Sometimes it's difficult to catch every story that hits tech media in a day, so we wrap up some of the most talked about stories. We give you a daily recap of what you missed in the ReadWriteWeb Community, including a link to some of the most popular discussions in our offsite communities on Twitter, Facebook, LinkedIn and Google+ as well.

Why Apple Won't Disrupt the Textbook Industry Anytime Soon

Starting today, Apple's iBooks 2 became available in the iTunes App Store. Though Apple is known for disrupting industries, as they have done with the mp3 player, the phone, the tablet and music purchases, John Paul Titlow thinks the disruption of the textbook industry may take a bit longer, much like their attempt to disrupt television.

From our readers:

@rww Real market for iBooks is p2p study material e.g. tutor creates book for her students, kid creates book for friends out of class notes

— Raj Bandyopadhyay (@plusbzz) January 19, 2012

More Must Read Stories:

Will Windows Phone Get Instagram Before Android?

Fast Company is reporting that Instagram is working with Microsoft to develop a version of the popular photography app for Windows Phone.

Critics love Windows Phone, but it still has a relatively low market share, which left most people to assume Instagram would next aim to conquer Android. The photography application was named the iPhone's app of the year by Apple and now has more than 15 million users. (more)

Apple Takes Aim at Education With iBooks 2 and Textbook Publishing Tools

Having already done their part to shake up several industries, Apple officially unveiled what the company hopes is the next phase in textbooks. Starting today, iBooks 2 will be available in the iTunes App Store. The update will provide access to Apple's new breed of interactive textbooks, which are aimed at high school students and will cost $14.99 each. To help populate the store, the company is also launching a suite of digital publishing tools for authors. Phil Schiller, Apple's VP of Worldwide Marketing, revealed the company's plans this morning. (more)

Top 0 Lessons Learned from the SOPA Protest

So what just happened? Well, several of the world's most prominent Web destinations interrupted their regular programming to remind their readers of the dangers of a world where certain content may be arbitrarily made to disappear. For most Americans, this was probably the first they'd seen of any efforts by Congress to change the Internet, for whatever reason they'd want to do so. (more)

Twitter Buys Summify for the Next 500 Million Users

Twitter has acquired Summify, a service that digests the links in one's Twitter feed and produces a daily email of the most relevant stories. The developers will join Twitter's Growth team, and their work will still "explore ways to help people connect and engage with relevant, timely news." As Twitter nears 500 million users, it needs new ways to teach them how the service works. (more)

Maybe Turning Off Email Is Catching On

Last year I wrote this post reviewing 40 years of using email. I am old enough to recall many of those events and while I wasn't exactly present at the dawn of email, I know people who were. But it seems as if email, at least corporate email, has come and is in the process of going all in my own lifetime. A number of factors are making turning off, or at least reducing your email dependency, more viable these days. (more)

Foxconn Chair Calls Employees Animals

Terry Gou, chairman of Taipei-based Hon Hai, Foxconn's parent company, called his employees animals at a recent company party, according to Want China Times. Foxconn makes many of the devices Western consumers use, such as the iPhone and the Kindle.

"Hon Hai has a workforce of over one million worldwide," he said, "and as human beings are also animals, to manage one million animals gives me a headache." (more)

Infographic: Key Moments in Social Media Law

The Socially Aware blog has put together a nice infographic that highlights several key decisions in social media case law, starting with the Sony v. Universal Supreme Court Betamax recording decision of 1984 and continuing to the more recent past. In light of the SOPA and PIPA protests and discussions of this week, I found the review enlightening and interesting to see how far we have gone in terms of legislating copyright violations and other digital misdeeds. Remember Facebook suing and ultimately crushing Power.com? How about Courtney Love's Tweet that supposedly defamed a fashion designer? (more)

Al-Shabaab Tweets Terror

Since the Kenyan army has gone into Somalia in October (during my trip to Kenya), the main Islamist group Al-Shabaab has used Twitter in its propaganda war against the Kenyan government.

It's latest tweets, posted yesterday on @hsmpress, include photos and descriptions of two Kenyan government officials they've kidnapped, Fredrick Irungu Wainaina and Mule Edward. (more)

Ditch the Dongle: Make Payments With Your Smartphone's Camera With Card.io

Imagine making credit card-based payment with your smartphone. Visions of dongles are go dancing through your head. This is a function of conditioning that companies like Square and Intuit have taught users to expect. But, what if you could make a payment just by scanning the card with your smartphone's camera? Ditch the dongle. That is the goal of payments startup card.io. (more)

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From sources that the studios at one time claimed would put them out of business: Pay-per view TV, cable and satellite channels, video rentals, DVD sales, online subscriptions and digital downloads.

• 1920's: The record business complained about radio. The argument was because radio is free, you can't compete with free. No one was ever going to buy music again.
• 1940's: Movie studios had to divest their distribution channel - they owned over 50% of the movie theaters in the U.S. "It's all over," complained the studios. In fact, the number of screens went from 17,000 in 1948 to 38,000 today.
• 1950's: Broadcast television was free; the threat was cable television. Studios argued that their free TV content couldn't compete with paid.
• 1970's: Video Cassette Recorders (VCR's) were going to be the end of the movie business. The movie businesses and its lobbying arm MPAA fought it with "end of the world" hyperbola. The reality? After the VCR was introduced, studio revenues took off like a rocket. With a new channel of distribution, home movie rentals surpassed movie theater tickets.
• 1998: The MPAA got congress to pass the Digital Millennium Copyright Act ( DCMA), making it illegal for you to make a digital copy of a DVD that you actually purchased.
• 2000: Digital Video Recorders (DVR) like TiVo allowing consumer to skip commercials was going to be the end of the TV business. DVR's reignite interest in TV.
• 2006: Broadcasters sued Cablevision (and lost) to prevent the launch of a cloud-based DVR to its customers.

