In late November, Twitter started contributing its DMCA takedown letters to Chilling Effects, the online clearinghouse jointly organized by the Electronic Frontier Foundation and many universities and law schools.

Chilling Effects says it received records of 11,500 total takedown notices in 2010, as of Dec. 15. Major contributors include Google, Yahoo and Digg.

Techdirt’s Mike Masnick flagged the Twitter takedowns, noting that many of them are for tweets that contain links to copyrighted material. Why go to Twitter and not the content host itself? he asks.

Chilling Effects founder Wendy Seltzer said she believes Twitter has been getting the takedown notices for a while but only recently started submitting them for public posting.

Using Twitter to get out the word about content may well be a growing phenomenon. In August, BitTorrent released a tool for more easily tweeting about torrent files. A friend of mine who’s an avid Green Bay Packers fan recently told me about a Twitter account he follows to find streams of football games he doesn’t have access to on TV.

“It’s interesting that they are receiving takedowns, given that most of what they’re hosting is little 140-character bursts of expression,” Seltzer said on a phone call yesterday. “Copyright holders are pushing the complaint out further, not going after the user who hosted, or even the user who pointed, but going after Twitter because it’s made itself a central location for the collection of information.”

Seltzer said that under the U.S. Supreme Court Grokster ruling, it’s possible that users could end up on the wrong side of the law for inducing infringement by posting a link with the intent to encourage their Twitter followers to access or download infringing material. But as long as Twitter complies with takedown requests, it should be within the safe harbor rules of the DMCA, which protect providers of information tools, said Seltzer. “Twitter doesn’t have an intent to infringe, so they would have a solid argument.”

A spokesperson for Twitter declined to comment, citing mellowness in the office over the holidays.

I can’t remember a year during which computer security stories jumped so readily from the tech and business pages to the front page.

The year 2010 was bookended by two such cases. It opened with Google’s disclosure that it had come under attack in China, an apparent attempt to penetrate the Gmail accounts of certain activists and journalists.

It ended with the WikiLeaks affair, which stemmed from the alleged theft by an Army private of classified documents stored on a government network.

And let’s not forget in mid-year came the story, as fascinating as it was sobering, of Stuxnet, a computer worm developed by parties unknown–although the smart money is on Israel–that penetrated and ultimately damaged equipment used in the Iranian nuclear program.

Computer hacking–which has for too long evoked images in the public mind-set of teenagers in basements taking digital joyrides–has finally revealed itself to everyone for what it has long been for those in the know: The domain of espionage, sabotage and possibly warfare.

In Google’s case, the attacks upon its systems raised questions about where it draws the line with authorities in Beijing about such matters as freedom of speech. When the attack was first disclosed, Google publicly mulled shutting down its operations in China.

Then in protest, it stopped censoring its search results, giving mainland Chinese access to the same search results available to residents of Hong Kong. Beijing responded by blocking access to Google’s site.

Finally, Google and China came to a new agreement, and Google appeared the loser in the battle of wills.

Computer security is one of those things that companies and governments say they take seriously, but never really seem to get a grip on, judging by the results.

In any case, there is no firewall or software in existence that could have prevented Bradley Manning from stealing the documents that he is alleged to have given to WikiLeaks. As a low-level Army intelligence analyst, he was a trusted insider who had access to this material in the course of his day-to-day job.

So, it was not technology that failed. The failure was one of internal policies that allowed him access to data not relevant to his position.

Any employee of a midsize company can see how wrong that is. Human-resources documents are limited only to those who work in that department. The same is true of people who work in the legal office, business development department and so on.

But it apparently didn’t occur to anyone in government to limit the access to what became the WikiLeaks cache to people who worked only for or closely with the State Department.

If it turns out that thousands of companies are better at protecting their business secrets than the U.S. government is, then it’s not for nothing that the Central Intelligence Agency task force investigating the WikiLeaks affair bears the initials “WTF.”

Something similar was true of Stuxnet. One of the reasons the attackers, whoever they are, succeeded was that they used several so-called “zero day” vulnerabilities in Windows.

These are undocumented weaknesses that hackers save up for special occasions as a way to open a back door into a computer and then insert a troublemaking payload, like a worm. Zero day exploits are a fact of life, and once spotted in the world, they’re usually patched.

