lose. Mobile advertising is predicted to account for 30% of Google’s 2015 revenue. Marin Software (NYSE:MRIN) estimated that mobile devices will account for 50% of Google search paid clicks by end of this year.

Google has acknowledged that there are now more searches being done from mobile devices than computers in 10 mature markets like the U.S. and Japan.

Mobile is the future of Google search advertising business.

It is therefore of utmost importance that Google does not lose its default search engine status in iOS/Safari browser. The well-off owners of iPhones/iPads are major contributors to Google’s dominant 54% share in global search advertising revenue (includes mobile and desktop).

Apple’s alleged work on developing its own search engine is likely a bluff maneuver to compel Google to pay a higher TAC fee. It will take many years before Apple could upgrade Spotlight in to a real alternative product to Bing and Google’s search engines.

If it means retaining its default search status in iPhones, Google should be prepared to double its current $3-$4 total acquisition cost payment to Apple.

As long as Facebook (NASDAQ:FB) and Apple cannot deliver a competitive search engine app, Google remains a good long-term investment.

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May 29, 2015 Leave a comment

NetBase logo

Visual Impact on the Business Can boardrooms afford to look the other way on social? There’s more opportunity than ever before to access, distill and visualize social information in a way that helps executives mitigate risk, sustain positive brand sentiment, and ultimately connect with more customers to grow business. Not to mention the competitive advantages social offers. So the answer to that question (around ignoring social) is a resounding NO. The visualization of social media — and social media analytics — is the next logical step for the boardroom. Here’s why; There’s a general trend toward communicating more with visuals today. Devices and the social network have empowered us to have images at our fingertips 24/7 in our personal lives. This visual trend also significantly impacts businesses. As more images are shared, there’s more opportunity to understand the social consumer’s net sentiment and passion about brands, both positive and negative and to what extent. The need for social analytics visualization is two-fold: The human brain is ‘visually wired’. We can get the sense of a visual scene in less than 1/10 of a second1 The enterprise needs to track and monitor these images at the speed of social and executives must be able to consume social data in a visual, at-aglance way in order to make effective decisions. Early adoption of social analytics visualization will not only give companies exceptional insight to target audience behaviors, it will provide a competitive advantage that those late to the game will find difficult to overtake. This paper examines 1) the trend toward visualization in social media and social analytics in business and 2) how it’s driving the need for action in the boardroom.

See link to this white paper

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Target to create shoppable mobile ads

May 29, 2015 Leave a comment
fierce retail

Target (NYSE:TGT) is one of the first U.S. companies to a sign a partnership with Shazam for the rollout of a new visual recognition platform. The mobile platform can now be used to photograph images on packaged goods and print media and transforms them into “dynamic pieces of content.”

Here’s how it works: Users with Shazam on their mobile phones open the app to start the camera. Then, the user simply waves the phone over any item with a Shazam camera logo on it or a QR code, and instantly interactive content, including special deals, appear. The platform also gives users the ability to purchase items directly through the app or share them with others.

The use of QR codes is becoming increasingly popular, as 24 percent of U.S. shoppersare now taking out their mobile phones in brick-and-mortar stores to scan these codes.

Previously, consumers with Shazam used the app to listen to music or watch television. Currently the app has more than 100 million monthly users, according to a Shazam company statement.

Several companies have signed on for the initial launch of the revamped app. Target, specifically, is working with Shazam to create shoppable print and TV ads accessible through a mobile phone. When Target guests “Shazam” an image, they will be able to engage with additional content and shop featured products on

Target is working to stay at the forefront of retail technology and recently announced plans to roll out radio frequency identification technology later this year for pricing and inventory control.

Several other companies, including companies abroad, have signed on for the initial launch of the Shazam app, such as U.K. retailer Boohoo.

For more:
-See this Shazam press release

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May 27, 2015 Leave a comment

Fast Company

Gap’s new CEO Art Peck knows that the first step toward regaining its iconic reputation is making clothes people actually want to wear.

Defeat, it turns out, smells a lot like cinnamon rolls. On a Saturday afternoon in January, the cheap-caloried aroma of Cinnabon permeates New Jersey’s two-story Livingston Mall, distracting visitors from an increasingly visible reality.

The 43-year-old shopping center’s fleet of modest stores—so familiar and accessible to customers for more than a generation—are turning into a liability.

