Iran social media hopes dashed as Twitter, Facebook access called a 'glitch'

Iranians had a few hours access to Facebook and Twitter before a Web firewall went back up by Tuesday and Tehran scotched talk of new Internet freedoms by blaming a technical glitch for the brief opening of access.

Late on Monday, several people in Iran found they could log in to their accounts on the U.S.-based social media sites without using techniques to circumvent blocks on Twitter and Facebook that the state imposed four years ago, during a clampdown on the biggest protests since the Islamic revolution.

That prompted speculation that it might herald a broader easing of censorship under President Hassan Rouhani; last month, he succeeded Mahmoud Ahmadinejad, whose re-election in 2009 sparked the demonstrations, in which social media played a part.

However, access was being blocked again on Tuesday and an official involved in controlling Internet usage said the brief lifting of the embargo at some Iranian Internet service providers was probably caused by a technical malfunction.

“The lack of a filter on Facebook last night was apparently due to technical problems and the technological committee is investigating this issue,” Abdolsamad Khoramabadi, secretary of a state panel that filters sites, told Iran’s Mehr news agency.

Service providers were being investigated, he added.

International executives at Facebook and Twitter had no immediate comment on the development.

One Iran expert based abroad said controls had briefly been removed across a very wide range of sites, including online pornography, supporting the view that it was a glitch.

Another, however, said Rouhani’s new administration could be considering easing restrictions on sites that remain popular among Iranians able to get around the domestic firewall – and which senior government figures, and even Iran’s clerical Supreme Leader, have themselves used to convey their messages.

“I strongly believe it was a technical glitch because all Web sites that support SSL were available in the country last night, even porn websites,” said Amin Sabeti, a British-based expert on the Internet in Iran. SSL is a Web security tool.

Sabeti added: “Iran has invested millions of dollars for its filtering system and it is clear that the regime will not give up Internet censorship very easily.”

Nonetheless, there have been signs in that direction. Rouhani, a moderately reformist cleric, pledged to relax some social controls during his campaign for June’s election. New, U.S.-educated foreign minister, Mohammad Javad Zarif, has Facebook and Twitter profiles and has engaged with other users.

Even Supreme Leader Ayatollah Ali Khamenei seems to have taken to global social media to publicize ideas.

Siavush Randjbar-Daemi, who lectures on Iran at England’s Manchester University, said at least partially unblocking sites like Facebook would recognize its popularity. A ban on video recorders, he noted, was lifted in the 1990s when the devices had already become very widely used, despite being outlawed.

“Keeping them illegal became senseless,” he said.

Many Iranians use proxy servers to trick systems into believing they are outside Iran to access foreign social media.

Randjbar-Daemi said the authorities might experiment with ways of allowing most access to the likes of Facebook and Twitter, as they do with the search site Google, while using technology to block certain kinds of activity.

“I think we could be seeing a partial unblocking of Facebook, along the lines of Google, in which some search results are filtered but others are not,” he said. “Rouhani would also score clear kudos within his supporters in this way.”

Arash Tajik, an IT administrator in Tehran, said he believed that the brief opening might have been part of an experiment by the authorities: “They are testing what will happen if they remove the filter and whether they can control the situation or not,” said Tajik, who accessed Facebook unfiltered on Monday.

Like Tajik, another Internet user in Tehran called Hossein, said he could not use Facebook without a proxy server on Tuesday. Hamed, a 32-year-old journalist and teacher, said he too found Facebook and Twitter blocked on Tuesday, said Internet providers could face penalties if the opening was unauthorized.

Iran has accused Israel and the United States of cyberwar against its computer systems in the past, notably involving its energy and nuclear facilities. It did not link this week’s brief failure of its social media firewall to hacking activity.

Though Rouhani has spoken of reform, any move to ease controls will need approval from the ruling establishment of conservative clerics and security officials, including Khamenei.

How does Twitter make its money? Ads, of course

NEW YORK -- As long anticipated, Twitter is going public. It almost goes without saying that the social network broke the news with a tweet -- its announcement came in five characters under the microblogging site's 140-character cutoff.