The Stuxnet attackers used as many as four zero day exploits as a way to get their worm into targeted computers. Microsoft, to its credit, made short work of fixing them once they came to light.

Even so, the Stuxnet worm burrowed its way from Windows machines into industrial control computers known as SCADA systems, which are widely used to run factories, power plants, pipelines and all sorts of other infrastructure essential to modern life.

The worm was designed to find a specific target: The systems controlling a set of as many as 1,000 centrifuges at the uranium enrichment facility in Natanz, and make them spin faster than they were supposed to.

The ability to attack industrial computers and cause them to do things they’re not supposed to do has been a lingering fear among security experts for years. Researchers at the U.S. Department of Energy in 2007 looked at the potential for attacks on SCADA systems and proved that it was possible to seize control of an electrical generator and then make it destroy itself.

They also found that many of these systems are connected to the Internet for what seem like good reasons: Convenience and cost savings. But these connections have also opened them up to the same kind of attacks that rattled the Iranian facility in Natanz.

Another Stuxnet-like worm, the thinking goes, could be used to bring down a power grid, or poison drinking water, or shut down an oil or gas pipeline. The good news is that such an attack is expensive–Stuxnet, by one estimate, cost $10 million to create–and requires a lot of specialized insider knowledge.

The bad news is that the Stuxnet source code is circulating in the wild for anyone to study. And as the WikiLeaks case shows, there are often insiders willing to take part in criminal schemes.

The other bad news? Securing these systems won’t come cheap.

If history is any judge, there will likely be a barrage of computer security companies that try to spin these incidents into opportunities to make a sales pitch. That’s what security companies do, after all.

But they usually miss the point. How can you plan for a vulnerability you’ve never seen? How can you stop an otherwise trusted insider from abusing their access to sensitive information? Both are fundamentally difficult problems for which there are no easy answers.

Spending money on last year’s security vulnerabilities is like preparing to fight the last war: Circumstances inevitably change, and they certainly will in 2011. New kinds of attacks will arise, and they will catch their targets by surprise.

And the public, like the CIA, will reasonably ask, “WTF?”

The unvarnished fact is that the networked society to which we’ve become accustomed in the last several years has a soft, vulnerable underbelly.

And the more we rely upon it, the more people with a combination of advanced technical skills and repugnant motivations are going to look for ways to turn it against us.

Some will do so as a means of making a personal profit. Others may see it as a way of advancing a political or ideological agenda.

But others will want to use theirs skills to do serious harm to innocent people on a large scale.

And the events of 2010 point the way to a world where that’s a more realistic scenario than it ever was before.

Twitter has completed its latest round of funding–$200 million at a $3.7 billion valuation–with Kleiner Perkins as the lead investor, according to sources familiar with the situation.

Sources said the San Francisco microblogging service is also adding two new board members: Flipboard’s Mike McCue and David Rosenblatt, who ran DoubleClick until a bit after it sold to Google.

Twitter recently added former Netscape exec Peter Currie to the board, as BoomTown previously reported.

A Twitter spokesman confirmed the funding and the board appointments, but declined further comment.

The moves are big ones for Twitter, which is moving fast to upgrade its management and business model under CEO Dick Costolo, who just posted a blog (see below) on the new funding and directors, titled “Meaningful Growth (although it was first curiously called, “Stocking Stuffers,” and was much funnier).

But, indeed, a big slug of cash will surely help the start-up’s expansion efforts and essentially declares it is not for sale to bigger companies such as Google (quite yet, that is).

As I reported last week, Kleiner partner John Doerr has been pushing hard to fund Twitter, beating out Russia’s DST Global.

Kleiner is the only new investor in the latest round, which brings its funding total to $360 million since it was founded about five years ago.

The storied Silicon Valley venture firm, which has been aggressively moving into the Web 2.0 space of late, put in $150 million, with the remaining $50 million coming from existing investors.

Past investors include Benchmark Capital, Union Square Ventures, Spark Capital and several other venture firms and angel investors.

Adding Currie, McCue and Rosenblatt are very strong choices for the board. Currie has deep financial and IPO experience, McCue is a well-connected and innovative entrepreneur and Rosenblatt brings much-needed online advertising heft.

As it happens, Costolo will appear at our D@CES event in January, where I am interviewing him and we can talk about all the changes.