Between a lackluster Sears on one end of the mall and a Macy’s on the other, four naked mannequins and an empty metal rolling hanger are all that remain in the fresh graveyard of Wet Seal, the teen retailer that recently announced it’s shuttering two-thirds of its stores. “One day they’re remodeling, the next day it’s closed,” mutters the teenager working the cell-phone repair cart outside the store. Across the way, at an Aeropostale kids’ shop, an everything must go! sign hangs in the window. “We’re closing Tuesday,” explains the girl at the register, sipping a smoothie while assembling a 200-piece puzzle. “They’re going online.” Next door is a large, empty storefront, freshly vacated by a Toys “R” Us, while at the other end of the corridor, teen retailer Delia’s, which recently announced liquidation, flaunts its own going out of business sign. “Once malls like the Livingston Mall lose competitive edge in a market, they can’t compete,” says D.J. Busch, mall analyst for Green Street Advisors, who predicts that 15% of lower- to mid-tier malls will disappear over the next decade. “Once you lose a good tenant, others will follow. Retail works that way—you follow the mob.”

Four miles away, at the Mall at Short Hills, tony brands like Bur­berry, Calypso St. Barth, and Chanel draw shoppers from all over the state. “Malls are the story of the haves and have-nots,” says Busch, who believes that destinations like Short Hills will continue to thrive. E-commerce has devoured lower-end malls, but “customers still want to try on, touch, and feel high-end apparel,” he adds. “As goes Middle America, so goes the middle-American mall,” says Wendy Liebmann, CEO of WSL Strategic Retail. The result is the latest wave of retail Darwinism: the classic American shopping emporiums that put downtown Main Streets out of business in the 1960s are now themselves on their way to extinction.

All of this has been weighing on Art Peck, who has just become CEO of the company arguably most synonymous with malls: Gap Inc., which also owns Old Navy and Banana Republic. “Gap was founded in 1969, when malls were being built, real estate was coming available, and consumer shopping patterns were being trained,” says Peck, a slim 59-year-old, who was dressed in a hooded black leather Rag & Bone bomber jacket when I first met him in December, two months before he started his new job. “Gap essentially rode the wave of that initial change in retail, that mall building boom that took place for 30 or 40 years.” The brand enjoyed a 15-year reign over classically cool, affordable American style, but it has spent the past decade-plus struggling with an identity crisis while new retailers have colonized much of its domain. The iconic brand slept through the fast-fashion revolution fueled by the likes of European labels H&M and Zara; got lost amid competitors such as Uniqlo and Target, who offered basics and denim at higher and lower price points; overexpanded; and became too ubiquitous for today’s niche-minded fashion crowd. “We used to talk about the ‘Gapification of America,’ that notion of one size fits all,” says WSL’s Liebmann. “That’s just not a proposition relevant to America now.” Between 2006 and 2010, sales dropped every year at Gap’s North American stores; since 2013, store sales have continued to suffer.

Into this reality rides a former consultant turned digital believer with perhaps an impossible task: to make the once-iconic business relevant again. It is a task echoed throughout our economy—at brands like Yahoo and MTV, JCPenney, and Buick. Peck has spent the past nine years moving up through a variety of roles at the $16 billion apparel conglomerate, which includes newcomers Athleta and Intermix. He is convinced that the company’s future will depend not just on delivering better product but on radical experimentation. Gap thrived in the heyday of the mall—what Peck calls Retail 1.0—and floundered in the fast-fashion wave he calls Retail 2.0. Gap’s hope, he explains, is to leapfrog ahead to win in the Retail 3.0 era: a mobile-fueled future in which physical stores will have an entirely new role. “We’ve been doing business the same way for 40 years, and there are very few 40-year-old business models that are successful forever,” Peck says. “Periods of disruption are periods of disproportionate opportunity,” he continues, laying the stakes. “More money is made during disruptive times—but is also lost—than is made during times of stability.” So what will that store of tomorrow deliver? And how soon before Gap rolls it out near you? Peck props his foot on his knee, gripping his lower leg with both hands like an oar. Predicting what form that store will take is the puzzle he’s trying to solve.

If there’s one item of clothing that both inspires and haunts Peck, it’s colored denim. He refers to the Colored Denim Period often in conversation, as if drifting back to memories of an old summer fling: bold punches of greens, yellows, fuchsias, and aquas in the form of skinny, cropped, and broken-in jeans and khakis. It represented a rare moment in the company’s recent history (February 2012, to be exact) when the Gap brand was ahead of a fashion trend yet true to its heritage—casual, American, optimistic. Peck was running the North American arm of the Gap at the time and he gambled big, letting stores run dry on other inventory in advance. “Then we flowed the product,” he recalls. “I kept looking at my head merchant, asking, ‘Where are the numbers?’ Day one, day two, day three, four, six, seven—then, boom, it hit, and the comps went through the roof.” It was the brand’s best-selling line in years.

