Facebook May Become Part of Your Digital Estate

When Karen Williams' son died in a motorcycle crash, the Oregon woman turned to his Facebook account in hopes of learning more about the young man she had lost.

Roslan Rahman | AFP | Getty ImagesWilliams found his password and emailed the company, asking administrators to maintain 22-year-old Loren Williams' account so she could pore through his posts and comments by his friends. But within two hours, she said, Facebook changed the password, blocking her efforts.

"I wanted full and unobstructed access, and they balked at that," said Williams, recalling her son's death in 2005. "It was heartbreaking. I was a parent grasping at straws to get anything I could get."

Now lawmakers and attorneys in at least two states are considering proposals that would require Facebook and other social networks to grant access to loved ones when a family member dies, essentially making the site contents part of a person's digital estate. The issue is growing increasingly important as people record more thoughts and experiences online and more disputes break out over that material.

Williams, a second-grade teacher from the Portland suburbs, ultimately got back into her son's account, but it took a lawsuit and a two-year legal battle that ended with Facebook granting her 10 months of access before her son's page was removed.

Nebraska is reviewing legislation modeled after a law in Oklahoma, which last year became the first state to take action.

"Mementos, shoe boxes with photos. That, we knew how to distribute once someone passed away," said Ryan Kiesel, a former legislator who wrote the Oklahoma law. "We wanted to get state law and attorneys to begin thinking about the digital estate."

Under Facebook's current policy, deaths can be reported in an online form. When the site learns of a death, it puts that person's account in a memorialized state. Certain information is removed, and privacy is restricted to friends only. The profile and wall are left up so friends and loved ones can make posts in remembrance.

Facebook will provide the estate of the deceased with a download of the account data "if prior consent is obtained from or decreed by the deceased or mandated by law."

If a close relative asks that a profile be removed, Facebook will honor that request, too.

Like the Oklahoma law, the Nebraska bill would allow friends or relatives to take control of social media accounts if the deceased person lived in the state. The measure would treat Facebook, Twitter and email accounts as digital assets that could be closed or continued by an appointed representative.

Omaha lawyer William Lindsay, who specializes in estate planning, said his professional experience has taught him that the issue should be addressed in the law. But he also has a personal interest because of a cousin who died while serving in the Navy.

"We wanted to be able to get the email records, but we couldn't because nobody knew the password," Lindsay said. "We wanted to let her friends know she had died, but we didn't know all of them."

Sen. John Wightman, who sponsored the measure at the urging of the state bar association, said he expects the Judiciary Committee to approve the bill, sending it to the full Legislature.

Facebook spokesman Tucker Bounds said the company was surprised by the Oklahoma law and was working closely with Nebraska legislators on the latest proposal. The company declined to say how many people had requested access to accounts held by Oklahomans, but Bounds said it was relatively rare.

"I can tell you there aren't people pouring out into the streets asking for access," Bounds said.

Oregon could be the next state to take up the issue. The Oregon State Bar Association has formed a group to work on the matter and hopes to propose legislation next year.

Portland lawyer Victoria Blachly said the plan will mirror the Oklahoma law, but it will also include a "virtual asset instruction letter" that lists online information and passwords, along with instructions for when someone dies or becomes incapacitated.

"That's the part that social media providers have been wrestling with," Blachly said.

Like others, Blachly said she began studying the issue after a young relative died and left social media accounts in limbo.

Her top concern is the emotional value of social media accounts.

"Some people say, 'Well, if I get hit by a bus, what do I care?"' she said. "The people who love you care very much about it."

© 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Facebook Seeking Bigger Credit Line: Sources

Facebook plans to increase its $2.5 billion credit line to help cover a major tax hit when employee stock awards vest shortly after it goes public, according to two sources familiar with the company's plans.

The world's largest social media network, which boosted its borrowing capacity by two-thirds just six months ago, is taking advantage of its strong position to get more financing for its phenomenal growth, the sources said.

The sources spoke on condition of anonymity because they are not authorized to speak publicly about such plans.

A spokesman for Facebook declined to comment.

"All these tax obligations are being created and you need cash to take care of it. You see this all the time but in this case it will be substantial," said Michael Moe of GSV Capital, which owns Facebook shares. "Having the cash to be able to take care of that makes a lot of sense. That would be the motivator of a larger credit facility."

Facebook has said it plans to pay taxes on its employees' restricted stock units, or RSUs, when they vest six months after the company's initial public offering. The exact amount is likely to total billions of dollars, based on Facebook's stock price at the time.

Helping employees cover tax on RSUs is relatively unusual and leaves the employer with a "very expensive obligation" that could increase if Facebook shares climb, said Bart Greenberg, a partner at law firm Haynes and Boone who advises start-up tech companies.

"It could create such a large cash obligation that it eats up most of the credit facility," Greenberg added. "That facility may have been originally set aside for acquisition opportunities or working capital."

Facebook said it may sell equity securities, tap its credit facility, use cash or a combination of these options to meet its tax obligation, according to its IPO filing.

In February 2011, Facebook set up a $1.5 billion credit agreement with affiliates of Morgan Stanley, JPMorgan, Goldman Sachs, Bank of America's Merrill Lynch and Barclays Capital, the leading underwriters of the company's IPO. In September 2011, the borrowing capacity was increased $2.5 billion.

"The golden rule of finance is that you get the money when you can, not when you need it," said Moe, who co-founded investment bank ThinkEquity. "Creating maximum flexibility will allow you to be efficient with your use of capital but also opportunistic when appropriate."

Some other tech companies that recently went public have also arranged similar credit facilities. Zynga [ZNGA  Loading...      ()   ] , the social games giant, set up a $1 billion facility with some underwriters of its IPO, which happened late last year.

Facebook and Zynga generate substantial profits, but the companies have big credit facilities because it is good corporate finance strategy to line up back-up cash from a position of strength, Moe and others said.

The months leading up to an IPO are a good time for companies to arrange credit facilities because they have the most negotiating power with banks vying for lucrative roles in equity offerings, according to the chief financial officer of a large private tech company who asked not to be identified.

Copyright 2012 Thomson Reuters. Click for restrictions.

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Facebook Seeking Bigger Credit Line: Sources

Facebook plans to increase its $2.5 billion credit line to help cover a major tax hit when employee stock awards vest shortly after it goes public, according to two sources familiar with the company's plans.

The world's largest social media network, which boosted its borrowing capacity by two-thirds just six months ago, is taking advantage of its strong position to get more financing for its phenomenal growth, the sources said.

The sources spoke on condition of anonymity because they are not authorized to speak publicly about such plans.

A spokesman for Facebook declined to comment.

"All these tax obligations are being created and you need cash to take care of it. You see this all the time but in this case it will be substantial," said Michael Moe of GSV Capital, which owns Facebook shares. "Having the cash to be able to take care of that makes a lot of sense. That would be the motivator of a larger credit facility."

Facebook has said it plans to pay taxes on its employees' restricted stock units, or RSUs, when they vest six months after the company's initial public offering. The exact amount is likely to total billions of dollars, based on Facebook's stock price at the time.

Helping employees cover tax on RSUs is relatively unusual and leaves the employer with a "very expensive obligation" that could increase if Facebook shares climb, said Bart Greenberg, a partner at law firm Haynes and Boone who advises start-up tech companies.

"It could create such a large cash obligation that it eats up most of the credit facility," Greenberg added. "That facility may have been originally set aside for acquisition opportunities or working capital."

Facebook said it may sell equity securities, tap its credit facility, use cash or a combination of these options to meet its tax obligation, according to its IPO filing.

In February 2011, Facebook set up a $1.5 billion credit agreement with affiliates of Morgan Stanley, JPMorgan, Goldman Sachs, Bank of America's Merrill Lynch and Barclays Capital, the leading underwriters of the company's IPO. In September 2011, the borrowing capacity was increased $2.5 billion.

"The golden rule of finance is that you get the money when you can, not when you need it," said Moe, who co-founded investment bank ThinkEquity. "Creating maximum flexibility will allow you to be efficient with your use of capital but also opportunistic when appropriate."

Some other tech companies that recently went public have also arranged similar credit facilities. Zynga [ZNGA  Loading...      ()   ] , the social games giant, set up a $1 billion facility with some underwriters of its IPO, which happened late last year.

Facebook and Zynga generate substantial profits, but the companies have big credit facilities because it is good corporate finance strategy to line up back-up cash from a position of strength, Moe and others said.

The months leading up to an IPO are a good time for companies to arrange credit facilities because they have the most negotiating power with banks vying for lucrative roles in equity offerings, according to the chief financial officer of a large private tech company who asked not to be identified.