(Thank goodness the funding is done, since I was worried about all those awkward pauses.)

Here is new version of Costolo’s blog post on McCue and Rosenblatt (the old one is below it for you to compare and contrast):

Meaningful Growth

In the past 12 months, Twitter users sent an astonishing 25 billion Tweets and we added more than 100 million new registered accounts. In that time, our team has grown from 130 people to more than 350 today. We’re thankful for every Tweet, every account, and every talented employee who has decided to join the Twitter team. This week, we’ve got some big news to share.

As part of a significant new round of funding with investor Kleiner Perkins Caufield Byers and existing investors, we’ve added two new members to Twitter’s board of directors. Please join us in welcoming Mike McCue and David Rosenblatt. The experience these new directors bring to Twitter, along with this renewed investment, will help us continue to grow as a company and business.

2010 was one of the most meaningful years since Twitter, Inc. was founded in 2007. We operate on a principle that people are basically good–when you give them a simple way to express this trait, they prove it to you every day. We’re proud of what Twitter users have accomplished, we’re proud of our work, and we’re very proud of our team. Thanks for being a part of this work; it means a lot to us.

Stocking Stuffer

Growth is fun. In the past 12 months, Twitter users sent an astonishing 25 billion Tweets and we added more than 100 million new registered accounts. In that time, our team has grown from 130 people to more than 350 today.

This week, we added two new members to Twitter’s board of directors who have strong experience running technology companies: Mike McCue and David Rosenblatt. Mike was the CEO of Tellme Networks, is currently CEO at Flipboard and also worked for Netscape and Microsoft (which acquired Tellme in 2007). David is the former CEO of DoubleClick and an ex-Google executive.

We also closed a significant new round of funding, with new investor Kleiner Perkins Caulfield Byers leading the round. KPCB brings to Twitter a track record of helping build great companies, ranging from Amazon to Zynga (get it? A to Z? See how we did that?), and a team with expertise in Internet, mobile and social platforms. The additional resources and expertise will be extremely helpful as Twitter continues to grow as a company and business.

Thank you to Twitter users everywhere for making 2010 such a good year.

Example 1: Twitter saw a rash of promotional tweets for a bogus berry weight-loss product, the result of a security breach thought to be connected to the Gawker break-in.

Example 2: LinkedIn has temporarily disabled the accounts of any users whose email addresses turned up in the public database of hacked accounts. It’s asking those users to reset their passwords.

LinkedIn PR guy Hani Durzy says the move, which started yesterday afternoon, has only affected a “small fraction” of LinkedIn’s 85 million members. He says the social network made the decision proactively, not because it had any evidence that any accounts had been misused;  LinkedIn now has a blog post on the topic.

Some context/math: Gawker has said it has had to notify users of 1.5 million email addresses to change their passwords following the break-in.

If, for argument’s sake, half of those emails belonged to LinkedIn users, that would be less than one percent of the company’s user base. And likely much less: For some reason I have two emails connected to my single LinkedIn account. And both were exposed during Gawkergate, so I got two emails this morning.

No real debacles so far, but that doesn’t mean we won’t see them. Who’s next?

The release of funds follows a number of denial-of-service attacks earlier this week that were aimed at the document-leaking site’s providers. Most of the providers are now refusing to work with WikiLeaks after the U.S. government accused it of being in possession of documents that were provided in violation of U.S. law.

Yesterday, WikiLeak’s founder Julian Assange was arrested and denied bail in London. He’s accused of sexual misconduct in Sweden.

While PayPal is releasing the residual funds to WikiLeaks, it is not reinstating the ability for it to receive donations.

PayPal was caught up in a brief media storm this morning, after PayPal’s VP of Platform Osama Bedier gave the impression at LeWeb in Paris that PayPal had cut off access to WikiLeaks because of direct pressure by the U.S. government.

PayPal now wants to set the record straight, and says that it reviewed its policies regarding WikiLeaks after the U.S. Department of State publicized a letter stating that WikiLeaks may be in possession of documents that were provided in violation of U.S. law. The letter was published, and not sent to PayPal directly.

“PayPal was not contacted by any government organization in the U.S. or abroad. We restricted the account based on our Acceptable Use Policy review,” writes PayPal’s General Counsel John Muller. “Ultimately, our difficult decision was based on a belief that the WikiLeaks website was encouraging sources to release classified material, which is likely a violation of law by the source.”