Peck’s office, at Gap HQ in San Francisco, looks more like a designer’s den than an executive suite, evoking the confidence and whimsy of the Colored Denim Period. There’s no desk. A series of hacked Barbie dolls (a “family art project,” he explains, referring to his wife and four kids—two of whom work for Old Navy) line the windowsill; a decou­paged dress form topped by a soldier’s Vietnam War helmet (“worn by a guy who apparently, in the boredom of fighting a war, had a hot glue gun and glued pistol cartridges to it”) stands in the corner; and a tattered mustard-yellow rough road sign leans in the corner (“it’s irony”). The walls of the conference room next door are checkerboarded with another art project: 15 mini–David Hockney replicas, painted by Peck and his tech leadership team as a creative exercise. “There was a fair amount of wine flowing,” he admits.

Although there’s retail in Peck’s blood—a distant relative helped found Woolworth’s back in 1879, and his grandfather helped grow it globally—he didn’t find his way into the field until his late forties. After graduating from Harvard Business School, he spent 20 years at the Boston Consulting Group, advising executives at large industrial, technology, and entertainment companies and working for the likes of Universal Music when digital file-sharing services such as Napster started to emerge. “I can remember executives arguing that a customer will never not want their music in physical form. There was a lot of denial,” Peck recalls. “I’ve seen this again and again—by the time change has happened around a company, they panic and reflexively react to it. It’s oftentimes too late. To be out there in the messy mosh pit of change with unclear direction and unclear implications, that’s much more important.”

Peck jumped into the mosh pit in 2005, after Gap’s then–CEO Paul Pressler hired BCG to help identify growth opportunities—and ended up bringing Peck in-house to lead the company’s strategy and corporate development. “The most important things in my life have been unexpected, unplanned forks in the road,” says Peck (who met his wife on a blind date). He worked with Bob Fisher, son of Gap founder Don Fisher and then the non–executive chairman of the board, to cut costs—which included shutting down experiments such as Forth & Towne, a failed attempt to grab the over-35 set. Peck also suggested that the company accelerate international growth by franchising to local operators instead of relying on wholly owned stores. “We would surely not be as global as we are today were it not for Art,” says Eric Severson, Gap’s SVP of talent, who has worked closely with Peck for years.

Peck has spent his time at Gap steadily hopping from one area to another, always with good results. He’s overseen operations and global logistics, led the acquisitions of activewear brand Athleta and upscale women’s fashion retailer Intermix, and ran Gap’s profitable outlet business (his first experience managing a P&L).

In 2011, the company’s next CEO, Glenn Murphy, appointed Peck president of Gap North America, which had suffered years of falling sales. “What most leaders do is spend all this time analyzing, diagnosing, and then building a huge plan that you unveil,” says Severson. “Art is much more firmly rooted in get in, and start doing.” Peck had one priority: fix the product. Much of the problem, he concluded, stemmed from a fractured creative team—from design to merchandising to marketing. “The store felt one way, the service felt another way, the product felt another way, and the marketing was another way,” says Severson. “It was cognitive dissonance.” Peck fired Gap’s high-profile head of design, Patrick Robinson, and camped out in Gap’s New York Design Center. One weekend, he hotboxed all the top leaders in a room until they came to a consensus on a cohesive look. The gambit worked: The clothing created during Peck’s two years as head of the Gap brand led to eight straight positive quarters (including the Colored Denim Period), its best run in years—all without a head of design.

Peck’s near-term priority as CEO is, once again, to fix the product. On a brisk January day, he stands at the mouth of Gap’s flagship store in Midtown Manhattan. “I’m glad to see yellow, because color has been lacking in the assortment. But it’s not the most democratic color,” he observes. He’s digesting the latest merchandise with Jeff Kirwan, who has spent the past four years building Gap Inc.’s China presence and whom Peck just put in charge of the Gap brand. Only one week into his new job, Kirwan can see the challenges ahead. “We’ve stuck with some old historical winners that have started to fall off the cliff. We’ve held on to them too long,” says Kirwan, pointing to a pile of skinny jeans that don’t have enough stretch in them. Adds Peck, “The trend in denim right now is the destructive and destroyed denim, and our washes are clean. We missed a little bit of the trend.” Then Peck wanders over to a table of cashmere sweaters and picks up a heather grey one. “It’s a really nice cashmere, but it’s a really tight crew neck. That’s not a feminine neckline at all,” he says, disappointed. “My guess is I could buy this in a large and wear it.”

Gap, founded in 1969, pioneered the idea of casual, affordable cool. Today, competitors encroach from every direction—and these are just the ones with actual, physical stores.