Today it's the Internet that's going to put the studios out of business. Sound familiar?

Why was the movie industry consistently wrong? And why do they continue to fight new technology?

Technology Innovation

The movie industry was born with a single technical standard - 35mm film, and for decades had a single way to distribute its content - movie theaters (which until 1948 the studios owned.) It was 75 years until studios had to deal with technology changing their platform and distribution channel. And when it happened (cable, VCR's, DVD's, DVR's, the Internet,) it was a relentless onslaught. The studios responded by trying to shut down the new technology and/or distribution channels through legislation and the courts.

Regulation/Legislation

But why does the movie business think their solution is in Washington and legislation? History and success.

In the 1920's individual states were beginning to censor movies and the federal government was threatening to do so as well. The studios set up their own self-censorship and rating system keeping most sex and politics off the screen for 40 years. Never again wanting to be at the losing side of a political battle they created the movie industry's lobbying arm, MPAA.

By the 1960's, the MPPA achieved regulatory capture (where an industry co-opts the very people who are regulating it) when they hired Jack Valenti, who ran the studios' lobbying efforts for the next 38 years. Ironically, it was Valenti's skill in hobbling competitive innovation that negated any need for studios to develop agility, vision and technology leadership.

Management of Innovation

The introduction of new technology is always disruptive to existing markets, particularly to content/copyright owners whose sell through well-established distribution channels. The incumbents tend to have short-sighted goals and often fail to recognize that more money can be made on new platforms and distribution channels.

In an industry facing constant technology shifts the exec staff and boards of the studios have lawyers, MBAs and financial managers, but no management skill in dealing with disruption. So they rely on lobbying ($110 million a year), lawsuits, campaign contributions (wonder why the President won't be vetoing SOPA?) and Public Relations.

Ironically, the six major movie studios have a great technology lab in Silicon Valley with projects in streaming rights, Video On Demand, Ultraviolet, etc. But lacking the support from the studio CEOs or boards, the lab languishes in the backwaters of the studios' strategy. Instead of leading with new technology, the studios lead with litigation, legislation and lobbying. (Imagine if the $110 million/year spent on lobbying went to disruptive innovation.)

Piracy

One of the claims that studios make is that they need legislation to stop piracy. The fact is piracy is rampant in all forms of commerce. Video games and software have been targets since their inception. Grocery and retail stores euphemistically call it shrinkage. Credit card companies call it fraud. But none use regulation as often as the movie studios to solve a business problem. And none are so willing to do collateral damage to other innovative industries (VCRs, DVRs, cloud storage and now the Internet itself.)

The studios don't even pretend that this legislation benefits consumers. It's all about protecting short-term profit.

SOPA

When lawyers, MBAs and financial managers run your industry and your lobbyists are ex-Senators, understanding technology and innovation is not one of your core capabilities. The SOPA bill (and DNS blocking) is what happens when someone with the title of anti-piracy or copyright lawyer has greater clout than your head of new technology. SOPA gives corporations unprecedented power to censor almost any site on the Internet.

History has shown that time and market forces provide equilibrium in balancing interests, whether the new technology is a video recorder, a personal computer, an MP3 player or now the Net. It's prudent for courts and congress to exercise caution before restructuring liability theories for the purpose of addressing specific market abuses, despite their apparent present magnitude.

What the music and movie industry should be doing in Washington is promoting legislation to adapt copyright law to new technology- and then leading the transition to the new platforms.
The U.S. State Department has been championing the Internet Freedom initiative across the world. Secretary of State Clinton said, "...when ideas are blocked, information deleted, conversations stifled, and people constrained in their choices, the Internet is diminished for all of us."

It's too bad the head of the MPAA - an ex Senator - made a mockery of her words when he wondered "why our online censorship can't be like China?" We wonder, "Why can't the film industry innovate like Silicon Valley?"

Lessons Learned

• Studios are run by financial managers who have no corporate DNA to exploit disruptive innovation
• Studio anti-piracy/copyright lawyers trump their technologists
• Studios have no concern about collateral damage as long as it optimizes their revenue
• Studios110M/year lobbying and political donations trump consumer objections
• Politicians votes will follow the money unless it will cost them an election

Movie camera by Jeremy Burgin

PayPal has shunned NFC to this point in its mobile payments push. The company's stance has been "it will not be a hard thing for us to implement if we find that it gains popularity." Really, this new NFC sharing widget for Android does not change that stance at all. Peer-to-peer payments in PayPal are a service, not a business vertical. Essentially, this update for PayPal does not affect how the company will approach mobile payments.

The way PayPal makes it sound in the update to the Android app is that the new NFC feature is no different. It is a "hey, why not?" type of feature. Yet, it could be the set up for quite a bit more.