Copyright 2012 Thomson Reuters. Click for restrictions.

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Facebook: The Wimps Will Inherit the Data Center

Facebook hardware man Frank Frankovsky outside the company's new HQ -- aka the former home of onetime hardware giant Sun Microsystems (Photo: Jon Snyder/Wired)

Unlike Google, Facebook believes the wimps have a future in the data center.

As various academics and free-thinking startups seek to reinvent the server using ultra-low-power processors — aka “wimpy cores” — Google continues to downplay the idea, and because it’s Google — the company that led a data-center revolution over the last several years — people are listening.

But Facebook is now leading a data-center revolution of its own, and the social networking giant cum hardware designer is rather high on the wimpy-core idea.

“I think it’s going to shake things up sooner than you think,” says Frank Frankovsky, the man who oversees Facebook’s effort to design its own servers and other data-center hardware.

The idea is to save power and space by building servers equipped with hundreds of processors not unlike the one in your iPhone. Rather than running your applications on traditional “brawny core” server chips, you break your software up into tiny pieces and spread them across a much larger number of “wimpy cores” — a “core” being a single microprocessor. Startups such as SeaMicro and Calxeda are actually stuffing hundreds of individual chips into each server, while another outfit, Tilera, is stuffing hundreds of cores into a single chip.

The wimpy-core movement is part of a larger effort to re-imagine hardware in the data center so that it’s suited to big-name web services and other operations that juggle unusually large amounts of data. Google was at the forefront of this movement, designing its own data centers and its own servers, and a big part of its philosophy was to break its software into pieces that could be run across a large array of servers. While other big businesses were using enormous monolithic servers to run their software, Google was using thousands of commodity machines equipped with commodity server chips.

In a way, Google pioneered the wimpy-core movement. But the company is believes there’s a limit to how wimpy your cores can be. As you spread your application thinner and thinner, says Google distinguished engineer Luiz André Barroso, the spreading gets harder and harder. And at a certain point, he argues, it’s just not worth it to go any further. “There’s easy parallelism, but then there’s harder parallelism,” Barroso recently told Wired. “There are some parts of a program that are trivial to chunk into pieces, that don’t necessarily have to interact with each other … but eventually you’ve exhausted this, and you have to go down to other pieces of the code that are hard to parallelize.”

The wimpy-core evangelists see Google’s point, but they don’t necessarily agree with it. SeaMicro CEO Andrew Feldman believes that Google takes this stance because its particular infrastructure isn’t suited to wimpy cores, and Dave Andersen — the Carnegie Melon professor who coined the “wimpy node” name — says much the same thing. Both acknowledge, however, that some applications must be heavily rewritten for wimpy codes, and that many others — not just Google’s — are completely unsuited to the setup. Because some potential customers were cold on the wimpy core idea, SeaMicro is now offering a version of its servers based on traditional Intel Xeon “brawny cores.”

At Facebook, engineers have been tracking the progress of wimpy-core hardware for years, including gear from SeaMicro and Tilera. According to Frankovsky, the social networking giant is “actively testing hardware from both these outfits, and the company has employees dedicated to working with such hardware makers, “making sure Facebook code can run on alternative technology” to Intel’s x86 instruction set, the technology used by today’s brawny cores.

Facebook has yet to adopt this hardware for its live service, in part because the hardware from companies such as SeaMicro and Tilera can’t handle as much memory as the massive social network requires. But the hardware makers are working to eliminate this restriction. “We’re getting very promising results on our tests,” Frankovsky says. “What we’re focused on when it comes to CPU selection — or really any selection [of hardware in the data center] — is what can deliver the most useful work per watt per dollar. If that comes from Intel or AMD or Tilera or an ARM vendor, it’s all good with me.”

Part of the problem with using wimpy cores is that you have to move far more information between cores, and that can bog things down. But Tilera’s hardware alleviates this problem by putting all the cores on a single chip, and Frankovsky points out that the problem goes away once you build new protocols for moving data between cores — something that Facebook and others are now working on as part of the Open Compute Project. Frankovsky acknowledges that there may be limits to the wimpy-core setup, but he says it’s too early to actually identify them. “At this point,” he says, “those limits are all theoretical.”

