1 of 2. A woman walks past a Nokia advertisement board at a home appliances store in Shenyang, Liaoning province December 6, 2012.

HELSINKI | Fri Dec 21, 2012 4:18am EST

HELSINKI (Reuters) - Struggling Finnish mobile phone maker Nokia has settled its patent dispute with BlackBerry maker Research in Motion in return for payments, as it tries to exploit its trove of technology patents to boost its finances.

Terms of the agreement were confidential, but Nokia said on Friday it included a one-time payment to be booked in the fourth quarter, as well as ongoing fees, all to be paid by RIM.

Nokia is one of the industry's top patent holders, having invested 45 billion euros ($60 billion) in mobile research and development over the past two decades.

It has been trying to make use of that legacy to ensure its survival, amid a fall in sales as well as cash. The Finnish firm is battling to recover lost ground in the lucrative smartphone market to the likes of Apple and Samsung.

The agreement with RIM settles all existing patent litigation between the two companies, Nokia said, adding similar disputes with HTC Corp and ViewSonic still stood.

"This agreement demonstrates Nokia's industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market," said Paul Melin, Nokia's chief intellectual property officer.

Nokia has earned around 500 million euros a year from patent royalties in key areas of mobile telephony.

Some analysts have said it could earn hundreds of millions more if it can negotiate with more companies successfully.

Analysts estimated its June 2011 settlement with Apple was worth hundreds of millions of euros.

($1 = 0.7555 euros)

(Reporting by Ritsuko Ando; Editing by Hans-Juergen Peters and Mark Potter)

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n">(Reuters) - Instagram, the popular photo-sharing service, has retreated from some but not all of the controversial changes in its terms of service that prompted a fierce backlash from users earlier this week.

In a blog post on Thursday, Instagram founder and CEO Kevin Systrom apologized for a failure to "communicate our intentions clearly." The terms of service changes pertaining to advertising have been reversed, Systrom said, and restored to what they had been before the changes announced on Monday.

Instagram, which allows people to add filters and effects to photos and share them easily on the Internet, was acquired by Facebook earlier this year for $715 million.

Some top users of Instagram, including National Geographic magazine, said they would stop using the service after the new rules were announced on Monday.

Language that had appeared to allow Instagram advertisers to display user photos without compensation have been removed from updated terms of service posted on Thursday.

The updated terms also do not appear to contain a controversial provision which had stated that if a child under the age of 18 used the service, it implied his or her parent had tacitly agreed to Instagram's terms.

However, the new terms still contain a mandatory arbitration clause, which is not included in terms of service for other leading social media companies like Twitter, Google, YouTube or even Facebook itself. That immunizes Instagram from many forms of liability, according to legal experts.

Internet experts said Instagram had been very aggressive in asserting its rights to user information and inviting anyone who did not agree to delete their accounts within a few weeks.

The updated terms still say that anyone who accesses Instagram agrees to be bound by the new terms which are slated to go into effect on January 19.

Also, Instagram kept language which gave it the ability to place ads in conjunction with user content, and "that we may not always identify paid services, sponsored content, or commercial communications as such."

Instagram representatives could not immediately be reached for comment.

Systrom stressed in the blog post that the company had no intention of selling the photos that users post on the service. Many users had read the new terms of service as an indication that the company was reserving the right to do that.

"Going forward, rather than obtain permission from you to introduce possible advertising products we have not yet developed, we are going to take the time to complete our plans, and then come back to our users and explain how we would like for our advertising business to work," Systrom said.

(Reporting by Jonathan Weber and Dan Levine; Editing by Paul Tait and Michael Perry)

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The Apple logo hangs in a glass enclosure above the 5th Ave Apple Store in New York, September 20, 2012. Apple's iPhone 5 goes on sale tomorrow.

WASHINGTON | Thu Dec 20, 2012 6:04pm EST

WASHINGTON (Reuters) - Tech giant Apple Inc, battling Samsung Electronics Co over patents in several countries, argued on Thursday that a U.S. appeals court should reconsider its decision to overturn a pretrial sales ban on Samsung for infringement.

The U.S. Court of Appeals for the Federal Circuit in October overturned a pretrial sales ban ordered by a lower court in California. The order was to stop sales of Samsung's Galaxy Nexus smartphone.

Apple argued that this was inappropriate and asked for an "en banc review," which means that a larger panel of judges would reconsider the decision made by the three-judge panel in October.

The fight is over a single patent - one that allows the smartphone to search multiple data storage locations at once. For example, the smartphone could search the device's memory as well as the Internet with a single query.

Apple argued that the sales ban should be reinstated because it uses the patent in question and competes with Samsung. The three-judge panel had said that consumers did not buy Samsung phones primarily because of the patent, and thus, a sales ban was inappropriate.

It has become increasingly difficult for companies to win sales bans related to patent infringement in recent years. Such sales injunctions have been a key for companies trying to increase their leverage in courtroom patent fights.

Apple, in a different patent lawsuit, scored a sweeping legal victory over Samsung in August when a U.S. jury found Samsung had copied critical features of the hugely popular iPhone and iPad and awarded Apple $1.05 billion in damages.

The Nexus phone was not included in that trial, but is part of a tandem case Apple filed against Samsung earlier this year.

The case in the Federal Circuit is Apple Inc vs. Samsung Electronics Co Ltd et al., 12-1507.

Earlier this week, U.S. District Judge Lucy Koh rejected Apple's request for a permanent sales ban against 26 mostly older Samsung phones, though any injunction could potentially have been extended to Samsung's newer Galaxy products. Koh cited the Federal Circuit's Nexus ruling as binding legal precedent in her order.

In a separate court filing on Thursday, Apple said it intended to appeal Koh's ruling.

(Reporting by Diane Bartz; Editing by Leslie Gevirtz)

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n">(Reuters) - Red Hat Inc, the world's largest distributor of Linux operating software, posted third-quarter revenue above analysts' estimates on strong growth in its subscription business, sending its shares up 6 percent in after-market trading.

The company also said it would buy privately held ManageIQ, which provides management and automation programs for cloud computing, for $104 million in cash.

The acquisition, its fourth since October last year, is not expected to have any material impact to Red Hat's revenue for the fiscal year ending February 28.

Red Hat expects to earn between 29 cents and 30 cents per share in the fourth quarter, on revenue of $347 million to $351 million, it said on a conference call with analysts.

Analysts were expecting earnings of 30 cents on revenue of $350.9 million, according to Thomson Reuters I/B/E/S.

Third-quarter net income fell to $34.8 million, or 18 cents per share, from $38.2 million, or 19 cents per share, a year earlier.

On an adjusted basis, the company earned 29 cents per share, in line with expectations. Revenue rose 18 percent to $344 million, beating estimates of $338 million.

Red Hat's subscription revenue rose 19 percent to $294.2 million in the quarter ended November 30.

Shares of the Raleigh, North Carolina-based company were trading at $55.60 after the bell. The stock closed at $52.61 on the New York Stock Exchange on Thursday.

(Reporting by Neha Alawadhi; Editing by Krishna N. Das)

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The loading screen of the Facebook application on a mobile phone is seen in this photo illustration taken in Lavigny May 16, 2012.

SAN FRANCISCO | Thu Dec 20, 2012 4:35pm EST

SAN FRANCISCO (Reuters) - Facebook Inc unveiled a test on Thursday that charges users to send certain types of messages through the social network, the latest example of the company looking for new sources of revenue and profit.

Until now, Facebook's messaging system sends the most-relevant messages, including those from users' Facebook friends, into an Inbox and siphons off less-relevant messages, such as potential spam, in an "Other" folder.

"Today we're starting a small experiment to test the usefulness of economic signals to determine relevance," Facebook said. "This test will give a small number of people the option to pay to have a message routed to the 'Inbox' rather than the 'Other' folder of a recipient that they are not connected with."

A Facebook spokesman said the charge for the test is $1 per message, but added that the company is still looking for the "optimum" price. Users can only receive one of these paid, re-routed messages per week, he noted.