If PayPal tracks the data on peer-to-peer for trends (location, time of day, how much is being transferred, how far away are they) then the NFC rollout could be the first steps to tracking where, when and how to implement a possible NFC solution for smartphones.

There will be a wave of Android devices in 2012 that are NFC enabled. Right now there are only a handful with the Samsung Nexus S the most prominent of the bunch. This is a way for PayPal to have some type of NFC offering in the mix for when consumers get NFC devices in their hands and do not have much of a reason to actually use the feature.

We can imagine a dozen scenarios where independent merchants could use NFC payments. It comes back down to our well-worn farmer's market scenario - a farmer could use a NFC phone to accept PayPal payments from other PayPal Android users with NFC. While that seems cool, think of the limiting factors - both parties need NFC, Android, PayPal and a desire to do business. Finding two matching parties with those particular attributes right now is a niche within a niche.

By instituting the completely non-threatening peer-to-peer feature, PayPal sets itself up to widen the set of functionality down the line. For a company that is moving horizontally through the mobile payments sector, that shows surprising foresight.

Of the non-computer traffic, much of it comes from Netflix (on TVs), Facebook and YouTube (both mostly on mobile devices).

Looking first at overall traffic - which includes both computers and other devices - real-time entertainment accounts for 60% of peak downstream Internet traffic in North America. There's been a steady increase in this figure over the past few years. It was 50% in Sandvine's March 2011 report, 42% in 2010 and just under 30% in 2009.

Netflix alone accounts for 32.7% of total peak downstream traffic in Sandvine's latest report, a relative increase of more than 10% since U.S. spring. YouTube accounts for 11.3% of peak traffic.

Post-PC Habits

The report notes that people are watching real-time entertainment on an increasing number of screens - including smartphones, tablets and "a TV with direct (smart TVs) or indirect (via a game console or set-top) Internet connectivity."

Interestingly, the report states that when people watch online video, "they generally choose to watch content on the largest screen available to them." So they will choose a TV over a computer, a tablet over a smartphone, and a smartphone over nothing at all. What's more, screen size has direct correlation to data usage:

"For example, when watching a video on a 60-inch HD capable plasma screen, most subscribers will opt for the highest video fidelity available. In that same scenario, higher- quality audio might also be provided to the home theatre system."

What's behind the increase of consumption of real-time entertainment on devices other than computers? Sandvine claims it is mainly due to game consoles, "through manufacturers partnering with content producers." As an example, it cites this month's announcement by Microsoft of "a massive expansion in the list of content providers that will be available on the Xbox 360, including such heavyweights as Bravo, Comcast, HBO, BBC, Telefonica, Rogers on Demand and Televisa."

Mobile Devices

Looking specifically at mobile devices (which effectively means smartphones), Sandvine reports that real-time entertainment generates 30.8% of peak demand on mobile. Web browsing is next, on 27.3%, while social networking is 20.0%. Most of the latter comes from Facebook, which represents 19.3% of peak mobile traffic. YouTube gets 18.2%.

These statistics correlate with other data that we've been hearing. For instance, in September Google announced that mobile devices are responsible for 10% of all YouTube downloads. Mary Meeker's Web 2.0 Summit presentation attributed 33% of Facebook traffic to mobile devices. Meeker also pointed to Pandora and Twitter, which have 60% and 55% respectively of their traffic going to mobile devices.

Slide from Mary Meeker's 2011 report

These statistics from Sandvine, backed up by Mary Meeker's data, clearly show that devices other than computers are not only having a big impact on consumption of real-time entertainment - they're now the primary way to consume such content.

Let us know in the comments about your own usage patterns for consuming real-time entertainment on the Web. Are you finding that most of that is through a connected TV, mobile device or tablet?

Skype-powered apps have always been a source of huge unrealized potential. People say that your telephone contact list represents your real social network and the ultimate social graph to build apps on top of, but people do a whole lot of calling on Skype these days too. Add in video calling, screen sharing, text chat, file transfer and the P2P protocol it all runs on top of and what have you got? An awe inspiring opportunity. "Imagine the possibilities of Skype Video Calling directly in one or more of the desktop applications you use each and every day," the company says, "be it office productivity software or games."

Here at ReadWriteWeb, we use the Skype API for inbound and outbound messaging. We haven't used any video chat APIs to date, though options like TokBox and recently the Google Hangouts API have made that seem easier than ever. We are bloggers, though, so pantslessness is an occupational hazard and other forms of communication tend to be more viable on a day-to-day basis.

The app directory is almost entirely filled with call and chat recording apps, which are great, but Skype has so much more potential than that.

Unfortunately, signal quality is not always great on Skype. Cross-platform support is uneven: frustrating for Mac users and maddening for Linux users. Skype's mobile offerings sometimes feel out of their weight class, too, when up against a big stream of data they are asked to transmit. Many developers have fallen deeply in love with Twilio's API already, too.

"[Chris Andrews, Senior Business Development Manager at Skype] says that potential products using the API could focus on specific Skype desktop apps for kids, or seniors," writes Leena Rao at TechCrunch this morning. "He adds that some partners who are using the Video APIs are focused on distance learning and telemedicine opportunities. For, now, there are no plans for a mobile API, he says."