Challenge: Stuck in the middle, it’s been losing relevance as competition chips away from all sides.
Strategy: Boost design, materials, and production cycle to reestablish itself as an iconic brand.
Challenge: The “basics” brand has gone too basic, veering toward generic, cheap clothing.
Strategy: Make trends accessible at a low price point (already showing signs of progress).
Challenge: Has developed a staid and serious “dressing for work” reputation.
Strategy: Give J.Crew vet Marissa Webb freedom to steer the brand into more fashion-forward territory; her first line debuted in March.

Androgynous cuts, bland colors, and missing trends completely have been just a few of the issues plaguing Gap’s women’s collection since Peck stepped away from day-to-day management of the brand two years ago. After he left, the company hired a new creative director, Rebekka Bay, a Danish trend forecaster and design consultant who cut her reputation launching H&M’s more modern, upscale Cos brand. Bay tried to bring a fashion-forward basics sensibility back to the brand, but items like a T-shirt dress ended up too minimalist and boxy for the Gap customer. One of her more daring touches this past season was reviving Gap’s “Crazy Stripe” sweater from the mid-2000s, which boasts a rainbow’s worth of colors. While not referring specifically to that sweater, Peck commented to his staff: “It’s a sign of the times, unfortunately, that when there was an Ugly Christmas Sweater Party at the company, some of the sweaters there were from our current assortment. That’s not the way it should be.” By late January, Bay was out.

At the Manhattan flagship store, Peck directs my gaze away from the bustling “Sale” section that appears to be a magnetic force for customers. “We’re not going to allow you to go over there,” he tells me, only half teasing. Training customers to expect chronic discounts has become a destructive cycle at Gap. He knows that he has to “pull out the promo needle,” as the industry puts it. To do so, Gap needs to ramp up its Retail 2.0 capability: Right now, he says, it takes the brand at least 10 months to get its new product ideas into stores. That’s about three times as long as competitors like H&M and Zara, which have built their success by hopping onto the fashion world’s hottest trends and riding them. “We’re an industry that guesses a lot,” says Peck, who is working with vendors across the entire supply chain to cut production time down to around 30 weeks. “The faster you are in conceiving product and putting it on the shelf, the less risk there is.”

If Peck’s time as the head of the Gap brand gave him a road map for attacking the company’s product woes, it was his next job—the one he had just before he became CEO—that provided him with the skills for imagining Retail 3.0. For two years, Peck headed the awkwardly named “GID” division (for “growth, innovation, and digital”). This was the group in charge of the company’s smaller, high-growth brands, e-commerce, and so-called omnichannel offerings—industry jargon for bridging digital and physical retail. He introduced retail services such as “Reserve in Store,” “Find in Store,” and “Ship From Store,” and digitized its entire product inventory. Peck didn’t have technical engineering skills, but he pushed the group to infuse a sense of humanity into the company’s e-commerce products, and he was never afraid to question things. “If you looked at the way we presented ourselves on smartphones two years ago, it was highly utilitarian. Big buttons, gray, prominent text,” says Sol Goldfarb, the company’s executive VP of digital and customer experience. “Art kept saying, ‘It’s not good enough, it’s not good enough, you’re not there.’ Art taught us that choosing convenient and transactional versus emotional and engaging is a false dichotomy.”

For years, Peck has focused on dissolving the wall between physical and digital. During the two years he ran the Gap brand, Peck shrank its U.S. footprint by shuttering more than 225 locations “in malls where real estate wasn’t productive,” he says. Now, as CEO, Peck hints that the number and size of the company’s 3,680 stores will inevitably shrink. He plans to make mobile the central point of all customer interactions—though he’s not exactly sure how. “I would like to be able to articulate a nice linear path as to what our stores are going to evolve to,” he says. “But I think it’s going to be a lot messier than that.” He’s testing showroom formats, mobile registers, RFID–tagged clothing, interactive digital walls, and even something that might resemble a vending machine. Peck has developers in Silicon Valley camped out at Gap, Banana Republic, and Old Navy stores, incorporating customer and salesperson feedback into code in real time. “I think that kind of rapid prototyping—typical in a lot of other industries, not so typical in ours—will be critical for figuring out this collision of physical and digital,” he says.

Peck’s enthusiasm in this area is one of the key reasons he was tapped to be CEO. “As the board thought about the kinds of skills the new leader should have, digital operations skills were pretty far up the list,” says Bob Fisher. “Art was the unanimous choice.” Michael Silverstein, who ran BCG’s retail practice for 25 years, was one of the people Peck turned to in weighing the decision to accept. Silverstein advised him that it was a rare opportunity to reinvent retail at a moment filled with uncertainty—something Peck was wired for.