The offering is expected to be the tech world's largest since Facebook went public in May 2012. Analysts valued Twitter at $10 billion earlier this year, and it may be worth a little more than that today. But as my Slate colleague Matt Yglesias points out, the fact that it is filing confidentially implies that its annual revenues have not yet reached $1 billion.

Following the lead of Facebook and other Internet companies whose fortunes depend on an enormous user base, Twitter has been cautious about turning its service into a money-maker so far, with ads few and far between on the site. So how does it make money, and why might it be worth so much?

Like Facebook, Twitter makes its money primarily by selling ads, which gain a lot of their value from the advertiser's ability to target specific groups of users.

Twitter's disadvantage relative to Facebook is scale: It has on the order of 200 million users, while Facebook has about 1.15 billion.

But its advantage lies in timeliness and topicality. People check Facebook casually, when time allows. Twitter users tend to use Twitter quite actively, and in conjunction with specific events, like TV shows, rallies, concerts and breaking news. So advertisers can craft ads tailored not only to a Twitter user's general tastes and demographic profile, but to what that user is doing at the very moment they see the ad.

The fact that the company broke its own IPO news via Twitter -- and saw the news retweeted by thousands of people within minutes -- underscores the company's growing role as a global source of breaking news and instant analysis. It is in some ways the CNN of the Internet -- the key difference being that it costs CNN an awful lot of money to produce its content, whereas Twitter gets it all for free from users.

A disproportionate share of those users are, in fact, paid journalists for other companies, including CNN. They use the platform enthusiastically, bordering on addictively, as a way to build their personal brands and draw readers to their own sites.

The result is that Twitter today is valued at some $10 billion, more than five times as much as The New York Times -- and it has the potential to become more valuable still.

Equally important to its business prospects in the near term is Twitter's role as a "second screen" that people check while watching TV. That gives advertisers a chance to play off of a program that it knows millions of people are watching, as Oreo did during the Super Bowl in February.

Meanwhile, Twitter has acquired two startups in the past year that analyze social-network activity related to TV programming, raising the possibility that Twitter could raise extra revenue by providing finely grained audience data to TV advertisers. And in May it launched a feature that lets TV advertisers target Twitter users who have just watched their commercials. That gives advertisers a clear path from showing a commercial on TV to getting potential customers onto their website -- or, potentially, even selling them a product directly through Twitter.

Finally, Twitter is poised to be a big player in the fast-growing realm of mobile advertising. Just three days ago it splashed a reported $350 million to buy MoPub, the world's largest mobile-ad exchange, which allows advertisers to target users on their mobile devices.

Oremus is Slate's lead blogger for Future Tense, reporting on emerging technologies, tech policy and digital culture.

Twitter's low-key announcement bodes well for IPO

With an understated 135-character tweet, Twitter has moved into the intense spotlight that comes with being the most anticipated initial public stock offering since Facebook.

But experts believe Twitter should be able to avoid the pratfalls that caused the overly hyped 2012 Facebook IPO to initially flop on Wall Street. Particularly beneficial, they say, are Twitter's deep roots in mobile.

Even using its own position as a mass-media microblogging service to announce the IPO with a tweet was a "stroke of genius," said Ken Wisnefski, CEO of Internet marketing firm WebiMax.

"Avoiding the pomp and circumstance of a huge announcement allows the media to create the hype for you, which is only half as clever as the decision to take advantage of the Jobs Act," he said in an e-mail.

Twitter filed for its IPO under a provision of the Jobs Act, passed last year, which allows companies with less than $1 billion in revenue during its prior fiscal year to keep financial information secret until 21 days before it begins marketing to potential investors.

So there were no press conferences or news releases Thursday when the San Francisco company transmitted a simple tweet announcing it has "confidentially" registered with the Securities and Exchange Commission to start the process of selling stock publicly.

That method has been used by about two-thirds of the 131 IPOs priced this year, according to IPO research firm Renaissance Capital.

The Jobs Act provision is designed to streamline the process for a startup during the SEC's normal IPO review period. Eventually, Twitter's financial information will become public in time for investors to evaluate whether to buy.