Will Microsoft and Skype be able to build a thriving ecosystem of apps that let seniors practice telemedicine on kids around the world, record the video, translate the dialogue in text and voice, all while transferring files?

That would certainly be fabulous if they could.

The acquisition will give Rhapsody Napster's paying subscribers as well as "certain other assets" including Napster's IP portfolio. The companies' announcement did not divulge the current number of Napster subscribers, but it's understood to be at least half of Rhapsody's 700,000 subscribers.

Napster filed for bankruptcy and was ordered to liquidate its assets in 2002. The company's assets and brand changed hands a few times before being purchased by Roxio, which relaunched Napster as a pay subscription music service.

After its relaunch as a pay service, Napster never quite regained the popularity it once had in its P2P days, during which it grew significantly thanks to the ongoing media coverage and controversy Napster garnered at the time.

This latest deal effectively rolls Napster's remaining subscribers and IP portfolio into Rhapsody, which the company hopes will better position it to compete against the likes of Rdio, MOG and Spotify, the European on-demand streaming service that launched in the United States in July.

This new breed of on-demand, all-you-can-stream subscription music service has been growing in popularity in the years since the demise of the original Napster. Several of them, including Spotify and Rhapsody, recently unveiled tight integrations with Facebook for a more social music-listening and sharing experience. There's even evidence suggesting that the rise of pay subscription services has helped decrease illegal piracy of the sort Napster originally enabled.

The TDL-4 botnet is 4.5 million PCs strong. It has some unique features that make it difficult to remove such as a powerful rootlet exploitation and the ability to disable other malware that is installed on a computer. Those features make it difficult to detect and remove the malware, but that is not what makes the botnet indestructible. The way TDL-4 communicates with its command-and-control center and other infected computers is what makes it unique.

Users usually think using encryption to transfer data and messages is a good thing on the Internet. In general, it is (despite the headaches associated with implementing and maintaining HTTPS). TDL-4 uses encryption against security defenders by swapping the table created for outgoing HTTP requests and eventually converting it to HTTPS using Secure Socket Layers (SSL) to connect to the command-and-control server.

Here is how the Kaspersky team describes the process:

"This table is activated with two keys: the domain name of the botnet command and control server, and the bsh parameter. The source request is encrypted and then converted to base64. Random strings in base64 are prepended and appended to the received message. Once ready, the request is sent to the server using HTTPS."

Here is Kaspersky's breakdown of the 4.5 million infected computers:

Essentially, TDL-4 uses peer-to-peer networking that enables it to hide the command-and-control center and also move the server so that it does not have one centrally-identifiable location. It encrypts the P2P communication, making it nearly impossible to track.

The Malware That Kills Malware

In the wild, only the strong survive. TDL-4 recognizes that it is stronger than its competitors, but also the fact that its competitors' behavior provides a threat to detection.

Botnet malware doesn't want the user to know that it is hiding in the hard drive. That means digging deep into the rootkit and kernel of the machine and tricking the rest of the system that everything is just fine. Yet, less sophisticated malware has tell-tale signs that it has infected a user's device such as unusual packet bursts, slowing of the machine and general odd performance issues.

So, TDL-4 kills the competing malware. The malware is a bootkit that accesses a computer's MBR (master boot record). It does this to hide from security programs and increase the life-cycle of the malware. The TDL-4 code, known as TDSS, has the ability to delete the most common viruses found on a computer, such as Zeus. It then downloads its own malware, such as "fake antivirus programs, adware and the Pushdo spambot," according to Kaspersky.

Unique Behavior

P2P botnets are increasing and the evolution is making it harder to track and destroy the networks. TDL-4 uses a unique method - it uses a public KAD P2P network to send and receive queries. This helps the botnet stay decentralized while also acquiring new devices that are using KAD to share files and applications.

TDSS also works to "poison" search engine results and advertising networks, creating proxy affiliates that can help download the malware to computers. We will have more on malware using P2P and "search engine poisoning" next week.

But does Banjo have the winning formula? What about the others? And will anyone really use these services?

Banjo is most similar to another app called Sonar, which launched in May at the TechCrunch Disrupt conference. Like Banjo, Sonar only uses publicly available information to locate people nearby. It also doesn't require to you to connect to your social networks, like Facebook and Twitter. But if you choose not to, you miss out on the app's key feature: the way it identifies your friends and your friends of friends that are nearby.

When at a venue, Sonar ranks the people there by how many friends you have in common. This is most helpful, obviously, to those who already participate on Facebook and Twitter, but it's also a big difference from how Banjo works. On Banjo, it's less about how you're connected to others, and more about just who's there right now. Sonar is also restricted to nearby users, while Banjo lets you expand your radius or even look up far away locations.

In addition, Sonar only gathers location data from Foursquare currently. In the future, the company plans to add both explicit check-in services, like Facebook Places and Gowalla, and services where the check-in is implied, like Meetup and Eventbrite. However, it's stopping short of mining other social networks for the geotagged posts and media, which Banjo uses.

Finally, there are some slight technical differences, too: Sonar requires users run the latest version of the iPhone operating system, iOS 4.2, while Banjo works on older versions of the software, starting at iOS version 4.0 and up. Banjo currently has an Android app, but Sonar's is in the works.

