Tech giants look to encrypt Internet traffic

November 30, 2013

Microsoft is moving on a major new effort to encrypt its Internet traffic amid fears that the National Security Agency may have broken into its global communications links, said people familiar with the emerging plans. Suspicions at Microsoft, while building for months, sharpened in October when it was reported that the NSA was intercepting traffic inside the private networks of Google and Yahoo, two industry rivals with similar global infrastructures. With such a move to expand encryption, Microsoft would join Google, Yahoo, Facebook and others in hardening its defenses. The new investments in encryption technology stand to complicate surveillance efforts — by governments, private companies and criminals — for years, experts say.

Business

AMR, parent company of American Airlines, won bankruptcy court approval of the deal it reached with regulators to complete its $17.2 billion merger with US Airways and create the world’s biggest airline.

Hilton Worldwide, based in McLean, is expected to raise $2.25 billion in the largest-ever initial public offering by a hotel chain and perhaps erase doubts that private-equity giant Blackstone Group erred when it bought the company six years ago. The Hilton IPO, if successful, will help pay down the company’s $13 billion in debt and go a long way toward justifying the $26 billion that the Blackstone Group paid for the iconic hotelier.

The Bank of England moved to head off the risk of a housing bubble in Britain, making a surprise announcement that it would put the brakes on a scheme launched last year to help boost mortgage lending. The central bank will stop offering banks incentives for mortgage lending and refocus on helping small firms borrow.

Illinois’ General Assembly reached an agreement on how to solve the state’s $100 billion pension problem — after months of negotiations and years of unheeded calls to shore up what’s considered the nation’s worst public pension shortfall. Without action, millions of dollars have been diverted from education and other programs.

The judge overseeing Detroit’s historic bankruptcy petition has set Dec. 3 as the date for issuing his decision on whether the city may formally enter municipal bankruptcy. Detroit is weighed down by more than $18 billion in debt and long-term liabilities.

Wal-Mart named Doug McMillon chief executive, changing leadership as it faces scrutiny for its treatment of workers and rising pressure to up sales.

Boeing 787 Dreamliner and 747-8 aircraft using engines made by General Electric could see forced landings because of icing problems, the FAA said.

Weatherford International, an oil-field services company, agreed to pay a $253 million fine to settle bribery charges.

Japan’s Toyo Tire & Rubber agreed to plead guilty and pay a $120 million criminal fine for conspiring to fix prices of automotive parts sold to Toyota, Nissan and Subaru, the Justice Department said. Toyo conspired to fix prices for anti-vibration rubber parts as early as 1996 until at least May 2012.

French carmaker Peugeot Citroen’s outgoing chief executive Philippe Varin said he will give up pension benefits worth $28.5 million after criticism from France’s Socialist government.

Even as millions of shoppers descended on retailers across the country Thursday, the battle for their dollars has shifted to the Web — specifically mobile devices — this holiday season. Wal-Mart, Target, Best Buy and other big-box retailers have redesigned their mobile sites, launched new apps and offer customized shopping experiences.

Deals

CVS Caremark will buy Coram, a provider of drug infusion services, for $2.1 billion. CVS said the acquisition would expand its services to include infusion therapy, which involves administering medication through a needle or catheter to patients who cannot be treated orally.

Carlyle Group agreed to buy Diversified Global Asset Management to expand its hedge-fund business. Carlyle will pay $25 million of stock and $8 million in cash from its balance sheet for 100 percent ownership of the firm.

Yahoo hired Katie Couric. Now employed by ABC News, she will log on to Yahoo in January as its “global news anchor.” Yahoo didn’t disclose the financial terms.

Apple confirmed that it has bought PrimeSense, an Israel-based start-up that focuses on 3-D sensor technology, after weeks of rumors that it was interested in the firm. PrimeSense was involved in the development of Microsoft’s Kinect motion sensor. No other details were offered.

Earnings

Barnes & Noble posted 8 percent drop in quarterly revenue to $1.73 billion, below analyst estimates, hurt primarily by its deteriorating digital books and Nook device business. Profit totaled $13.2 million, compared with a loss of $501,000 last year.

Hewlett-Packard pulled off a profit of $1.4 billion in the quarter, compared with a loss of $6.9 billion a year ago, after writing down its acquisition of British software maker Autonomy.

Economy

Surging supplies of U.S. corn and soybeans coupled with higher revenue for specialty crops will boost farm incomes to a record this year even after grain prices fell. Net-farm income will reach $131 billion, up 8.6 percent from $120.6 billion forecast in August and 15 percent higher than a year earlier.

U.S. residential building permits issued in October reached 1,034,000, the highest level in five years. Permits were up 6.2 percent from the month before and 13.9 percent from October of last year.

Washington

The Obama administration announced it would delay a significant piece of the health-care law: the online small-business insurance marketplace. The Small Business Health Options Program, known as the SHOP exchange, will not offer online enrollment until November 2014, a one-year delay.

Senate Finance Committee Chairman Max Baucus (D-Mont.) rolled out a series of proposals to wipe out special interest tax breaks and use the proceeds to lower the 35 percent tax on corporate profits, now the highest in the developed world. Businesses large and small reacted with alarm at the trade-offs. The proposals would end the practice of indefinitely deferring U.S. taxes on foreign earnings, impose an immediate 20 percent tax on roughly $2 trillion in profits accumulated overseas and sharply curtail the ability of businesses to quickly deduct certain expenses, such as advertising.

The Securities and Exchange Commission is redoubling its effort to combat the manipulation of “microcap” stocks, opening about half a dozen investigations each month into schemes suspected of bilking mom-and-pop investors, agency officials said.

Transitions

Carlyle billionaire David M. Rubenstein paid $14.2 million for a copy of the 1640 Bay Psalm Book. The Carlyle Group co-founder is ranked by Forbes magazine as the 209th-wealthiest American, with $2.6 billion. The book is thought to be the first printed in what became the United States. Published in Cambridge, Mass., in 1640, it is one of only 11 surviving copies and one of the rarest volumes in the world. It is also now the most expensive.

— From news services and staff reports

$159 million
price of Post buildings

Graham Holdings, former parent of The Washington Post, will sell the company’s headquarters at 15th and L streets NW to Carr Properties. The newspaper, now owned by Amazon founder Jeffrey P. Bezos, will rent space in the building until it identifies a new location. Carr has said that the properties, a few blocks from the booming corridor on 14th Street, would make sense as a mixed-use project.

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