Facebook's fumbles

But Twitter should also be able to avoid the ups and downs of a prolonged public review - and the kind of last-minute surprise that sank Facebook's IPO. During the stretch run toward its IPO, Facebook amended its filing to clarify that the company had no proven method of generating revenue from the fastest growing segment of its users - those who logged in using a mobile device.

That clarification rang alarm bells for investors, especially since Facebook was supposed to have a seemingly through-the-roof valuation of $100 billion.

It wasn't until Facebook pivoted to become a mobile-first instead of Web-centric company, redesigning its mobile apps and generating actual income from mobile advertising - now a healthy 40 percent of all ad revenue - that the Menlo Park company topped its initial market capitalization.

Twitter's confidential filing "means there will be a little less of these kinds of surprises," said David Rogers, director of the Columbia Business School's executive education program on digital marketing strategy.

And, he said, "Twitter benefits from being mobile first from the get-go. They don't have to pivot."

As a private company, Twitter has had time to build its advertising platforms - including Sponsored Tweets that appear in the tweet stream - out of the glare of the intense scrutiny that comes from being a publicly traded firm.

MoPub buy a signal

And it appears the table for the IPO announcement was set Monday, when the company acquired MoPub, a mobile-ad technology firm located near Twitter's South of Market headquarters, reportedly for more than $350 million.

With the focus of all Internet giants on mobile advertising, Twitter, with its 200 million users, has a story Wall Street investors want to hear.

"I think they're in really good shape," said Ken Doctor, an analyst who follows Twitter for research and advisory firm Outsell.

"In a sense, the world has come to them," he said. "We're getting to be a mobile-majority society. And they are well set up by the nature of their service. One hundred forty characters is perfect, not just for a tablet, but for a smartphone."

In addition, the business world in general now has a more sophisticated understanding of social media than when Facebook went public, which could help Twitter better tell its story to Wall Street, said Sarah Carter, general manager of social business at Actiance, which sells a business platform for social media communications.

"Facebook was able to do their IPO on the hype of what social networking was going to be," Carter said. "Twitter is doing an IPO on the basis of what social has become."

Twitter Files for Initial Public Offering

In fewer than 140 characters, Twitter Inc. broke the news Thursday on its own short-message service that it has filed confidential paperwork to begin the process for its highly anticipated public offering.

An IPO would mark a business milestone for seven-year-old Twitter, which is used by more than 200 million people and created a global online communication culture, but has yet to prove itself as a big and lasting business in the mold of Google Inc. GOOG -0.35% and Facebook Inc. FB -0.64%

Since Twitter's filing was submitted to the Securities and Exchange Commission under a new law that allows small companies to keep their IPO documents private, Twitter didn't reveal how fast it is growing or whether it is profitable.

Goldman Sachs Group Inc. GS -1.04% is the lead underwriter on the planned initial stock sale, people familiar with the matter said. One person familiar with the matter said other banks are expected to join Goldman in managing what is likely to be one of the highest-profile IPOs since Facebook went public in the spring of last year. A Twitter spokesman declined to comment.

Twitter has already achieved a valuation of more than $9 billion, as judged by private sales by employees of their stock to BlackRock Inc. BLK +0.19% earlier this year, people familiar with that transaction have said. Such a valuation would still put Twitter well behind Facebook, which went public with a valuation of about $100 billion. After initially struggling, Facebook shares hit a new all-time high this week and now trade above their IPO price.

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AP

CLICK IMAGE for an interactive look at major moments in Twitter history.

"It's maybe a little earlier than some people suspected. A lot of people suspected first quarter of next year," said Carter Mack, president of JMP Group Inc., a San Francisco investment banking and asset management firm. "It's been a terrific IPO market for technology-related companies this year."

Under the direction of CEO Dick Costolo for the past three years, Twitter made it a priority to turn its popularity into an ad business. Through ads on its service dubbed "promoted tweets," the company is expected to take in $583 million in ad revenue this year, says EMarketer Inc.

"Twitter has already become the pulse of the world for breaking news and information," said Josh Elman, a former Twitter executive, who owns shares in the company and now is a partner with venture-capital firm Greylock Partners. "I am excited for the business that has been built to support that."

