The probe, which could take several months to complete, is initially focused on AdWords — Google’s flagship advertising product and main source of revenue. But the agency conducting the investigation, the Competition Commission of India, could expand it to scrutinize other Google services if it sees fit, the officials said.

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He calls it “the highest-performing handset on the market, as far as we can tell.” It has taken a few years to get to this point, but there’s a two-billion-unit addressable market to be carved out.

In the video below, Otellini also talks about the competitive threat — though he seems not to consider it much of a threat at all — coming from Microsoft’s Windows 8 and its variant that will support chips running the ARM architecture. How much market share does he expect to lose? None. Intel’s chips can offer the same performance and power efficiency that ARM chips do, while being 100 percent compatible with existing PC software. See the full interview below:

Facebook filed an updated version of its S-1 public offering document today, which included somewhat disappointing first-quarter financials.

In the new filing with the Securities and Exchange Commission, its fourth update for its upcoming public offering, the social networking giant’s revenue was $1.058 billion, up 46 percent for the year, but down six percent from the previous quarter.

In the first quarter of 2012, Facebook’s net income was $205 million, which was down from $233 million a year ago. The company attributed the decline to rising costs, including in marketing and in research.

Facebook also said its current share price was $30.89 each, which values the entire company at about $77 billion.

Some investors might worry about the latest results, which show a slowing in Facebook’s torrid growth. But Facebook said the quarterly decline was due to seasonality — it was flat in the same period a year ago.

As it noted in the document:

“We believe that our rates of user and revenue growth will decline over time. For example, our revenue grew 154% from 2009 to 2010, 88% from 2010 to 2011, and 45% from the first quarter of 2011 to the same period in 2012. Historically, our user growth has been a primary driver of growth in our revenue. We expect that our user growth and revenue growth rates will decline as the size of our active user base increases and as we achieve higher market penetration rates.”

Its audience, though, was still growing strongly: Facebook also said it had 532 million daily active users, up from 372 million a year ago and 483 million in December. Its monthly active users were up from 680 million last year to just over 900 million and up from 845 million from December.

Facebook also added an explicit figure for average revenue per user, which was $1.21, up six percent year over year. It also said the number of full-time employees grew 46 percent from last year to 3,539 at the end of March.

The last update to Facebook’s regulatory filing for its mid-May IPO was in late March. That one gave investors more information about a patent infringement lawsuit waged by Yahoo — Facebook noted its counter claim in the newest filing — and also its motion to dismiss Paul Ceglia’s legal attempt to garner half of the company. It then included more information about growing engagement by users of the social networking site.

Along with some other minor changes in the new document, Facebook noted, in news that was already known, that it would trade its stock on the Nasdaq market under the ticker symbol “FB.” It also said it had bought photo-sharing start-up Instagram, another piece of old news, and noted its just-struck patent deal with Microsoft.

One new detail about Instagram: Facebook forked over “approximately 23 million shares of our common stock and $300 million in cash” to buy it.

Also, said Facebook, in an interesting new section on its global business:

“In the first quarter of 2012, 50% of our revenue was generated by users in the United States and Canada, a decrease from 54% of our revenue for the first quarter of 2011, and in 2011, 52% of our revenue was generated by users in the United States and Canada, as compared to 58% in 2010, as we experienced more rapid revenue growth in markets such as Germany, Brazil, Australia, and India.”

Here is the whole updated file, if you want to peruse yourself:

4thfbs1update

• 3G expands consumer audience by 100 million listeners

  Until now, most Indians have not had access to high-speed Internet or a PC. The wired broadband penetration of India stands at about 13 million subscriptions — which is a pittance, especially when you consider that this includes offices, cyber cafés and the like; and including institutions, there are only 50 million PCs in the country. Very few Indians have broadband or a PC of their own; this renders the historical paid download model (to a desktop or to a PC-tethered mp3 player) unscalable.

  Despite the lack of broadband and PC penetration, there are currently 121 million Internet users in India. Guess where they are? Mobile. With the rollout of 3G in India, access to high-speed Internet has become cheaper and more widely available. You no longer need to own a desktop computer to get online or, most importantly, to participate in e-commerce — all you need is a mobile phone.

  The mobile model — and by extension, the mobile music model — scales. It took broadband 7 years to reach 11.5 million wired subscribers. In less than half that time, 3G subscriptions in India topped 13 million, and that number is rapidly growing. There are 884 million mobile users in India, and as smartphones flood the market, more of them will be making the switch, becoming not just first-time smartphone users, but first-time Internet users as well.

  Already, 59 percent of mobile web users access the Internet via mobile only. A study by the Boston Consulting Group predicts that the total number of mobile Internet users will balloon to 237 million by 2015. It is connectivity, now more than ever.

