All Things Digital

Add Washington Mutual (WM) to the list of troubled financial institutions felled by the current economic crisis. Thursday night, the lender was seized by federal regulators and sold to JPMorgan Chase (JPM) for $1.9 billion in hopes of preventing further damage to the country’s hard-hit economy. Under the deal, JPMorgan will acquire all of WaMu’s banking operations, including $307 billion in assets and $188 billion in deposits. “This institution was a big question mark about the health of the deposit fund,” said Sheila Bair, chairwoman of the Federal Deposit Insurance Corporation, on a conference call yesterday. “It was unique in its size and exposure to higher risk mortgages and the distressed housing market. This is the big one that everybody was worried about.”

WaMu’s failure is historic–the largest bank bust on record. The company’s assets are equivalent to about two-thirds of those held by the 747 insolvent thrift institutions and sold off by the Resolution Trust during the S&L crisis.

With more than 20 percent of global technology spending coming from the financial industry, WaMu’s failure and the collapse of other institutions are certain to have repercussions in tech. “This is game-changing,” Gartner (IT) analyst Joanne Correia said of the economic crisis recently. “People are going to stop new software deployments. They’ll cut in the applications space. In PCs and servers, everyone will stop putting in new hardware.”

PREVIOUSLY:

• Lehman Brothers: $2.5 Billion for a Bankruptcy Well Done
• Here’s $39 Billion in Recognition for Your Hard Work on the Forthcoming Financial Crisis
• Weekend at Bernanke’s II
• Weekend at Bernankes

[Image Credit: Ape Lad/Flickr]

Apparently, someone forgot to tell Intel (INTC) about the recession. The company reported a sharp rise in profit on Tuesday in the face of a flaccid U.S. economy. Revenue rose 9 percent to $9.5 billion from the year-ago quarter. And net income rose 25 percent to $1.6 billion, or 28 cents a share–well above the expectations of Wall Street analysts, who had projected earnings of 25 cents a share.

Best of all, Intel predicted more strong sales in the months to come. “As we enter the second half, demand remains strong for our microprocessor and chipset products in all segments and all parts of the globe,” Intel CEO Paul Otellini said in a statement. Comments like that, coupled with Intel’s strong Q2 earnings, should go a long way toward reassuring investors that the technology sector isn’t succumbing to the economic downturn. At least until AMD reports second quarter results on Thursday. Analysts expect AMD (AMD) to post a loss of 52 cents per share.

Looks like Firefox Download Day will be one for the record books after all.

Though its servers were initially overwhelmed by the volume of download requests yesterday, Mozilla soon had the Firefox 3 download site humming along nicely. Yesterday afternoon, it was serving up 14,000 downloads a minute and 13 gigabits of data a second. And within 5 hours it had broken Firefox 2’s single-day record of 1.6 million downloads and by 5 a.m. PDT today–18 hours into its world record attempt–it had already blown the doors off the 5 million mark it had set for itself with 6,415,252 downloads. By 7 a.m. PDT it was closing in on 7 million.

“We’re incredibly happy to have released Firefox 3 and for nearly 7 million people so far to care enough to make a positive decision to download it and use it,” Mozilla CEO John Lilly told Digital Daily. “A few more hours left in download day and then we’ll shift away from thinking about download day and back to thinking about what’s next. How to make the browser even more useful on your desktop and in your pocket, and how to help more people understand that the browser is the lens that we often look at the world through today. But it’s been amazing to watch the map though the day as countries woke up and went to sleep–really gives you a sense of how global things are now.”

Global, indeed. Worldwide usage share of Firefox 3.0 has spiked since yesterday. According to independent data compiled live by analysis firm Net Applications, 4.23% of the world’s browsers are declaring themselves as Firefox 3 in HTTP requests.

UPDATE: Firefox 3 has broken the 7 million downloads barrier. As of 7:44 a.m. PDT, 7,067,347 copies of the browser had been downloaded.

(Image Credit: Al Billings)

Add Sen. Joe Lieberman (I., Conn.) to the list of folks who complain YouTube is neither thorough nor expedient in removing objectionable content from its servers, whether it be in violation of copyright or “good taste.”

Last week, the U.S. senator sent a letter to Google CEO Eric Schmidt decrying YouTube as a clearinghouse for terrorist propaganda videos and calling upon Google to remove them. “… Islamist terrorist organizations use YouTube to disseminate their propaganda, enlist followers and provide weapons training–activities that are all essential to terrorist activity,” Lieberman, Chairman of the Homeland Security and Governmental Affairs Committee, wrote. “According to testimony received by our committee, the online content produced by al-Qaeda and other Islamist terrorist organizations can play a significant role in the process of radicalization, the end point of which is the planning and execution of a terrorist attack. YouTube also, unwittingly, permits Islamist terrorist groups to maintain an active, pervasive and amplified voice, despite military setbacks or successful operations by the law enforcement and intelligence communities.”

Lieberman would like Google (GOOG) to smoke these YouTube terrorists out of their holes. To that end, he provided Schmidt with a list of offensive videos. Some featured gratuitous violence or hate speech and were removed. But many more featured legal non-violent, non-hate speech. These YouTube refused to remove because they don’t violate its Community Guidelines.

