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Emblaze's First Else Unveiled in London Promises to be a Game-Changer? - Engadget

By Richard Lai  posted Nov 24th 2009 8:34PM

Folks, today might be the day when you start to notice how ancient our smartphones have become, even if they only came out in last few months. Blame Else (formerly Emblaze Mobile) for its confusingly-named First Else, a phone "built from scratch" over the last two years and now powered by Access Linux Platform (ALP) 3.0 -- a mobile OS thought to have quietly died out since our last sighting in February. Until today's London launch event, the last we heard of this Israeli company was from October's Access Day in Japan where it previewed the Else Intuition OS, which we like to think of as inspired by Minority Report. While it's still too early to tell whether the First Else -- launching in Q2 next year -- will dodge the path of doom, we were already overwhelmed by the excellence of the device's user experience, both from its presentation and from our exclusive hands-on opportunity. Do read on to find out how Else is doing it right.

Emblaze ELSE unveiled in London, we go hands-on

Built from scratch

As the name suggests, the First Else's main objective is to be different. This may sound like a marketing hype but Emblaze seems serious -- it wanted to create not just another phone, but rather a brand new mobile user experience (especially the ergonomics, aesthetics and the content delivery system) to upstage the iPhone and the latest Android devices, both of which Else considers to be the market leaders. Eldad Eilam, CTO of Else, explained that this required starting from scratch and using custom technology where possible (such as its proprietary graphics engine), while at the same time the technical details are well-packaged so that they don't intimidate the users (but not just by wrapping an aging OS with some fancy skin; yes, we're staring at you, Windows Phone).

Else started with ALP's Linux foundations, and after two years and 33 partner agreements, it unveiled the Else Intuition OS. When asked about other Linux-based platforms like Android and webOS, Eilam expressed little concern. "Android's a game-changer... [but] people need to consider that Android doesn't bring good user experience. Most [manufacturers] have failed. The Droid is improving, has a great infrastructure but they treat Android as just a component." Interestingly, Else didn't comment on webOS -- probably to avoid stirring up Access's bitter memories of Palm, but it could've been just a miss.

"The death of main menu"

While there's some good old Linux doing the donkey work underneath, the First Else's futuristic and intuitive user interface mesmerized us during the presentation and our hands-on, all thanks to "sPlay" -- a right-thumb-controlled, sci-fi-like fan menu interface. Else actually did a live demo on its prototype First Else with no visible glitches, and when we had our hands on the device we got the same great responsiveness. Else CEO Amir Kupervas made a good point about how "smart" phones should actually be adapting to us instead of us having to adapt to cluttered menu systems, which led the to birth of sPlay and the fisheye display which provide minimal but necessary information, while keeping a consistent layout and visual aesthetics across different applications. At the same time, these features are positioned within reach of the right thumb, and sPlay takes it further by letting you easily browse different content by just a simple swipe of the right thumb. Kupervas went as far as saying this single-hand operation is "the death of main menu," mocking most other smartphone platforms. You'll probably appreciate more of what Else is trying to achieve after watching its presentation (followed by its campaign video which is also available at the 'Source' link):

Impressive hardware, interesting service integration

While Else's focus is on the user experience, it hasn't compromised on the hardware front: inside it's got a powerful TI OMAP 3430 processor (as found on the Motorola Droid and Palm Pre), a brilliant 854x480 3.5-inch capacitive LCD touchscreen, a 5-megapixel camera which promises to capture 480p video at 30fps, and a 1450mAh battery which claims to outlast the iPhone 3GS by at least one hour. Oh, we dig the OLED indicators at the top as well, leaving us some useful space on the screen. Details on storage capacity are still vague, but right now Else is only saying anything up to 32GB. There's no word on where the First Else will make its commercial launch -- all we know is that it'll only operate on HSDPA and EDGE (sorry, Verizon fans).

Speaking of carriers, Else is also working on a self-branded media store which will require no credit card details, thus enhancing the "out-of-the-box experience". How will it do that, you say? Well, it'll work very closely with carriers in full partnership, and let them charge you at the end of the month. This isn't totally revolutionary -- with the iPhone it's just a one-off setup on iTunes -- but it's still a nice touch by Else, and we're sure someone out there will appreciate this extra effort to create a seamless user experience. Similarly, Else will be setting up an app store and they'll release an SDK at launch. We've been told that some big names are already working on the first lot of apps -- World of Warcraft was mentioned -- and there'll be an app approval process to ensure that they'll have the same flow as the handset itself. Good for the users, but probably not so good for the developers.

Wrap-up

There's a lot of potential here and well done to Else for the work so far, but there are still many uncertainties: pricing, availability, carriers, apps, final device specs and, most importantly, usability in the long run. That's a lot of of unanswered questions -- almost enough for us to call this vaporware -- but we're optimistic, as we've actually held and played with a working device in person. We're hoping to hear a lot more about what Else has in store -- until then, we can only drool over this final quickie demonstration. Just remember to wipe up afterwards.

via www.engadget.com

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Toys For Tots Circa 1999 with Elfin Magic

 

In one of the major highlights of his short but colorful 'military career', the Head Elf leads a squad of U.S. Marines into the Heart of a local Toys R Us during the 1999 campaign.

Alice @ 97.3's Vinnie Krackhorne of the "Sarah and Vinnie Morning Show" was on hand to broadcast the festivities.  It took two entire Marine M923s (five-ton transport trucks) to hold the booty collected.  That's alot of Elfin Magic...

Thanks to Lt. General Matthew T. Cooper USMC (Ret.), the then President of the U.S. Marines Toys For Tots Foundation, for the opportunity to serve.

Marine Toys For Tots Foundation
715 Broadway Street, P.O. Box 1947
Quantico VA  22143
+1 (703) 640-9433

 

Soundtrack Info

"Magic Carpet Ride"

From The Second (Steppenwolf, 1968)

Words and music by John Kay and Rushton Moreve

I like to dream yes, yes, right between my sound machine

On a cloud of sound I drift in the night

Any place it goes is right

Goes far, flies near, to the stars away from here

Well, you don't know what we can find

Why don't you come with me little girl

On a magic carpet ride

You don't know what we can see

Why don't you tell your dreams to me

Fantasy will set you free

Close your eyes girl

Look inside girl

Let the sound take you away

Last night I held Aladdin's lamp

And so I wished that I could stay

Before the thing could answer me

Well, someone came and took the lamp away

I looked around, a lousy candle's all I found

Well, you don't know what we can find

Why don't you come with me little girl

On a magic carpet ride

Well, you don't know what we can see

Why don't you tell your dreams to me

Fantasy will set you free

Close your eyes girl

Look inside girl

Let the sound take you away

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BLUE MATTER by IBM - Human Brain Computer Rival May Be Ready By 2019

By Brandon Bailey  

Posted: 11/18/2009 12:01:00 AM PST  

Updated: 11/19/2009 05:01:01 AM PST

By Daniel Terdiman, CNET News.com Thursday, November 19, 2009 10:59 AM

Computers capable of mimicking the human brain's power and efficiency could be just 10 years off, according to a leading researcher at IBM.

In an era when PCs perform like supercomputers, and supercomputers carry out inhuman feats of calculation, some of the brightest minds in Silicon Valley say there are still crucial ways in which a computer can't match the problem-solving abilities of our own brains.

But today, at a supercomputing conference in Portland, Ore., a team of scientists from IBM's Almaden Research Lab and several other Bay Area institutions are planning to announce two developments that could one day lead to a new kind of computer — one that uses specially designed hardware and software to mimic what's inside our heads.

Researchers from IBM and the Lawrence Berkeley National Laboratory say they have performed a computer simulation that matches the scale and complexity of a cat's brain, and project members from IBM and Stanford have developed an algorithm for mapping the human brain at new levels of detail. Eventually, scientists hope that detailed knowledge will help them build a computer that replicates the more complex working of a human brain.

The developments are early milestones on a long road that could one day yield applications for business, science or even the military. Still, veteran computing analyst Rick Doherty at the Envisioneering Group called the scale and significance of their progress "jaw-dropping."

According to the researcher, Dharmendra Modha, the manager of IBM's cognitive computing initiative, scientists from his company and some of the world's most prestigious universities have already managed to simulate the computing complexity of the feline cortex, a feat that could augur a day not too far off when it will be possible to ramp up to what the human brain can accomplish.

The simulation, for example, did not exactly mimic what a real cat does in catching a mouse. But it surpassed earlier efforts that simulated the much simpler brain structure of a creature the size of a mouse.

Researchers used an IBM supercomputer at the Lawrence Livermore Lab to model the movement of data through a structure with 1 billion neurons and 10 trillion synapses, which allowed them to see how information "percolates" through a system that's comparable to a feline cerebral cortex.

The work is part of a federally funded effort to study what's known as cognitive computing, starting with what IBM project manager Dharmendra Modha calls "reverse-engineering the human brain," or designing a new computer by first getting a better understanding of how the brain works.

"The brain is amazing," said Modha, a computer scientist who can wax poetic about the capabilities of human gray matter. "The brain has awe-inspiring capabilities. It can react or interact with complex, real-world environments, in a context-dependent way. And yet it consumes less power than a light bulb and it occupies less space than a two-liter bottle of soda."

A key difference between human brains and traditional computers, Modha says, is that current computers are designed on a model that differentiates between processing and storing data, which can lead to a lag in updating information. The brain works on a more complex physical structure that can integrate and react to a constant stream of sights, sounds and other sensory information.

"The data can be very ambiguous. When we see a friend's face in a crowd," Modha said, "she could be wearing a red sweater or a blue dress, or her hair could be styled differently, but we're able to get to the fundamental essence of the pattern and recognize this is our friend."

Modha imagines a cognitive computer that could analyze a flood of constantly updated data from trading floors, banking institutions and even real estate markets around the world — sorting through the noise to identify key trends and their consequences. Or one that could evaluate pollution, weather and ocean data from real-time sensors around the world, to monitor global water supplies.

"As our digital and physical worlds collide, there is a tsunami of information," Modha said. "There is a need for a new kind of intelligence that can sort through, prioritize and extract the most important information, much like how the brain deals with sight, sounds, tastes, touch and smell."

A cognitive computer might also help soldiers analyze and react to chaotic events on a battlefield. The research is the result of a $5 million grant from the Pentagon's Defense Advanced Research Projects Agency, or DARPA, which also funded the forerunner of the Internet. But like that earlier work, scientists say the study of cognitive computing could lead in many unexpected directions.

Stanford psychology professor Brian Wandell, who studies neuroscience, was on the team that developed a new algorithm for interpreting data from a kind of noninvasive brain scan. Using supercomputers, the team has used that data to measure and map the structure of axons, or thin white threads that help carry brain signals.

Understanding these structures could lead to better knowledge of conditions such as multiple sclerosis or autism, Wandell said.

"When you see how something is laid out, you get insights about how something actually functions," he added. "So seeing the wiring diagram of the brain will be helpful for understanding how the brain functions."

Last year, IBM and five universities were awarded a DARPA contract to work on a cognitive computing project aimed at eventually achieving that goal. Just a year later, Modha said, his team, working in conjunction with the universities' scientists, have achieved two major milestones.

The first was a real-time cortical simulation that achieved more than 1 billion spiking neurons, as well as 10 trillion individual learning synapses. According to Modha, that exceeds what a cat's cortex is capable of.

Second, the scientists created a fresh algorithm they are calling BlueMatter that is aimed at spelling out the connections between all the human brain's cortical and sub-cortical locations. That mapping is a critical step, Modha suggested, for a true understanding of how the brain communicates and processes information.

The human brain, Modha said, is fundamentally different from today's computers in power and size, and he and the many scientists he is working with are eager to learn from the brain how to build new kinds of computing architectures. Part of the reason, he added, is that as our world gets more and more complex, a "tsunami" of data is being produced and analyzing those data demands "a new kind of cognitive system, a brain-like system, to make sense of it."

To achieve the goal, Modha and his fellow scientists are combining supercomputing, neuroscience, and nanotechnology research to demonstrate what is possible. The work they have done has progressed in just a year from the granting of the DARPA contract to today's achievements.

Modha said that examples of what could be done with computers working at this scale are realistic analysis of the world's water supply systems, or financial systems. The idea is to detect causality behind phenomena, and to make those connections quickly and effortlessly, the way the human brain works. Writing such a program using today's computers would be impossible, he said, but these future computers would be able to quickly distill answers to these kinds of enormous problems.

There is no promise, of course, that Modha and his colleagues will be able to advance the difference between the power of the cat and human cortexes in the next decade. After all, there is a difference of a factor of 20 between the two. But, he sounded optimistic that a decade is a realistic goal.

But, regardless of the timing, the aim is clear: reverse-engineer the human brain and learn its computational algorithms. And then deploy them in a bid to solve some of the world's most complicated computing problems.

( via San Jose Mercury News  via ZDNet Asia )

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Live From Google’s Chrome OS Event - TechCrunch

We’re here today in Mountain View, CA at the Googleplex for an event during which Google is promising to give a lot of details about Chrome OS. This includes a full product rundown and details about the formal launch, which is expected to occur early next year.

Sundar Pichai, Google’s VP of Product Management and Matthew Papakipos, Google’s Engineering Director for Google Chrome OS are speaking at the event. And there will be a Q&A session afterwards.

Below find our live notes (paraphrased):

SP: Welcome everyone. We’re here today to talk about Google Chrome OS. We aren’t launching it today and not beta today. But we’ve made progress. As of today the code will be completely open. We’re excited to announce this.

Google Chrome is foundation of everything we’re doing here. Why do Chrome. It’s been a year. We just announced we’re over 30 million users – and now we’re already over 40 million users. We focused on speed, simplicity, and security. It’s 40% faster in JS than IE8. “One is fast and one is slow.” The most common feed back we get is “Chrome is fast.”

In the last year we’ve updated Chrome about 40 times, but most users don’t even notice. And we’re really focused on HTML5. We really want to push the web forward.

Just this year there is tons of new stuff coming:

1) Chrome for Mac will be ready before the end of the year. Very close now.

2) Chrome for Linux is coming along very well. That’s the foundation of Chrome OS.

3) Extensions are coming. We’ve taken our time to do this right. We have more details coming about extensions with certain partners. These update automatically.

HTML5, we want the web to apps as well as they do natively. We’ve been working hard on this. We want web apps to be able to use system resources the same way. Graphics is one example, we need a way to access to the GPU. Audio/video playback is key. And we need apps to work offline. We’re working with the other major browser vendors to make sure HTML5 comes along.

The growth in netbooks is amazing. Growth is exploding despite the recession. Ultra thin, ultra light computers. The trend is clear that we’re moving to web applications – not desktop applications. It’s the most successful platform out there right now. We’re moving from laptops down to netbooks on the regular computer end. On the other side we’re going from phones to tablets – these are all computers. Laptops are becoming more like phones too – always on connectivity.

Is there a better model of personal computing? We believe so. That’s Chrome OS.

We focus on three things. Speed. Simplicity. Security.

We want Chrome OS to be blazingly fast, basically instant-on. Chrome (the browser) on Chrome OS is going to be much faster.

In Chrome OS every application is a web application. There are no native applications. That gives us simplicity. It’s just a browser with a few modifications. And all data is Chrome OS is in the cloud. This is key, we want all of personal computing to work this way. If you lose your machine, you just get a new one, and it works. With security, because everything is a web app, we can do different things. No system is ever fully secure. With Chrome OS no user install binaries, so we can see bad things easier. We run completely inside the browser security model.

——–DEMO———

It takes about 7 seconds to to go the log-in screen. And another 3 seconds to log in to your application. And we’re working to make that faster.

Should be no surprise that it looks like Chrome the browser. We are opening up the project a year ahead of release right now. A lot of the UI will change in that time. But many of the core concepts here will carry over into the final product.

It looks like Chrome but it has application tabs. (Just like the pictures we posted.) And there is an App Menu. The UI will change a bit, but we want to give you a way to find your favorite applications. Panels are pesistent lightweight windows that never move. Buddy lists and chat are great for this. Or a notepad. And media pops up in little windows.

Demo of a chess game being played within the browser. And you can allow it to take over the full screen so you don’t realize you’re in the browser.

And we want you to be able to read books in Chrome OS. And YouTube videos look great. And there is an all view mode (and the YouTube video is still playing. You can drag and drop tabs. “It just works.”

What happens if you plug in a camera? It simply opens a window with the camera’s files. I can pull any picture and open it in a new browser window.

Microsoft Office launched a killer-app for Chrome OS (laughs). So if you get an Excel doc, it will open in Office online.

People have many types of files with computers right? They need to get in them. Like PDFs, but these work instantly in the browser too.

———–Time for Matthew Papakipos to go under the hood of Chrome OS—————–

MP: Excited about the tech under the hood. All the code is out in the open now, you can go check it out.

We want this to feel much more like a television than a computer. All Chrome OS devices will be based on solid-state storage.

One of the reasons computers boot so slowly today is that they’re still looking for things like floppy drives. Does anyone use those anymore? No. We cut out a lot of the startup processes. And we open the browser immediately. And we have something called Verified Boot – Chrome OS auto-updates itself with all the security patches. Everytime you boot we double check that you’re running what you should be running. If something fails the cryptographic system check, we reboot to get a clean image. Basically this is system recovery.

Current OSes allow apps to have the same power as you. They can modify files, etc. This means a rogue app can do bad things. In Chrome OS all the apps are web apps, with a different security model. All apps are treated as if they are hostile at a system level. A web app can change files on your hard disk, etc.

And we have security sandboxing – same thing we do in Chrome. Every tab run in Chrome OS is locked down and different from other tabs.

The File System: It’s always auto-updated. There are a few areas of the hard disk. The root partition is read-only. This is locked down, which is unusual in OSes today. User data is always encrypted. This is key for safety of your data. So important if you lose your machine.

All user data is synced with the cloud at all times. If you lose your machine, it’s not really gone.

———Back to Sundar Pichai——-

This is all about offering a choice for users.

We’re not going to go into too much detail about going to market today. We’re working on the software right now, but we are also working with manufacturers on the hardware level. For example, we only support solid-state drives and certain types of WiFi cards.

You cannot download and install Chrome on any machine. You will have to buy a new one.

End of next year. Before the holiday season.

While netbooks are popular, but some have usability issues. We want to make slightly larger netbooks with full sized keyboards and big trackpads.

Again, the code is all open source now. The Linux kernal, Unbuntu, Moblin have all been important to what we’re doing now. We can’t wait to see what people do with our code now.

If you are a developer and have the right type of netbook (and a screwdriver) you can get Chrome OS running today.

————Video Demo Time———–

———-Q&A Time———

Q: So many questions. One is what is the focus group for this type of device? I have an Android device now – can you run Android apps on Chrome OS? And Android devices are becoming so powerful, so why not just use this – is there a Chrome server solution?

SP: There are many possibilities. What we are doing across Android is great because it’s all open-source too. I think we’re going through a shift in computing, it’s exciting. Time will tell.

Q: Do you know what this Chrome OS netbooks will cost?

SP: You will hear that from our partners. They will be in the price range that people are used to for netbooks today. But it’s hard to predict a year from now. Also remember, they will be bigger.

Q: Price target you want to hit?

SP: No we don’t have one.

Q: What netbook are you running this on right now (for the demo)?

SP: That’s an Eee PC.

Q: With the APIs support W3C working group standards? What about docs for partners?

SP: There’s a lot of documentation on our website. And we’ve been reaching out to partners for a while.

MP: For standards, yes we’re working closely with all the standards group like W3C to standardize as much as we can. But web standards take a while to be finalized. But it’d be nice to see all this on different OSes.

Q: Will there be an app store? What about driver certification? What about editing apps – like editing photos?

SP: We will have more details about the idea of an app store down the line. We care about web apps – on the web there are hundreds of millons of applications.

MP: We’re working closely with hardware makers for the drivers.

SP: Back to apps that you can’t use on the web, like powerful editing. This will be a secondary device, it may be a primary device in terms of time spent on it, but we expect people to have other computers too.

Q: Codec support and native client support?

MP: Yes, everything that works in Chrome will work in Chrome OS.

SP: And we’re investing in new tech to make web apps run just like desktop apps. Chrome OS will also influence Chrome (the browser).

Q: Will you support Silverlight?

SP: Certain select plug-ins we’re trying to work on. But I don’t have a comment on working with Microsoft (laughs).

Q: Other browsers?

SP: Chrome OS is all about Chrome, so another browser can’t really work here. That said, it’s open source, so other browser makers can make their own OSes if they want.

Q: Will the system be exclusive to netbooks or other devices too? Any hardware partners you can make?

SP: Hardware details will come in the middle of next year. We are intially fully focused on netbook-like computers (clam shell). In the future it will be able to work on anything though.

Q: How big is the whole OS?

SP: Since it’s open source, there’s a lot in there right now. But we’re working hard to make it simple.

Q: Offline access with Gears? What about being on a plane?

SP: WiFi is the use case we have in mind. But having said that, there will be ways to plug in and play media (listen to music and read books, etc) And with HTML5 there is offline support.

Q: What WiFi will you use?

MP: We’re focused on 802.11n.

Q: Virtualization, can you run it now?

MP: Sure, you could build it and run it in a virtual machine. That’s a great way to compile and debug.

Q: What about partners like Adobe? So Android’s marketplace is key – what about Android apps on Chrome?

SP: Independent of Chrome OS we’re all about moving web apps forward – including things like Photoshop on the web. Android apps currently will not run on Chrome OS.

Q (from Mike): Steve Jobs said the same thing when he launched the iPhone (about web apps). There will be pressure to get Android like apps right?

SP: Currently we’re only working with web apps. The iPhone was a bit different because THEY made their own native apps. We’re not doing that, we’re doing all web apps for Chrome OS. Netbooks are a better size for web apps.

Q: What processors will this run on?

SP: x86 and ARM eventually.

Q: So different code?

MP: Not ready to answer that, but basically yes.

Q: What about other machine timeline? What about business model?

SP: We’re just focused on netbooks in 2010. For business model, Chrome OS is free, using the web more benefits us for a company.

Q: Any new ads in Chome OS?

SP: No plans for that. These are all just web apps.

Q: What does Chrome OS do that other browsers on other OSes can’t do?

SP: Most of what we show here you can do in other browser. But there are new user concepts we’re exposing, app tabs, panels, and there will be more.

MP: We can do more stuff with the file system and faster boot times.

Q: How do you get people past the cloud reliability? And what about storing this on Google’s servers.

SP: If your cloud is down, it affects every computer now, so this isn’t really much different. Compare the cloud reliability with what you have to do – the cloud compares favorably. In terms of trust, it’s important that users have choice. And things are open so developers can tell users what is going on.

Q: Is the Signature process – is Google in charge of that?

MP: Yes, we’ll open source that as well.

———Google co-founder Sergey Brin Enters———

Q: Chrome runs JavaScript really well – what about supporting Java?

SP: Technically there is nothing limiting what you’re talking about. But we’re focused on web apps.

Q: Dell has a full laptop but also a small netbook that runs ARM and is instant-on. Any plans to be a second OS on a laptop?

MP: No we’re focused on being the core OS on a machine.

Q: What about running printers or flip cams?

SP: We plan for all standard keyboards, mice, and storage devices. For printing – we’ll have more to share next year. Yes Chrome OS will print. We’re working on it.

Q: Is this about moving the community/ecosystem forward again?

MP: Yes definitely, that’s why we’re open sourcing it. Hopefully this will help other products out there. This makes it easier to work with hardware vendors too.

Q (from Steve): Realtime notifications on every page?

SB: I think we definitely need support for that in the browser. And especially in Chrome OS. Hopefully we can solve the problem of chatting when you’re not signed in to Google.

MP: There is a new notification API standard that is being worked on now.

Q: What about Wave.

SB: Wave will work with that.

Q: What is Chrome’s strategic position for Google?

SB: We really focus on user needs rather than strategies based on other companies. Netbooks are now $300 or $400 you can buy a bunch, but there’s no good way to manage a bunch of them — that’s where the web comes in, and Chrome OS comes in.

via www.techcrunch.com

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FEDS: Top E-tailers Profit From Billion-Dollar Web Scam - CNET News

 

by Greg Sandoval

Updated at 2:50 p.m. PST to include quotes from senators and names of retailers that do business with Vertrue, Webloyalty, and Affinion.

Words like "scam," "fraud," and "arrest" filled the air during a Senate hearing on Tuesday that focused on the controversial marketing companies that allegedly dupe consumers into paying monthly fees to join online loyalty programs.

Vertrue, Webloyalty, and Affinion generated more than $1.4 billion by "misleading" Web shoppers, said members of the U.S. Senate Committee on Commerce, Science and Transportation, which called the hearing. Lawmakers saved their harshest rebuke for Web retailers that accepted big money--a combined sum of $792 million--to share their customers' credit-card information with the marketers.

Senate investigators launched their six-month inquiry by examining complaints from people who discovered mysterious charges on their credit card bill. For years, Web shoppers have complained that they were signed up to some Web loyalty program without their knowledge and were charged fees until they discovered the problem and complained. Some paid fees for years.

The government says the investigation shows that Webloyalty, Affinion, and Vertrue "trick" consumers into entering their e-mail address just before they complete purchases at sites such as Orbitz, Priceline.com, Buy.com, 1-800 Flowers, Continental Airlines, Fandango, and Classmates.com. A Web ad, which many consumers say appears to be from the retailer, offers them cash back or coupon if they key in their e-mail address.

Many of those who complained say they don't fear the ad because they aren't being asked to turn over credit-card information, according to the Senate report. But buried in the ad's fine print is notification that by entering their e-mail address, the shopper is agreeing to join a loyalty program and allowing the store to authorize marketers to charge their card each month, between $9 and $12.

"What's happening is many online merchants have decided to betray their customers' trust."

--Sen. John Rockefeller

"When people shop online, they have the right to expect that the stores they entrust with their credit card and other personal information will not share it," said Sen. John Rockefeller, (D-W.V.), the committee's chairman. "What's happening is many online merchants have decided to betray their customers' trust...fine print is the (biggest) scam of all time."

The way the government lays out its findings, it appears the loyalty programs are profiting off of the reluctance of many consumers to read fine print and check their credit card statements, and the blind trust many have in the stores where they shop.

Vertrue and Webloyalty issued statements saying they have changed their practices and have opted to require consumers to key in some credit card or other information to enroll into one of the company's membership programs. Expert witnesses and government officials said during the hearing that these alterations don't go far enough.

"This really has an easy solution. Retailers shouldn't sell (credit card) numbers to third parties, period. There is no legitimate reason to justify it."

--Prentiss Cox, professor

Perhaps most importantly, witnesses also said the best and only way to defeat the problem is to make it unlawful for retailers to ever sell their customers' personal information.

Affinion representatives were not immediately available for interview.

Rockefeller noted during the hearing that Vertrue and Webloyalty dropped some of their business practices only after Senate investigators were well into their probe. He also remarked that some of the retail companies, including U.S. Airways, had informed him that they they had ceased doing business with the marketers. He told the audience at the hearing and those who watched via a Webcast that he anticipated Continental Airlines would do the same.

The government's report provides a jaw-dropping amount of information that shows:

 • Managers at Webloyalty, Affinion, and Vertrue are fully aware that most of the people signing up for memberships are unaware that they are doing it.

• Their programs are designed to mislead consumers into signing up.

"Classmates.com, which has been partnered with each company at different times and has earned more than any other partner, generated approximately $70 million in revenue."

--From the Senate report

• Retailers doing business with the companies are also aware that customers are likely to be angered once they notice the charges but do it because they are paid big bucks. Classmates.com has pocketed $70 million from partnering with the all three companies, according to the report. The government says that 88 retailers have made more than $1 million through the partnerships with e-loyalty programs, while 19 have made more than $10 million.

"The more aggressively an e-commerce company is willing to market Affinion, Vertrue, or Webloyalty's membership clubs to its customers, the more money it will earn," the Senate Commerce committee wrote in the report.

Another reason e-tailers risk alienating customers is that some of the e-loyalty companies insulate the Web stores from customer complaints. They call these complaints "customer noise." To illustrate this, the Senate committee included excerpts from a letter from a Priceline shopper who said she was charged for a loyalty membership for over a year without her knowledge.

The governments investigation will continue. According to a Senate staffer, Rockefeller will invite the CEOs of Webloyalty, Affinion, and Vertrue to testify at another hearing, which will likely be held sometime early next year.

To watch a replay of the Senate hearing go here.

via news.cnet.com

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