Posts Tagged ‘power balance’

Conflict shifts Mideast power balance

November 22nd, 2012 No comments

Are you affected by the conflict? Share photos and video, but stay safe.

(CNN) — However crude the calculation, especially amid all the civilian casualties, the winners and losers in the Israel-Gaza conflict are already reshaping political alliances in the Middle East.

Before the last rocket was fired, before U.S. Secretary of State Hillary Clinton announced the cease-fire, there was already a consensus building among stakeholders and analysts that the events of the last week have transformed the fortunes of many in the Middle East.

Egyptian President Mohamed Morsy, clearly underestimated, deftly navigated what is a minefield of competing interests, including those of his own country.

Egypt’s role in Israel-Gaza cease-fire

Mitchell: Have to keep trying for peace

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“For a civilian president in Egypt perceived as a weak leader, he has, much to everyone’s surprise, delivered,” says Aaron David Miller, a Middle East scholar at the Woodrow Wilson Center.

Egypt and Morsy proved ‘pivotal’ in Gaza cease-fire talks

Morsy proved he has the leverage necessary to bring Hamas to the table and get its leadership to agree to a cease-fire. Brokering that deal has given him much needed political capital in both the Arab world and the United States.

This was a qualified victory as well for Israel and its tenacious Prime Minister Benjamin Netanyahu. Just months before an election, Netanyahu’s government targeted and killed Hamas’ military leader, Ahmed al-Jaabari. Hundreds of airstrikes on Gaza followed, but the real victory here might have been the combat debut of Iron Dome, the U.S.-funded defense shield that kept dozens of Hamas rockets from hitting Israeli civilians.

Ironically, though, Hamas has emerged emboldened from this conflict and its truce.

“Hamas has emerged stronger, it has consolidated its control over Gaza and it has gained now more legitimacy,” explains Miller.

In the eyes of the Palestinian people, the militant leaders of Gaza took on Israel more boldly than ever before, firing rockets farther than ever before. And they may yet manage to get an easing of the Gaza economic blockade if a more comprehensive deal can be reached.

Timeline: Israel-Gaza conflict

Inside Israel’s drone system

Israel reacts to cease-fire

PLO reaction to cease-fire

“Look what they accomplished; they, rather than (President Mahmoud) Abbas, has put the Palestinian issue back on the international stage,” says Miller.

Palestinian Authority President Mahmoud Abbas and his Fatah faction have lost much in this conflict. He was supposed to be the moderate peace broker who could finally forge a new deal with Israel. Now he cannot even claim to speak for all Palestinians and has shown that he has no leverage with Hamas, his archrival.

And then there’s Iran, on the outside looking in but always a player when it comes to Hamas. Iran’s hand now arguably has been weakened after this episode. The Iron Dome shot hundreds of its missiles out the sky.

While Israel has always accused Iran of smuggling weapons to Hamas through the Egyptian border, Iran today implicitly confirmed it.

“Gaza is under siege, so we cannot help them. The Fajr-5 missiles have not been shipped from Iran. Its technology has been transferred (there) and are being produced quickly,” Mohamed Ali Jafari, the head of Iran’s Revolutionary Guard, is quoted as saying by the Iranian news agency ISNA.

The question now: If Israel attacks Iran, can Iran still call on Hamas to retaliate with missiles or have they been rendered ineffective with an ever-improving Iron Dome?

In just a matter of days, with one truce, allies and enemies in the region have shifted, and this will certainly affect any future peace negotiations.

How the Middle East has changed since the last Gaza conflict

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Al-Assad: Syria opposition failing

(CNN) — The Syrian president says his country’s opposition movement has failed to duplicate the kinds of mass protests that unfolded in other Arab nations.

“They wanted to bring people out into the streets in large numbers just like in Egypt and Tunisia,” President Bashar al-Assad said in the latest installment of an interview published Thursday in the Turkish newspaper Cumhuriyet. “However they were not successful.”

Al-Assad said people were paid an initial equivalent of $10 to participate in the protests, with the amount going up to $50.

He said the protests started peacefully, but opposition forces “wanted to form liberated areas by arming certain regions, like the Benghazi model” in Libya. The city of Benghazi in eastern Libya was the base for rebels fighting Moammar Gadhafi’s regime.