“Art’s running the company as if it’s a smaller company,” says Jyothi Rao, Intermix’s new president, whom Peck recruited from Gilt Groupe, where she ran its women’s and kids’ divisions. Rao recalls negotiating a critical new hire when the process hit a bump. “We could have gone through two or three layers in our HR organization,” says Rao. “But I just texted Art and said, ‘Are you cool with this?’ And he got back to me in less than one minute.” Nancy Green, a 21-year Gap Inc. vet who’s now running its fast-growing Athleta business, says that Peck understands how to cultivate entrepreneurs within a large organization: “What Art always says is, ‘What do you need from me?’ And I’ll say to him, ‘I need you to remove that wall for me, please.’ He’s like, ‘Okay, let’s figure it out.’ ”

For all the criticism Gap has faced, its digital competence has never been questioned. “They’ve always been ahead of the curve,” says Sucharita Mulpuru, an e-commerce analyst at Forrester. The retailer builds almost all of its technology in-house, has been aggressive with services that straddle the physical and digital, and boasts one of the most elegant digital interfaces for its $2.26 billion e-commerce business, where most of the brand’s sales growth is coming from these days. “Gap is one of those brands that’s at an inflection point,” says Mulpuru. “It will either go the way of JCPenney, with its glory days behind it, or do what J.Crew has done: have a massive retrenching and turn the business around.”

As Peck works to remedy lapses in the company’s Retail 2.0 proficiency and build a digital framework for Retail 3.0, he’s simultaneously creating a bridge that will allow the company to move smoothly from one to the other. That bridge, odd as it may seem, is fashion. Peck undoubtedly watched J.Crew elevate its brand prestige by debuting collections on the runway, and recently took a page from that playbook. In February, for the first time, Banana Republic revealed its latest line at New York’s Fashion Week, under new design chief Marissa Webb.

Webb is arguably now Gap Inc.’s most fashionable employee. On the snowy winter day when I visited, she may have been the only woman in New York showing toe cleavage. Webb, J.Crew’s former head of women’s design, is walking Peck through a preview of her fall 2015 collection, bare skin exposed between her three-inch heels and cuffed navy wool trousers. An independent thinker, she represents a new type of dynamic Peck hopes to have with creatives. “Every time he comes to town he wants to meet at my [personal] studio,” says Webb. After leaving J.Crew in 2011, she launched an eponymous fashion line and had been running it for three years when Gap Inc. came calling last spring. Banana Republic was a staid brand trying to shake its work-wear reputation; then–CEO Murphy sent Peck in to meet with her. “I was the closer,” Peck says with a grin.

Fashion has the potential to bring some necessary buzz to the company (remember when the First Family wore J.Crew to the inauguration?), but more important, it offers Gap Inc. two things it desperately needs in order for Peck’s overall vision to succeed: trend insights and credibility. Intermix, which sells high-priced wares from designers like Valentino and Derek Lam, will give Gap Inc. immediate access to fashion information and serve as a trend breeding ground for the company’s other brands. So will Peck’s relationship with Emily Current and Meritt Elliott, the L.A. duo behind Current/Elliott. After they designed the Boyfriend Jean—a trend that rocked women’s wear in 2008—Peck reached out to them for lunch, and they began a relationship that led to consulting work for the Gap brand. Last year, Peck became a personal investor in their newly hatched brand, the Great. (Peck says that his stake in the high-end brand isn’t considered competitive with Gap Inc.) “He allows any creative person to feel free,” says Current. The pair were recently named style ambassadors for Old Navy.

Banana Republic creative director Marissa Webb. Both Rao and Webb are tasked with channeling trend intelligence to other Gap brands.of course, there’s Webb. In hiring, Gap made an unprecedented financial investment in her namesake brand, knowing that it could provide valuable early intelligence—and perspective. “It’s the two extremes of the industry,” says Peck. “Ours is a big machine that sits in the corner every day and says, ‘Feed me.’ And [hers is] this relatively small business where the pure essence of it is product, nothing else—no politics, no process. I think it’s a healthy [way] to always remind us what job number one is.” Webb, who now juggles both Banana and her own line simultaneously, says she’s found a like-minded partner in Peck. “It’s an honest relationship,” she says. “He calls it as he sees it, and I respect that. He’ll send me a text and I’ll send him a text back. It’s very fast, very scrappy.”

Now, once Gap develops its fast-fashion machinery, it will know precisely how to deploy it.