  With the addition of over 100 million Internet-enabled potential users, it’s no wonder the Indian digital music industry is jumping for joy. 3G has brought a new generation of Internet users online, where music can be discovered, enjoyed, purchased and shared.

• Advertisers, rather than end users, are footing the bill

  Is there anything better than free? At last, the dream of ad-supported free music is a reality.

  Brands are embarking on the biggest consumer grab of the century as China’s and India’s multi-billion audiences rise in economic status. Thousands of brands are competing to become the future soda, life insurance and auto brands of this part of the planet. That’s a major influx of ad dollars looking for a scalable way to engage consumers.

  Asking consumers to shell out 15 to 25 rupees for a song online was unrealistic when pirated options were widely available for free. But as legal sites gain popularity and engagement numbers soar, major brands are ready to spend their advertising dollars on digital music Web sites and apps, so music services like Saavn can provide a large catalog of ad-supported music to end users for free.

  The benefits are abundant for the brand advertisers, end users and record labels; the end user gets something customizable and valuable for free, while major brands can finally capture the attention of one of the world’s largest emerging markets. Record labels can now pull in much larger profits from major brands while cutting their own costs of manufacturing, packaging and distributing physical products.

  So what made advertisers change their minds? Piracy. Until recently, the digital music industry in India was completely overrun by rampant piracy — a staggering 97 percent of digital music content was from pirate sites. This means poor quality without options of sharing and discovery for the user, no profits for the record labels and an unwillingness from brands to risk having their names on an illegal site.

  Thankfully for all parties involved, piracy is finally being addressed — in February, the High Court of Calcutta handed down the decision to ban the pirate site songs.pk on major ISPs. This kind of move reinforces for the industry and for consumers that the music pirates’ days are numbered.

  While pirated music is still an issue in India, legitimate and fully legal music streaming Web sites and apps are restoring the faith of advertisers, meaning a huge new audience for advertisers, profits for the music labels from brands with deep pockets and top-notch quality for users.

• Digital means data

  Labels are excited that they can finally reach audiences who are passionate about their niche content, thanks to the kind of targeting that digital platforms make possible from user data. It’s especially great for indie labels, who now have fast entry to market and an opportunity to get in front of the right audience, despite not having the major-label marketing moolah.

  Thanks to the wealth of data digital music supplies, the Indian music industry can get the right music to the right people at the right time. No need to make assumptions based on demographic information or guess what people will like. Data provides the ultimate customization tool for an industry in which customization and understanding the preferences and tastes of the end user is key.

  This is the moment the music industry has been waiting for; it can finally focus on its core business — producing music — while advertisers happily foot the bill. And users get to sit back and enjoy, share and discover for free.

Paramdeep Singh is the managing director and co-founder of Saavn, the fastest-growing music service for South Asian music worldwide. He is also a principal and co-founder of 212Media, a privately-held venture development company, which he helped launch in 2005. Follow Paramdeep @paramdeepsingh on Twitter.

And so, on Thursday, the company will debut in India the BlackBerry Curve 9220, a stripped-down 2G handset with a built-in FM radio, a two-megapixel camera, seven hours of talk time and a dedicated BlackBerry Messenger key. Price? 10,990 rupees, or $210 U.S.

For RIM, which in recent months has been discounting the prices of its smartphones in India to capture a larger share of the country’s growing smartphone market, the move seems a wise one. Targeting massive emerging markets like India with a smartphone specifically designed for them could do quite a bit to preserve RIM’s market share until it is finally able to bring its BlackBerry 10 devices to the rest of the world. CEO Thorsten Heins said as much during the company’s last earnings call, when he noted that the company planned to heavily subsidize a new line of low-end BlackBerry 7 phones. Presumably, the Curve 9220 is the first of those.

RIM plans to bring the 9220 to Indonesia — one of its most lucrative markets — in the coming weeks, as it extends the device’s reach and, hopefully, revenue along with it.

But there’s no denying the attraction of services like Amazon Web Services or Joyent or Rackspace, where you can spin up and configure a new virtual machine within minutes of figuring out that you need it. So, many companies seek to approximate the experience they would get from a public cloud provider on their own internal infrastructure.

It turns out that a start-up I had never heard of before this week is the most widely deployed platform for running these “private clouds,” and it’s not a bad business. Eucalyptus Systems essentially enables the same functionality on your own servers that you would expect from a cloud provider.

Eucalyptus said today that it has raised a $30 million Series C round of venture capital funding led by Institutional Venture Partners. Steve Harrick, general partner at IVP, will join the Eucalyptus board. Existing investors, including Benchmark Capital, BV Capital and New Enterprise Associates, are also in on the round. The funding brings Eucalyptus’ total capital raised to north of $50 million.