A driver of the secret manner and possibly the timing of Twitter's filing could be the Jumpstart Our Business Startups Act, or JOBS Act. An effort to spur corporate and economic growth in the wake of the financial crisis, the JOBS Act allowed for the first time some U.S. companies to initially file IPO paperwork confidentially, so that only regulators at the SEC can see it.

Only U.S. companies defined by the act as "emerging growth companies," which meet criteria including having less than $1 billion in revenues, can use confidential filings. The act also allows those that qualify for it less stringent disclosure requirements in areas including executive compensation, and enables them to quietly withdraw their filings if they don't find the demand they expect.

Companies don't have to have make their public filing until at least 21 days before they launch a "roadshow," which is when they actively shop the IPO to investors and price the deal. The filing doesn't obligate Twitter to set a timeline for selling its shares.

If it goes public soon, Twitter could capitalize on a buoyant market and a hot period of new stock offerings. The U.S. IPO market is on track to produce almost 200 debuts this year, which would be the most since 2007, according to Dealogic. The IPOs have also performed well for investors, jumping an average of 13.1% in their first day of trading.

Twitter has raised more than $1 billion in private financing so far, including money used to cash out some early investors or employees. Twitter's stock buyers have included venture-capital investors Charles River Ventures, Benchmark, Insight Venture Partners, Andreessen Horowitz and Kleiner Perkins Caufield & Byers. Wealthy investors, including funds led by Russian billionaire Yuri Milner, and mutual-fund firm T. Rowe Price Group Inc., TROW +0.04% bought private Twitter shares more recently.

Twitter will have to prove to investors that its ad business is more than just promise. Many big marketers still treat Twitter more as an experiment than a cornerstone of efforts to lure shoppers into a store or to pull people to their websites.

Part of the advertiser reluctance is the size of Twitter, which draws smaller numbers than TV networks or Facebook. Advertisers also say Twitter options for advertisers are crude compared with Facebook's.

"The appeal for advertisers is more than the amount of revenue they're getting at the moment because they don't have very good products," said Simon Mansell, chief executive of digital-advertising firm TBG and a Twitter ad partner.

Questions also remain about whether Twitter's popularity will prove lasting. New digital services, such as photo-sharing app Instagram and messaging service Snapchat, have emerged to challenge Twitter.

Twitter's decision to tweet about its confidential IPO filing is perhaps fitting for a company that gave people a platform to broadcast private moments. The company quickly followed its IPO disclosure tweet with another: "Now, back to work," the company wrote, with a photo from Twitter offices of employees working at their desks.

Twitter's legal champion of free speech steps down

SAN FRANCISCO -- Alex Macgillivray, Twitter’s top lawyer who pushed back against government and law enforcement demands and helped stake out the company’s stance as “the free speech wing of the free speech party,” is stepping down.

He made the announcement in a blog post on Friday. And on Twitter, of course: "Passing the torch. I care deeply about Twitter and our users, will continue to help while exploring other passions"

Vijaya Gadde, who has handled Twitter’s corporate and international legal work, will take over as general counsel. Macgillivray said he would continue to work as an advisor to Twitter.

“I continue to care deeply about Twitter, the folks who work at Twitter and our tremendous users, so I’ll remain close to all three,” Macgillivray said in a blog post.

There was an immediate outpouring on Twitter from Macgillivray’s admirers who said they were grateful for his efforts to protect Twitter users’ rights and his advocacy of digital civil liberties.

Tweeted Silicon Valley investor Hunter Walk: "@amac is one of the best I've seen. Not just 'lawyer w good soul' but rather a good soul who happens to practice law."

It’s unclear if Twitter will maintain that same level of commitment to free speech rights after Macgillivray, known on Twitter as @amac, leaves the company. As Twitter expands around the world and prepares for a hotly anticipated initial public stock offering, that commitment has become tougher to maintain.

How Twitter Dodged Attack That Took Down New York Times

Chalk one up for Twitter Inc.