None of this, of course, guarantees that Gap will succeed. As Peck takes the helm, Old Navy—now led by former executives from H&M and Nike—is on the upswing. Athleta, in the booming “athleisure” space, has the company’s fastest growth prospects, along with Gap Inc.’s Asian expansion. Peck killed e-commerce experiment Piperlime. He removed Bay and installed Limited Brands vet Wendi Goldman as Gap’s first executive vice president of product design and development. The pruning and buffing under way are always good practices, and Gap’s faster-fashion effort will be a smart investment no matter what—retail certainly isn’t slowing down. Plus, there could be more acquisitions ahead. (Some think the company should buy a retailer like Uniqlo, which still has yet to fully conquer North America, but Peck is more interested in smaller startup businesses that have a lot of growth ahead of them. “I tend to get much more excited about those,” he says.) Still, no one can answer that ultimate question of what a Retail 3.0 store will look like. No one knows.

For all the ground it lost with fast fashion, Gap might be in the best position to find out. It’s already ahead of competitors like H&M and Zara when it comes to a digital and mobile presence. If, by generating desirable, on-trend clothing and lots of good buzz, Gap can establish an emotional connection with consumers, perhaps it can then lead them anywhere, be it to a mall, an app, or a vending machine. In December, two months before officially becoming Gap’s CEO, Peck held his final meeting with his GID team. He riffed about “the wonderfully messy, ugly, disruptive time” that Gap’s business was entering, “the beginning of a shakeout” rippling across the apparel industry, and his hope that his legacy as CEO will be that “we grabbed it, wrestled it, and we are killing it.”

There’s a Gap at New Jersey’s Livingston Mall, wedged between the surrendered Wet Seal and liquidating Aeropostale kids’ store. On an early January day, an end of season sale sign hangs in the window, next to mannequins dressed for the gym. Seven of the 10 shoppers inside rummage through the discounted merchandise. There’s another Gap one town over, at the Short Hills mall, where there’s also a Banana Republic. Webb’s fall 2015 collection will arrive in August. Many customers will see it first—and shop from it—on their phones. “The role of the store is evolving,” says Peck. “What it’s going to become is something that we and the customers will figure out, together, over time.” Luckily, when it comes to fashion, customers are always looking to try on something new.

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Michael Kors issues disappointing forecast

May 27, 2015 Leave a comment


A tough quarter for Michael Kors- the retailer reported its slowest quarterly revenue growth since they went public in December 2011. However, revenue did beat expectations while its profit came in a bit light. Demand for its handbags and accessories especially weak in North America where same-store sales fell nearly 7%. Analysts expected a gain of more than 4%. Margins also fell as the retailer tried to lure shoppers with heavy discounting. While rivals Coach and Kate Spade have scaled back on promotions to boost their bottomline, Michael Korshas expanded heavily with new stores and distribution channels with retailers such as Macy’s, and has plans to continue to do so. Michael Kors CEO John Idol: “We see multiple top line growth opportunities through international expansion, digital ecommerce flagships, new store openings, and additional shop-in-shop conversions in our wholesale channel. We plan to expand upon our ready-to-wear and footwear categories and fully develop our global men’s business.” Despite its expansion plans, the retailer cut its revenue and earnings forecast for the year ending March 2016. Shares plummeted in premarket trading.

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WordPress malware: Don’t let too-good-to-be-true deals infest your site

May 27, 2015 Leave a comment

Sometimes you can smell when it’s not going to end well. It’s almost like there’s a taste in the air. It started with a routine email message in my inbox. But after reading the first few words, I knew this was going to be one of those.

Here’s how it started: “We bought the seamless donation plugin for our website…”

Let’s start with a quick bit of back story for those of you who haven’t been following along. A few months ago, I adopted a WordPress plugin, Seamless Donations, as my new side project. Seamless Donations helps nonprofits accept donations, and it’s got just about 68,000 organizations depending on it to help them do good things for the world.

Helping users of the plugin and keeping it up to date is a good thing to do and it also helps keep my programming chops up to date. It’s a win-win. It’s also free, available for download from the central plugin repository. There should be no “We bought” in the email I got from the user.

Unfortunately, there are some real schmucks on this planet, and as soon as I read this guy’s note, I had a feeling he had been a victim of one of them.

A few weeks ago, I wrote WordPress: is it safe to use for my websites? In it, I explained how WordPress (which runs about 23% of the world’s websites) can be very safe – if site operators use best practice. These include things like making sure the WordPress core, plugins, and themes are kept up-to-date, and making sure to download and buy from reputable sources.

Ah, here’s where things get dangerous. You see, malware purveyors out there have figured out that if WordPress runs about a quarter of the Web, if they can get malware installed on some of those websites, when a visitor visits the website, that visitor can be easily infected with malware, especially if the visitor’s browser and computer haven’t been kept up to date.

What these malware purveyors have done is turn unsuspecting website operators into a distribution channel of their slimy crap.