The company has an impressive roster of customers: Sony, Intercontinental Hotels, Raytheon, and the athletic-apparel group Puma. There are also several government customers, including the U.S. Food and Drug Administration, NASA, the U.S. Department of Agriculture and the Department of Defense.

In March, Eucalyptus signed a deal with Amazon to allow customers of both to migrate their workloads between the private and public environments. The point here is to give companies the flexibility they need to run their computing workloads in a mixed environment, or move them back and forth as needed. They could also operate them in tandem.

Key to this is a provision of the deal with Amazon that gives Eucalyptus access to Amazon’s APIs. What that means is that you can run processes on your own servers that are fully compatible with Amazon’s Simple Storage Service (S3), or its Elastic Compute cloud, known as EC2. “We’ve removed all the hurdles that might have been in the way of moving workloads,” Eucalyptus CEO Marten Mickos told me. The company has similar deals in place with Wipro Infotech in India and CETC32 in China.

However, some deductive reasoning suggests that it will be Lava, a little-known Indian company that Intel announced in February as one of its early customers.

Lenovo and France Telecom’s Orange also plan devices this quarter, but both of those companies have announced dates for later in the quarter. Lenovo’s first Intel phone is coming in May, while Orange’s is expected in June.

Intel is hoping to make a dent in a market that until now has been dominated by the likes of Qualcomm, Texas Instruments and Nvidia.

“We have ambitions to not be a minor player here,” CEO Paul Otellini said back in February.

Part of Intel’s strategy has been to create a near-complete reference design that aspiring players — like Lava — can use to quickly get into the smartphone game.

Intel also announced a longer-term partnership with Motorola Mobility, though it has yet to convince most big-name phone makers to adopt its chips.

On Friday, April 20, the new iPad will arrive at market in South Korea, Brunei, Croatia, Cyprus, the Dominican Republic, El Salvador, Guatemala, Malaysia, Panama, St. Maarten, Uruguay and Venezuela. Friday, April 27, will see another wave of releases, with the device shipping in Colombia, Estonia, India, Israel, Latvia, Lithuania, Montenegro, South Africa and Thailand.

So, by the end of the month, the new iPad will be available in some 56 countries. Not bad for a six-week rollout. Certainly, it’s a marked improvement over last year’s launch of the iPad 2, during which Apple was able to ship to only 39 countries in about five weeks, thanks to supply-chain constraints.

The San Jose, California, company is trying to steer Indian consumers toward buying high-margin products such as clothes and shoes — as is the trend among eBay shoppers in the West — rather than electronic gadgets and books, which are the most popular choices now but command lower profit margins and are less frequent purchases.

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In broad brushstrokes, one key aspect of the deal addresses a problem with Cisco’s set-top box business: Its lower profit margins. Adding high-value software to the mix will boost that unit’s overall profitability, De Beer told me. NDS, which has been private since 2009, is on a run rate to about $1 billion in sales this year. “And it’s a very profitable revenue stream,” he said.

But there’s also some pretty interesting tech in play. NDS specializes in software that creates a unified entertainment experience across several devices. You can watch your shows on the TV, as always, but if you want to switch to your PC or tablet, you can do it with a user-interface environment that’s entirely consistent and customized according to the service provider’s branding and needs. NDS has a software architecture called Snowflake that’s supposedly pretty good and is the basis of the Zon TV service that is being plugged in the ad that can be seen below, which I think is for Portuguese TV.

But there’s another Snowflake interface video that’s worth seeing first. Check out the demo reel (also below) of the user interface for SFR’s Neufbox Evolution, which I think is a streaming Internet media box.

The point, De Beer said, is to get more closely engaged with the service providers, and by those he means the cable, satellite and other TV and entertainment outfits around the world, and offer them white-label software they can build and brand as they see fit, to deliver a consistent experience across any device. “They’ll be able to constantly update and upgrade their experiences,” he said.

Another point: NDS is strong in India and China with the satellite TV outfits, whereas Cisco is strong in North America with the cable companies. “They’re strong where we’re weak, and vice versa,” he told me.

There are a few critical points. ISI analyst Brian Marshall observed that Cisco is using up about 20 percent of its offshore cash balance. Also NDS’s business is pretty highly concentrated. About 70 percent of its revenue comes from 10 customers, and a little less than half comes from the top three: DTV, BSkyB and Sky Italia.

While Marshall sees the opportunity in comprehensive digital media, he thinks the price Cisco is paying is “rich for a company growing sales at less than 10 percent year on year.” And with revenue per employee at $200,000 at NDS — much lower than Cisco’s $750,000 per employee — Marshall wonders how the deal will be accretive to Cisco right away. “We struggle identifying sources of accretion in year one other than headcount reduction.”

NDS STUDIO DESIGN & SFR AWARDED from NDS Design on Vimeo.

ZON online from NDS Design on Vimeo.

The case is the highest-stakes example yet of the controversy in India over what role Internet companies should have in policing content on the Web. If convicted, executives from the companies could face jail time and the companies could face fines, lawyers following the case said.

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A person familiar with the matter said Google removed content from its search service, YouTube video site and Blogger after receiving an order to do so from Judge Mukesh Kumar of a New Delhi district court.

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When pressed for an assessment, Cook pointed to the company’s just-reported monster earnings.

“You can see our results,” Cook said during a conference call with analysts. “I think the team is doing a fantastic job. We feel really good about where we are.”

And it’s tough to argue otherwise. Apple’s profits for last quarter, at more than $13 billion, were more than what most tech giants report in revenue. Apple also posted twice as much revenue and profit as Microsoft did in its holiday quarter.

Apple’s quarterly iPhone sales, at more than 37 million smartphones, were numbers that its rivals would kill to have for a year, let alone a quarter. And recent data for the U.S. shows Apple alone nearly even with the entire Android world in market share.

Cook said he is focused on remaining the lead horse in the race, but said he doesn’t see Android as the only competitor.

“I wouldn’t say it is a two-horse race,” he said. “There’s a horse in Redmond that always suits up and always runs.”

On the tablet side, Cook said that Apple continues to dominate the market despite the flood of would-be rivals. And that market, Cook notes, is huge and growing, recently surpassing the market for desktop PCs. Eventually, Cook said, many people expect it to be larger than the PC market as a whole.

“In terms of competitiveness, the ecosystem for iPads is in class by itself,” Cook said, noting that there are 170,000 apps customized for Apple’s tablet as compared with what he said appears to be only a few hundred designed specifically for rival tablets.

Last year, Cook said, was supposed to be “the year of the tablet.”

“I think most people will agree it was the year of the iPad for the second year in a row.”

As for where Apple is headed, Cook stuck to the company’s standard secretiveness, though he did offer a few insights, at least geographically. China, he reiterated, remains the company’s big bet with regards to emerging markets, with Brazil a distant second in terms of focus and investment. India, he noted, saw its sales go threefold from a year earlier, but from a very small base.

While not mentioning any rumored plans for an Apple-badged television, Cook said the company sold 1.4 million Apple TV units in the December quarter, as compared to 2.8 million devices for the entire prior fiscal year.

“We still classify this as a hobby,” he said. “However, we continue to add things to it.”

The New York Times published something of an exit interview with Palmisano over the weekend. It read a bit like a victory lap, and that’s not undeserved. The record books will show that IBM shares during the Palmisano era (2003-2011) rose by 125 percent; sales grew from $81 billion in 2002 to an expected $107 billion; and annual profits on a per-share basis went from $3.07 to a consensus forecast of $13.38.

But it got me to thinking about one of the highlights of the Palmisano era; one that generated a great deal of attention at the time: IBM’s decision to sell its personal computer division to Lenovo, the Chinese PC maker. It was a relatively small deal, worth less than $2 billion at the time, but it was a controversial move. Despite the fact that IBM wasn’t making much money on the business, IBM PCs, especially its ThinkPad line of notebooks, were generally considered to be pretty good.

Nearly seven years later, it’s worth noting that Lenovo is now the world’s second-largest PC vendor, behind Hewlett-Packard, having vaulted past Dell earlier this year, according to the market research firm IDC. It’s also worth noting that Lenovo is in fifth place in the U.S., behind HP, Dell, Apple and Toshiba, in that order.

IBM initially owned 15 percent of Lenovo and maintained a stake in that company until February of this year, when it sold its remaining 4.3 percent shares at a profit of more than a quarter-billion dollars.

Lenovo’s biggest shareholder is Legend Holdings, of which 36 percent is owned by the Chinese Academy of Sciences, a.k.a. CAS Holdings, a state-controlled entity. The state has pared back its stake, though: When the IBM-Lenovo deal was announced in 2005, Lenovo was 57 percent state-owned.

There was a lot of natural controversy, and even national security concerns in 2005, about selling so red-blooded an American product as the IBM PC to China. But there was also a solid business case to consider. The PC business was a drag on earnings because of downward price pressure exerted by Dell and all the others, and it wasn’t even leading the market, as was the case with Hewlett-Packard, which engaged in some very public contemplation about spinning off its own PC division.

But there was also a potential strategic benefit, which Michael Useem, a professor a the University of Pennsylvania’s Wharton School of Management, pointed out at the time: Making friends with China.

By selling an underperforming asset to a buyer willing to take it and run with it, IBM got solid access to the exploding Chinese market. In paraphrased remarks to the Times, Palmisano concedes the point:

Palmisano says he deflected overtures from Dell and private equity firms, preferring the sale to a company in China for strategic reasons: the Chinese government wants its corporations to expand globally, and by aiding that national goal, IBM enhanced its stature in the lucrative Chinese market, where the government still steers business.

So how has that worked out? It’s a little hard to tell from reading Big Blue’s Byzantine financial statements. In fiscal 2005, the year the deal closed, IBM reported $18.6 billion, or about 20 percent of revenue, came from the Asia-Pacific region, including China.

And though it declined to provide specific dollar amounts, it said that year that sales in China had dropped by 19 percent, but after after stripping out the PC division, would have grown by 8 percent.

For the first nine months of fiscal 2011, IBM reported that the Asia-Pacific region accounted for exactly the same dollar figure — $18.6 billion — amounting to 24 percent of its overall sales of $77.4 billion, and there’s still a quarter to go. That would put Asia on track to account for a little less than a quarter of IBM’s revenue.

In its earnings statement, IBM also makes a point of calling attention to what it calls “growth markets,” which are generally the BRIC countries — Brazil, Russia, India and China. These markets combined for 23 percent of sales in IBM’s most recent quarter.

This is about as close to understanding the size of IBM’s business in China as we’re going to get. On balance, it looks to have been a positive move, especially when you consider that if IBM had kept its PC division, it would have likely only gotten smaller and become more of a profit drag on a company that’s increasingly focused on high-margin businesses like services and consulting.

Nor can we judge by IBM’s headcount. Globally, as of the publication of its last annual report, IBM employed 426,751 people. But it has stopped providing a geographical breakdown. A report in the Times of India in 2010, mentioned by The Wall Street Journal, suggested that Big Blue’s headcount in India might be as high as 130,000; which, if true, would make it one of that country’s top 10 employers.

There is no question that IBM’s presence in China has grown. You can tell by the press releases. There was for example, a new IBM Research lab in Shanghai in 2008, and another in 2010. Just last month, IBM announced that it had closed a significant IT deal for a major health-care provider in Hong Kong, and another with a Chinese province to improve the safety of pork (which included a food-safety video I embedded below).

For better or worse, Palmisano will be remembered as the man who traded PCs for access to China. On balance, it seems to have been a good trade, but the jury is still out.

Tomorrow is the first business day of IBM’s Rometty era. Assuming she retires at age 60, a well-established IBM tradition, she’ll have about six years to make her mark. One wonders what she’ll be remembered for most.

Until Bawa’s replacement is named, RIM’s Indian operations will be overseen by Urpo Karjalainen, senior vice president for Greater China, India, Australia and New Zealand, the company said in a statement.

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As The Wall Street Journal reported today, Lenovo’s profits rose by 88 percent, and it eclipsed Dell as the world’s No. 2 manufacturer, behind Hewlett-Packard. The company has been growing in part through acquisitions — it recently paid 465 million euros (about $640 million) for the German PC outfit Medion — but also by playing well in markets where people are still buying their first PCs, says Peter Hortensius, the president of Lenovo’s Global Product Group.

Lenovo’s results did good things for shares of rival HP, which last week announced that it will keep the PC unit it had previously considered spinning off. Its shares rose 1.8 percent to $26.06. Shares in Dell rose more than 1 percent to $15.29, while Intel fell 17 cents, or less than 1 percent.

Hortensius told me that much of Lenovo’s strength comes from being the top vendor in the world’s leading market, China, and also in its No. 3 market, Japan. In the world’s No. 2 market, the U.S. — not so much. Lenovo is fifth there, but that’s an improvement from prior periods, he says.

Another strength he noted is in emerging markets like Brazil, where lots of people are still buying their first device and just getting their first Internet connection and not ready to think about buying tablets or smartphones just yet. But Lenovo’s a big player there, too, and sells Android based smartphones and tablets in China. It also plans to sell tablets running Windows 8 when it’s released. And as part of a four-screen strategy, he said, the company will have more to say on the subject of smart TVs soon.

What it doesn’t have, at least in the U.S. yet, is a strong brand presence. And so it has crafted a marketing campaign around “people who do.” So what do you do when you need to get attention for a less-well known PC brand? You drop a laptop out of a plane, naturally. Of course there was a technical reason for doing it: Proving that the machine could boot up in time to deploy a parachute and land safely, though I have to wonder just how soft that landing was in reality. I embedded the spot below just because it looks cool.

And these aren’t the kind of cyber attacks carried out by bumbling troublemakers like the LulzSec gang, which make headlines but really only cause a nuisance for companies like Sony. In these cases, networks were compromised by remote access tools — or RATs, as they’re known in the industry. These tools — and they are tools, because they have legitimate uses for system administrators — give someone the ability to access a computer from across the country or around the world. In this case, however, they were secretly placed on the target systems, hidden from the eyes of day-to-day users and administrators, and were used to rifle through confidential files for useful information. It’s not for nothing that McAfee is calling this Operation Shady RAT.

McAfee says the attacker was a “state actor,” though it declined to name it. I’ll give you three guesses who the leading candidate is, though you’ll probably need only one: China.

Dmitri Alperovitch, McAfee’s Vice President, Threat Research, makes a statement in his blog entry on the discovery that should give everyone minding a corporate or government network pause: “I am convinced that every company in every conceivable industry with significant size and valuable intellectual property and trade secrets has been compromised (or will be shortly), with the great majority of the victims rarely discovering the intrusion or its impact.” He further divides the worldwide corporate landscape into two camps: Those who have been compromised and know it, and those who simply don’t know it yet.

This has been a particularly nasty year on the cyber security front. (I hate to say it, but I told you so.) Prior to this, the big attack whose full impact has not yet been fully sized up was the one against the RSA SecureID system, which uses popular keychain devices that create a constantly changing series of numbers that in turn create a second password for access to system resources. They’re widely used in government and military circles and among defense contractors. Google has been a regular target in recent years.

The RSA attack and Operation Shady RAT are examples, Alperovitch says, of an “Advanced Persistent Threat.” The phrase has come to be a buzzword that, loosely translated into English, means the worst kind of cyber attack you can imagine. Unlike the denial-of-service attacks and network intrusions carried out by LulzSec and its ilk, which require only minimal skill and marginal understanding of how networks and servers work, an APT is carried out by someone of very high skill who picks his targets carefully and sneaks inside them in a way that is difficult to detect, which allows access to the target system on an ongoing basis that may persist for years.

How did these attacks happen? Its very simple: Someone at the target organization received an email that looked legitimate, but which contained an attachment that wasn’t. This is called “spear phishing,” and it has become the weapon of choice for sophisticated cyber attackers. The attachments are not what they appear to be — Word documents or spreadsheets or other routine things — and contain programs that piggyback on the targeted user’s level of access to the network. These programs then download malware which gives the attackers further access. This all happens in an automated way, but soon after, live attackers log in to the system to dig through what they can find, copy what they can, and make a getaway — though they often leave the doors unlocked so they can come back for repeat visits.

Alperovitch notes — correctly, to my mind — that the phrase has been picked up and overused by the marketing departments of numerous security companies. His larger point is that too often those attacked in this way refuse to come forward and disclose what they’ve learned, thereby allowing the danger to continue for everyone else.

Alperovitch says that the data taken in Operation Shady RAT adds up to several petabytes worth of information. It’s not clear how it has been used. But, as he says, “If even a fraction of it is used to build better competing products or beat a competitor at a key negotiation (due to having stolen the other team’s playbook), the loss represents a massive economic threat not just to individual companies and industries but to entire countries that face the prospect of decreased economic growth.” It’s also bad for a target’s national security, because defense contractors dealing in sensitive military matters are often the targets. The best thing that can happen is that victims start talking about their attacks and sharing information with each other so that everyone can be ready for the next one, which is surely coming.

What gives? The research firms don’t have access to the same kinds of sales-channel data that Intel does, especially when it comes to emerging markets. Namely Brazil, Turkey, Russia and other rapidly developing revenue streams.

Intel CEO Paul Otellini called this “channel revenue” during the conference call with analysts. Channel is industry lingo for the business Intel does that’s not with major PC manufacturers like Apple or Hewlett-Packard or Dell, but instead goes through indirect sales channels to smaller companies that make PCs with lesser-known brands geared toward specific markets.

This channel revenue grew 17 percent during the quarter, Otellini said, because demand for PCs remains healthy in these countries. Turkey and Indonesia were both up 70 percent over last year. India was up 17 percent. Russia, 15 percent. China, 14 percent. Latin America as a whole was up 12 percent.

But then there’s Brazil. Otellini said it’s growing like crazy and is on track to become the world’s third-largest PC market next year, after the U.S. and China.

This channel business in emerging markets helps explain at least part of the dichotomy between the results that Gartner and IDC report in their quarterly market surveys — both of which show a market that grew by less than three percent — and Intel, which saw sales in its PC division grow 11 percent.

Later, Otellini and Chief Financial Officer Stacy Smith addressed this issue in response to a question from Evercore analyst Patrick Wang. You can hear their exchange, which runs less than three minutes, below.

Intel-q2-2011-call by ahess247

With its annual meeting this coming Thursday, you’d think Yahoo CEO Carol Bartz would be taking a rest.

Not so!

She has been a regular Carmen Sandiego, in fact, jetting to Yahoo hotspots around the globe from Dubai to Milan to New York and then back to Yahoo’s Sunnyvale, Calif., HQ.

As do Yahoos, I get most of the Friday emails she sends out, but I usually don’t bother to post them.

That said, I liked the can-do tone of this one, shades of Bartz early in her term, even in the face of a stock price that’s dropped almost eight percent this month to close at $14.69 on Friday.

(To be fair, the shares of Google are down by a little more in the same time, although its CEO Larry Page seems to prefer to remain holed up in his digital cave in Mountain View and lick his stock wounds.)

No matter, as Bartz writes, it’s nothing a little retail therapy can’t fix!

I myself am off on an international biking vacation in Ireland next week, so while I am gone, please enjoy Carol’s letter to Yahoos:

Last week was a crazy one -– Dubai and Milan in five days! You may not know it, but the Middle East and Italy are two of our hottest markets in the EMEA region (and I do mean hot — it was 114 Fahrenheit and very humid in Dubai — I thought I was going to melt!).

First on the itinerary was Dubai, where I met with government officials, advertisers, the media, and our awesome Yahoos there.

I kicked things off Monday with the Deputy Ruler of Dubai, Shaikh Maktoum Bin Mohammed Bin Rashid Al-Maktoum. Turns out he is a BIG Yahoo! fan. He told me that he’s on our sites every day to check the latest news and sports headlines. It makes sense — we’re huge in the Middle East and North Africa. Since we acquired Maktoob a year and a half ago, we’ve grown from 30 million to 53 million users. That’s impressive in a region with more than 70 million people online today.

We’re tops in entertainment with omg! Arabic, and with our women’s lifestyle site, Helwa. And we’re a strong #2 in News, thanks in part to our new Arabic homepage that launched six months ago. Already, it’s our fourth most popular homepage in the world — right behind the U.S., India and Taiwan. Meanwhile, Yahoo! is #1 in the Middle East and North Africa for display advertising with 40% market share.

Then on Wednesday it was off to Milan, where I visited with advertisers and our passionate Yahoos there. (I love that our Italian headquarters also happens to be located in one of the fashion capitals of the world — so convenient! An hour of retail therapy goes a long way).

We are winning it Italy. In a business review, our folks called themselves the Yahoo! “Italian Racing Team,” and I believe it. They’re firing on all cylinders. The country boasts some of the highest engagement numbers for us in the EU. We reach 66% of the online population in Italy. We’re top three in seven content categories, and #1 in four of them: Mail, News, Answers and Flickr. Plus, these #1 sites are growing faster than the market. And on the ad side, May was a record month for our display advertising in Italy — we’re taking share while growing revenue.

Throughout my trip to Italy and the Middle East, one thing came through loud and clear: Our local teams are able to execute and grow user engagement more quickly than ever before. This is thanks, in large part, to the great work of our Products org.

Take, for instance, our new Yahoo! Publishing Platform (aka LEGO). Our editors have put it to good use on our Italian Movies site. We’ve seen a 90% increase in page views, and a 60% increase in users. And that’s just in the first three weeks! This is exactly what we’ve been working so hard on for the past two years. We’ve completely re-architected our infrastructure, and it’s incredibly satisfying to see it pay off in so many parts of the world.

After all that fun, I headed back across the Atlantic and spent two good, solid days covering a lot of business in the Big Apple — press, investors, agencies and Yahoo! Sales leaders. Then it was back here to Sunnyvale for CEO staff meetings and a great “Coffee with Carol” with 30+ Yahoos.

I’m off to have a good weekend, hope you do too — especially you Dads on Father’s Day!

Carol

So far, the company has been focused on selling Indian-inspired attire, such as saris, tunics, jewelry and very traditional wedding gowns, to Indians living in the U.S.

Today, the company is announcing it is expanding into the U.K. Other countries will follow, including India by the end of the summer, where it will be able to provide the latest fashions to Indians living in their home country.

The execs have identified 50 countries they’d ultimately like to be serving.

To support its rapid growth, the New York-based company, which has substantial offices in New Delhi, has raised $16 million in a second round of funding. Investors in the round include Tiger Global Management, Accel Partners India and Helion Venture Partners.

In many ways, the company is aspiring to be the Gilt Groupe of Indian fashions.

“That’s the simplest way to summarize it, but there will be some evolution that’s different from Gilt over time,” said Exclusively.In’s CEO and co-founder Sunjay Guleria. “The way our brand and merchandising mix is, is similar to Gilt, but it will evolve into a unique reality.”