The company said its test service may be useful in certain situations, such as allowing users to send a message to someone they heard speak at an event but are not friends with, or contacting someone about a job opportunity.

Facebook, which went public earlier this year, is under pressure from Wall Street to find new sources of revenue and profit. The company has responded with a series of new services and tests in recent months. In September, the company said it would start charging merchants to run offers on its social network.

The test messaging service is similar to the InMail service from LinkedIn Corp, the professional networking rival to Facebook, which lets users with high-end subscriptions send messages to other LinkedIn members outside their networks.

"For the receiver, this test allows them to hear from people who have an important message to send them," Facebook added.

(Reporting by Alistair Barr; Editing by Dan Grebler)

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LONDON | Fri Dec 21, 2012 4:35am EST

LONDON (Reuters) - BT Group PLC must repay its corporate customers after overcharging for ethernet services, the British market regulator Ofcom said on Friday.

The British telecoms operator faces a total 94.823 million pounds ($154.19 million) refund to communications providers BSkyB, Talk Talk, Virgin Media, Verizon UK and Cable & Wireless.

Ofcom received the first complaint that charges levied by BT for high-speed data services were "not cost orientated" in 2010, and continued receiving related claims before issuing its final determination on the dispute on December 20 2012.

BT, which said in November its second quarter revenues had been hit by a triple whammy of recession, regulation and rain, can appeal the decision over the next two months.

($1 = 0.6150 British pounds)

(Reporting By Isla Binnie; editing by Sarah Young)

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1 of 3. File picture shows designated new finance chief Timotheus Hoettges (L) and Rene Obermann, CEO of Deutsche Telekom AG before the annual news conference in Bonn February 27, 2009.

FRANKFURT | Thu Dec 20, 2012 1:14pm EST

FRANKFURT (Reuters) - Deutsche Telekom chief executive Rene Obermann has unexpectedly announced he will step down at the end of 2013 and be succeeded by finance director Timotheus Hoettges.

Hoettges, 50, said on Thursday he was not planning major changes to strategy and would continue Obermann's drive of investing in the United States and Germany as the firm battles to return to revenue growth against a tough economic backdrop.

"I have worked with Obermann for 12 years, and I don't expect to change a lot in the way that we do things," he told journalists during a conference call.

He is, however, expected to bring a fresh spark to Germany's former state telecoms monopoly, as he is considered by analysts to have the energy to take on challenges and an ability to absorb knowledge. But he has a big job ahead of him.

The European telecoms industry is struggling with sluggish economic growth, costly investments and cut-throat competition, and on top of that Deutsche Telekom has had its hands full with trying to fix its troubled T-Mobile USA business.

The German government, Deutsche Telekom's biggest shareholder with a 32 percent stake, said it welcomed the choice of Hoettges as new CEO because it promised continuity.

"The chief strategist so far becoming the new captain indicates that the course will be held," a spokesperson for the finance ministry told Reuters.

Hoettges joined the group in 2000 after playing a central role in the merger of VIAG AG and VEBA AG to form E.ON, now Germany's biggest utility.

In 2009, he was promoted to finance chief at Deutsche Telekom and, among other things, oversaw the move to put its British mobile business in a joint venture with France Telecom,.

"Hoettges is extremely good as a CFO, he's well respected by investors, but it remains to be seen whether he has the vision and political clout to succeed as CEO," Espirito Santo analyst Will Draper said.

Hoettges said the company had not yet decided on a new finance director to replace him.

THE ENGINE ROOM

Obermann was the youngest-ever chief executive of a German blue-chip firm at the time when he took over in 2006, aged only 43. He gained a reputation for being eager to keep unions and politicians happy and wary of making big strategic decisions.

One of his boldest moves was a deal to sell T-Mobile USA, to AT&T, but it collapsed last year amid concerns from competition regulators, dealing a blow to Obermann's reputation.

T-Mobile USA was a growth engine for Deutsche Telekom in its early days but is a rundown asset now that has been haemorrhaging customers. Deutsche Telekom is now trying to merge the business with smaller rival MetroPCS.