Lokast: These Apps are Just Features of Our App

Sonar is hardly the only app playing in this space these days. It's just the most similar to the latest entry, Banjo. Other newcomers include the photo-sharing startup Color and the like (see: Trover, Tracks), which focus on photos as the jumping off point for location-based networking.

Meanwhile, location-based startup Lokast sees all its competitors, from local public chatting app Yobongo to group texting apps like Beluga and Groupme, as startups building entire companies on top of one of its feature sets, either current or on its roadmap.

Lokast is still struggling a bit with design (the new, but still unpublished design, not shown here, is better). It has some of the most interesting technology under the hood. Although it doesn't yet use the publicly available geodata like Banjo and some others do, the upcoming Android version promises something unique: Qualcomm's AllJoyn, a peer-to-peer technology that works over Wi-Fi, or given OEM integration, Wi-Fi and Bluetooth. Still somewhat experimental, this technology provides a way for the app to use the built-in radios on the phone to connect to whoever's nearby, and form ad hoc networks, as well as share data. With AllJoyn, the connection is more accurate and faster than a similar connection made using GPS and 3G.

In addition, when Wi-Fi direct becomes more prevalent, Lokast found its ability to pinpoint people's locations using this technology increased by 900% during simulations. The eventual goal is to increase location accuracy down to three to five feet, the company says. This is only two to three years away, given ubiquitous device-to-device technology, says Lokast's CEO Boris Bogatin. In the meantime, Bogatin predicts that the company will be at sub-10 meters within a year or so, on a fairly consistent basis, most likely on Android first.

Lokast has two patents pending, one for its content distribution technology and another, a location ID system, whose technology the company believes it's already seeing in some of its competition's software. To determine a physical location, the system uses a wide range of both relative (person is X# of feet away) and absolute (person is standing in corner at this exact spot) location techniques. Instead of using signals like sound (see: Shopkick) or light (see: Color), it uses wireless RF to determine location, which is more accurate.

In terms of functionality, Lokast offers "disposable" social networks tied to a location. You can chat with a public location-based group, similar to Yobongo, and share media, or you can start private groups where you text, share photos, videos, links and more. Once you're in that private group, the group becomes elastic, like Beluga and GroupMe offer - you can communicate with members even after you've left the location. And a friending feature allows for private, one-on-one communications, also unbound from the location where you first met.

Will Mainstream Users Come?

But winning the mindshare of the mainstream takes more than technology, it takes design, marketing and a certain viral effect. Group texting and chat apps were the hit at SXSW in Austin this year, where a great crowd of people spread out all over town, heading to different events and parties and needing a way to keep up with friends. But outside of that more unique use case, where do these startups fit in with users' daily lives? Anecdotally, we've seen usage of these apps taper off dramatically in the months that followed.

Which startup has the ability to push forward to become a new social behavior? It's probably too soon to say. But for anyone looking for the "post-Facebook" social networks, they're already here.

Singly was co-founded by Jeremie Miller, creator of XMPP, the open source foundation of most of the instant messaging in the world. Adding Zimmerman to the team is huge news.

Called The Locker Project, the open source service will capture what's called exhaust data from users' activities around the web and offline via sensors, put it firmly in their own possession and then allow them to run local apps that are built to leverage their data.

Here's how The Locker Project will work. Users will be able to download the data capture and storage code and run it on their own server, or sign up for hosted service - like WordPress.org and WordPress.com. Then the service will pull in and archive all kinds of data that the user has permission to access and store into the user's personal Locker: Tweets, photos, videos, click-stream, check-ins, data from real-world sensors like heart monitors, health records and financial records like transaction histories.

Where data extraction is made easy already by APIs or feeds, Lockers will pull it that way. Where the data is appealing and the Locker community is motivated to do so, data connectors will be built.

Searching those data archives has been a technical challenge for many other startups, but the Locker team says it is trivial for them - because they only have to build search to scale across your personal data and the data you've been given permission to access by members of your network.

Search and sharing across a user's network will be powered by Miller's eagerly-anticipated open source P2P project called Telehash, described as "a new wire protocol for exchanging JSON in a real-time and fully decentralized manner, enabling applications to connect directly and participate as servers on the edge of the network."

Is This Just a Dream?

All of this is happening in a larger context that includes:

• A widespread understanding of the deep disruption and opportunities being presented by strategic analysis of data is emerging across global markets. "Analyzing large data sets--so called big data--will become a key basis of competition, underpinning new waves of productivity growth, innovation, and consumer surplus, as long as the right policies and enablers are in place," wrote giant consulting firm McKinsey Global Institute in a major new report this month on the topic.
• People are coming to realize that their personal digital data may be more complex than they thought when Mark Zuckerberg did a bait-and-switch with it more than a year ago. Now the Wall St. Journal is writing fear-mongering article after article called What They Know About You and multiple arms of the US Federal Government are taking action concerning data transmission, privacy and innovation.
• A number of startups focusing on individual ownership over data are emerging - personal data as a platform for software development, outside of the silos like Facebook or Microsoft, is an increasingly common aspiration. See Kaliya Hamlin's organization the Personal Data Ecosystem Collaborative Consortium for more examples.

A lot of people are watching The Locker Project and hoping it can succeed in creating a big new space for each of us individuals and for our free will in the data-centric future. There are other stakeholders who would have all this data used for nothing but the profit and power of the already powerful. The team assembling at Singly may be small, and the whole project may be too geeky for all but the geekiest among us, but it's shaping up to be a remarkable effort.