It works in one of two ways. The first is the one I’ve seen more often. A malware scumbag will buy (usually using a stolen credit card number) a legitimate copy of a moderately pricey plugin. Said scumbag will download that product, dig into its code, remove the registration information that calls back home for approval, and instead, embed malware. This turns what was once a popular piece of software into a time bomb with a payload.

It gets worse. The malware makers then go and set up online shops where they advertise steep discounts on the software they’ve stolen and hacked. Don’t want to spend a hundred bucks on ThemeSwamp’s popular real estate theme? No problem. You can buy it from ScumShack for $9.95 with free lifetime updates.

Naive bargain-hunters fall for this all the time. So now they’ve not only bought a theme with a malware payload, they’ve given their credit card information to the bastards at the same time. And then, when they use that theme or plugin, they’re infecting all their visitors. Special.

The other variant, the one my user seems to have fallen for, is the one where popular free plugins (like the one I support) are downloaded by these same malicious merchants of maleficent malware and then posted on their stores and then sold.

In this case, naive site operators (who may not know to go to the plugin repository, but are just Googling their way to their doom) are giving money (and, again, their credit card and identity information) to the bad guys when they could have actually gotten it for free.

As soon as Hapless Dude told me he’d bought the plugin, I pasted the URL of his website into Sucuri’s malware scanner and wouldn’t you just know it? Infected. Even worse, this guy had also been blacklisted, so people finding his site on Google and using other resources would actually be warned away from the site — meaning what little Google Juice this guy might have had is now long gone.

This should all serve as a cautionary tale. When things seem too good to be true, they probably are. Also, you should do your research. If you’re downloading a plugin or a theme, start with Visit the vendors’ sites for pro versions or extensions directly from the links off the base plugin’s page on the repository.

If you want to use a resource that’s not directly available from the repository, first research the vendor and then buy from that vendor. You can use discount codes (they are plentiful in the WordPress world), but use them only on the original vendor’s site.

Once again, WordPress can be safe… as long as you’re not foolish. In the immortal words of Sergeant Phil Esterhaus, “Let’s all be careful out there.

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NetUSB vulnerability leaves millions of connected devices open to attack

May 27, 2015 Leave a comment

Security researchers have published proof-of-concept code for a major router vulnerability leveraging a popular driver that could be used by hackers to compromise millions of connected devices.

The vulnerable Linux kernel driver is called NetUSB, and it allows USB devices such as printers, external hard drives and flash drives to be connected to a router or access point so as to be made available on the network. The NetUSB technology belongs to a Taiwanese firm called KCodes Technology, but each vendor has a different name for the technology. Netgear calls it ReadySHARE, while other vendors use terms such as “print sharing” or “USB share port.”

The vulnerability, which can be used to deliver denial-of-service attacks and as well as run code remotely, was uncovered by SEC Consult Vulnerability Lab. The firm says it has identified 26 vendors whose products were likely affected by the router flaw.

“The client side is implemented in software that is available for Windows and OS X,” writes SEC Consult in a blog post. “It connects to the server and simulates the devices that are plugged into the embedded system locally. The user experience is like that of a USB device physically plugged into a client system. It’s worth noting, that the NetUSB feature was enabled on all devices that we checked and the server was still running even when no USB devices were plugged in!”

The exploit itself is an old-school buffer overflow, where a client sends a computer name to the device that is longer than 64 characters.

Certain TP-LINK and Netgear devices are known to be vulnerable, but the researchers believe that devices from a whole range of manufacturers including IOGear, Western Digital, and ZyXEL are affected. For a full list of devices that are possibly affected by this vulnerability, check out the advisory.

The researchers attempted to contact KCodes with regards to the vulnerability back in February of this year, but only got back “a few nonsensical responses” before being ignored.

According to SEC Consult, only TP-LINK has released fixes, with ZyXEL, Netgear and D-Link saying that patches are in the pipeline.

Routers have become a popular target for hackers, and earlier this month researchers uncovered an exploit kit that brings together vulnerabilities relating to multiple products into a single easy-to-use tool that the bad guys can use.

See also:

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May 27, 2015 Leave a comment

As the marketer’s role continues to morph at light speed in an attempt to deliver a seamless positive customer experience across all touch points, so does the technology underneath and all the headaches that come with it which include but are not limited to: • Having a clear customer experience vision. • Becoming the customer champion responsible for identifying and mapping the euphoric customer journey. • Working together with technology counterparts to ensure the customer experience vision is mutually understood and the basis for technology success. • Redesigning teams and breaking down process silos to ensure cross functional collaboration. • Not owning it outright, but becoming an active stakeholder in the application of each technology within a well designed, integrated platform to achieve your marketing vision. It is a challenge all CMOs are facing and the basis for why we felt it was time to produce a CMO Solution Guide to Leveraging New Technology and Marketing Platforms. The goal is not to represent assumptive solutions to your specific challenge, but to share peer solutions that provide a collective perspective on how other CMOs are tackling this incredibly difficult topic.

