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Good morning. New revelations about how Facebook apps track and resell private information about its users should give pause to CIOs hoping to leverage the social networking platform for their businesses. The Wall Street Journal's Julia Angwin and Jeremy Singer-Vine lay bare the way Facebook apps accumulate private data from unsuspecting users — something the government's consumer protection arm will have something to say about, as CIO Journal has reported. The question for CIOs is how much the risk of fines and a hit to their company's reputation outweighs the benefits of doing business on the world's largest social media platform.
EXCLUSIVE ON CIO JOURNAL
Cisco CEO names CIO as a possible successor. CEO John Chambers said Rebecca Jacoby is one of five possible successors to his throne at Cisco during a breakfast in Menlo Park, Calif. He later told CIO Journal's Rachael King he considers Jacoby "one of the most talented leaders in the company." If she's not his eventual successor, he said she's likely to become a CEO elsewhere.
CVS Caremark CIO takes the money and runs. CIO Journal has learned that Stuart McGuigan is set to become CIO of Johnson & Johnson. While at CVS Caremark, McGuigan oversaw the development of a "consumer engagement engine" using sophisticated data storage and analysis, that gives CVS pharmacists instant access to Caremark information about whether a customer has just been diagnosed with diabetes. The technology makes the process "faster" and more cost-effective, he told CIO Journal during an interview in February. McGuigan leaves CVS Caremark a wealthier man, having sold about 48,500 CVS Caremark shares in February and March worth a little over $2 million.
The IT jobs that go begging. Jay Leader, CIO of iRobot, the company that makes the Roomba vacuum and other automation products, laments that "we cannot find people" to fill certain jobs, such as enterprise architect and integration architect. A report from Forrester Research suggests outsourcing is partly to blame for sluggish IT jobs growth. But an inadequately trained IT workforce, and schools that discourage talented students from pursuing careers in IT, are a source of frustration to IT managers looking to hire in the U.S.
Why IT projects fail. Sixty years into the information economy, big IT projects still fail at disheartening rates. This may be the case because managers focus on IT infrastructure at the expense of "human infrastructure," writes Frank Wander, former CIO of the Guardian Life Insurance Company, in a guest post for CIO Journal.
TECHNOLOGY NEWS
Sony to slash 10,000 jobs. Half the cuts will come from spinning off its chemicals and medium-sized LCD businesses, and the other half from the television division. The cuts could run through two fiscal years until March 2014, WSJ's Daisuke Wakabayashi reports.
Breaking: AOL in $1B patent deal with Microsoft. AOL said it will sell over 800 patents and related applications to Microsoft, and will grant Microsoft a non-exclusive license to the patents it retains, for slightly over $1 billion in cash, Reuters reports.
Utah breach exposes 25,000 social security numbers. Eastern European hackers are suspected in an attack on the state's servers containing Medicaid information. The state government says the hackers hit a new server that hadn't been properly configured to guard against such attacks, according to CIO.com's John Ribeiro.
Apple faces its biggest computer virus yet. CIOs warming up to Apple's Mac have another reason to think again. A virus called Flashback has hit more than half a million Mac users, introducing a new risk into business networks, report Josh Lowensohn and Seth Rosenblatt at CNET. Apple has released a Java patch to combat it.
Palo Alto Networks files for IPO. In case you missed this, Palo Alto Networks, a fast-growing maker of online security products, filed plans Friday for an initial public offering to sell up to $175 million in stock, reports the Journal's Drew Fitzgerald. The company's products have cloud-friendly features, such as one that helps IT administrators allow certain types of online activities, such as Skype calling, while blocking similar types of peer-to-peer or file-sharing activities.
Ex-Intel worker guilty of stealing design documents. A former Intel engineer accused of stealing $1 billion worth of information from the chip maker to advance his career with competitor AMD pleaded guilty to five counts of fraud, each carrying a maximum penalty of 20 years, according to Bloomberg's Andrew Harris.
Samsung smartphone sales boost earnings. Samsung's accelerated transition from making cellphones to smartphones produced a financial stunner—a profit in the traditionally sluggish first quarter that is expected to be bigger than in the fourth, reports WSJ's Evan Ramstad. Samsung includes tablet sales in its cellphone results, and it bears watching if its next generation of Android-powered tablets start to encroach on Apple's dominance.
AT&T averts a strike, at least for now. The carrier has extended labor talks with its union, but the threat of a service disruption still looms, because both sides in the negotiation are far apart, the Journal's Greg Bensinger writes.
Google has a mobile quandary of its own. Google, which reports earnings Thursday, will be under pressure to prove that less expensive mobile-based ads aren't cannibalizing its traditional PC-browser-based ad business, reports the Journal's John Letzing. Last quarter's earnings disappointed Wall Street because of lower costs-per-click, the metric by which Google is measured.
Huawei cuts corners on computer security, its biggest rival says. Company data that travels on routers run by Huawei Technologies might not be safe, according to the CEO of Huawei's biggest rival, John Chambers of Cisco. He helpfully suggests that big customers such as governments consider Cisco "trustworthy," WSJ's Don Clark reports.
New sensors from Philips monitor posture. Philips has created a sensor that analyzes the way people hold themselves in a chair, and can even shut down a sloucher's computer, thereby sparing workers and the company unnecessary medical costs, writes Slashgear's Chris Davies.
Augusta has a champion, but still no female member that we know of. If the Augusta National Golf Club, which hosts the Masters Tournament, has invited IBM CEO Virginia Rometty to become a member, neither the club nor Ms. Rometty is letting on, report the Journal's Spencer Ante and Jason Gay. It's a clash of traditions — the CEO of IBM, one of three tournament sponsors, has always been a member of the club, and the club has never allowed female members. One of those traditions will end this year; we just don't know which one.
EVERYTHING ELSE YOU NEED TO KNOW
Welcome to earnings season. Alcoa kicks things off on Tuesday and could demonstrate how we're hitting the limits of cost cutting amid tepid growth. It's expected to swing to a loss, setting the stage for what could be a gloomier crop of corporate results. Analysts are expecting the lowest rate of year-to-year growth since the end of the financial crisis. And companies have been issuing a lot more negative earnings guidance than positive forecasts.
No pain, no gain. Cost cuts during the downturn and caution during the recovery have made big U.S. companies more efficient and more profitable. The Journal's Scott Thurm dug through S&P 500 financial reports for this A1 splash and found that "cumulative sales, profits and employment last year" bested 2007 levels. Thurm's research shows capital spending is beginning to rebound. Capex rose 19% last year at S&P companies, more than double the 9% increase in 2010. "The sharper increase brought capital spending back to 5.8% of total revenue for the companies in the Journal's analysis, equal to its level in 2007." The question of course is how much longer this will continue. There are already signs that we're hitting the limits — several bellwethers may show weaker profits in coming days. And as Friday's dismal jobs report shows, there's still plenty of caution when it comes to hiring. Agilent CEO Bill Sullivan says he's still "very, very cautious" about hiring. "That's a lesson current leaders of industry will not forget."
Financial markets grow murky. The WSJ highlights the lack of transparency in financial markets with this A1 deep dive into Pipeline Trading Systems. The story "shows how a firm that set out to offer a trading system that would protect investors from the hazards of the electronic marketplace evolved into something that presented its own risks."
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