Spy scandal weighs on U.S. tech firms in China, tech giants take hit

[enhanced_deficit]

http://www.reuters.com/article/2013/11/14/us-china-cisco-idUSBRE9AD0J420131114

Spy scandal weighs on U.S. tech firms in China, Cisco takes hit (http://www.reuters.com/article/2013/11/14/us-china-cisco-idUSBRE9AD0J420131114)

By Matthew Miller
SINGAPORE Thu Nov 14, 2013 6:22am EST

(Reuters) - U.S. technology companies including Cisco Systems Inc and IBM Corp are facing unprecedented difficulties selling their goods and services in China, as fallout from the U.S. spying scandal starts to take a toll.
Cisco said on Wednesday that its revenue would drop 10 percent this quarter, and continue to contract until the middle of 2014, in part due to a backlash in China against revelations about U.S. government surveillance programs worldwide.

"The U.S. government isn't doing any favors for Cisco," said Evercore Partners analyst Mark McKechnie, after the company's shares fell 10 percent in late trade.
In June, former National Security Agency contractor Edward Snowden revealed the spy agency had hacked network backbones around the world to gain access to sensitive information.
The leaks provoked a storm in the Chinese media and added urgency to Beijing's efforts to use its market power to create indigenous software and hardware capabilities, analysts and businessmen say.
"This is all about China using its own technology, and China building leading technology companies," said James McGregor, chairman for Greater China at consultancy APCO Worldwide.
In a call with analysts, Cisco Chairman John Chambers said Cisco "and our peers" were facing "challenging political dynamics" in China.
One of those peers, IBM, reported in October a 22 percent drop in China revenue, leading to a decline of 4 percent in third-quarter profit for the world's biggest technology services company.

IBM Chief Financial Officer Mark Loughridge attributed the company's problems to the "process surrounding China's development of a broad-based economic reform plan", which caused state-owned enterprises and governments to delay purchasing.

[Brian4Liberty]

I wonder how much of the purchases of Cisco equipment was by the Chinese government, who thought that only they would have back-door access to everything?

[tangent4ronpaul]

Cisco just recently issues a security patch for some of their routers.

The problem with routers is that most people just buy one and never turn them off, so they never get patched.

-t

[FindLiberty]

I'm confused by all this 'cause I thought they only purchased a few samples of this equipment so they could rev-engineer it and then build clones at the same factory on the not so secret night shift??? Oh wait, I get it! They cloned all the firmware back doors too.

lol "Oh Poncho... Oh, Seeeszgo!" [Both tilt heads together and hold grins for ~4 seconds... then fade to black.] The Cisco Kid starred Duncan Renaldo and Leo Carril back in the 1950's.

+++

BTW, the key logging crap hidden on my PC is still acting up, though the non-functioning return key

is

now

working

fine on RPF. THANKS nsa!

But now, Ctrl-v is non-functional and every other word has a character or two missing as I type (backspace, fix it), etc....

As usual, I've left my PC on and all the (Win7pro64IE-11) back doors are open. Please fix this ASAP!!!

[enhanced_deficit]

https://corporate.target.com/about/payment-card-issue


Target data breach affects at least 70 million customers, online shoppers


Target Corporation said the massive payment card data breach that occurred during the first three weeks of the holiday shopping season affected 70 million customers, 30 million more than its previous estimate.
Staff and wire report 7:27 p.m. CST, January 10, 2014

The data breach at Target Corp over the holiday shopping season was far bigger than initially thought, the company said today, as state prosecutors announced a nationwide probe into the second-biggest retail cyber attack on record.
Target said an investigation has found that the hackers stole the personal information of at least 70 million customers, including names, mailing addresses, telephone numbers and email addresses. Previously, the No.3 U.S. retailer said the hackers stole data from 40 million credit and debit cards.
The two sets of numbers likely contained some overlap, but the extent was not clear, according to Target spokeswoman Molly Snyder. She also noted that some of the victims did not shop at Target stores during the period of the breach between November 27 and December 15, and their personal information was stolen from a database.

"I know that it is frustrating for our guests to learn that this information was taken and we are truly sorry they are having to endure this," said Gregg Steinhafel (http://www.latimes.com/topic/economy-business-finance/consumer-goods-industries/gregg-steinhafel-PEBSL000110.topic), Target's chief executive said. "I also want our guests to know that understanding and sharing the facts related to this incident is important to me and the entire Target team."
Attorneys general from New York, Connecticut, Massachusetts, and Minnesota said they were joining a nationwide probe into the security breach. A source familiar with the joint probe said more than 30 states were involved.
"A breach of this magnitude is extremely disconcerting and we are participating in a multi-state investigation to discover the circumstances that led to this breach," said Massachusetts Attorney General Martha Coakley.
Security experts said the stolen payment card data could be used to fabricate false magnetic strip credit cards. And the personal information could be sold on underground exchanges for use in email "phishing" campaigns, aimed at persuading victims to hand over even more sensitive information, such as bank account numbers.
"I think they still have no idea how big this is," said David Kennedy, a former U.S. Marine Corps cyber-intelligence analyst who runs his own consulting firm, TrustedSec LLC.
Target lowered its fourth-quarter profit forecast, in part due to weaker-than-expected sales since reports of the cyber-attack emerged in mid-December. Target shares closed down just over 1 percent to $62.62, hovering near a year-low.
The largest known breach at a U.S. retailer, uncovered in 2007 was at TJX Cos Inc, where more than 90 million credit cards were stolen over about 18 months.

Fraud reports growing
Reports of fraudulent card charges have been growing since the Target breach was disclosed, said an executive at one major card issuer who asked not to be identified.
The full magnitude of the damage will not likely be known until later in January, when customers receive and examine their monthly statements and call their banks, the executive said. He added that, in past cases, it has taken 30 to 45 days for the vast majority of bad charges to surface.
Target and credit card issuers have said customers will have zero liability for the cost of any fraudulent charges.
Harlan Loeb, global chairman of the crisis & risk management practice at Edelman, said Target should have been more proactive in communicating with its customers. He thinks Target will have a tougher task containing the situation than TJX did.
"The game has changed so dramatically since 2007," Loeb said, citing "the dramatic escalation of information channels and the sophistication of hackers" since then.
"The one thing that should be part of any crisis plan is the specter that you might have to be in communication with hundreds of thousands of customers instantly," Loeb said. "There was an element of that missing" in Target's case.
According to a Reuters/Ipsos poll, 40 percent of people who shopped at Target during the period of the data breach had not been notified about the incident. Thirty-one percent said they had been notified by Target and 28 percent said they had been notified by their bank or credit card company. The results represent 640 surveys conducted from January 2 to January 10 with a margin of error of plus or minus 4.5 percentage points.

http://www.chicagotribune.com/business/breaking/chi-target-data-breach-affected-70-million-customers-20140110,0,621285.story?page=1