Open Link:

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Microsoft Continues To Exploit Android’s Dominance In Mobile

May 27, 2015 Leave a comment


  • LG Electronics and Sony join Samsung, Dell, and Pegatron as Microsoft’s major partners who will pre-install Office, Skype, and OneDrive apps on Android devices.
  • There are now 31 Android device manufacturers who are helping Microsoft increase the total number of users of its mobile apps.
  • Skype is a strong vehicle for mobile advertisements.

The offer of lower Android licensing fees is definitely helping Microsoft (NASDAQ:MSFT) attract more original equipment manufacturers to pre-install Office, Skype, OneDrive, and OneNote mobile apps on Android products. In addition to the initial 11 partners (which includes Samsung (OTC:SSNLF), Dell, and Pegatron) Android devices last March, Microsoft announced that 20 more manufacturers will also pre-install its mobile apps on Android tablets.

LG Electronics (OTC:LGEAF) and Sony (NYSE:SNE) are among the new 20 OEMs backing Nadella’s cross-platform strategy to increase the number of users of Microsoft mobile apps. The list also includes top-selling popular Chinese Android vendors Teclast and Cube.

(Source: Microsoft)

Significant Savings From Pre-installing Microsoft Apps

Samsung, LG, Dell, and Sony are taking advantage of the discounted Android royalty licensing offer from Microsoft. Android device manufacturers allegedly pay $5-to-$15 per device as royalty fees over Microsoft’s Android-related patents. There’s substantial benefit to Samsung because pre-installing Microsoft mobile apps might help save $2-to-$5 (my own estimate) on each Samsung Android device.

Samsung shipped out 317 million smartphones last year. If it can save $1 or $2 on every Android handset, Samsung could save as much as $600 million annually. LG is also a major phone vendor that could save a lot of money by pre-installing Office and Skype on its Android phones.

Samsung and LG are also top vendors of tablets, which could mean further savings for them.

(click to enlarge)

(Source: Statista)

Microsoft Could Recoup The Discounts Via Mobile Advertising

Microsoft could recover the lost money over the Android licensing discounts through mobile advertisements and premium subscriptions of Office 365 from Android device users. Android remains the dominant OS in mobile devices. IDC says Android has 78%s share in smartphones. Windows Phone still has less than 3% share.

Compelling Android OEMs to pre-install Microsoft apps is therefore an easy to way to increase the potential number of people who will pay for Office 365 subscriptions. The more Android device users who get access to Skype, the better it is for Microsoft’s mobile advertising efforts.

The reason why Google (NASDAQ:GOOGL) leads the global mobile advertising business is due to the billion-plus number of Android devices being used around the globe. Microsoft is not among the top ten players in mobile ads most probably because of the low 2.7% market share of Windows phones.

Pre-installing Skype on new Android tablets and smartphones could help Microsoft benefit more from the $100 billion mobile ad spending that will happen next year. Android enjoys a bigger presence than Windows mobile gadgets in the U.S. and China. These two countries are the top markets for mobile advertisements.

Persuading Cube, Haier, and Teclast to pre-install Skype on Android tablets/phones gives Microsoft a better access to China’s $14 billion mobile advertising industry.

Pre-installing Skype Translator on Android device users might also make it more useful to Chinese people than the Google Translate app. Unlike Google Translate, Skype Translator can do real-time English to Mandarin Chinese (and vice-versa) voice translation.


Samsung, LG, Sony, and Dell could offer cheaper Android devices (or improve their gross margins) thanks to the discounted licensing fees from Microsoft. The cutthroat pricing on some Android phones makes it difficult for manufacturers to make a decent margin.

Microsoft could persuade more OEMs to pre-install its apps on Android devices if it implements a revenue sharing deal. Google still does not practice any revenue sharing on Android. European wireless carriers are already threatening a ban on Google’s mobile ads allegedly to force the internet search giant to share revenue.

Microsoft could easily win the backing of European carriers for Windows 10 phones and tablets if Nadella offers them a revenue sharing deal. Nadella could also persuade major wireless carriers to pre-install Office 365 and Skype on Android devices if he offers them the same $3 or $4 dollar subsidy per device that Microsoft allegedly gives to Chinese white-box tablet manufacturers.

MSFT is a Buy. Exploiting the dominant position of Android is just standard operating procedures. Microsoft is cash rich and ruthless enough to do an aggressive contra revenue tactic toward increasing the total addressable market of its Office 365 and Skype business.

Long-term technical indicators also support my Buy rating for Microsoft.

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