“While we respect and understand [Lieberman's] views, YouTube encourages free speech and defends everyone’s right to express unpopular points of view,” YouTube said in a post to its company blog. “We believe that YouTube is a richer and more relevant platform for users precisely because it hosts a diverse range of views, and rather than stifle debate we allow our users to view all acceptable content and make up their own minds. Of course, users are always free to express their disagreement with a particular video on the site, by leaving comments or their own response video. That debate is healthy.”

When the transparency group Wikileaks was censored in China last year, no one was too surprised. After all, the Chinese government also censors the Paris-based Reporters Sans Frontieres and New York-based Human Rights Watch. And when Wikileaks published the secret censorship lists of Thailand’s military junta, no one was too surprised when people in that country had to go to extra lengths to read the site. But on Friday … in the home of the free and the land of the brave, and a constitution which states ‘Congress shall make no law … abridging the freedom of speech, or of the press,’ the Wikileaks.org press was shut down.”

–Excerpt from Wikileaks’ press release

Talk about slamming the barn door shut on a long-ago departed horse. A U.S. district court in Northern California has ordered whistle-blower site Wikileaks.org shut down after Switzerland’s Bank Julius Baer complained that the site had posted bank documents that allegedly link it to money laundering and tax-evasion schemes in the Cayman Islands.

The court ordered Wikileaks’ Web host, Dynadot, to “immediately clear and remove all DNS hosting records for the wikileaks.org domain name and prevent the domain name from resolving to the wikileaks.org Web site or any other Web site or server other than a blank park page.”

Dynadot was quick to oblige, not that it mattered much. Wikileaks remains available from a number of so-called cover names and its content has already been widely mirrored and torrented. As “NewsRadio” ’s Joe Rogan once said, “Dude, you can’t take something off the Internet. … That’s like trying to take pee out of a swimming pool.”

The cheeky folks at the Pirate Bay may need a peg leg or two when Sweden’s legal sharks are done with them. A Swedish prosecutor filed charges today against the popular BitTorrent tracker’s proprietors, accusing them of “promoting other people’s infringements of copyright laws.“

“The operation of the Pirate Bay is financed through advertising revenues,” said prosecutor Hakan Roswall. “In that way it commercially exploits copyright-protected work and performances. … [This case is] a classic example of accessory–to act as intermediary between people who commit crimes, whether it’s in the physical or the virtual world. [The Pirate Bay] is not merely a search engine. It’s an active part of an action that aims at, and also leads to, making copyright-protected material available.”

Pirate Bay’s defiant operators, predictably, disagree. Though they acknowledge the site maintains an index of BitTorrent files, they say no copyrighted material is stored on their servers. They colorfully describe the charges as “idiotic,” and have so far refused to take the site offline. “In case we lose the pending trial (yeah right) there will still not be any changes to the site,” they wrote in a recent post to the site’s blog. “The Pirate Bay will keep operating just as always. We’ve been here for years, and we will be here for many more.”

This morning Ask.com became the Internet’s least intrusive search engine. Too bad it’s also one of least used. Because with a 2.9% share of the search market, few are likely to pay much mind to the title.

That said, “AskEraser,” which allows users to delete their search queries and related data (IP address, user ID, session ID) from Ask’s servers, is a stride for consumer privacy on the Internet–especially in these days of Facebook Beacon and the AOL data Valdez. “Anywhere that you log into, anywhere where you put in personalized information, there should be a way–an easy way–to control how that information is used and retained,” Doug Leeds, Ask.com senior vice president, told The Wall Street Journal. “We are giving users the ability themselves to take control of their privacy.”

Well, some control, anyway. Ask.com recently signed a five-year sponsored search and advertising agreement with Google, so it sends user data to Google even in cases where it’s been deleted with the AskEraser function. So while Ask might not retain its users’ data, Google does. But then Google probably already had their data anyway, right?

So while AskEraser might be a nice gesture, it’s not really a grand victory for consumer anonymity on the Web. And because of that, critics say it’s not likely to be much of a selling point. “My gut tells me that basically it is not going to be a competitive advantage,” Larry Ponemon, chairman and founder of the Ponemon Institute, an independent research company, told the New York Times. “I think people will look at it and see it as a cool thing, and they may use it. But I don’t think it will be a market differentiator.”

Sun Microsystems, whose co-founder and Chairman Scott McNealy once described Microsoft’s Internet Information Server as “the Corvair of Web servers–unsafe at any speed” has become a Windows Server OEM.

Extending a partnership first struck in 2004, Sun will now resell and install Windows on its x86-based servers. For Sun, the deal is a way to drive broad adoption of its technologies. “One hundred percent of Sun’s customers use both Solaris and Windows,” said Sun Executive Vice President John Fowler. “We have an opportunity to extend our technology leadership in this critical area with customers that we share.”

For Microsoft, it’s a way to better compete in the virtualization market. Under the terms of today’s agreement, both companies pledged to optimize their server operating system for virtualization of the other’s software. And that’s an important issue for Microsoft. As Microsoft Watch’s Joe Wilcox notes, Windows Server 2008 and Microsoft’s next-generation Viridian virtualization technology have both been delayed. Said Wilcox, “Virtualization interoperability provides a place for Windows Server 2003 on Solaris and an opportunity to better position Windows Server 2003 for consolidation of Solaris servers.”