The shareholders claimed in the June 2006 lawsuit that company directors and officers, including Chief Executive Steve Jobs, committed fraud when they backdated some awards made between 1997 and 2001 to time the options when prices were low and boost later payouts. Judge Jeremy Fogel of the U.S. District Court for the Northern District of California ruled Monday that claims alleging fraud in some proxy statements were filed after the federal statute of limitations had expired. But he gave the plaintiffs an option to amend their complaint to change their arguments. Dozens of companies have admitted to backdating schemes. Last year, Apple conducted an internal probe, acknowledged the backdating incidents at issue in this case and restated some of its earnings. The shareholders had asked the court to order that backdated options and any proceeds from them be returned to the company. Fogel ruled that the lawsuit raised some valid arguments but said its claims against Jobs and other officers did not contain enough detail. Lead plaintiffs’ attorney Mark Molumphy said Tuesday he intends to refile the case focusing on issues the judge identified. “The discovery we have so far has made the case stronger,” he said but declined to explain. Apple spokesman Steve Dowling declined to comment on the ruling. The case is Apple Computer Inc. Derivative Litigation, 06-04128. Derivative lawsuits are filed by shareholders on behalf of a company. Last week, Fogel rejected a similar lawsuit against Apple led by a New York pension system but said those plaintiffs could refile it by joining the derivative lawsuit. That case was Vogel v. Jobs, 06-05208.

IBM Corp. is placing bets on African countries where it has launched a mentoring program for college students. The project, called Makocha Minds, using the Swahili word for “teachers,” puts 250 of IBM’s top researchers in regular contact with engineering, math and computing students at universities in 10 sub-Saharan countries: Ethiopia, Rwanda, Uganda, South Africa, Kenya, Senegal, Botswana, Tanzania, Ghana and Nigeria. The participants chat mainly by e-mail or phone, but in-person meetings could happen eventually. The students usually want general guidance on becoming successful or pursuing advanced degrees, rather than help with their homework, said Mark Dean, head of IBM’S Almaden Research Center in Silicon Valley and leader of the project. Dean said the project lays groundwork for IBM to do business in Africa, where potentially groundbreaking research is being pursued on diverse topics like plant genomics and nuclear power. “We believe that Africa is that next emerging opportunity,” he said. “We need to be familiar with different cultures and languages and operations in the African countries. What we want is the African people and African businesses to look at IBM as a trusted provider.” Other technology companies have tried strengthening their interactions in Africa, including Google Inc., whose foundation has backed business-plan competitions in Ghana and Tanzania. However, experts in international technology development said IBM’s mentoring program appears unique.

The Beta 1 version of Firefox 3 released this week still has problems, including the inability to run newer Web-mail programs from Yahoo Inc. and Microsoft Corp., and a final version for consumers isn’t expected for several months. But it offers a window on what’s to come. Many of its new features concern bookmarks, an area typically slow to change in the browsing world. You can now add keywords, or tags, to sort bookmarks by topic. And a new “Places” feature lets you quickly access sites you recently bookmarked or tagged and pages you visit frequently but haven’t bookmarked. There’s also a new star button for easily adding sites to your bookmark list — similar to what’s already available on Microsoft’s Internet Explorer 7 browser. Offline Web support — for example, letting you compose Web mail while offline to send after you’re back online — is bound to come in handy as more software developers design programs to be run completely over the Internet, eliminating installation complexities. But Web developers must add the Firefox offline functionality to their sites, so the usefulness of this feature will be limited at first. Other new features include the ability to resume downloads midway if the connection is interrupted and an updated password manager that doesn’t disrupt the log-in process. Versions for Windows, Mac and Linux computers were released Monday by Mozilla, an open-source community in which thousands of people collectively develop free products, mostly as volunteers. ___ On the Net:

Detectives probing the November 1 stabbing death of 21-year-old Meredith Kercher have closed in on their suspects in the sex-and-drugs whodunnit with the help of text messages and web-based telephony. One of the earliest clues in the probe was a text message from Kercher's American flatmate Amanda Knox, 20, to Congolese bar owner Patrick Lumumba Diya on the night of the murder, reading "See you later." Diya, in his late thirties — who was released from custody on Tuesday, hours after a new suspect was arrested in Germany — says he was pulling pints at his pub Le Chic at the time, and the message should not be taken literally. But reports said Diya's cell phone emitted a signal from the zone of the murder scene that evening. Forensic investigators, still undecided over how to interpret the contents of Kercher's stomach in the autopsy, have yet to conclude the exact moment of her death. Internet postings have also heavily influenced media and public perceptions in the case. Knox no doubt regrets some YouTube footage showing her appearing drunk, as well as her MySpace page, signed "Foxy Knoxy" and since removed from the web, which displayed a picture of her laughing while handling a machinegun. The investigating magistrate in the case reportedly said Knox and her 24-year-old Italian boyfriend Raffaele Sollecito had spent the afternoon of the "sexually motivated" murder smoking hash. Sollecito, also in custody, posted a photo of himself wearing something like a hazardous materials suit, brandishing a cleaver and holding a container of pink liquid in his other hand, while Knox reportedly posted a short story that referred to a woman's rape. Meanwhile, Tuesday's arrest of Ivorian Rudy Hermann Guede, 20, was thanks partly to the Skype web-based telephone system. After Perugia police identified some of Guede's friends by surfing the Internet, one agreed to come to the police station, where he conversed with the suspect using Skype. Guede was responding from an Internet cafe in Germany, ANSA said. The probe has also produced a text message that turned out to be a total, though tantalising, red herring. After reading media reports of the murder, a Roman witness contacted Perugia police to report having received an SMS reading: "For me, tonight or tomorrow, Meredith dies." The message was sent on October 31 — the eve of the murder and Halloween — the day that Italian television was due to broadcast an episode of the medical soap opera "Grey's Anatomy" in which the main character, Dr. Meredith Grey, nearly dies in a ferry accident. None of the suspects in the Kercher case was linked to the SMS.

The package includes software that can reduce the energy used by base stations by setting some components to enter a power-saving mode at night, a time when network traffic dramatically decreases. Another feature changes the minimum temperature requirement for a base station. While base stations are typically stored indoors where the air is cooled to around 25 degrees Celsius (77 degrees Fahrenheit) Nokia Siemens found that increasing the temperature to closer to 40 degrees Celsius can reduce energy consumption at the site by as much as 30 percent. Nokia Siemens' energy-efficient package also includes network-planning tools that can allow operators to use fewer base stations, which would also save on energy costs. The company plans to reduce the energy consumption of its base stations from 800 watts for GSM (Global Systems for Mobile Communications) today to 650W and from 500W for WCDMA (Wideband Code Division Multiple Access) to 300W by 2010. The base-station energy-savings initiative is the first of others to come from the company, which said that it is committed to improving the environmental impact of telecommunications infrastructure. The move is better for the environment but also saves money for operators, Nokia Siemens said. In addition, lower energy use can make telecommunication infrastructure more attractive in emerging markets without an extensive electric grid. Nokia Siemens isn't alone in targeting these regions. For example, Motorola earlier this year said it would test sun and wind-powered base stations in Namibia. Siemens, before its merger with Nokia, supplied solar-powered base stations in Malawi.

Close to 75,000 developers have been testing early "alpha" versions of Firefox 3.0 code for several months now, but this first beta release of the code, unveiled Tuesday, should open up the software to a much larger group of testers, said Mike Schroepfer, Mozilla's vice president of engineering. "The move from alpha to beta typically means that we've hit a point of quality where we believe the browser is usable as a daily browser," he said. "For us, it's a step up in terms of getting closer toward the final release." Schroepfer expects a second beta to follow by year's end, followed by a final beta 3 update in early 2008. By the time the finished product is unveiled, sometime in 2008, the team hopes to have close to half a million users testing its software. One of the big changes with Firefox 3.0 is an overhaul of the way the browser bookmarks and keeps track of browsing history. With , browsing history will now be stored in a database, meaning that it will be much easier for Firefox users to search for sites they've visited. "Because of the new Places infrastructure, we're able to store a much larger component of your history," Schroepfer said. And the browser will now be able to search what is being typed into the address bar to see if it's relevant to previous Web visits. For example, someone who had recently visited a Web page entitled "Review of 2008 Toyota Prius," could type "Prius" into the address bar and would be directed to the review page. Security has also taken a front seat with Firefox 3.0. The browser is now integrated with Google's database of known malicious Web sites and will warn users before they visit sites that are considered to be dangerous. And Firefox's download manager is now better integrated with anti-virus software, making it easier to spot malicious files before they are placed on the desktop. The browser will no longer allow add-ons to be downloaded from insecure sites, mending a practice that could have serious security ramifications, . Much of the hardest work has been under the hood, however. Firefox sports a new HTML rendering engine, called Gecko 1.9, that will make it , where developers are trying to find new ways of running software whether the PC is connected to the Internet or not. "You won't see those as a user right away," Schroepfer said. "But you'll see Web applications do more interesting things and run more quickly in Firefox over time."

More a rock band simulator than a game, the title takes on the hit "Guitar Hero" series that has sold millions and become a cash cow for publisher Activision Inc (ATVI.O). Many retailers opened their doors at midnight so gamers could plunk down $170 for a "Rock Band" bundle that includes the game software and controllers shaped like a guitar, drum set and microphone. "Rock Band" is the headline act in Viacom (VIAb.N) unit MTV's plan to spend more than $500 million on games over the next two years as it expands beyond its traditional TV base. "Rock Band" is the crowning achievement of Harmonix, a Boston-based game studio started by MIT students seeking to make the experience of playing music accessible to the masses. A partnership with accessory maker Red Octane resulted in the hit formula of "Guitar Hero," but the teams parted ways as Activision bought Red Octane while MTV picked up Harmonix. "For the first time ever we had the resources to really go for it," Harmonix head Alex Rigopulos told Reuters. "For us it's a dream game. It's really sort of everything we've ever dreamed of doing." It's a dream many gamers apparently share. The "band in a box" won an average rating of 95 on , which compiles reviews from different gaming sites and publications. In "Rock Band," four people can play together on guitar, bass, drums and vocals. Players hit buttons on the guitar or tap drums in sync with notes on-screen. Players can also sing along, karaoke-style. If notes are hit accurately, the song plays properly and the band earns points. TRANSFORMER Much as MTV's music videos transformed the industry in the early 1980s, industry executives and analysts said, "Rock Band" may change the way people enjoy music. New songs will be available for download every week, with players able to tailor their game to their favorite genres or bands. Just as musicians tested the novelty of downloads a few years ago by releasing songs online at the same time as on CD, MTV is working with labels to release playable versions of new tunes alongside their debuts in established formats. "In 10 years people are going to look at idly listening to music the same way as we look at watching a TV show in black and white," said Geoff Keighley, co-chair of the Game Critics Awards that named "Rock Band" the best game of the industry's annual trade show in July. Game downloads are attractive to game makers and the music business because they are priced at about $2 — double the cost of a song from an online store. "I don't really expect it to be a huge source of income for the industry but it is a positive story when they need one," said Billy Pidgeon, an analyst with market research firm IDC. Activision Chief Executive Bobby Kotick said new songs for "Guitar Hero" will boost profit margins. Activision has sold more than half a million "Guitar Hero" song packs. That's only $3 million in revenue, but it's a highly profitable drop at a time when the overall music bucket is shrinking. MTV, for its part, aspires to build an iTunes for games. "We've moved from initial rounds of discussions with the labels to talking about how we can harness this platform to break new artists and to introduce new music from established artists," Paul DeGooyer, vice president of MTV Games, said in an interview. DRIVERS NEEDED The music business badly needs growth drivers. Downloads are expected to more than double over the next five years to $3.4 billion — more than a third of all music revenue — but that's partly because the industry is contracting, according to a report released Tuesday by JupiterResearch. For all its grand plans, "Rock Band" is still playing the role of an upstart new act that must meet several challenges. This year, the game is only available in $170 bundles that are nearly twice as expensive as "Guitar Hero." Individual instruments won't be offered until next year. There is also the issue of availability. MTV said it would ship more than a million units this year, but "Guitar Hero 3" sold 1.4 million units in its first six days on the market and is enjoying wider brand recognition. Moreover, "Rock Band" is only available now for Microsoft's (MSFT.O) Xbox 360 and Sony's (6758.T) PlayStation 3 consoles but there is no release date yet for Nintendo's (7974.OS) Wii, which has been the best-selling game console in 2007. Other game makers aren't expected to sit still, either. Electronic Arts Inc (ERTS.O), which is distributing "Rock Band" under a three-year deal, may jump in with its own music game at some point. While EA books the revenue from each "Rock Band" sale, its share of profits is much lower than if it was publishing its own game. Asked whether EA was working on its own game, EA Partners general manager David DeMartini praised Harmonix before telling Reuters: "That's not to say that we wouldn't at some point be involved in the genre, as this is a huge genre that hasn't reached full potential. We wouldn't rule anything out." (Reporting by Scott Hillis; Editing by Gary Hill)

Porsche this month revealed it had made EU3.6bn from share options in the year to July, compared with about EU1bn from sales of its cars. The news provoked comments from some analysts that the German luxury marque was acting more like a hedge fund than a carmaker. Yet many managers regard derivatives as essential tools to manage the risks of volatility in exchange rates, interest rates and commodity prices. When is it acceptable for manufacturers to place big bets on the market? Should investors be pleased or dismayed when an industrial enterprise makes money from financial speculation? THE ADVICE: THE ACADEMICJames Dow There are two general rules here. First, companies shouldn't use derivatives to speculate unless they specialise in this kind of trading. Shareholders of non-financial companies are, rightly, unsympathetic to this kind of activity. Second, derivatives are useful for hedging - taking positions that reduce overall risk because they are negatively correlated with risks elsewhere in the business - but there is a fine line between hedging and speculation. Unless risk management policy is fixed in advance, discretion on when and how much to hedge can turn hedging into speculation. So the market will be hostile to large hedging trades that are announced after the fact. Porsche's VW options can be justified by the cute argument that it protected itself against the rise in VW shares following the announcement of its possible takeover bid. But it is not clear the market favours the takeover anyway and Porsche has reportedly hinted that the price may now be too high. Since Porsche has great appeal for shareholders as a carmaker, why has it put itself in a position where its spokesman likens the company to a hedge fund that also makes cars? The writer is a professor of finance at London Business School THE CONSULTANTAlan Middleton Porsche should be praised for pursuing its core business, as it appears to be doing. It is following a sound business rationale that has secured a big financial upside. Porsche essentially means the "Porsche-Piech" family. Historically, the family has been entwined with Volkswagen: Ferdinand Porsche was Volkswagen's founder and designed the first Beetle. Until recently, the family protected its interests at the VW board with a minority shareholding and with Ferdinand Piech, the founder's grandson, as the head of VW's supervisory board. However, since the European Court of Justice ruled last month that Germany's "VW law" had illegally shielded Volkswagen from takeover, that approach was put at risk. So Porsche needed to act to secure two interests. First, sharing product platforms and technology with VW-Audi (Porsche cannot easily afford to develop these areas alone). Second, safeguarding the wholesale business of Porsche Austria, which generates around half the family's income. If one assumes that Porsche was acting to secure its core business - and that its decision was based on publicly available information - then the profit was simply a fortuitous windfall. The writer is CEO of PA Consulting Group THE ACCOUNTANTNigel Ruddock Porsche is not the only company to use sophisticated financial arrangements, but such arrangements require very careful consideration from both individual and institutional investors. The complexity and volatility of the global car industry offers ample justification for spreading risk and increasing shareholder value. However, with options trading on its stake in VW netting more than three times the profits derived from its core business, in many ways Porsche has acted more hedge fund than carmaker. The level of sophistication required to make investment choices in such companies is therefore much greater than it is when a business is focused solely on its core competencies. Primarily, shareholders must examine the risk profile of a company's hedging choices as closely as its business fundamentals and the track record of the management team controlling those options. If this trend continues it may become an increasing barrier for individual investors in particular, who often do not have access to data of a quality needed to make well-founded investment decisions. The writer is head of automotive services at Grant Thornton UK THE PRDave Senay Why shouldn't Porsche use every advantage to maintain its financial strength? Investment strategy can help turbo-charge results and fuel R&D, design, production quality and marketing. A failed strategy can hobble the very same things. But does the use of derivatives help or hurt the brand itself? Done well, it helps. Porsche customers want a smart, successful and well-funded company that can create the next generation of terrific cars. Affluent, discerning customers are often very committed to the brand. Many are financial professionals or executives themselves, so they appreciate smart financial management. But they also have plenty of brand choices, so it is essential that Porsche stays true to its enduring brand attributes in every way. The writer is president and chief executive of Fleishman-Hillard

The SFLC filed lawsuits Monday on behalf of the developers of BusyBox against High-Gain Antennas of Parker, Colo., and Xterasys of City of Industry, Calif. The lawsuits, filed in U.S. District Court for the Southern District of New York, allege that the companies are distributing BusyBox illegally, without meeting the GPL requirement of providing access to the source code of their implementation. BusyBox, available since November 1999, is a lightweight set of standard Unix utilities commonly used in embedded systems licensed under GPL version 2. The two companies are distributing "BusyBox, or a modified version of BusyBox that is substantially similar to BusyBox," the lawsuits allege. The lawsuits ask the court to give the BusyBox developers the profits from that software, plus other damages. But Richard Bruckner, CEO of High-Gain Antennas, said the SFLC is mistaken about the GPL violation. The company, which makes wireless broadband antennas and related products, uses firmware from a company called Edimax, not BusyBox, and makes the source code available, at the request of customers, he said. Bruckner said he tried to explain the situation in a conference call with SFLC officials, but they hung up on him. During that first conversation SFLC was "already asking for money," he said. "What they need to do is get their act together and read the source code." If the SFLC doesn't end its threats, High-Gain Antennas may file a countersuit, Bruckner added. But Dan Ravicher, SFLC's legal director, said the organization has tried to work with both companies and has not gotten adequate responses. The two sides may still be able to settle the lawsuits out of court, he said. "There is a hope, but since neither defendant wanted to resolve the matter privately previously, we'll have to see if they want to do so now," he said. "In the end, we can hope to settle all we want, but if the defendants don't want to do so, we can't force them to. All we can do is ask the court to force the defendants to comply with the law." Ravicher also said he's confident in the lawsuits. "The evidence we collected during our investigation was sufficient for us to form a basis for our belief that they are distributing BusyBox and are not doing so in compliance with the GPL," he said. If either case filed is heard before a judge, it would be the first time that a GPL infringement lawsuit has gone to trial in the United States. Officials from Xterasys weren't available to comment on the lawsuit against their company. These are the second and third lawsuits the SFLC has filed on behalf of BusyBox developers Erik Andersen and Rob Landley. The first lawsuit, against Monsoon Multimedia, was settled out of court Oct. 30, with Monsoon agreeing to fix the violation and pay Andersen and Landley an undisclosed sum. "We let companies do what they like with BusyBox on their hardware, and what we asked in return was that they let us reproduce what they've done with BusyBox on our hardware," Landley said in a statement. "That's the deal embodied in the GPL." The SFLC assists nonprofit open source and free software projects. Its chairman is Eben Moglen, longtime general counsel to the Free Software Foundation.

The FCC awarded the license for the spectrum in the 700MHz band to the Public Safety Spectrum Trust Corp. (PSST), a nonprofit organization with representatives from several public safety groups, including the International Association of Chiefs of Police, the International Association of Fire Chiefs, and the National Sheriffs' Association, on Monday. The 10MHz awarded to PSST will be combined with an adjacent 10MHz of spectrum that will be auctioned in early 2008 with the winning bidder required to create a nationwide wireless network for both public safety agencies and commercial use. The FCC award to PSST was expected. PSST was the only applicant for the nationwide license. PSST will negotiate a network-sharing agreement with the winning bidder on the adjacent 10MHz of spectrum and it will administer usage fees for the nationwide network. The organization will also review requests for early build-outs, and it will manage public safety access to the commercial portion of the spectrum during emergencies, according to the FCC. PSST members are grateful to the FCC for "recognizing the significant amount of work and progress achieved by the PSST to fulfill the FCC’s guidelines for creating a nationwide network for public safety,” said Harlin McEwen, PSST's chairman, in a statement. “Holding the spectrum license is a responsibility the PSST takes very seriously as we embark upon building an unprecedented interoperable communications system for public safety.” The PSST spectrum is part of a chunk of spectrum being abandoned by U.S. television stations after the U.S. Congress in late 2005 required them to move to all-digital broadcasts by early 2009. The FCC will auction 62MHz of spectrum in the 700MHz band starting on Jan. 24. Several lawmakers and groups pushed for part of the spectrum to be used for an emergency communications network. During the Sept. 11 terrorist attacks on the U.S. and in more recent disasters, emergency response agencies found they couldn't talk to each other because they were using a variety of equipment on different spectrum bands. The auction of 700MHz band of spectrum is expected to raise more than $10 billion. Several companies are eyeing the spectrum to use for long-range wireless broadband networks. The spectrum is particularly valuable because signals can travel three to four times farther than wireless signals on higher spectrum bands.