Further, the company disclosed that twice before–in 2008 and 2009–PayPal reviewed and restricted the account associated with WikiLeaks “for reasons unrelated to our Acceptable Use Policy. As soon as proper information was received from the account holder, the restrictions were lifted.”

PayPal has been one of many providers that have been the victim of computer attacks, where servers were inundated with traffic. A spokesperson told us that it mostly affected the company’s blog site, and did not directly affect its payments services.

Other affected companies include MasterCard and Swiss bank PostFinance, The Wall Street Journal reports. No one is yet claiming responsibility for the attacks, but some say they are being organized by the ad hoc “Operation Payback.”

In fact, a lot of the real workers have been toiling away, and one new big result is that Microsoft’s adCenter is now officially powering 100 percent of paid search on the Silicon Valley Internet giant’s owned-and-operated properties and its publisher network in the U.S. and Canada.

According to the companies, that means marketers can now use one account for their search advertising campaigns across both the Microsoft Bing service and Yahoo.

Yahoo and Microsoft–which are attempting to combine their share of the search marketplace to better compete with behemoth Google via a partnership–have already completed algorithmic search integration.

In the U.S., that’s 163 million searchers on Yahoo and Microsoft, as well as 15 million searchers in Canada.

Thus, the pair are as tight as ticks–kind of like the JWoww and Snooki of search!

Time for a fist pump, Yahoo CEO Carol Bartz and Microsoft CEO Steve Ballmer!

“We’re very proud of this latest achievement with the search alliance which signifies a seminal step in Yahoo!’s search history,” said Chi-Chao Chang, Yahoo’s VP and GM for the global search business, in a statement. “Now that the back end work is done, Yahoo! will be able to focus on achieving the long-term goals of the alliance that will benefit consumers, advertisers and publishers alike.”

Mike Murphy, Facebook’s VP of Global Sales, is leaving the company.

Facebook said the well-known advertising exec decided to step down in order to take some personal time off, which Murphy reiterated was the case in an interview with BoomTown, noting that hundreds of nights on the road over the years have been enough.

“For the last five years of hyper-growth here, I have been focused on Facebook,” said Murphy. “Now, I felt it was time to shift that focus to my family.”

Murphy will stay on at the Silicon Valley social networking powerhouse until December, helping with the transition. His staff was told this morning in an email from him.

Both he and his boss David Fischer, VP of Advertising and Global Operations, have discounted any notion of tension between them, since Fischer came on board at Facebook in March.

Murphy said he had been planning his departure for a while, and wanted to get through the most recent quarter to finally pull the trigger.

“It is something I have been thinking about for quite some time and I discussed it with David early on,” said Murphy, who noted Facebook execs tried to come up with other options at the company for him. “I wanted [my departure] to come at a time when I knew the team was in good hands.”

Fischer said that there are no precise plans to replace Murphy yet, but that Facebook would “evaluate a lot of options.”

Interestingly, while he said he had no plans for now, Murphy is perhaps the dream candidate for Yahoo CEO Carol Bartz to run its ad sales business, which has been drifting of late due to a series of exec departures.

In fact, Murphy is an ex-Yahoo exec, having come to Facebook in 2006 directly from a stint as VP of Media Sales for the Western region at the Internet giant.

At Facebook, Murphy has led media strategy, advertising sales and account management. He came to the company five years ago, when it was not the social networking powerhouse it is today.

He is one of a handful of experienced online ad sales leaders in the business, and the affable exec is very well-liked in the industry.

Murphy also worked at Ziff-Davis Publishing and CMP Media.

Reflecting on all the changes that have gone on in online advertising, especially with the advent of social media, Murphy noted how quickly the landscape has changed.

“It’s been an amazing progression for marketers from how you launch a campaign to having a presence on Facebook to how you make an emotional connection with your customer,” said Murphy. “The momentum has been huge.”

That’s why Murphy said he expects to eventually return to the fray, once he has spent some quality time at home and has a “clear head.”

For a look back, here is a video interview I did with Murphy in 2007, back in the days when Owen Van Natta, also in the video, was COO at the Palo Alto, Calif.-based Facebook: