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Mark Zuckerberg won't say he's sorry, but the 26-year-old CEO and founder of Facebook does promise to change his ways—a little. His nonapology came after weeks of outrage over Facebook's recent changes to its privacy (actually, antiprivacy) policy, and was delivered in the form of an op-ed in The Washington Post. In his essay, Zuckerberg put on his best innocent-little-boy voice and claimed Facebook only changed its policies in order to help people share more information, because "a world that's more open and connected is a better world." In addition to that bit of risible rubbish, Zuckerberg also said Facebook intends to amend its privacy policy to address complaints. I doubt these changes will be substantive, but even if they are, as far as I'm concerned, it's too little too late.

Facebook's current troubles began in April, when it rolled out new rules that push members to share more information about themselves. Facebook also said it would start sharing info with some partners like Yelp, Pandora, and Microsoft. Tech pundits howled. Some vowed to quit Facebook. Government officials in Europe, Canada, and the United States threatened to take action.

Facebook responded by deploying spinmeisters who ludicrously claimed there was nothing wrong with the new policy—Facebook just hadn't explained it well enough. When that didn't wash, Zuckerberg hunkered down with his advisers to figure out how to dial back the changes. (Among his inner circle is Facebook boardmember Donald E. Graham, who is chairman of the Washington Post Company, which is NEWSWEEK's parent corporation.) From this came Zuckerberg's promise to make its privacy controls simpler to use, which will address complaints that Facebook's controls are impossibly complicated—intentionally so, some argue.

So now we're all set then? Well, no. The problem now is that Facebook has shown its hand. Now we know what we're dealing with. If you really expect this company to suddenly become trustworthy, you've lost your mind. Over the past five years Facebook has repeatedly changed its privacy policy, always in one direction, and every time this happens, the same movie plays out.

People complain. Facebook stonewalls, then spins, then pretends to be contrite, then finally walks things back—but only a little. Nobody seems to notice that after the walk-back Facebook is still grabbing more personal info than it was before. When the storm dies down, Zuckerberg strikes again, with new rules that grab yet more personal data. And the kabuki drama of complaint-and-false-contrition gets played out all over again.

The truth is, Zuckerberg needs your data. His business is built upon it. The most important thing to understand about Facebook is that you are not Facebook's customer, you are its inventory. You are the product Facebook is selling. Facebook's real customers are advertisers. You, as a Facebook member, are useful only because you can be packaged up and sold to advertisers. The more information Facebook can get from you, the more you are worth. In response, a FB spokesman told me: "I'm sorry you feel that way."

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I was already fed up with my lousy AT&T service, and was seriously considering switching to the HTC Incredible, an Android-powered phone that runs on the Verizon network. But then, after seeing Google's new mobile-phone software, I've made up my mind.

Goodbye, Apple. I'm ditching my iPhone. Seriously, I'm gone.

I don't even care if Apple does manage to get off the awful AT&T network and strike a deal with Verizon. That may or may not happen, depending on which blog you read on which day.

I used to think that would be enough, that if I could just run my iPhone on Verizon, I'd be happy. Well, no more.

The new version of Android—version 2.2, a.k.a. Froyo—blows the doors off the iPhone OS. It's faster, for one thing. It also will support Flash, something Apple refuses to do, mostly out of spite.

The new Android OS will support tethering, meaning you can use your phone as a portable Wi-Fi hotspot, connecting your computer to the Internet. Apple and AT&T say they're going to offer tethering—someday. It's just not clear when. Which is why, just to be mean, Google showed an Android phone tethered to an Apple iPad at Google's developer conference this week. Big laughs all around.

Froyo also will let you buy songs over the air and download them directly to your phone. It will also stream songs from your music library to your phone. I don't really use my phone as a music player that much, but still, it's impressive that Google has this feature and Apple still doesn't.

I'm assuming that Apple could have done this already, but chose not to. Who knows why? Maybe they want to keep people locked into their old way of doing things. Or maybe because they were a market leader with no real competition and just got lazy.

And, yes, while Apple might one day match what Google just introduced, the point is this: Apple now is chasing Google.

The most telling thing to me was Google's tone toward Apple at its developer's conference. Instead of pretending to still be an Apple ally, Google has basically thrown down the gauntlet and admitted that it's engaged in total war with Apple.

And unlike other Apple rivals, like Adobe, Google execs weren't huffing and puffing and wringing their hands about Apple's bad behavior. No, instead, Google was mocking Apple. Making fun of it. Laughing at it.

The Android OS is already outselling iPhone OS in the United States. Now it's blowing past Apple in terms of the technology it's  delivering.

Yes, Apple still has a larger installed base. I was a little shocked recently when an Apple spokesbot responded to the news of Android's outselling iPhone OS by reciting the old chestnut about Apple's having more phones out there.

I was shocked because it's a familiar line, one that I've heard countless times in my 20-plus years covering technology. But I've only ever heard it from companies that are doomed and in total denial about it.

We've seen this movie before. In the 1980s, Apple jumped out to an early lead in personal computers, but then got selfish. Steve Jobs, a notorious control freak, just could not play well with others.

Along came Microsoft, with Windows, which was a knockoff of Apple's operating system. Microsoft partnered with everyone and today has 90 percent market share, while Apple's share lingers in the single digits.

Today the battlefield is mobile devices, and just as before, Apple jumped out to an early lead. And just as before, Jobs got selfish. He won't support Flash, or any cross-platform tools—because he wants developers locked into his platform, and his App Store, where he collects a 30 percent commission.

He's created his own advertising platform, and stacked the deck in his favor by refusing to share user data with other platforms. On that one he'll take a 40 percent slice, thank you very much.

He's even censoring content, ruling out material that he deems to be offensive. Not just porn, but anything that's racy or suggestive, or that "ridicules public figures."

What makes this even more insulting is that Jobs tries to dress up his selfishness as a kind of altruism. He says it's all about creating a beautiful experience, that while he may be selling you an intentionally crippled device, he's doing it for your own good.

Well, bull. The truth is, this is about Apple wringing every last dime out of its ecosystem and leaving nothing on the table for anyone else.

As sick as I am of my iPhone's dropped calls, I'm even more sick of Apple treating us all like a bunch of idiots, stonewalling and bullying and feeding us ridiculous explanations for the shortcomings of its products—expecting us to believe, basically, that its flaws are not flaws, but strengths.

Steve Jobs has created his own precious little walled garden. He's looking more and more like Howard Hughes, holed up in his penthouse, making sure he doesn't come in contact with any germs.

Now Google is saying, hey, nice garden, have fun sitting in it. By yourself.

As Google exec Vic Gundotra said when explaining why Google entered this market: "If we did not act, we faced a draconian future where one man, one company, one carrier would be our future."

Just this morning, fed up with constant dropped calls on my iPhone, I called Verizon to ask about the HTC Incredible. They told me that phone is back-ordered, and I can expect to wait about 30 days to get one.

I'm not surprised. And frankly, I think it will be worth the wait.

A passage from Sorkin's The Social Network screenplay. Ever since its launch in 2004, Facebook has rolled along like a juggernaut. Users occasionally protest its policies and privacy changes, but the social network shrugs them off and just gets bigger and bigger.

Something different is afoot now. There was no immediate, intense reaction to what CEO Mark Zuckerberg unveiled at the f8 conference on April 21: systems that insinuated Facebook across the entire Internet. The earliest responses, in fact, showed something like awe. "Google had better watch out. There may be a new sheriff in web town," TechCrunch wrote.

But over the next few weeks, sparked by a series of security flaws, serious unrest began to percolate—seemingly from all corners. That includes:

• a letter of concern from four U.S. senators,
• a filing with the Federal Trade Commission by 15 privacy groups,
• grave op-eds from the influential people at TechPresident, Wired, Thomas Baekdal, GigaOM, and elsewhere,
  
• helpful information to make sense of Facebook's evolution, including a timeline from the Electronic Frontier Foundation and a clever infographic from an IBM researcher,
• and the launch of an idealistic NYU startup, Diaspora, to cheers—and a surprising groundswell of donations.

Later today, Facebook is reportedly holding an all-staff meeting to address escalating concerns about the company's approach to privacy. This comes on the heels of a less-than-successful Q&A session between a Facebook VP and readers at nytimes.com, which came off as insincere at best and Orwellian at worst.

If Mark Zuckerberg thinks this is bad, wait till what comes next. On Oct. 1, The Social Network, an Aaron Sorkin–penned movie about the site's controversial founding, hits theaters. A draft screenplay circulating now is a brutal read. Based on Ben Mezrich's 2009 book The Accidental Billionaires, it portrays Zuckerberg as a borderline autistic, entirely ruthless conniver. Nothing sways public opinion like a movie—and this scorcher could counteract the entire body of good press Facebook has received till now.

Sorkin's up-tempo script adds color to what are widely known moments—true, rumored, or somewhere in between—in the Facebook legend. The first is Zuckerberg's creation of Facemash, a Facebook forerunner that let Harvard students rank each other's looks, after he is dumped by a girlfriend; the then sophomore compares Harvard girls to barnyard animals during an drunken all-night coding session. Another scene depicts Zuckerberg and Facebook cofounder Eduardo Saverin hooking up with groupies at a Cambridge bar:

JENNY's got his fly unzipped. EDUARDO looks down at the space between the stalls. He sees a pair of Adidas flip-flops. Then the sound of moaning. Before EDUARDO has time to say anything, JENNY pulls her shirt open, revealing the red bra, and puts her hand down his pants as we CUT TO...

Campus follies aren't what will damage Facebook. It's the much more serious accusations about Zuckerberg's character—namely, that he stole the idea for the site from three Harvard students (twins Cameron and Tyler Winklevoss and Divya Narendra) and later betrayed Saverin out of his ownership stake. Sorkin's draft screenplay leaves no doubt as to who's in the wrong. Much of the movie takes place in a deposition room, with Zuckerberg's undergraduate machinations played out in flashback, and some of the film's final frames inform audiences that the Winklevosses received a $65 million settlement. Napster cofounder and early Facebook president Sean Parker also comes off poorly, as a high-flying but functionally homeless cocaine fiend who plies Zuckerberg with girls and venture capitalists.

October is a long way away, and Facebook will surely respond to its current privacy critics quickly. It had better be a substantial response, not just a smoothing-over of elite bloggers' rumpled feathers. Their objections run deep, and until Zuckerberg truly addresses them, the unparalleled ability of a major Hollywood film to capture public attention will rekindle a PR nightmare of blockbuster proportions.

O. J. Simpson’s low-speed chase, the blackout in the Northeast in 2003, Kanye “I’ma let you finish” West at the MTV Video Music Awards—these are the “common denominators” of our time, to borrow a phrase from NEWSWEEK’s editor in chief, Jon Meacham. They are the water-cooler moments, the events that everyone talks about the next day at work, the connective tissue keeping American culture from liquefying into isolated pools of niche interest.

And increasingly, they happen online. Every time Gmail burps or Facebook hiccups, the Internet bonds together and acts as if mankind has suddenly been united by the discovery of a hostile alien force. And so it was today with The Great Reset, when Twitter reduced everyone’s follower count to zero. It was only a temporary measure to provide a little slack for Twitter’s programmers to fix a bug, publicized by Gizmodo, which allowed any user to force another to follow him or her. But even Twitter must have been surprised by the outpouring of bemused grief that happened when, shortly after 1 p.m. in New York, the service's 75 million users logged in and found that zero people were following them.

David Carr, a media reporter at The New York Times and popular Twitterer, summed up the feeling:

 

All that hard work of effortlessly accumulating random, faceless strangers and porn bots—for naught! Oh, the horrors. There is probably no group more ego- and status-obsessed than journalists, and NEWSWEEK is no exception. In the first few minutes after The Great Reset, at least two-dozen messages flooded a group e-mail list here at NEWSWEEK HQ—a rapidity that came second only to this winter's Snowpocalypse, when intrepid NEWSWEEK journalists sent an avalanche of worried e-mails about the white stuff outside their windows.

Even Justin Bieber, the teeny-bopper celebrity that pretty much owns Twitter, was affected:

He was wrong, of course, and remained a trending topic even as the glitch demolished his follower count. Luckily, the world found encouragement from P. Diddy:
 

 

Needless to say, Diddy took credit once Twitter's programmers finally found a fix. Conan O'Brien, however, found his faith rattled:

 

Conan's comment may have been tongue-in-cheek, but there's a grain of truth to it. Twitter isn't about to take over the stock market (though maybe it should), but, for better or worse, it is now the water cooler where we bond over shared events, from awards shows to natural disasters. And nothing is more disastrous—or at least more talked about—than when the water cooler itself breaks.

Despite our noisy fascination with iPhones and iPads, it turns out the United States is one of the least advanced places in the world when it comes to the way we use mobile devices. That is the conclusion of a new study by Sybase 365, which provides services for mobile messaging and mobile commerce.

In fact, when it comes to using mobile devices for things like text messaging and instant messaging, the survey indicates we’re getting blown away. Only 31.5 percent of people in the United States use a mobile device for text messaging and sending IMs—while in China 90 percent of people surveyed use mobile devices for those things.

“The snapshot view is that you have Asia ahead on almost every metric, and the U.S. kind of catching up,” says Marty Beard, president of Sybase 365, which is based in Dublin, Calif.

For more advanced things like mobile commerce, the U.S. also ranks near the bottom among 16 countries included in the survey, which polled 4,100 people in Argentina, Australia, Canada, China, France, Germany, India, Indonesia, Italy, Malaysia, Mexico, Singapore, South Africa, Spain, and the United Kingdom.

Only 12.9 percent of users in the U.S. said they make use of mobile commerce services. In China the figure was almost four times that amount, at 49.2 percent. Across all of Asia, 34 percent of people surveyed said they use mobile devices for banking, versus only 13 percent in the United States. Asian customers are also more likely to make payments with their mobile phones than are Americans.

“Worldwide, mobile banking and mobile payments are absolutely exploding. They’re the fastest growing part of our business,” Beard says.

Why are we lagging behind? One reason, simply put, is that here in the United States we’re stuck with a legacy infrastructure, and in the developing world they’re starting from scratch. “They didn’t have the broadband infrastructure that we do, and didn’t have the PCs,” Beard says. Ironically, this has enabled them to roll out new systems that leapfrog over what ours can do.

There’s also the issue of habit. People in the United States have grown accustomed to doing banking online via the personal computer. In the developing world people are less likely to have PCs, so they’ve gone straight to the mobile phone as their platform of choice.

Beard expects the United States will catch up over time, as banks adopt the technology needed to deliver mobile commerce services, and people shift from PCs to mobile devices as their primary computer platform. The survey also indicated high interest in mobile commerce services in the United States.

“We expect the United States is going to catch up,” says Diarmuid Mallon, senior product marketing manager at Sybase 365. “When you look at the results what you really see is that the United States represents a huge opportunity. Build it, and people will come.”

For now, alas, we remain in a strange position. We might make the coolest phones in the world, like Apple’s iPhone, but when it comes to using them, we’re the laggards of the world.

Long before Apple even announced its new iPad, media companies were going nuts about the device, for two reasons. First, they believed they would be able to create apps that would be gorgeous and stunning and way better than anything they’ve been able to do on a Web browser. Second, money. As in, media companies figured that with apps, customers would be willing to pay subscription fees, something they have been reluctant if not outright unwilling to do when their news delivered via a browser.

The idea of getting people to pay for news again was especially appealing to old-media companies. Those guys have been online for a decade or so, and most still can’t figure out how to make money over the Internet. In the original version of the magical thinking that surrounded the Web, media companies were led to believe that the Internet was a pot of gold, and that the money they would make via the Web would offset the declines in their print businesses. Instead, their Internet divisions have turned out to be money losers; instead of solving the problem, they are often making it worse.

Ah, but here comes the iPad, and with it a fresh round of magical thinking, with a three-step process that goes like this:

1.    Create an app

2.    Um …

3.    Profits!

And who knows? That may work out. But it's worth noting that some of the savvier denizens of Internet media have not leaped on the Apple iPad app bandwagon. Case in point—Nick Denton, publisher of Gawker Media, who says he won’t rule out the idea of creating apps for Apple’s environment, but for now he will happily stick to delivering news via the plain old browser, thank you very much.

“Every single time something new comes out and people wonder what’s the killer app, the answer is the same. It’s the Web every time.The boring old Web,” Denton says, or rather writes, since we were doing the interview via IM, Denton’s preferred mode of communication.

Denton has looked at some of the news-media apps and says he’s unimpressed. “Wasn’t it obvious when one played with the WSJ and Time apps that the apps were a massive step back?” he says. “I loved the look of the Time app, but then I tried to select and copy a paragraph to send to a friend. I did the action automatically, without even thinking.”

And guess what? You can’t do that. “You can’t e-mail. You can’t bookmark. It made me realize how much the experience of reading has changed. Nobody really just reads anymore. They copy text, send links, tweet,” Denton says.

There’s another issue for media companies to consider,which is, do you really dare to get into bed with Apple, and put yourself at the mercy of Steve Jobs?

Over and over, Apple has run roughshod over its partners. This is Apple’s one great weakness—they simply do not know how to play well with others.

Recently Apple has been bullying developers, issuing new rules telling them what tools they can and cannot use when they make apps. Apple also hopes to give itself a leg up in the advertising space by prohibiting apps from sharing usage data with third-party ad networks. Apple’s new policies reportedly now have drawn the attention of federal antitrust regulators.

More relevant to media companies is the way Apple has been policing content, blocking apps that ridicule public figures or contain material that Apple considers objectionable. Why would a media organization align itself with a distributor that insists on having a say about the material that is being published?

The reason is that Apple has rounded up a huge audience, having sold close to 80 million devices that run the iPhone OS. We’ve all heard about the little companies that are making lots of money selling iPhone apps.

The hope among media companies seems to be that it’s worth putting up with Apple’s control-freakery for a chance to get in on the gold rush. Plus, don’t forget, the media companies are struggling, and they can’t figure out the Internet, and desperate times call for desperate measures, and so forth.

In other words, from Apple’s perspective, they’re perfect.

Just remember—the music industry at one time made a similar Faustian bargain with Jobs & Co., betting that the pros would outweigh the cons. They didn’t come away too thrilled.

When it comes to the holy call that is the priesthood, it turns out that it can come in many forms, including via Facebook. The Catholic Church in France has turned to the social-networking site as part of its campaign to recruit young priests, with the hope that they can reverse years of dwindling ordainment. (Think 24,000 priests in France today compared with 42,000 in 1975.)

The church's Facebook page, which was set up on April 21 in French, has garnered more than 1,400 fans so far. Most of the posts center on reasons to consider a career of the cloth, a difficult pitch to make given the recent child-abuse scandals. According to the Associated Press, the campaign was launched April 20 and also included “postcards depicting a Catholic priest's outfit with a button reading 'Jesus is my Boss,' " pinned to the lapel. These have been distributed at restaurants, bars, and movie theaters across France.

The French are not alone in the push to use social networks and other online communities as a way of attracting a new generation of Catholic leaders. The United States Conference of Catholic Bishops launched ForYourVocation along with a Facebook page two weeks ago. The site provides information for men and women who are interested in serving the church. “The church knows that we have to use the means available to reach out to young people, [and] social sites let us do that in a way they understand,” says Father David Toups, associate director of Committee for Clergy, Consecrated Life, and Vocations at USCCB.

Even Pope Benedict XVI has expressed that the church should embrace the new digital era in his message for the upcoming World Communications Day, saying, “Using new communication technologies, priests can introduce people to the life of the Church and help our contemporaries to discover the face of Christ.” As part of that effort, the pope is even podcasting prayers in Portuguese, leading up to his visit to Portugal later this month.

So what about his recent warning at a conference on the ills and shortcomings of the Internet? Apparently, His Holiness is actually a fan of the Web so long as the Web doesn’t become an all-consuming situation for any given person. “Certainly, wherever people are, the church needs to be there, and that includes the Internet, but there also has to be a balance," Toups tells me. “As Thomas Aquinas would say, ‘Moderation in all things.’ ”

Apple’s next “magical” and “revolutionary” product? An iLegalDefenseTeam. According to the New York Post, the Department of Justice and Federal Trade Commission are negotiating over which of the two agencies will launch an antitrust inquiry against the company, now the third-largest in America (by market capitalization). A decision could be made within days, but at this point, it’s just a rumor—neither the government nor Apple is confirming or denying anything. And even if true, an inquiry won’t necessarily result in legal action—it's just a preliminary investigation to determine whether any laws have been broken.

Still, it’s bad news for Apple. The reputation of the tight-lipped Cupertino firm has done a 180 in the last couple of years, going from snazzy, innovative upstart to tech bully. Its public badmouthing of Adobe and its Gestapo-like tactics against the finders of a next-generation iPhone are only the latest black marks on the company’s record. App developers, music executives, Google engineers, and even a Pulitzer-winning cartoonist have all had opportunities to grumble about Apple’s hardline policies at one point or another.  

The issue under consideration by government lawyers is a fairly arcane and technical one: does Apple have the right to dictate how outside developers write programs for the App Store? Apple thinks so. A new rule announced in early April mandated that “applications must be originally written” in some variation of the C programming language or JavaScript. That sounds innocuous enough, but in practice this rule kills off a number of “cross-platform compilers,” which turn one type of code into another. A lot of programmers like cross-platform compilers because it means they can write a program once, in a language they’re familiar with, and then run it on iPhones, Androids, and Palm Pres. Indeed, at one point the newest version of Adobe's Creative Suite prominently featured a cross-platform compiler that translates Flash scripts into iPhone apps. (It was eventually killed due to Apple's new restrictions.)

Apple says that apps built in this way are terrible. As Steve Jobs puts it, cross-platform compilers “produce sub-standard apps and hinder the progress of the platform.” Perhaps. But angry developers speculate that the new rule is less about ensuring quality and more about demolishing competition. With more than 85 million iPhones, iPod Touches, and iPads in use, Apple now has a huge base of locked-in consumers. Android, Palm, and other smart-phone makers have far, far fewer, and BlackBerry, though it may have a lot of users, doesn't take the app market very seriously. If a programmer has limited resources and can choose only one platform, the choice is simple—going with Apple provides access to way more credit cards. But if a decent cross-platform compiler takes hold, much of that locked-in advantage disappears. Apple wants to "tie developers down to their platform, and restrict their options to make it difficult for developers to target other platforms," says an Adobe product manager.

It's all very reminiscent of the government's successful antitrust suit against Microsoft in the late 1990s. Back then, the government argued that Microsoft's huge user base was a barrier to potential competitors; moreover, the company used its monopoly power to squash competitors, like Netscape. Now Apple is surely hoping that government lawyers don't read too much into the parallels between Microsoft v. Netscape and Apple v. Adobe. Maybe a few free iPads will help sway the decision.

Is $1.2 billion a lot or a little for Hewlett-Packard to pay for Palm? 

With the acquisition, HP gains an instant foothold in the mobile Internet market—but it ain't much of one. Palm's webOS devices aren't exactly where it's at in the mobile space. The Pre and Pixi have been well reviewed, but they've failed to catch on in the marketplace. They haven't captured consumers' hearts like the iPhone; they haven't become an indispensable business tool like the BlackBerry; and they haven't gotten anywhere in the great big middle of the market, like Android handsets have. The Pre simply hasn't been the resurrection Palm hoped for. Only 408,000 of the company's phones were sold last quarter.

That's poor performance, until it's compared with HP's position, which was . . . none at all. The company that has pioneered so much technology is an utter nonplayer in mobile. Given that pretty much everyone agrees that mobile Internet will be bigger than the desktop Internet soon, even a small stake in the game could become a big one in the years to come.

There are two major ways in which the HP-Palm deal can work out. First, HP can reinvigorate Palm's "mindshare" among those making apps for handheld devices. As things stand today, Palm is easy to laugh off. While Apple can boast that its app store has 185,000 offerings, the Palm webOS storefront carries a pathetic 1,500 or so. What Google is doing with the Android app store may be instructive to HP. As David Pogue of The New York Times wrote last week, Google employees are reaching out to individual app makers to encourage them to write software for the platform, a tactic that is helping Android begin to close the gap on Apple. Palm can't tell developers how great it is to build for webOS with a straight face—there just aren't enough customers, and to say otherwise would be a lie. HP, though, can plausibly make the case that it will invest its considerable scale and resources into getting webOS devices into consumers' hands.

Second, HP can recognize that there is more to mobile computing than phones—and use webOS as the platform underpinning an entire range of mobile devices, from media players to tablets. Early reviews of the HP Slate, a purported iPad killer, have been disastrous, and now HP is saying that it doesn't know when the Slate will come out at all. The major problem appears to be that the gadget runs a balky touchscreen version of Windows 7, instead of something designed from the ground up for handheld operation. Well, HP is now the sudden owner of a bona fide mobile operating system. It's impossible to say if $1.2 billion is an appropriate price for a single product—but when you factor in the engineers and intellectual property behind it, the figure begins to make sense, especially if HP can persuade Palm CEO and former Apple exec Jon Rubinstein to stick around. If the Palm purchase kick-starts HP's entry into the mobile world, $1.2 billion makes sense. Just look at the strong early sales of the Apple iPad to see how eager consumers are for new kinds of products in the category. HP paid a 23 percent premium over Palm's stock price, but in after-hours trading, shares of Palm rose even higher. A billion dollars for a failed phone company with a great history struck some as too high, some as a "song," but in the final calculation it may prove just right.

iFakes? One of several Apple knockoffs coming out of China. (aliexpress.com)

Call it another shining example of how China doesn't need the United States to get what it wants when it wants. According to a Reuters story, Chinese demand for the Apple iPad—whose international launch was delayed—is so big that knockoffs have already made it to some of the dark-lit back rooms where vendors sell all sorts of bootleg digital devices. 

The new fake iPad is apparently a little larger and heavier than the actual iPad, but one of the vendors the Reuters reporter spoke to said it's only the first generation, implying that future versions will address these issues. The price for the counterfeit is slightly cheaper, at $410, compared with the real thing, which ranges from $499 to $699. (There's also another version available on Aliexpress.com--an eBay like site--for about $200.) 

China has long had a taste for faux things, pirating everything from DVDs to Nike shoes, and a lot of it eventually makes its way here. The U.S. Customs and Border Protection report for fiscal 2009 states that 79 percent of counterfeit and pirated goods the agency seized came from China. The Chinese government has made some attempts to deal with the problem, but little has deterred the now multibillion-dollar industry.

Jennifer McCreight did not mean to make the Internet freak out over boobs and earthquakes. In fact, what we now know as the Boobquake movement started out as a boob joke. Last week, amid college homework, McCreight came across a comment by Iranian cleric Hojatoleslam Kazem Sedighi, who was quoted as saying, “Many women who do not dress modestly...lead young men astray, corrupt their chastity, and spread adultery in society, which increases earthquakes." That’s right, bad girls literally make tectonic plates shift in discomfort, causing the earth to quake. (And here I thought earth-shattering was supposed to be a good thing.) 

So McCreight decided to put the man’s theory to the test. She offered up a modest proposal, inviting women on Facebook and Twitter to wear their most revealing tops this Monday to see what kind of seismic impact they might have on the world. Well, the results are in and, according to McCreight’s blog, there were only 47 earthquakes on Monday, not an abnormal number based on U.S. Geological Survey figures. In other words, bosoms have no supernatural powers to move the planet. Sorry, ladies.

But there were at least some aftershocks. Facebook, Twitter, and YouTube were showered with thousands of cleavage shots from across America and the world yesterday. Websites like zazzle.com created tank tops with logos like "Did the earth move for you?" and "I survived Boobquake." And if that weren’t enough, nobody can agree on whether this is a giant virtual leap forward for feminism or just an acceptable version of Girls Gone Wild.

Russell Blackford at the Institute for Ethics and Emerging Technologies is pro-show writing, “Strut your stuff, and don’t let anyone make you feel ashamed about so-called 'immodesty'. Feel free to scorn the moralism of Islamic clerics and anyone else who tries to put you down.”  While Rutgers academic and feminist Golbarg Bashi called the idea degrading and started a new movement. “Let’s create a 'Brainquake' and show off our résumés, CVs, honors, prizes, accomplishments (photo evidence) because the Hojatoleslam and the Islamic Republic of Iran are afraid of women’s abilities to push for change,” she wrote.

Regardless of what side you’re on, both make good points. It is, after all, a ridiculous notion to suggest body parts are basically evil. But it’s also kind of awkward to think women are sticking it to the cleric by showing off their stuff. He might not like it, but the rest of the world isn't as easily offended by shapely body parts. We are talking about the Internet here. No two pairs of eyes view the same image—even with context—the same way. That's how a boob joke becomes a movement, and that same movement becomes an accidental poster child for feminism lite, all in the span of seven days. 

Mark Zuckerberg must read NEWSWEEK. For months now, Techtonic Shifts has implored him to open up the social graph—the Facebook data that describe our friendships, tastes, and more—and share it with the world. Back in February, we wrote, "If competition breeds innovation, closed systems kill it . . . Today, there's no war over who can better mine the social graph. That's because Facebook holds the only key, and for now, we're all locked inside."

Facebook still holds the key, but yesterday it swung the door wide open. At the annual f8 conference for outside developers, CEO Zuckerberg took the stage to announce some game-changing new technologies. The first is the Web-wide "like" button. Now, when someone visits any one of hundreds of sites ranging from CNN to IMDb, he can "like" a piece of content there. That connection is automatically, intelligently integrated into your Facebook profile—if you like Eternal Sunshine of the Spotless Mind, Facebook understands that that's a movie, and automatically adds it to your list of favorite films. This is Facebook-as-magpie, a crowded nest to house every possible scrap of social information about its users, even if it's coming from elsewhere on the Web.

The second and more important technology is the "open graph." For the first time, outside developers can get a good look at the Facebook social graph, and use it on their own sites. In practice, that means when you go to CNN.com, CNN can show you a list of articles that have been "liked" by your friends—even if you've never been to CNN.com before, let alone created an account and signed in there.

This is the most ambitious thing to happen on the Web in a long, long time. The coverage has been breathless. A TechCrunch post carried the headline "I Think Facebook Just Seized Control of the Internet." Slate's technology writer, Farhad Manjoo, declared that "Facebook is basically going to be the Web."

The implications are enormous, and Twitter, for one, should be very, very scared. During his keynote, Zuckerberg seemed to take a dismissive swipe at the micromessaging service and its ceaseless "stream" of tweets:

The stream is ephemeral. You post something to the stream, and it's there for a few hours, and some people will see it, and then it mostly floats away. And the services that consume the stream, they don't actually form a connection between you and that restaurant, they don't actually understand the semantic relationship that exists between you and what you're connecting to.
Facebook is now going to create and store that "semantic relationship," which is both great and terrifying. Computer scientists have long envisioned a Web 3.0, a smarter Internet that understands the difference between objects, people, places, animals, etc. In other words, computers and servers should know that Eternal Sunshine of the Spotless Mind is an object, and in particular it's a film, and in particular a film by Michel Gondry, who is a person. Right now computers see words like "Michel Gondry" only as dumb, meaningless text. Facebook wants to change that—which is great. But it also plans to own that information—which is scary. As Web guru Dave Winer puts it, "Facebook is to be the identity system for the web. A company? That just can't work . . . Even Bill Gates didn't have the audacity to propose that!" Gates may not have it, but Zuckerberg certainly does.

Hot or not? The phone Gizmodo claims is an Apple prototype.  In the world of tech-gadget journalism, this score represents the Holy Grail—a next-generation Apple iPhone discovered in a bar, presumably left there by a careless employee. The photos of the phone are splattered all over the home page of tech-gadget blog Gizmodo today. If they’re real, the folks at Apple, a place known for its crazy secrecy and security measures, must be freaking out.

"This is our biggest Apple week ever," says Brian Lam, editor of Gizmodo. "This is the best. It’s just so great."

Traffic to the site was so heavy that Gizmodo had to take down its comments system. The post, they said, was "setting our servers on fire."

Apple, for its part, did not respond immediately to NEWSWEEK's request for comment.

Lam and his colleagues say they believe the phone is real—not a dummy or an imitation. They say Apple is expected to roll out the next iPhone in June, which would explain why prototypes would be floating around Silicon Valley.

The official version of the story goes like this: Gizmodo was contacted by a person who said he’d found the phone at a bar in Redwood City, Calif., about 20 miles from Apple headquarters in Cupertino.

The finder claimed the phone was inside a regular box for an iPhone 3GS, and was disguised in a case that made it look like a 3GS model. But inside that case was a new model—slimmer than the current iPhone model, with a sleek new design and an extra camera, one that faces you so you can use it for videoconferencing.

Gizmodo got hold of the phone, took it apart, and found it was loaded with components marked "Apple." The phone won’t boot up, but the guy who found it claimed that when he first turned it on it was running the next version of Apple’s mobile operating system—which then was remotely disabled, presumably by Apple. The new phone is slightly heavier (3 grams more) than the current 3GS model, and appears to have a better battery than the current version.

The story first broke on Gizmodo’s leading rival, a blog called Engadget, which posted photos of the device over the weekend and claimed it had been found in a bar in San Jose. John Gruber, a blogger who appears to have sources inside Apple, on Saturday suggested the whole thing was a hoax.

But on Sunday, Gruber wrote that he’d "called around," and "I now believe this is an actual photo from Apple—a unit Apple is very interested in getting back."

This, it seems to me, was Apple’s way of confirming the story. Apple doesn’t communicate directly with the outside world. But they do talk to friendly journalists, and use those people to leak their side of a story. In the world of Apple journalists, Gruber is as friendly as they get.

On Monday, Gizmodo upped the ante, claiming it not only had photos—it had obtained the device itself. Gruber, a devoted Apple fanboy, then blogged that (a) Gizmodo had paid for the device; and that (b) "it is my understanding that Apple considers this unit stolen, not lost."

In other words: You bought stolen goods, and you’re going to be in a very great deal of trouble.

Lam says Apple hasn’t contacted Gizmodo to demand the phone be returned, but as he sees it, the company is in a bit of a pickle. If Apple does demand the phone back, it will basically be admitting that the device is genuine. But Apple likes to keep everything a secret until the last possible minute, to build suspense. Admitting that Gizmodo is right would just let the air out of the balloon. And making a big legal stink will only draw more attention to what Gizmodo is reporting. "If they contact us, we’ll just do another post," Lam says.

As for whoever lost the phone, it’s hard to imagine what kind of recrimination that person will face from Apple. Last summer an engineer at Foxconn, the Chinese company that makes iPhones, committed suicide after losing a prototype phone and allegedly being badgered and harassed by Foxconn security goons. Bottom line: If this all turns out to be true, somewhere in Cupertino there is someone enduring such abuse that Guantánamo Bay would seem like a vacation.

Ah, the folly of youth. According to a new survey that looks at young adults and their understanding of Internet security, an overwhelming majority of people between 18 and 27 are aware of the dangers of not protecting data but don't do much to deal with it. At least 73 percent say they're worried about online fraud or identity theft, but 71 percent of those surveyed say they're not especially careful about policing their financial data, social networking accounts, and other passwords. "The irony is that the most tech-savvy generation is the one playing Russian roulette—the one that knows the risk, but still does the risky behavior," says Sam Curry, chief technology officer at RSA, an IT security firm that sponsored the survey.

The numbers aren't a total surprise. A study last year found that a quarter of Americans teenagers have "sexted," either receiving or sending text messages of a sexual character—not exactly model behavior for an Internet user. And NEWSWEEK's Nick Summers wrote last fall about his own bad password habits.

But such dirty little habits send security researcher into conniptions because it's hard to cover up personal information once it's on the Internet. "If everything I did from 16 on was cataloged, we probably wouldn't be having this conversation right now," jokes Robert Siciliano, a security consultant who works with RSA. Where the major risk for most internet users involves phishing schemes and other scams, young adults face a threat to their employability. Companies increasingly check out applicants' online profiles, and stories abound of people whose employers have withdrawn offers because of something a potential employee has posted online. Based on the survey results, it's not enough to freak any of these young guns out.

A few of the survey's more interesting tidbits:

• Nine out of 10 respondents say they're linked to people they either don't know or don't know well on social-networking sites like Facebook and LinkedIn.
• Three quarters fear identity theft, but 57 percent can't be bothered to use services to prevent, mostly because of the cost. And 64 percent say they've already had their identity stolen, been hacked, or lost credit cards or sensitive data.
• Two out of three have put content online that is vulgar or sexual—although just 4 percent admit to posting photo or video—or discussed drugs or alcohol. One third are worried they might have trouble finding a job because of it.
• 56 percent don't bother logging out of accounts on their computers, saying it's just too much hassle to sign back in.

The survey was based on interviews with 1,000 subjects and conducted by TRU Research. Results will be available Tuesday on RSA's site.

Update: Here's news about an interesting study released last week by the University of California at Berkeley and the University of Pennsylvania. The study's finding match up with the concerns cited in the RSA survey: researchers found that young respondents cared just as much as older ones about privacy—and believed they had protections they actually don't.

How does a tweet die? Quickly and quietly. As any Twitter user can attest, the rolling, unstoppable "tweet stream" has a short shelf life; any message older than a few hours has reached its expiration date. That all changed yesterday, when the Library of Congress announced (through its Twitter account, of course) that it would archive every public tweet ever made. That’s right—every tweet, from the mind-numbing review of your sister-in-law’s breakfast burrito to John Larroquette's 140-character tone poems, will now be preserved for posterity.

This is good news for pretty much everyone. It's a win for Twitter, which gains legitimacy at the expense of its rivals. (Don't expect the Library of Congress to target Foursquare checkins any time soon.) It's a PR coup for the Library as well, showing the world that a hidebound government bureaucracy can adapt to the digital era. And, most of all, it's a boon for researchers and historians. Much of Twitter is drivel, but a smart data miner can glean truth from this mass of information, which one Twitter executive characterizes as the "the pulse of the planet." Individual tweets may prove worthy of historians' attention as well. The Library of Congress points out that Barack Obama’s tweet about winning the 2008 election is worth preservation. And if, say, one of today’s young Twitterers becomes president in 2028, historians will be glad to have a Twitter timeline of his or her early years. (As will muckraking journalists.)

In fact, the only group that might be a little discomfited by this move—other than Tea Partiers angry at the fact that the government is doing anything at all—are the Twitterers themselves. We’re quickly approaching a world in which most of our thoughts, writings, pictures, and ideas are stored permanently in a digital warehouse somewhere. Most of us recognize this at an intellectual level, but we don’t always act accordingly—society is still in an in-between zone. Already there are a smattering of cases where a dashed-off tweet caused controversy—see, for instance, the ABC News reporter who tweeted about President Obama calling Kanye West a “jackass.” The presidential candidates of 2028 might not want to give the press access to the digital artifacts of their young selves. But increasingly, they don’t have a choice in the matter.  

The 30-second spot didn't always exist. Someone had to invent it. Same goes for the full-page magazine ad, the couple-of-minutes-long movie trailer, and, much more recently, the Google search ad. For an advertising medium to matter, someone has to first come up with a killer format.

Last week in Cupertino, Calif., Apple CEO Steve Jobs unveiled iAd, the equivalent of the 30-second spot for mobile devices. At the time, the announcement was drowned out by fuss over other new features for iPhone OS devices, namely multitasking, but in time this will prove to be the day's big news. Whether you heard details of the iAd platform or not, you really need to see video of it in action:

Click ahead to about the 6:00 mark to see Jobs cue up a Toy Story 3 demo. The ad takes over the screen, and can contain any kind of media—photos, audio, video. So far, nothing new. But these ads can also contain intuitive touch- and tilt-sensitive games. Maps of theaters, zoomed in to your location. Apps within the app. The ability to make purchases within the ad itself, using the credit-card information Apple already has on file. "Have you ever seen a mobile ad like this?" Jobs asked the audience. "Anything even close?"

Some tech pundits were less than enamored. Slate's normally genial Farhad Manjoo penned a sarcastic screed. NEWSWEEK's Dan Lyons thought Apple's creep into yet another big-money industry was like Tony Soprano taking over Disney World.

Yes, yes, it is lamentable that we are inundated with advertising from the moment the radio wakes us up to the time we fall asleep watching Hulu. But c'mon: advertising is a necessary evil. Ads are what will keep many iPhone and iPad apps free, and iAd appears to be an engrossing, elegant way to do it. Some advertising is better than others—people watch the Super Bowl for the commercials, and movie trailers are often better than the films they promote. The Toy Story 3, Nike, and Bed Bath & Beyond ads that Jobs demo'd in Cupertino belong in this superior category. Even though they were simple efforts, dummied up in a limited amount of time, they're engaging—you actually want to interact with them. Compare that with the sorry state of Web advertising. Assuming you don't have ad-blocking software installed, when was the last time you gave more than a glance to a display ad on a Web page? Have you ever felt anything other than exasperation as an "interstitial" prevented you from accessing a news article online? Clearly, there will be a great many annoying iAd ads. (That's going to get tiring to say.) But in a way that the Web has never delivered on, advertising on the iPhone and iPad has the potential to be a fun and engrossing experience.

Not to pick on a fellow magazine, but GQ's iPad app demonstrates why the iAd platform is necessary. The GQ app looks gorgeous, but it's largely just a re-creation of print pages in digital form. Ads are shown exactly as they appear in the magazine. On some of them, a drop-down bar allows you to click over to the advertiser's Web site—not exactly mind-bending functionality. Ads this rudimentary are not going to be what makes magazines money in the new medium. The most obvious missed opportunity is a Gap spread, a static image. Gap has its own interactive iPad app! It's silly that Gap stuff would be vividly interactive on one part of your iPad but dead to the touch on another. IAd bridges this divide.

This is meant to be constructive criticism. GQ is to be applauded for having such an early, promising iPad app, and as soon as iAd goes live, it'll make a lot of money. A part of the media's fascination with the iPad is that this lets us put the horses back in the barn a bit: it lets us make money while producing content in digital form. The iPad won't save publishing in the way some hoped. But iAd can be the foundation of a paid new world.

For much of the last two years, Silicon Valley’s favorite parlor game has been guessing how Twitter would eventually make money. The much-hyped company is now valued at more than $1 billion, yet for its first three years of existence it had no meaningful revenues. At a conference last November, Twitter’s chief operating officer, Dick Costolo, hinted that a business model was in the works, and that it would wow the tech punditry. “It will be fascinating and completely nontraditional,” he told the audience. “It’s going to be really cool.”

Yesterday Twitter unveiled its fascinating and nontraditional business plan, and it is … drumroll please … search advertising. Upon this announcement, a heavy sigh emanated from the Internet. In Silicon Valley, where tradition falls under the boot heels of revolutionaries every five years or so, it’s hard to think of something more traditional than search advertising, which Google perfected nearly a decade ago.

The failure here is not inherent to the advertising model itself. Many of the third-party applications built on top of Twitter already feature ads, and Twitter arguably should have developed its own ad platform long ago. But yesterday’s announcement seems to hint at a failure of ambition. The company’s executives once thought Twitter would become a kind of global “nervous system.” It seems a waste to help give voice to the collective consciousness of the world, and then offer it a half-price Frappuccino from Starbucks.

That’s especially true because there are far more captivating—and potentially lucrative—alternatives right in front of Twitter's eyes. Last week a research paper by two Hewlett-Packard computer scientists debuted with a fascinating, nontraditional headline: “Predicting the Future With Social Media.” In it, authors Sitaram Asur and Bernardo Huberman reveal how they successfully used tweets to predict the box-office take of new movies. Their model estimated the new Amanda Seyfried movie Dear John would garner $30.71 million on opening weekend; it did $30.46 million. Asur and Huberman thought The Crazies would reap $16.8 million; it took in $16.07 million. Understandably, the researchers have been receiving a lot of calls from studio marketers and movie producers. Meanwhile, there is a “serious, ongoing discussion” at HP about how to make money off this idea, says Huberman.

It's smart for HP to have that conversation—it's just a shame that Twitter isn't having it too. (At least not publicly.) Now that they have a mainline into the pulse of the planet, it shouldn't require an overzealous imagination to find lucrative ways to mine it. Predict sales for a new gadget, voter turnout in an election, the impact of an ad campaign—there’s no shortage of opportunities. And Twitter has privileged access to all the tweets flowing through its system. It could create analytics software or even an in-house consultancy to spin social-media magic for well-heeled corporate and financial clients. As Huberman’s phone can attest, companies are interested in these results, and willing to pay for them. And if Twitter doesn't realize that potential on its own, someone else is going to do it for them.

According to the Daily Mail newspaper, the British intelligence agency MI5 has rolled out plans to lay off workers (including spies) who do not know how to use social-networking tools like Facebook and Twitter. 

The cuts were announced by the organization’s director-general, Jonathan Evans, who told Parliament's Intelligence and Security Committee last month that some of the older secret agents possessed computer skills that were not up to snuff in the war against cyberterror. The belief is that part of fighting counterterrorism involves dealing with cyberthreats. That includes extremists who turn to social-networking sites to recruit followers and hold meetings. So the need for agents who understand the Internet’s social landscape is becoming more and more crucial.

To be fair, this doesn't appear to be about a handful of agents afraid of technology. To infiltrate private terrorist forums and similar groups requires more than a basic understanding of social-networking tools. So even if a guy knows how to create an account and friend someone, it won't be enough. What the agency likely needs are people who are masters of the process and the etiquette and who know their way around even the shadiest corners of a given network. To get there, MI5 plans to fill the void by hiring younger, more tech-savvy recruits in the coming months.

     Twitter makes its long-awaited debut in advertising today, with “Promoted Tweets” beginning to appear in search results for certain keywords. Early reactions have been positive, as the microblogging service seems to found a palatable balance between making these paid messages noticeable but not obtrusive, relevant but not spam. The program is launching with major companies like Starbucks, Best Buy, Sony Pictures, and Virgin America. But Twitter may soon realize that there's another extremely lucrative pool of advertisers hiding in plain sight: you.

Promoted Tweets launched because Twitter-friendly companies are worried that their updates are getting lost almost as soon as they're posted, amid the site's 50 million, and counting, tweets per day. But average users care about getting their "message" out too. While Starbucks may pay $1 million to have a "Free Frappucinos today!" tweet promoted to everyone who searches for "coffee," there may also be 1 million Twitterers willing to pay $1 each to have their own tweets promoted to their followers.

Many—most—tweets are fleeting, but some cross a threshold of importance. A grandmother linking to a new album of baby pictures on Flickr; a garage band pushing details of a Friday-night gig; an author who wants to promote an appearance on a talk show—these are tweets that you don't want overlooked. Nobody would ever consider mounting an advertising campaign for these things. But if Twitter offers an extremely low-cost way to make a tweet just slightly more visible in the stream, it can both make a lot of money and offer an extremely valuable service to its members.

This is stuff you can expect to see Twitter's kinda-rival, Tumblr, experiment with soon as well: for a dollar, do you want to make this post "sticky" and stay near the top of your followers' feeds? For $2, do you want to display it for your followers' followers, too? For the price of a candy bar, your words don't get lost in the din.

By now, Internet users are comfortable with making payments online. Apple's iTunes paved some of the early way in persuading people to pay $1 for music they had been getting for free. Micropayments have become wildly popular in games like Farmville and Mafia Wars. And virtual gifts have been especially lucrative for Facebook, which may bring in $1 billion in revenue this year. Twitter can become a player in this multibillion-dollar industry overnight.

And again, this is all in addition to the big-dollar deals the site will make with blue-chip advertisers like Starbucks and Best Buy. Twitter has long been the butt of jokes for having no discernible way to make money. (Stephen Colbert: "I assume that 'Biz' in 'Biz Stone' does not stand for 'business model.' ") But with cautious, well-received first steps like this, the service could become a powerhouse.

Just because something isn't broken, doesn't mean it can't be, right? Hey, the idea isn't exactly an old adage, but software firm Intego thinks it might be a moneymaking move. The company, which only produces security products for Macs, is offering VirusBarrier X6 10.6.5 to keep your iPad free of malware.

The software is really an updated version of the anti-malware tool they designed for Mac computers and iPhones. It runs on a user's main computer and scans the iPad for malicious files whenever a person plugs it in. The software won't load on the iPad because Apple doesn't currently allow multitasking, making it difficult for stuff like antivirus software to run in the background. In other words, this is not what you might call a shroud of protection.

Theoretically, Apple deals with possible virus vulnerabilities by only running Apple-approved apps on its systems. So then why bother developing an antivirus software for this device? Intego spokesman Peter James tells me that they are essentially creating for the future, pointing out that among the issues that will make a market for this software is jailbreaking.

According to Pinch Media, less than 10 percent of iPhone and iPod Touch devices have been jailbroken to date. Jailbreaking is basically hacking your device so that you can get around controls set by Apple. On the one hand, you'll be able to download just about any software you like. But doing so has plenty of drawbacks, including voiding your warranty and making your device more susceptible to viruses.

Not that this is stopping anybody. Macnn.com reported earlier this week that there is already at least one way to crack the iPad, and the download to do it is forthcoming. So maybe, just maybe, there is a market for a problem that doesn't yet exist.