As Dave Andersen points out, some software “workloads” are suited to wimpy cores, and others are not. But when we asked which Facebook workloads might benefit from wimpy cores, Frank Frankovsky was unequivocal. “Within the Facebook environment, I haven’t seen a workload that would be exempted from wimpy cores,” he says. “But it’s all a matter of time.”

Cade Metz is the editor of Wired Enterprise. Got a NEWS TIP related to this story -- or to anything else in the world of big tech? Please e-mail him: cade_metz at wired.com.

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Apple Gives Shareholders More Input; Will Facebook Get the Message?

Images by Wired's Jim Merithew

At its annual shareholders meeting on Thursday, Apple’s management bowed to pressure from key investors and agreed to allow shareholders to elect board directors by a simple majority vote. Now any new or current director standing for election who fails to receive support from a majority of shareholders must resign his or her position. At next year’s shareholder meeting, the company’s bylaws will be changed to reflect the new policy.

Apple’s current directors all received votes of over 80% signaling shareholder approval. CEO Tim Cook’s popularity was the highest, at 98.15%. The company successfully resisted calls for a stock dividend.

Still, the message from shareholders is simple: no matter how successful a company or its stock has become, or how visionary its leadership, investors want input into corporate governance.

The board election resolution was sponsored by the California Public Employees’ Retirement System, a giant pension fund and increasingly important activist. The Financial Times’ Dan McCrum notes that Calpers’ “push for change at one of the fastest growing and most popular US companies had become the centrepiece of a campaign for boardroom accountability“:

Its victory reflects a growing investor consensus in favour of the corporate governance agenda… Calpers has now persuaded 77 large US companies to adopt majority voting in the last two years, and is targeting 17 who are holding out – which it has not yet named.

“It’s vitally important that a company the size and importance of Apple is not lagging behind on governance,” Anne Simpson, head of corporate governance at Calpers, told McCrum. “A high standard of governance will underpin their future success… There is a fundamental flaw in US capital markets if shareholders cannot hold boards to account.”

Apple’s response to investor concerns resonates in no small part because all McCrum’s criticisms could easily be applied to Facebook. In fact, another large California pension fund and early Facebook investor, CalSTRS (“State Teachers’ Retirement System”), has already urged Facebook to rethink its governance structure.

“No matter how brilliant you are, when you come to the public market — not that we want to ever tell Zuckerberg or anyone like him how to run his company — there should be some protection especially for long-term, patient money like CalSTRS,” the fund’s Janice Hester-Amey told Reuters.

Facebook’s proposed board structure is actually much more closed and hostile to rank-and-file shareholders than the one Apple is moving away from.

Between his own stock holdings and agreements with early investors including DST Global Ltd and Accel Partners, CEO/founder Mark Zuckerberg controls a majority interest in the company. This gives him total control over approving the board of directors as well as any acquisition or mergers. He also has the ability to appoint his own successor, even after his death.Because of Zuckerberg’s control, Facebook qualifies as a “controlled company,” meaning that it is not required to have a majority of independent directors or a separate nominating committee. Zuckerberg effectively has the ability to select anyone he chooses inside or outside Facebook to serve on the board, and then use his controlling interest to approve his own choices.Facebook has two-tiered stock; private Class B shareholders hold ten times the voting power per share accorded to publicly-traded Class A stock. If Class B shareholders ever lose a controlling interest in the company, the governance structure shifts again; only the board of directors will be able to fill vacancies within its own body, director elections will become staggered (making it even more difficult to vote in an all-new-board), and it will take a supermajority vote to change the company’s by-laws.

Taken together, the rules concentrate power with Zuckerberg and his inner circle of early investors and advisors. Zuckerberg is steering the ship; shareholders purchasing public stock can only come along for the ride.

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Tim is a technology and media writer for Wired. He loves e-readers, Westerns, media theory, modernist poetry, sports and technology journalism, print culture, higher education, cartoons, European philosophy, pop music and TV remotes. He lives and works in New York. (And on Twitter.)
Follow @tcarmody on Twitter.

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Man Faces Jail Time Over Facebook Post

 Highlight transcript below to create clipTranscript:  Print  |  Email Go  Click text to jump within videoThu 23 Feb 12 | 12:00 PM ET Mark Byron says frustration over his upcoming divorce and child visitation led him to post about his estranged wife on Facebook. A judge ruled the post and comments violated a civil protection order against him, so Byron was ordered to apologize every day for 30 days or go to jail for 60 days. Terry Daniels reports.

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