Obermann said he was leaving to work for a smaller company where he was "closer to the engine room" than he could be at an international corporation, without providing details.

Analysts were split over whether to believe Obermann's assurances that he was leaving of his own volition.

"If the board or the main shareholders were unhappy about the CEO's performance, they probably would have appointed an outsider, not the CFO, who also has been responsible for what has happened at the company over the last few years," Exane BNP analyst Mathieu Robilliard said.

Espirito Santo's Draper meanwhile said: "Obermann has had a lot of opportunity to fix the U.S. and yet it still remains Deutsche Telekom's biggest problem."

Obermann also disappointed investors with a bigger than expected dividend cut announced earlier this month as the company's investment drive eats away cash.

European peers Telefonica, the Netherlands' KPN, Telekom Austria, and France Telecom had already cut their dividends earlier this year, hurt by a weak economy and fierce competition that has driven down prices.

Deutsche Telekom shares closed 0.5 percent higher at 8.63 euros, outperforming a 0.2 percent fall in the STOXX Europe 600 European telecoms index.

(Additional reporting by Paul Sandle and Rene Wagner; Editing by Mark Potter and Helen Massy-Beresford)

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SAN FRANCISCO | Thu Dec 20, 2012 7:44pm EST

SAN FRANCISCO (Reuters) - Mobile game developers are scrambling to get on Apple Inc's top mobile app charts this Christmas, as seasonal sales are expected to reach an all-time high in a fast-growing market dominated by the iPad and iPhone maker.

Just as Billboard's music charts spell success for pop music, Apple's charts for the top paid, free and top-grossing apps have become a touchstone for the gaming industry, with a top ranking giving sales an extra boost.

As more mobile apps are downloaded around Christmas than at any other period, Apple freezes its charts as a way to deal with the overwhelming volume - giving top apps already on the lists guaranteed exposure over that period.

Game companies have double to 10 times the usual gamer traffic during this peak period, said Maria Alegre, chief executive of Chartboost, a mobile game ad network.

"But if you're in the top 5 or top 10 in the App Store rankings, then you get this extra exponential growth because everyone's looking at you," Alegre said.

The exact date and duration when Apple freezes those rankings is not fixed or announced in advance. In the past it has fallen between December 22 and 29 and lasted about a week.

What's certain is that the date is fast becoming the make-or-break moment for annual mobile gaming sales.

STRATEGIES

To clinch one of the 25 rankings on each of Apple's charts, the gaming industry has devised ever more technical tricks and marketing gimmicks, as the iOS market has evolved since the Apple's first iPad tablet was launched in 2010.

This year, game companies have become "more sophisticated" and "tactical" in the way they design and price content, following the early experimental years, beginning around 2010, said Nick Earl, senior vice president of Electronic Arts.

And game publishers have honed the ability to respond quickly to gamers and immediately tweak content and difficulty levels in real-time to push sales, Ellie Fields, senior director of product marketing at data visualization software company Tableau Software, said.

Strategies vary widely between companies. Some may focus on clever advertising while others craft holiday deals to generate a buzz around titles.

Smaller players like TinyCo and Pocket Gems may not have Electronic Arts' brand advantage so they cross-promote games and enter deals to advertise on their competitor's hit titles.

Say a mobile games maker invests $1 on a banner ad to acquire a new user and it learns through data analytics that the user is spending $2 in its game. Around Christmas, it can raise its ad budget in real-time or in advance and target a top-selling device, geographic location or demographic group, Alegre explained.

The ad strategies used to be a lot less smart but "right now people are more data driven and focused," Alegre said.

Electronic Arts' mobile label has planned 350 promotions, ranging from reduced rates to holiday-themed game content updates. The company uses data analytics and strives to maintain a daily deals site, tweaking rates and game offerings based on demand.

"We've really got smarter on what kind of deals to make available, when they should be unveiled, how many at a time and how many in parallel," Earl said.

The company's "Simpsons: Tapped Out" game based on the popular animated series was halted after its spring launch as its servers failed handle heavy traffic.

The city-building game was re-launched and this holiday has Homer Simpson's fictitious hometown of Springfield all snowy and adorned with Yuletide decorations.

For the Christmas period, technical stability is Electronic Arts' "No. 1 priority," Earl said.

DOWNLOAD VOLUME

The industry experiences a torrent of download activity starting on Christmas Eve until the first week of January as consumers use up app gift cards like iTunes gift cards.

In the last two years, the mobile gaming space has exploded as new tablets and phones flooded the market. Last Christmas about 7 million mobile devices were activated, compared to 2.8 million devices in Christmas 2010, according to mobile analytics firm Flurry. That's about seven times the number of Google Inc's Android devices activated on a normal day.

Android, which does not freeze its charts, has a lot more distribution but users spend less money than on Apple's iOS devices, analysts say.

Without providing details, EA said the number of its iOS games downloaded on Christmas day last year was 500 percent higher than the average daily download rate for all of 2011.

This presents a narrow, focused window for game companies like Electronic Arts and Disney Mobile to plug their games and landing them on app download charts maintained by hardware makers like Apple and Google.

That in turn spawned sophisticated strategies to handle the intense competition, Bart Decrem, Disney Mobile's senior vice-president, said.

Data analytics systems will be a revenue-driving weapon for mobile game companies on Christmas morning, Alegre said.

(Reporting by Malathi Nayak; Editing by Richard Chang)

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1 of 2. The asteroid Toutatis is captured by NASA's Goldstone radar as it passes by Earth on December 11, 2012.

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An artist's depiction shows the twin spacecraft (Ebb and Flow) that comprise NASA's Gravity Recovery And Interior Laboratory (GRAIL) mission. A pair of NASA moon-mapping probes smashed themselves into a lunar mountain on December 17, 2012, ending a year-long mission that is shedding light on how the solar system formed.

CAPE CANAVERAL, Florida | Tue Dec 18, 2012 10:22am EST

CAPE CANAVERAL, Florida (Reuters) - A pair of NASA moon-mapping probes smashed themselves into a lunar mountain on Monday, ending a year-long mission that is shedding light on how the solar system formed.

The Gravity Recovery and Interior Laboratory, or GRAIL, spacecraft had been flying around the moon, enabling scientists to make detailed gravity maps. The probes sped up slightly as they encountered stronger gravity from denser regions and slowed down as they flew over less-dense areas.

By precisely measuring the distance between the two probes, scientists discovered that the moon's crust is thinner than expected and that the impacts that battered its surface did even more damage underground.

Out of fuel and edging closer to the lunar surface, the probes were commanded to smash themselves into a mountain near the moon's north pole, avoiding a chance encounter with any Apollo or other relics left on the surface during previous expeditions.

"We do feel the angst about the end of the mission," said Charles Elachi, director of NASA's Jet Propulsion Laboratory in Pasadena, California, which oversaw the mission. "On the other hand, it is a celebration because this mission has accomplished tremendous science."

The U.S. space agency lost radio communications with the first spacecraft at 5:28 p.m. EST and the second about 20 seconds later, a NASA mission commentator said.

The probes' final resting place was named after the first U.S. woman in space, Sally Ride, who orchestrated GRAIL's educational outreach program before her death in July. The spacecraft included cameras that were operated by students.

After completing their primary mission in May, the GRAIL twins, each about the size of a small washing machine, moved closer to the lunar surface, dropping their orbits from about 34 miles to less than half that altitude to increase their sensitivity.

On December 6, the probes, nicknamed Ebb and Flow, flew down to about 7 miles to make one last detailed map of the moon's youngest crater.

"Ebb and Flow have removed a veil from the moon," said lead researcher Maria Zuber, with the Massachusetts Institute of Technology.

The discoveries not only will help scientists better understand how the moon formed and evolved, but what happened to Earth and the other inner planets which were similarly showered with comets and asteroids early in their history.

Several follow-up studies are planned, including coordinating the moon's new gravity maps with the locations where Apollo soil and rock samples were collected, Zuber said.

(Editing by Kevin Gray and Phil Berlowitz)

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