Although as we reported yesterday, Netflix now surpasses P2P Internet traffic - in North America at least - but this doesn't mean that this isn't a popular avenue by which many people access movie entertainment. Rather than fighting BitTorrent, the makers of The Tunnel are embracing it.

The plot of The Tunnel, according to the film's website:

In 2007 the New South Wales government suddenly scrapped a plan to utilise the water in the disused underground train tunnels beneath Sydney's St James Train Station.

In 2008, chasing rumours of a government coverup and urban legends surrounding the sudden backflip, investigative journalist Natasha Warner led a crew of four into the underground labyrinth.

They went down into the tunnels looking for a story - until the story found them.

This is the film of their harrowing ordeal. With unprecedented access to the recently declassified tapes they shot in the claustrophobic subway tunnels, as well as a series of candid interviews with the survivors, we come face to face with the terrifying truth.

This never before seen footage takes us deep inside the tunnels bringing the darkness to life and capturing the raw fear that threatens to tear the crew apart, leaving each one of them fighting for their lives.

Eek.

You can download the official torrent or find the film in the BitTorrent's new App Studio.

But beyond the evening, primetime hours, Netflix has become the largest source of Internet traffic overall - some 22.2% of traffic.

Sandvine cites Netflix CEO Reed Hastings saying that the company will eventually move into "all the markets where people have broadband and like TV", a sign perhaps that the impact on global Internet traffic has really just begun.

As it stands the rest of the world has different network consumption habits, although real-time entertainment does dominate in Latin America and Europe too, comprising 27.5% and 33.2% of overall traffic in those areas respectively. Close behind remains P2P file sharing, an indication that even with the availability of services like Netflix that there's still plenty of BitTorrenting going on. As Sandvine notes, "despite the emergence of an 'on-demand' mentality, P2P has maintained a consistent share of Internet traffic."

While P2P has received much attention for alleged illegal filesharing, even the legal real-time entertainment services may start to come under scrutiny now - but for bandwidth rather than legal reasons. But as some ISPs look to cap broadband usage, Netflix and others are pushing back.

Danilo Saraiva, an online journalist at leading Brazilian portal Terra, set up a Facebook Event yesterday called "Barbecue of the Different People." Saraiva, who has only 300 contacts on Facebook, set up the event after lunch and now thousands of people are RSVPing every hour. Messages posted to the Event page read, in Portuguese, "I will take the mayonnaise, I will take the popcorn. I will take the cheap soda." Saturday in Higienopolis is likely to be...very different.

A Startup Scene Emerging

After decades of military dictatorship, followed by years of crippling inflation, a culture of technology, entrepreneurialism and investment is just beginning to be built in Brazil. Startups are proliferating, there's a constant battle for talent, a few companies are making millions or hundreds of millions of US dollars annually, international investors are visiting and in some cases putting in large sums of money. It's really interesting here.

Brazil is deep into social networking; the country has the second highest market penetration by Twitter of any place in the world at 20% (Indonesia is #1), Facebook is growing fast, Google's Orkut has thrived here like MySpace in the US and Brazilians spend more time each day on social networking sites than anyone else in the world.

Many entrepreneurs here are young and inexperienced, though. The infrastructure is just being born. There are fewer resources, little broadband, an amazing 200 million mobile phones but hardly any smartphones. Apple products cost 2 to 3 times as much here as they do in the United States and employees sometimes cost double - largely due to taxes.

This is the first post I've written after a week in Sao Paulo. I'll be writing more over the coming weeks. I hope to follow up on the Barbecue of the Different People, too. Technology, economy and culture are all changing together here and all around the world.

Sao Paulo has a very class conscious culture; I'm writing these words outdoors at a cafe in downtown Sao Paulo surrounded by tall glass buildings, helicopter shuttles are carrying wealthy passengers over the snarled traffic of millions of cars given permission to drive this day of the week. (Each day, 20% of the cars here are required to take a turn staying off the road during rush hour.)

The Barbecue of the Different People isn't just happening because of Facebook; it's also happening here in Brazil because of major economic change. I am sitting with Leonardo Cid Ferreira, a US-educated online marketing entrepreneur. "I'll be really curious to see if these people will go; if they do it will be amazing," he says. "This is all Class C people. We're talking about the newly growing middle class."

Every single day I have been here, talking to a variety of online and mobile tech companies, someone has brought up the clearly labeled economic class system in casual conversation. Class A is the wealthy, Class B the upper middle class. Class C is the middle class and that group is expanding quickly, gaining purchasing power for the first time and just starting to come online. Class D is the poor. Class E are the people of the favelas, the vast shanty towns on the margins of the city, infamously drug ridden and violent but now largely pacified by militaristic police campaigns in expectation of global attention at the first Brazil-hosted Olympics in 2016.

Leonardo says the open discussion about class divisions is a uniquely Sao Paulan phenomenon, more than it is Brazilian. "My car is bullet-proof," he says. "That's common here; I have some friends who refuse to ride in a car that isn't bullet-proof from top to bottom."