“Our army did not allow this,” al-Assad said. “Now they are at a new stage: Assassinations, bombing state institutions, massacres targeting civilians and kidnappings have begun.”

Shocking footage: Two Syrian boys killed

Syrian rebels split amid new deaths

Diplomacy for Syria

‘The Elders’ on Syria

Last year’s mass protests in Tunisia, Egypt and Libya led to the ousting of the leaders there. He said the aim of his foes “is to divide Syria or to create internal war.” As a result, “the struggle against terrorism will continue.”

Al-Assad, who blames “terrorists” for the violence, said countries such as the United States and Turkey are helping the opposition.

“The arms that are coming from the other side have to be stopped immediately. Of course also the logistical support. The support that the international powers especially, starting with the United States, to the terrorists has to stop.”

He cites the Turkish government’s “animosity.” Syria and Turkey have been at odds over al-Assad’s crackdown.

“They are setting up camps on the border and taking people from here to there,” al-Assad said. “The government is trying to use the existing crisis for its own interests.”

Tensions have spiked since Syria’s shooting down of a Turkish military jet last month, which al-Assad said he regretted, adding that soldiers thought the plane was from Israel. The bodies of the jet’s two pilots were recovered Thursday in Syrian territorial waters, the Turkish military said.

Turkish authorities said the plane was shot down June 22 just one nautical mile outside of Syrian airspace and it crashed inside of the airspace. The bodies have been taken to Malatya, the site of the base in Turkey where the jet took off. Funeral details have not yet been announced.

The search for the pilots and the wreckage had been conducted inside Syrian territorial waters from the start, the Turkish military said.

Also, Turkish truck drivers were caught in the crossfire of a battle in Syria near Aleppo, the Turkish Foreign Ministry said on Thursday.

Turkey is trying to determine whether Syrian troops deliberately targeted them in the incident, which occurred Wednesday. Drivers left their trucks and escaped to safety, ministry spokesman Selcuk Unal told CNN.

YouTube videos have emerged of what appear to be burned-out Turkish trucks.

The uprising in Syria began last year when the government cracked down on peaceful protests. The regime’s show of force provoked a nationwide revolt with a growing rebel movement.

Videos pouring out of the country have shown thousands of anti-government forces taking to the streets during the uprising.

One opposition group, the Syrian Observatory for Human Rights, said Wednesday that more than 16,700 have been killed in nearly 16 months of unrest. More than 11,000 of them were civilians.

At least 31 people died Thursday across the country, the opposition Local Coordination Committees of Syria said.

Will Russia finally turn on al-Assad?

A Syrian military defector

Syria rebel groups struggle to unite

CNN cannot independently confirm the reports of casualties or violence because Syria restricts access by international journalists.

Regime security forces have been roundly deplored across the globe for their brutality, with human rights groups and the United Nations documenting widespread abuses against civilians.

Al-Assad was asked about U.N. Human Rights Council accusations of crimes against humanity by members of his units.

“As you know, the majority of these institutions are under the influence of the American and (W)estern administrations,” al-Assad said in the interview. “These reports are written as a result of international power balance. The aim is to increase pressure. They can say whatever they want. We are right and we will not submit.”

Pressed on whether his units committed abuses, he said, “Well of course mistakes are always made,” but added the government should not be blamed.

“Crimes are committed. If one group commits a crime, will the state be responsible for that?” he said. “These things happen everywhere in the world. Individual institutional crime is one thing; to blame the entire state is another thing.”

World powers, working with U.N. and Arab League envoy Kofi Annan, have been trying to foster a transition plan led by Syrians that would lead to peace. And Friends of Syria, a Western- and Arab-backed group that meets Friday in Paris, is looking for ways to bring about change.

Al-Assad was asked if he would be elected if polls were held tomorrow.

“I cannot answer on behalf of my people. And I have not conducted a public poll. And what I do I’m not doing so that they elect me. What I do I’m doing because I believe in it.”

He said he believes the “overwhelming majority” like him.

Earlier this year, Annan forged a six-point peace plan to end the conflict, which included a call for a cease-fire. The U.N. Security Council decided to form an observer mission to monitor a cessation of violence by the government and other combatants.

The mission had to be suspended last month as dangers increased after fighting intensified. Maj. Gen. Robert Mood, the head of the U.N. Supervision Mission in Syria, told reporters in Damascus on Thursday that it is restructuring and consolidating aspects of its operation if and when it resumes its activities.

Observers are concerned about another facet to the violence in Syria: the emergence of jihadists.

The Nusra Front for the People of the Levant, a group analysts have identified as a jihadist movement, has taken responsibility for attacks in the capital of Damascus and other locations.

It claimed responsibility on its website for a strike on a pro-government TV station outside of Damascus last month that left seven people dead.

Iraqi Foreign Minister Hoshyar Zebari told CNN that “extremist groups have an important role in the level of violence that is going on.”

For years, militants have been crossing into Iraq from Syria. Now, there’s “solid information and intelligence” they’re heading into Syria, Zebari said.

CNN’s Ivan Watson, Yesim Comert and Joe Sterling contributed to this report.

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Facebook IPO puts bankers on back foot

Facebook files for its first initial public offering today seeking to raise at least $5 billion.

(Financial Times) — As Wall Street makes final preparations for the largest technology debut by value in history, it has also faced what some bankers and investors have come to see as a series of snubs from Facebook.

From the sidelining of the banks through the registration process to the dithering of Mark Zuckerberg, Facebook’s co-founder and chief executive, over whether or not he will turn up for the investor roadshow, the message has been clear: whatever the normal rules governing Wall Street initial public offerings, Facebook is the one calling the shots. The notion that Mr Zuckerberg has even considered steering clear of such a key event in the build-up to an IPO that investors have long been waiting for, is just one illustration of the bargaining power he and his social networking company, with 900m users and counting, wields over some of the world’s most dominant banking institutions.

“I look at Wall Street as broken, from the point of view of Silicon Valley,” says Roger McNamee, an established tech investor and founder of Elevation Partners, the $1.9bn fund.

Facebook’s handling of its offering is taking the slowly shifting power dynamic in favour of Silicon Valley to a new level in its historically tense relationship with Wall Street; a tension that stems from bankers’ success in the 1990s “bullying” often young management into deals benefiting investors more than the companies, according to Silicon Valley veterans.

Google’s co-founders Sergey Brin and Larry Page are credited by these industry insiders as being the first technology entrepreneurs to wrest significant control of the IPO process away from their bankers back in 2004, though they also earned a reputation among investors of being arrogant. Since then, according to one long-time technology investor, Silicon Valley IPO advisers have become more savvy, and bankers, in turn, have become less aggressive.

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Reuben Daniels, partner at EA Markets, a boutique investment bank, adds that a more common view has developed among tech entrepreneurs that Wall Street is a service provider rather than offering essential insight or relationships. Facebook’s rise from start-up to global company adds to its influence, he says. Jay Ritter, a professor of finance at the University of Florida, says: “In Silicon Valley, the venture capitalists and entrepreneurs know that what’s best for the investment bankers is not necessarily what’s best for the companies. With big tech companies such as Facebook and Google, the companies realise that they’ve got a lot of bargaining power.”

As with any large IPO, Facebook’s offering, which could give the company an equity value between $75bn and $100bn, has already given it the leverage to make more common demands such as lower percentages on banking fees compared with smaller debuts. Although Facebook is not going as far as Google, which used an auction system instead of having underwriters set the price for its own $2.4bn IPO, the largest tech IPO at the time, Facebook is still planning to keep close control over the pricing and allocation of its shares, according to people familiar with the process.

Google also pioneered shares with dual-class voting structures in the tech industry, which many of its tech successors now use, including Facebook, so its founders can maintain control, says Lise Buyer, an IPO adviser who worked at Google when it was listing. “Every so often you have a company that has the market power to dictate the terms,” she says. “In the case of Google, and likely Facebook, the bankers generally strenuously argue their points, and mostly, ultimately, acquiesce.”

Facebook plans to carefully screen orders ahead of the float, rejecting those it deems unsuitable shareholders, according to several people familiar with the preparations. The company will welcome institutional investors it is confident will hold its stock over the long term, rather than those looking to make a quick profit, which has frustrated some bankers who represent individuals.

A retail broker with a large client base fears that only a tiny portion of shares will be allocated to individual investors, as was the case for the IPOs of Groupon, Zynga and LinkedIn.

The social network has maintained tight control of the entire process, including — in a rare move — writing its own registration filing with very little input from the banks, according to people familiar with the situation. It has also hired 31 banks to help sell its stock and attract the specific investors it seeks, compared with the 10 more typical for this size of deal.

“It gives Facebook better bargaining power,” University of Florida’s Prof Ritter says. “Facebook can play the underwriters off each other to get the best initial price for the stock.”

It appears that Facebook is still trying to figure out which way the power balance will tip if Mr Zuckerberg attends the roadshow or opts out. Investors had high expectations of meeting the Google founders on its roadshow, but Mr Brin and Mr Page ultimately offended them with their contemptuous attitude towards Wall Street’s preference to talk finances over and above the company’s technology.

Some industry insiders say that Mr Zuckerberg’s dilemma over attendance is not about exerting power. He appears nervous in front of crowds and has said that he dislikes public speaking. Leaving the roadshow to Sheryl Sandberg, chief operating officer and former Google executive, and David Ebersman, chief financial officer, would be more a tactical move than a statement of disdain, according to a person with knowledge of the preparations. Facebook declined to comment, as did the lead underwriters, Morgan Stanley, JPMorgan and Goldman Sachs.

But a no-show could backfire, as several investors have vowed not to place orders for Facebook shares if Mr Zuckerberg, who controls 57 per cent of voting rights, does not attend, according to a person familiar with the situation. If those investors are large, it could have a negative effect on Facebook’s valuation, the person said, though there should be plenty of investors willing to take up the shares.

Facebook would “probably pay a penalty for him not being there”, the person said.

One banker involved says his biggest worry is whether the power that Facebook wrests from Wall Street will set a precedent for future tech IPOs.

While Silicon Valley has benefited from Google and now Facebook in shifting the power dynamic between the two sides, smaller companies are unlikely to be so successful, counters Roger McNamee, a tech investor and founder of Elevation Partners, the $1.9bn fund. The recent debuts of Zynga and Groupon had less influence, and therefore disappointing offerings, he says. “Facebook is one of a kind. It’s the IPO of this generation.”

Additional reporting by Tracy Alloway in New York

© The Financial Times Limited 2012

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How social media are extending the GOP race

Rick Santorum and Mitt Romney spar during the CNN GOP debate in Arizona.

Editor’s note: Micah Sifry is co-founder of the Personal Democracy Forum, a website that examines how technology is changing politics, and the author of “WikiLeaks and the Age of Transparency.” This commentary is part of a series of “Campaign Tech” articles that will run through 2012 and explore technology’s role in the presidential election.

(CNN) — Why isn’t the Republican presidential race over already?

At this point in 1996, after weighing a divided field, Republicans had coalesced around Bob Dole, even though he had narrowly lost the New Hampshire primary to Patrick Buchanan.

Likewise, at this point in 2008, John McCain had already locked down the endorsement of chief rival Mitt Romney and was cruising to the nomination.

But in 2012′s roller coaster of an election cycle, there’s been no closing of the ranks around a front-runner. Even after presumptive front-runner Romney’s wins this week in Arizona and Michigan, the question of who will be the eventual GOP nominee remains very much unanswered.

Campaign-technology pundit Micah Sifry

The reasons are complicated, and next week’s Super Tuesday primaries could shake things up yet again. But amid the various factors, there’s one change that hasn’t gotten enough notice: the increasing importance of lateral social networking on the part of grass-roots conservatives.

And this isn’t just a Ron Paul story; much bigger chunks of the Republican base, including tea partiers, anti-abortion activists and evangelicals, are using social media to form self-reinforcing factions within the larger party that are less and less susceptible to what nominal party leaders may want them to do.

This isn’t to say that the rise of the super PACs or the never-ending series of TV debates aren’t important to keeping the Republican field fluid. Both of those are hugely important factors.

The debates — 21 so far — not only pull candidates and their senior teams away from retail politicking and toward mass-media politicking, but also have the effect of leveling the playing field for at least three and sometimes four contenders. Gingrich in particular has benefited from this dynamic.

