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Data Sheet—Thursday, April 2, 2015

April 2, 2015, 12:54 PM UTC

Good morning, Data Sheet readers. European antitrust officials could file charges against Google within mere weeks. President Obama considers cyber attacks sponsored by foreign countries a “national emergency.” Plus, Hewlett-Packard shareholders may see at least one good thing from the ill-fated Autonomy acquisition: better corporate governance.

Remember, Data Sheet will soon be sent from a new email address soon. Add to your address book and safe senders list. Have a productive Thursday.


Brace yourself, Google. The European Union’s antitrust agency could file charges in its five-year investigation of the Internet search giant’s business practices in mere weeks, reports The Wall Street Journal.

Why do we know this? Because the commission has been asking companies that could be part of the suit for permission to publish confidential information the submitted during the probe. “It is part of the choreography you always see,” one Brussels-based lawyer told the newspaper.

Europe’s last high-profile monopoly case also involved a technology company, Microsoft. Those charges eventually resulted in a $1.8 billion settlement.


Obama: Foreign cyber attacks are a ‘national emergency.’ The President signed an executive order officially calling for sanctions against those found to be sponsoring security break-ins and thefts of corporate or national trade secrets. Many recent attacks are believed to have been launched from offshore, with plenty of finger-pointing at China and North Korea. The order also applies to companies that benefit from these thefts.

“From now on, we have the power to freeze their assets, make it harder for them to do business with U.S. companies, and limit their power to profit from their misdeeds,” Obama wrote.

Probably a coincidence. The denial-of-service attacks crippling software coding site GitHub over the past week suddenly stopped—one day before Obama’s executive order. It is widely believed that the outage was orchestrated by the Chinese government.

GoDaddy flirts with $4 billion valuation. CEO Blake Irving chats with Fortune senior editor Dan Primack about competition from Google (actually, the lack thereof) and why this week’s IPO was so long in coming.

Sprint settles with shareholders. It could be required to pay $131 million to assuage claims the wireless carrier’s former CEO Gary Forsee and others were too positive about progress in the aftermath of the $36 billion Nextel Communications merger back in 2005. The agreement requires court approval.

Criticism of ‘religious freedom’ laws continues. High-level executives from more than 50 technology companies including Cisco, LinkedIn, PayPal and eBay have signed a “joint statement” condemning legislation makes discrimination on the basis of sexual orientation possible.

Salesforce CEO Marc Benioff went on the attack late last week when Indiana’s law was signed, and Apple CEO Tim Cook weighed in with an editorial over the weekend. The irony, of course, is that there is rampant “unconscious” discrimination on the basis of gender and race throughout the technology industry—personified through Ellen Pao’s failed suit against venture firm Kleiner Perkins.

For a thoughtful perspective, I highly suggest this essay by Re/code’s Liz Gannes. Maybe this is part of why Facebook, Google, IBM, and Microsoft have so far been relatively quiet on this issue. But this is going away: North Carolina—home to mrore than 50,000 tech sector jobs—could be next.


Here’s one good thing from the HP-Autonomy mess, better governance. Meg Whitman probably could use an aspirin, but it looks like the cure for one chronic headache is nearer.

I’m referring to Hewlett-Packard’s disastrous buyout of Autonomy, which took place four long years ago under the short-lived reign of then-CEO Léo Apotheker.

HP paid $10 billion for Autonomy in 2011 but wound up writing down $8.8 billion for what it has routinely described as accounting improprieties.

The big question: why wasn’t this caught beforehand, especially for a deal of this size? The resulting shareholder litigation against HP directors, management and advisors continues to be a legal distraction when all of the above should be laser-focused on strategizing the company’s big split.

The good news is that HP is now poised to move on, with far better governance policies in place to guide both new organizations.

The catalyst: the mid-March preliminary approval of an agreement that will settle the Autonomy-related lawsuits. Under the revised deal (the first two were rejected as too lenient), the claims will be dropped. In exchange, HP has agreed to a number of new governance practices—which will apply to both companies after the split.

Here’s the summary of the changes, including the creation of a risk management committee:

“The governance revisions provide for greater involvement in the [mergers and acquisitions] process by the finance and investment committee, as well as the technology committee of the board. The due diligence process will be enhanced, with additional training for persons taking part in the company’s due-diligence efforts and due-diligence plans subject to greater oversight. There will be additional and enhanced oversight for larger transactions by key members of the management, who will form a newly chartered risk management committee. And there will be periodic board- and management-level review of the company’s processes for evaluating, reviewing, and approving mergers and acquisitions, including the criteria for considering potential M&A partners.”

HP is also on the hook for at least $8.8 million in legal fees. The hearing to finalize the agreement is scheduled for July 24 in San Francisco.

Of course, HP denies it did anything wrong. Still, the deal must offer some sense of vindication for HP CFO Cathie Lesjak, who opposed buying Autonomy in the first place.