Leonardo is an uncommonly effective young entrepreneur - he's built a multimillion dollar search and online marketing company with a staff of 30 in just two years since returning to Brazil from college in the US. He's not the kind of person that the wealthy neighborhood referred to when they objected to the presence of "different" people. He is though, as many of the young entrepreneurs I talked to here are, appreciative of the social disruption caused by the intersection of declining poverty and increased access to technology.

"With all these people coming into the online world for the first time," he says, "the coolest thing about this [things like the Barbecue of Different People] is that it's P2P, it's bottom up. Three years ago they didn't have access to the internet and they wouldn't have been able to respond [to something like the government's decision] at all."

As I get to this point in writing this story, there are now forty six thousand people signed up for the Barbecue of Different People. Five thousand more signed on while I was eating lunch.

Capitalism and Social Disruption

Rising tides that lift the boats of the poor are being closely watched by all the entrepreneurs I've spoken with. Though they are happy to see it on a human level, as Brazil's poverty has been brutal and tragic for millions of people, these are also business people looking to build their companies.

"Those are the people every brand wants to attract," Leonardo Cid Ferreira says of the fast-expanding ranks of the Middle Class.

That was certainly true of the entrepreneurs I met here. Mobile app and e-commerce company Movile is positioning itself to serve an explosion of customers with cheap smartphones but no access to spectrum beyond wifi. ClickOn, Brazil's biggest native competitor to GroupOn in the red-hot group buying market (ClickOn went from launch to 300 employees in under a year), is working on a major new initiative to reach beyond its bulk of B Class and A Class customers by launching a white-label service targeting the new consumers of the ballooning C Class. Tahiana D'Egmont is an upbeat 25 year old phenomenon from Rio who's already launched one company, sold another, is now the Chief Marketing Officer at one of Brazil's hottest social gaming and virtual goods companies and who has let it be known she's pursuing other projects (everyone wants to know where she will land). She puts it this way: "I love the C Class! They are my customers!" They are her customers today, but that's also where she came from.

The populations in question are said to be quite enthusiastic about their new status as Desirable Customers. Social media advertising firm BooBox, one of the most high-profile startups in Sao Paulo, asks Twitter and Facebook users to post funny promotional messages for brands in support of advertising campaigns. "We know this kind of thing is controversial in the United States," co-founder Marco Gomes told me, "but in Brazil it's really not. People here love brands!" As my wife Mikalina suggested, and Gomes agreed was an accurate assessment of the situation, the upwardly mobile people of Class C have never been able to buy brand name items before and see the ability to engage with those brands as an affirmation of their new status.

As the upper class, subway-hating residents of Higienopolis are about to find out, though, all this growing empowerment of the formerly poor and new found access to online publishing tools can sometimes be a rocky road, for some people and their interests.

For purposes of growth, relevance and to CYA (Cover Your), the phrase social media is now on the lips of almost every business person here, just as it has been in the United States.

Leonardo Cid Ferreira, for example, is taking his search and online marketing business beyond those traditional markets (if you can call anything online traditional here) and is embracing social media for his customers as well.

Next week Ferreira will announce that his firm AD Brazil has merged with leading Brazilian social media agency Dialeto (like Dialectic in English). Dialeto does social media monitoring and advising for clients that include Warner Brothers, Clinique and the Brazilian airline Tam. Dialeto was the first Internet company invested in by Latin Invest, a $20 million Brazilian venture fund. Latin Invest bought out Dialeto's debt a few years ago and is now putting money into the merger with AD Brazil as well.

Leonardo says the new company born of the marriage will now have social media, branding, communications and engagement in its DNA. He says that even though it's on everyone's mind, most companies in Brazil underestimate the power of the internet.

He tells a story of a close friend's company that went public in a big IPO two weeks ago, then days later was hit with a giant scandal online. The company tried to shut down its previously neglected Facebook and Twitter profiles once they were overrun with criticism, which only made matters worse. And then they called Leo. "You should have called me two weeks ago!" he says he told his friend, "I've been trying to get a meeting with you about these things for months. Sorry, but it's too late for you now - there's nothing I can do to help you."

So goes the fast-paced, disruptive, sometimes rocky road of Brazilian economic and technology development in the age of social media. New voices and new strategies are engaging with both uniquely Brazilian circumstances and with many of the same issues people everywhere now face - whether that's in the corporate board room, the new or old press, or the site of a fast emerging flash-mob barbecue. (The number's grown now to more than forty eight thousand RSVPs.)

Many of these may be different people than the economic establishment is accustomed to, but they are smart, ambitious, emotional and they are looking to change things quickly. For at least some of the new entrepreneurs in Brazil's hot internet economy, that looks like good business so far.

Disclosure: Boobox, Movile and Buscape were among a group of companies that contributed to covering the cost of my travel to Brazil.

It just so happens that something like that may now be under development in the most official of venues. The World Wide Web Consortium (W3C) announced today the formation of a new Web Real-Time Communications Working Group to define client-side APIs to enable Real-Time Communications in Web browsers, without the need for server-side implementation. The Group is chaired by engineers from Google and Ericsson. It sounds like Opera Unite to me (see video below), but democratized across all browsers. It sounds like it could be a very big deal.

"These APIs should enable building applications that can be run inside a browser," the new Working Group's charter says, "requiring no extra downloads or plugins, that allow communication between parties using audio, video and supplementary real-time communication, without having to use intervening servers (unless needed for firewall traversal, or for providing intermediary services)."