Second, we can’t underestimate the rise of super PACs and billionaire donors like Sheldon Adelson and Foster Friess, whose injections of huge sums of cash in support of Santorum and Gingrich, respectively, are enabling those candidates to get a second, and maybe even a third, life after weak showings in early battles. Without those donors, there’s little doubt that both of those candidates would probably have decided to drop out after Romney won in New Hampshire.

Grass-roots activists would have a hard time keeping the race going on their own, without standard-bearers like Paul, Santorum and Gingrich to rally around. But as long as those candidates keep running, social media and social networking will continue to empower conservative voters and activists who care passionately about certain issues, enabling them to create strong factions within the Republican electorate that are less controllable by party leaders.

As Martin Avila, the conservative online strategist who worked on Paul’s 2008 web campaign, said to me last Thursday:

“The pundits are completely stumped as to what’s going on. They say Romney’s got it locked up, and then everything just changes. I think that’s a real consequence of what is happening online with the conservative movement. Up until this cycle, conservative grass-roots activists haven’t been online as much. On the left that happened a long time ago. Ron Paul was the start, then you had the tea party movement, and now you have the evangelicals on Facebook, on Twitter, discussing things on FreedomConnector.”

Avila has a point. Consider, for example:

• On Facebook, there are dozens of groups devoted to Santorum, including one for every state. Most are closed (you have to ask to join, which means these are trying to be real organizing hubs), and they’ve each got anywhere from a handful to hundreds of members. Gingrich supporters on Facebook are similarly distributed. These kinds of groups have social capital that can’t be turned off from above — unless the candidate himself drops out of the race.

• On, an open social network for conservatives (built by Avila) that launched a year ago at the Conservative Political Action Conference, more than 168,000 users have created nearly 7,000 groups and more than 2,000 events. You can see from the regular polls done on the site that Paul, Santorum and Gingrich are all benefiting from passionate support bases that refuse to compromise on their beliefs.

• The, a hub for Paul supporters, is attracting 250,000 unique visitors a month, according to On the RonPaulForums, another hub for volunteers which is currently getting about 100,000 unique visitors a month, there are hundreds of people active on the site at any given moment.

• In addition to support from billionaire Friess, Santorum is being lifted by an outpouring from small donors — more than 100,000 in February alone, his campaign says. On Fundly, a social fundraising site, the Rick Santorum page has nearly 3,000 donors who have built personal fundraising pages generating an average of about $80 each. The Mitt Romney page has two donors who have created personal fundraising pages, one of whom is his son Tagg.

The list goes on. The fracturing of the Republican base is a natural byproduct of the emergence of more lateral, networked activity by grass-roots activists reinforcing each other.

Or, as Avila put it to me last week, “Broadbased, issue-focused, principled factions within the party have a much stronger voice.”

So, when someone says social media aren’t changing politics, don’t listen. Right before our eyes, the power balance within the Republican coalition is being remade. And some part of that is due to grass-roots conservatives using social networking.

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Hottest stories, craziest moments from summer 2011

September 3rd, 2011 No comments

Officially, we still have three weeks of summer, but we all know that after the three-day Labor Day weekend it’s all but over. And it’s probably a good thing. After the blistering pace of big news and wild moments over the past three months, we could all use an autumn vacation. Here’s a look back at the stories that made summer 2011 so memorable:

Jobs ushered in our summer, and now he (as CEO of Apple) and the season are exiting in tandem.

CBS Interactive)

iOS 5 and “one more thing” from WWDC: No blockbuster new device announcement came out of Apple’s annual Worldwide Developers Conference in June. Instead we got updates to Mac OS X and iOS to anticipate, as well as one more very intriguing thing. Steve Jobs announced iCloud, which rehashes a lot of cloud concepts that are already old hat for
Android users, but adds that special Apple polish and iTunes Match, which syncs up users’ music and media collections across iOS devices. The service still hasn’t debuted, but Spotify landed in the U.S. (see below) in the meantime, creating some serious competition.

Everything’s coming up
The great race to catch up to the
iPad continued, but no one seemed to gain ground. RIM’s PlayBook flopped and HP’s TouchPad… well, more on that later. But the tech world is far from giving up. Microsoft started the summer by introducing Windows 8, which is basically built to be tablet-ready with a touch interface. Of course, who knows if we’ll see it before 2014–by that time tablets will probably have been replaced by nanotech thought-controlled devices. Amazon also looks to be throwing its hat in the tablet ring, with a rumored iPad-killer coming soon, maybe?