While the New York Times and Google Inc. (GOOG) had visitors to their sites redirected this week by hackers, the microblogging service was better able to deflect attacks because of a simple tool called a registry lock. Like alerts sent to credit-card users when something bad happens, the feature notifies website managers of attempts by intruders to tamper with critical information, such as Web-address data.

The cost? As little as $50 a year.

Large banks, e-commerce companies, gambling sites and pornographers have used registry locks from VeriSign Inc. (VRSN) and NeuStar Inc. (NSR) to prevent unauthorized changes. Attacks by the Syrian Electronic Army routed New York Times readers to a site that displayed the group’s initials and altered some registration data. They underscore how vulnerable many companies are to relatively unsophisticated attacks, which can take down sites and harm their businesses.

“This is certainly an ah-ha moment,” said Rodney Joffe, a senior technologist at NeuStar. The Sterling, Virginia-based company began offering registry locks in 2010 and requires that website domain information be accompanied by two layers of verification, such as additional codes from security tokens.

“It is a niche business but there’s no reason for it to be,” he said. “It’s the kind of thing you have to do today.”

While Twitter’s site operated normally, twitter.co.uk was inaccessible for some users. The Syrian Electronic Army, which backs the country’s president, Bashar al-Assad, claimed responsibility for the New York Times and Twitter intrusions, as well as the Washington Post this month and the Financial Times in early May. Unknown hackers altered Google’s website in the Palestinian territories, displaying a map without Israel.

Raising Bar

The attacks exploited weaknesses in a registration network called the Domain Name System, exposing risks that site operators face because they’re relying on third parties to handle their online addresses. Weaknesses in DNS, which was created in the 1980s to help computers find websites using names instead of numbers, haven’t been seen as a significant threat outside of the financial-services and retail sectors up to now, according to John Pescatore, director of emerging-security trends at the SANS Institute in Stamford, Connecticut.

“There are still a lot of sloppy practices,” Pescatore said. “There’s a lot of room to raise the bar.”

Because Twitter, based in San Francisco, monitors its DNS information in real time and had implemented a registry lock, it was better prepared than the New York Times, according to HD Moore, chief research officer at Rapid7, a Boston-based security firm. Since the attacks, many other companies have moved to institute similar safeguards, he said.

DNS Flaw

Twitter has had its DNS records hacked before. The company acknowledged in 2009 that its DNS records were compromised by hackers who defaced the site with a message about Iran. Jim Prosser, a spokesman for Twitter, declined to comment on the company’s security measures.

A vast system that underpins how computers locate each other, DNS is often called the phone book of the Internet. In 2008, Dan Kaminsky, a security researcher, uncovered a flaw in the system that would let hackers easily impersonate legitimate sites. He worked with technology companies to fix it. The finding prompted several companies that process financial transactions online to adopt additional security measures to ensure their domain information is secure, while others stayed on the sidelines, according to SANS’s Pescatore.

Security Steps

NeuStar and VeriSign, another provider of registry lock services, declined to identify the companies using its registry lock services. Danny McPherson, chief security officer of VeriSign, said in a statement that the technology gives customers more control over who can change information.

Eileen Murphy, a spokeswoman for the New York Times (NYT) Co., said the newspaper is looking at additional measures.

“In light of this attack and the apparent vulnerability even at what had been highly secure registrars, we are tightening all of our security,” she said.

Jay Nancarrow a spokesman for Google, declined to comment on the company’s security. The company’s Palestine site itself wasn’t hacked and Google is talking with the domain manager to resolve the issue, he said.

One complication of hosting sites with addresses of specific countries or regions is that many of the registration providers don’t use registry locks and other protective steps, said Paco Hope, a principal consultant with Cigital Inc.

“When you’re a company like the New York Times or Twitter or Google, your stock in trade is the Internet, it’s the service you offer, and that’s why it makes sense to put in a lot more security,” Hope said.

The rise in sophisticated hacking attacks is helping fuel a market for computer-security technology that is expected to exceed $65.7 billion this year, according to Gartner Inc.

Many companies that didn’t prioritize a threat involving their DNS records are now rethinking that approach, SANS’s Pescatore said.

“It’s one of several Achilles’ heels of using the Internet,” he said.