The working group is focused on the Application Programming Interfaces (APIs) that devices will use to implement these connections, but is working with an IETF group developing a technical protocol for transmission of the data between browsers. The first indication of this work appeared two months ago with the discovery of a mysterious flag inside Google Chromium.

The W3C's new working group on all this is chaired by Harald Alvestrand of Google and Stefan Håkansson of Ericsson. It plans on meeting regularly through February 2013 and is placing a special emphasis on ensuring users have control over and are aware of what media they might be transmitting from their browsers to others.

Fortunately, brave pioneers of intellectual freedom helped us bust out of the 1950's and begin to appreciate the world in all its rich and painful complexity and subjectivity. As of today, with the launch of News.me on the iPad - there's now an app for that. (iTunes Link) A collaboration between the New York Times and the data wonks at URL shortener Bitly, News.me shows you the news from other peoples' perspectives - and other people are very different from ourselves! I have found it quite appealing to use for the last several months - it's been one of my very favorite ways to learn about the world using my iPad. Even before launch, hundreds of publishing partners are intrigued as well. It's a strikingly new model for both users and publishers.

News.me has been eagerly anticipated by media-watchers for months. Prototyped by engineers at the New York Times, bought and built out by Betaworks (the Times now owns equity in Bitly) with data and interface rock-stars from Bitly and contracted friends, the app is a substantially new type of news consumption experience. The team behind it hopes consumers will appreciate it enough to pay for it at 99 cents a week or $34.99 for the year. The revenue will be split with publishers whose content is displayed in the app, on a per-click basis. Billing is done automatically through iTunes, weekly or yearly. There's a free one-week trial.

"We have no interest in taking ads in any form," says John Borthwick, CEO of Bitly and Betaworks. Borthwick says that more than 660 publishing partners are already participating. (Including ReadWriteWeb, the editorial department found out yesterday.)

Participating publishers range from the Guardian to the Associated Press to Al Jazeera to the Portland, Oregonian to the Bangkok Post in Thailand. A wide range of local, national and international publications are participating.

Borthwick believes that advertising-supported content is not suitable for the tablet experience and argues that a new business model is required.

But will users pay for it?

An Eye Opening App

What News.me offers is a strikingly original app. Open it up and you'll find a line of faces you can swipe left or right. Those are your friends or recommended people who have opted-in to sharing their subscriptions on the News.me platform. You cannot read the streams of people who have not opted in.

Those people know and follow different people than you do. Some people curate who they follow on Twitter very carefully and their News.me feeds are particularly distinct.

View Bit.ly data scientist Hilary Mason's stream on News.me and you'll see a flow of super-geeky articles shared by the people she's following on Twitter: articles about statistics, data mining and social networking from a qualitative perspective.

View Microsoft youth social network researcher danah boyd on News.me and you'll see something very different: anthropological articles about young people online, cyberbullying, teenage self-expression, mobile tech user studies.

At the end of each article News.me offers a list of other articles you might like. Borthwick believes that the experience also offers a meaningful antidote to the age-old dilema of internet-as-echo-chamber. The app makes it remarkably easy to find yourself reading content published and shared by people with world-views different than your own.

Seeing the online world through different peoples' perspectives is a remarkably unique way to experience news consumption. Is it something that a large number of people will appreciate enough to pay for? I don't know.

The app has a strong, clean visual design (thanks to the work of Justin Ouellette, best known for Muxtape), it's an ad-free experience, it's fast loading (there's P2P style-magic going on in the background) and it's got a fundamentally new model of user experience.

I hope enough other people find it compelling enough to make it a viable business - I certainly enjoy using it a lot myself. I am concerned that too few people may appreciate the empathetic experience of viewing the world through other people's eyes - otherwise society would likely be quite different.

Maybe we were all just waiting for the iPad app for such an experience, though.

Disclosure: ReadWriteWeb is a syndication partner of the New York Times.

See Betaworks CEO John Borthwick speak about Designing Products and Businesses for the Emerging Web at the ReadWriteWeb 2WAY Summit NYC June 13-14.

Users will be able to send or receive money from their Serve accounts, which can be funded by a bank account, debit or credit card, or by money from another Serve account. With the new AmEx digital payment system, consumers will be able to make payments via the Serve website, via their mobile phones, and with merchants who accept American Express cards. Accounts will be accessible via Android and iPhone apps and through Facebook.

According to American Express' Dan Schulman, "We intend to quickly evolve the Serve platform by adding new features and functionality as we learn from consumer and merchant experiences. To encourage a broad cross-section of people to experience the benefits and convenience of Serve, we are working with a range of partners to integrate Serve as a payment method and deliver customized offers, and we will waive most consumer fees for the next six months."

Wooing Customers Away from PayPal

The lack of fees might be a good way to lure new customers, but AmEx says those fees won't be high after that initial six month period. Customers will be charged for putting money into their Serve accounts - 2/9% plus a $0.30 per load - and will be charged for ATM cash withdrawals - $2 after one free withdrawal per month.

The move of both Visa and American Express to start offering these P2P online payments is a clear indication that credit card companies are recognizing that online payments are reshaping financial transactions. As both of these giants gun for what has long been PayPal's market, it will be interesting to watch if the competition makes things better for consumers, who will now have more choices in how they can send and receive money online.