(However, Exclusively.In’s $16 million round hardly compares to Gilt’s recent round totaling $138 million.)

Another difference between the two is that shipping clothing and apparel from India creates a whole new set of challenges that other flash sales sites do not have to contend with.

Just like Gilt, Rue La La and others, Exclusively.In sends out a daily email containing the several styles it has for sale. Members who subscribe to the email are able to purchase the items at a discount until the inventory is gone. However, unlike other sites, the company must ship the clothing from India to the U.S. and now the U.K.

Launching in 30-plus markets this year will mean a complicated set of rules and customs requirements to meet in each country.

Additionally, Exclusively.In establishes a distribution center in each country, to make returns convenient. Guleria calls it “shop globally, return locally.”

To ramp up, Guleria said they’ll more than double their 70 employees to 150 by the end of the year.

In addition to market expansions, Exclusively.In has also experimented with new categories. Last month, it launched a travel site focused on Asian vacations, and weddings is also a major category.

Guleria, who grew up in a small Ohio town where Indian fashions were difficult to find, said out of all the expansion plans, he was a little skeptical about launching in India, where the Internet penetration is only at 8 percent. But “the amazing thing is, that still yields an audience of more than 100 million people, which makes it the third-largest Internet country in the world and it’s growing at a rapid pace.”

Along with Internet adoption, he said, e-commerce companies in India, such as Flipkart, are helping to build a broader ecosystem, which includes better shipping systems and expectations around customer service. Both Tiger Global Management and Accel Partners, two of his new partners, have invested in Flipkart, making them ideal partners for the adventure.

J.P. Morgan analyst Mark Moskowitz figures Apple could rake in as much as $6 billion from CDMA iPhone sales through Verizon, and half that through carrier partners overseas, particularly in the Asia-Pacific region.

“We expect the iPhone’s relative growth to moderate over time, but in the next 18-24 months, we see incremental growth opportunities in both Asia- Pacific and the U.S., specifically in CDMA-based networks,” he writes. “Apple just began to penetrate this opportunity with its Verizon iPhone launch in February, and we think that the incremental CDMA market penetration can be a multi-year phenomenon for the company.”

I’d say so, considering there are some 564 million CDMA subscribers worldwide, of which Verizon’s 95 million comprise just 17 percent. So where will Apple bring the CDMA iPhone next? Moskowitz thinks the company will focus its efforts where CDMA adoption rates are highest: China, India, Japan, and South Korea. And, in all likelihood, it’s probably close to hammering at least a few of these deals out.

Apple is widely rumored to be negotiating a CDMA iPhone deal with China Telecom. It’s also said to be in talks with Reliance and rival CDMA carrier Tata Teleservices in India. Assuming Apple finalizes some, if not all, of them in the next year, what kind of sales and revenue can we expect from them? Moskowitz expects Apple to sell 10 million CDMA iPhones through Verizon in calendar 2012 for $6 billion in revenues. Overseas, he expects the company to capture about 10 percent of the CDMA market in 2012, which would generate approximately $3 billion in revenue.

That’s a nice boost to Apple’s bottom line and to the iPhone’s growth trajectory, which may well continue to outpace that of the broader smartphone market–if Moskowitz’s numbers pan out.

[Image credits: iFixit and JP Morgan]

Now, that’s beginning to change.

A host of Indian Internet companies are emerging to offer their take on services that proved big hits in the U.S. and elsewhere. There are firms vying to become India’s version of Amazon.com, Groupon or Expedia, all with the goal of capitalizing on Indians’ growing interest in buying things online.

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Exclusively.In, which launched in June and raised $2.8 million from investors such as Accel Partners, has launched Palaces to Paradise, a companion site to its retail site that will offer discounts on travel packages to Asia.

Travel has been an obvious niche vertical that other flash sales and daily deal sites have readily expanded into.

Gilt Groupe launched Jetsetter in September 2009, and already has two million people signed up to receive its deals by email. About two-thirds of the membership overlaps with the other Gilt sites. Other daily deals sites have expanded into travel, including LivingSocial’s Escapes and Overstock.com.

Just like its apparel site, Exclusively.In is focused on offering travel experiences from Asia. The four travel deals that are live on the site starting today are: A boutique hotel in Udaipur, Rajasthan; a jungle lodge located in Kanha National Park in India; a beachside resort in India; and a villa located in Koh Samui, Thailand.

As an example, the five-bedroom villa in Thailand, which sleeps 10 and includes a full-time Thai chef, normally costs $1,290 a night but has been marked down to $1,095. The deal will be available until May 31.