By the way, while the settlement prevents shareholders from suing Autonomy’s former management, it leaves HP free to pursue them. Early this week, HP lawyers in London did just that, filing a claim that seeks approximately $5.1 billion from former Autonomy CEO and co-founder Michael Lynch and former finance director Sushovan Hussain.

Lynch plans a $149 million countersuit, claiming personal losses from what he describes as ongoing “smear campaign.”

Several criminal investigations by U.S. and U.K. authorities are still ongoing, although Britain’s Serious Fraud Office closed its probe of the deal in mid-January, saying there wasn’t enough evidence for a conviction.


$47 billion. That’s the estimated revenue that U.S. cloud services companies will miss over the next three years from international customers because of potential spying by the National Security Agency. That’s actually better than expected.

Verizon bows to pressure on mobile tracking tactics. The carrier made good on a promise to let customers opt out of its “supercookie” initiatives, which collect information for the purpose of serving up targeted advertising. AT&T began offering this option several months ago.

Cisco snaps up another software startup. Its latest acquisition is Embrane, which sells network security technology that doesn’t require proprietary hardware—and that adjusts to traffic volumes. Terms weren’t disclosed.

Go ahead, take a leap. Wondering what it’s like to walk around looking at the world through virtual reality glasses? Fortune senior editor Verne Kopytoff takes a trip with Facebook’s Oculus.

Facebook has a new video app intended to appeal to the Snapchat crowd.

More apps out from the IBM-Apple relationship. The latest batch includes mobile software for nurses and industrial product managers.

Windows 7 keeps on ticking. Believe it or not, its market share keeps rising at the expense of its successor, Windows 8. That sets the latter up to be an even bigger flop than Windows Vista. Then again, it also sets up the potential for an extremely strong upgrade cycle for Windows 10, due this summer.

Salesforce buys log-in authentication startup. It’s paying an undisclosed sum for Toopher, which raised about $3 million over its life as a private company. The thing to watch is whether this technology becomes competitive or complementary to vendors specializing in single-sign-on and identity management technology, such as Okta or Centrify.

Gogo CEO: Here’s why in-flight Wi-Fi is so expensive. High traffic, low bandwidth.


A teen skincare startup reinvents the Avon Lady for the digital generation by Jaclyn Trop

This is how huge the Apple Watch’s first weekend will be by Benjamin Snyder

That time Google employees went to war over pie by Ben Geier

The best stolen iPhone story by Philip Elmer-DeWitt

Why Michelle Phan’s new network could reveal the future of the Internet by Deena Shanker


Why a renowned Disney animator now works for Google’s mobile research lab.


AWS Summit. First in a series of cloud strategy briefings. (April 9; San Francisco)

Knowledge15: Automate IT services. (April 19 – 24; Las Vegas)

RSA Conference: The world talks security. (April 20 – 24; San Francisco)

Forrester’s Forum for Technology Leaders: Win in the age of the customer. (April 27 - 28; Orlando, Fla.)

MicrosoftIgnite: Business tech extravaganza. (May 4 – 8; Chicago)

NetSuite SuiteWorld: Cloud ERP strategy. (May 4 – 7; San Jose, California)

EMC World: Data strategy. (May 4 - 7; Las Vegas)

SAPPHIRE NOW: The SAP universe. (May 5 – 7; Orlando, Florida)

Gartner Digital Marketing Conference: Reach your destination faster. (May 5 – 7; San Diego)

Cornerstone Convergence: Connect, collaborate. (May 11 - 13; Los Angeles)

Annual Global Technology, Media and Telecom Conference: JP Morgan’s 43rd invite-only event. (May 18 - 20; Boston)

Signal: The modern communications conference. (May 19 - 20; San Francisco)

MuleSoft Connect: Tie together apps, data and devices. (May 27 - 29; San Francisco)

MongoDB World: Scale the universe. (June 1 - 2; New York)

HP Discover: Trends and technologies. (June 2 - 4; Las Vegas)

Hadoop Summit San Jose: Mainstreaming adoption. (June 9 - 11; San Jose, California)

Red Hat Summit: Energize your enterprise. (June 23 - 26; Boston)

Brainstorm Tech: Fortune’s invite-only gathering of thinkers, influencers and entrepreneurs. (July 13 - 15; Aspen, Colorado)

VMworld: The virtualization ecosystem. (Aug. 30 – Sept. 3, 2015; San Francisco)

Dreamforce: The Salesforce community. (Sept. 15 - 18; San Francisco)

BoxWorks 2015: Cloud collaboration solutions. (Sept. 28 - 30; San Francisco)

Workday Rising: Meet and share. (Sept. 28 - Oct. 1; Las Vegas)

HP Engage: Big data, big engagement. (Oct. 4 - 6; San Diego)

Gartner Symposium ITxpo: CIOs and senior IT executives. (Oct. 4 - 8; Orlando, Florida)

Oracle OpenWorld: Customer and partner conference. (Oct. 25 - 29; San Francisco)