Everyone hacks everything: What’s summer without a fresh Mountain Dew and Low-Orbit Ion Cannon by the glow of a flat-screen monitor, DDoSing the lazy days away? You’re not anyone in this world anymore until someone hacks you. By that measure, a whole lot of people, companies, and governments finally “arrived” this year. Tongue-in-cheek congratulations to the CIA, Sony (several times over), Citigroup, Electronic Arts, Turkey, and so many more for making the long list of targets.

CBS News)

Weinergate: Even great summers have their low point. When oh-so-ironically-named Congressman Anthony Weiner tweeted a pic of his package, the power balance between Twitter and Congress seemed to flip–now the microblogging site seems more powerful than we ever imagined, while it turns out to be politicians who are clearly stupider than our wildest dreams.

Google+ launches: Leave it to Google to launch the most buzzed-about beta product of the year. The social network has seen impressive growth in its first two months, despite still being (kinda) closed to the public. It quickly became a top download in app markets, including the iOS App Store. It’s also had the strange side effect of turning Robert Scoble into a sort of human meme. Oh darn, now he just ruined this blog post, too.

Screenshot by Eric Mack/CNET)

It’s all about the patents: When “This American Life” takes a week off from Sarah Vowell’s road trips and David Sedaris’ awkward youth to do an hour-long investigative piece on the patent wars, you know something must be up. 2011 was the summer everyone sued everyone over patents no one understands while scrambling to grab more of them. Google bid pi billion (yes, 3.14 billion) dollars on Nortel Networks’ patents and lost to a consortium made up of Apple and other big names. But it turns out Google had other plans up its sleeve. (Read on.)


Spotify launches in the U.S.: The European music-streaming service of legend suddenly showed up on American shores this summer and became an overnight sensation, and the buzz has since died down. I suspect the jury will stay out on this one until iCloud debuts soon. Somebody should really call Rdio and MOG to see how they’re taking all this…

Everybody hates Netflix: Netflix decided to up the price on its streaming/DVD-by-mail combo by 60 percent, prompting global social-network ire of a distinctly first-world variety. While users threatened to cancel and citizens fighting autocratic regimes in the Middle East wondered if we might redirect a little of our righteous indignation at something that actually matters, Netflix responded by having a major service outage. Sorry, Syrians, we’ll get you next time.

Apple bigger than the Beatles: For at least a little while, Apple eclipsed ExxonMobil to become the most valuable company in the world this summer. Apple fans should remain diligent in ensuring that Yoko Ono stays far away from Cupertino.

Phone hacking: Turns out that newspaper journalists are not only still working, they’re even hacking. The news that British tabloids had hacked into the voice mail of royals, politicians, and even a missing girl prompted a huge scandal and led to the shuttering of a popular U.K. paper. Funny how quickly the scandal of the scandalous tabloid quickly seemed to morph into scandalous tabloid material itself.

Devices go viral: Phone hacking wasn’t the only example of devices making a splash in the mainstream. In case you hadn’t noticed, they’ve also been fueling revolutions in the Middle East, rioting and looting in the U.K., and protests over Bay Area Rapid Transit shutting down cell networks to thwart protests. Maybe we need a backup smoke signal network…

Google to buy Motorola: Google may get its patents after all. It announced a deal to buy Motorola Mobility, but it plans to pay a lot more than pi billion. The $12.5 billion deal would put Google in the handset business (not to mention the set-top-box biz) and it comes with 17,000 patents to boot. That whirring sound is heads in Silicon Valley still spinning.

HP wins by quitting: The same week as the Google/Moto news, the world’s biggest PC maker said it’s looking to quit making PCs soon, and quitting the tablet and mobile-phone game immediately. Apparently the company wants to go the IBM route and move to enterprise software. But after its fire sale liquidation of TouchPads became a sensation, there may be life for WebOS after all, if HP hadn’t just become the erratic crazy uncle of the tech world that nobody fully trusts anymore.

So long Steve Jobs: The man who built and then rebuilt Apple is stepping out of the CEO’s office to become chairman of the board, handing the reins to Tim Cook. If you want to know more about Jobs or his retirement, you just might be able to find a few stories online here and there. Be prepared to feel very small if you dare to dive into the resume of a man for whom founding Pixar was just a relatively small accomplishment. It’ll make you wonder where your summer went.

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Beware of Power Balance placebo bracelet

January 6th, 2011 No comments

Article taken from:,60432.asp

The Power Balance bracelet worn by high profile sports stars to improve their athletic prowess has been exposed as a sham. Here’s Dr Ross Tucker’s take on it.

Power balance: “We admit that there is no credible scientific evidence that supports our claims.”

The above statement should come as no surprise, given what history has shown us about companies that make such claims about products ranging from supplements to holographic stickers.

What is different is that the above quote comes directly from Power Balance, who are responsible for making the now ubiquitous holographic bracelets that are worn by celebrities, sports stars, and members of the public in such huge numbers that if you go down to your local gym and you don’t have one, you feel like the odd one out.

Power Balance placebo bracelet

Somebody is making a fortune of what is basically a placebo effect, a psychological benefit of wearing a bracelet that initially claimed to harness the body’s natural energy field to improve.  From their website, it “optimizes the body’s natural energy flow”, which improves strength, endurance and flexibility.  All without evidence of course.  And I would be the first to point out that the absence of evidence is not necessarily evidence of the absence of an effect.

However, in this case, the fact that not a single study exists is very telling.  Why?  Because proving whether these gimmicks work is so simple that a high-school student could conduct the study.  Yet nothing has emerged. And that’s because there is no incentive to provide the science – the science does not matter, the marketing does, and so Power Balance has invested into celebrity endorsement and viral marketing, not research.  With good reason – research destroys their credibility.  I’ll discuss this in much more detail in a post early next week.

For today, just the report on the findings of the Commission.  Below is the statement they issued in response to an investigation from Australia’s Competition and Consumer Commission, which exposed them as a sham.  The huge verdict resulted in Power Balance admitting that they had no evidence, that they had misled consumers, and promising to refund customers who feel misled by the advertising claims.  The statement below will appear in 20 magazines in Australia.


In our advertising we stated that Power Balance wristbands improved your strength, balance and flexibility.

We admit that there is no credible scientific evidence that supports our claims and therefore we engaged in misleading conduct in breach of s52 of the Trade Practices Act 1974.

If you feel you have been misled by our promotions, we wish to unreservedly apologise and offer a full refund.

To obtain a refund please visit our website or contact us toll-free on 1800 733 436

This offer will be available until 30th June 2011. To be eligible for a refund, together with return postage, you will need to return a genuine Power Balance product along with proof of purchase (including credit card records, store barcodes and receipts) from an authorised reseller in Australia.

This Corrective Notice has been paid for by Power Balance Australia Pty Ltd and placed pursuant to an undertaking to the Australian Competition and Consumer Commission given under section 87B of the Trade Practices Act, 1974.”

I hope that this is the catalyst for more of the same around the world.

Many of you will no doubt be thinking “so what.  If it’s a placebo effect, it doesn’t matter, as long as it works”.  And this is a topic certainly worth discussing.  But that’s for another time, so join me next week when I’ll look a little more closely at Power Balance bracelets, some of the claims they made, and how the lack of science was part of the strategy.  It’s a great case study in the clash of incentives between marketing and credibility, and should stimulate some good discussion.

And finally, I have no objection to members of the public, celebrities and even individual sportspeople wearing the bracelet.  However, if you are a sports scientist, a personal trainer or biokineticist/strength and conditioning coach who works with athletes and sports teams, and you wear this bracelet, then you are unwittingly (or perhaps knowingly) endorsing the sham “science”. After all, all you have is your scientific “credibility” – it is your value to your athletes and clients.  So rather than simply following the herd, think that perhaps your endorsement strips away your own credibility.

Dr Ross Tucker, is Health24’s FitnessDoc and has a Ph.D. in Exercise Physiology from the University of Cape Town and a Post-Graduate degree in Sports Management from the UCT’s Faculty of Commerce. He is currently employed at the University of Cape Town and Sports Science Institute of South Africa, and works as a consultant to various sporting teams, including South African Sevens, Canoeing, Rowing and Triathlon SA. He also blogs on