2012 stocks: How Illinois cos. fared









If you invested heavily in Illinois companies that provide consulting services, you had little reason to celebrate in 2012.

While the Standard & Poor's 500 index ended the year up 13 percent, most large businesses in the region that counsel other companies on how to improve their operations saw their stock prices drop.

Business support services was one of the few sectors getting clobbered in a 2012 Tribune ranking of Illinois and northwest Indiana stocks' performance.

Stock prices gained at about 70 percent of the 127 companies on the list, and about half outperformed the S&P 500. Bank owners such as Taylor Capital Group emerged from their 2011 doldrums, and Ulta Salon Cosmetics & Fragrance Inc. and Discover Financial Services marked their second consecutive year of soaring stock prices.

The year's biggest decliner, down 76 percent, was Groupon, as once-torrid revenue growth at the daily deals offerer started slowing.

Career Education was the second-worst performer; its stock fell 56 percent. The highly scrutinized for-profit school chain said it would close campuses and cut jobs amid sinking revenue and financial losses.

Sectors boosted by broad gains in 2012 included electrical parts and equipment, industrial machinery, and specialty chemicals.

Of seven Illinois banks on the list, all but one outperformed the S&P 500, with price appreciation of those six ranging from 16 to 86 percent.

In contrast, stocks of four of five professional services firms — Navigant Consulting, Huron Consulting Group, Heidrick & Struggles International and R.R. Donnelley & Sons — closed down 2 to 38 percent.

Each had its own set of issues.

Navigant's services, for example, include advising companies that face disputes, litigation and investigations, including government probes, as well as businesses that need help valuing potential mergers and acquisitions.

"You see fewer government investigations during an election year, as regulators are leaving their jobs, and they don't want to start new ones," said Tobey Sommer, a SunTrust Robinson Humphrey analyst. "Also, worries about the 'fiscal cliff' slowed M&A because CEOs didn't want to look foolish acquiring a company in September ahead of the fiscal cliff when they might have been able to buy it for 20 percent less in January had we gone off."

Meanwhile, Heidrick's troubles included a slowing market for executive searches. In early 2012, analysts expected Heidrick's annual earnings to be in the range of about $1.30 per share. It appears that it will earn closer to 57 cents a share.

Huron's earnings estimates during 2012 were also trimmed, to about $2.10 from about $2.40 a share as the timing of fee payments to its health care consulting business proved volatile.

"Its underlying demand is strong," but an increasing number of clients had signed contracts where a larger portion of revenue was contingent on the outcome of Huron's consulting work, said Randle Reece, analyst with Avondale Partners LLC. That made it harder for the company and the analysts who cover it to predict the timing of revenues, since they are deferred.

For investors interested in "Dumpster diving," Morningstar Inc. considers Exelon, WMS Industries and Caterpillar to be high quality yet undervalued this year, said Heather Brilliant, chief equities strategist.

Navigant is among the region's beaten-down stocks liked by stock research firm EVA Dimensions LLC. "Its fundamentals are improving, and it's really cheap," said EVA analyst Andrew Zamfotis.

Best of the best

Here are the top three stock gainers of 2012:

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Fire at crowded nightclub kills at least 200 in Brazil

A fire swept through a crowded nightclub in southern Brazil early Sunday, killing at least 245 people and leaving at least 200 injured, police and firefighters said. (Jan. 27)










SANTA MARIA, Brazil (Reuters) - A nightclub fire killed at least 232 people in southern Brazil early on Sunday when a band's pyrotechnics show set the building ablaze and fleeing partygoers stampeded toward blocked and overcrowded exits in the ensuing panic, officials said.

The blaze in the university town of Santa Maria was started by a band member or someone from its production team igniting a flare, which then set fire to the ceiling, said Luiza Sousa, a civil police official. The fire spread "in seconds," she said.






Local fire officials said at least one exit was locked and that bouncers, who at first thought those fleeing were trying to skip out on bar tabs, initially blocked patrons from leaving. The security staff relented only when they saw flames engulfing the ceiling.

The tragedy, in a packed venue in one of Brazil's most prosperous states, comes as the country scrambles to improve safety, security and logistical shortfalls ahead of the 2014 World Cup soccer tournament and the 2016 Olympics, both intended to showcase the economic advances and first-world ambitions of Latin America's largest nation.

In Santa Maria, a city of more than 275,000 people, rescue workers and weary officials wept alongside family and friends of the victims at a local gymnasium being used as a makeshift morgue.

"It's the saddest, saddest day of my life," said Neusa Soares, the mother of one of those killed, 22-year-old Viviane Tolio Soares. "I never thought I would have to live to see my girl go away."

President Dilma Rousseff cut short an official visit to Chile and flew to Santa Maria, where she wept as she spoke to relatives of the victims at the gym.

"All I can say at the moment is that my feelings are of deep sorrow," said Rousseff, who began her political career in Rio Grande do Sul, the state where the fire occurred.

News of the fire broke on Sunday morning, when local news broadcast images of shocked people outside the Boate Kiss, as the nightclub was known. Gradually, grisly details emerged.

The vast majority of the victims, most of them university students, died of smoke inhalation, officials said. Others were crushed in the stampede.

"We ran into a barrier of the dead at the exit," Colonel Guido Pedroso de Melo, commander of the fire brigade in Rio Grande do Sul, said of the scene that firefighters found on arrival. "We had to clear a path to get to the rest of those that were inside."

Officials said more than 1,000 people may have been in the club, possibly exceeding its legal capacity. Though Internet postings about the venue suggested as many as 2,000 people at times have crammed into the club, Pedroso de Melo said no more than half that should have been inside.

He said the club was authorized to be open but its permit was in the process of being renewed.

However, Pedroso de Melo did point to several egregious safety violations - from the flare that went off during the show to the locked door that kept people from leaving.

'HAPPENED SO FAST'

When the fire began at about 2:30 a.m., many revelers were unable to find their way out amid the chaos, confusing restroom doors for exits and finding resistance from bouncers when they did find an exit.

"It all happened so fast," survivor Taynne Vendrusculo told GloboNews TV. "Both the panic and the fire spread rapidly, in seconds."

Once security guards realized the building was on fire, they tried in vain to control the blaze with a fire extinguisher, according to a televised interview with one of the guards, Rodrigo Moura. He said patrons were getting trampled as they rushed for the doors, describing it as "a horror film."

One of the club's owners has surrendered to police for questioning, GloboNews reported.

TV footage showed people sobbing outside the club before dawn, while shirtless firefighters used sledge hammers and axes to knock down an exterior wall to open up an exit.

Rescue officials moved the bodies to the local gym and separated them by gender. Male victims were easier to identify because most had identification on them, unlike the women, whose purses were left scattered in the devastated nightclub.

The disaster recalls other incidents including a 2003 fire at a nightclub in West Warwick, Rhode Island, that killed 100 people, and a Buenos Aires nightclub blaze in 2004 that killed nearly 200. In both incidents, a band or members of the audience ignited fires that set the establishment ablaze.

The Rhode Island fire shocked local and federal officials because of the rarity of such incidents in the United States, where enforcement of safety codes is considered to be relatively strict. After the Buenos Aires blaze, Argentine officials closed many nightclubs and other venues and ultimately forced the city's mayor from office because of poor oversight of municipal codes.

The fire early on Sunday occurred in one of the wealthiest, most industrious and culturally distinct regions of Brazil. Santa Maria is about 186 miles west of Porto Alegre, the capital of a state settled by Germans and other immigrants from northern Europe.

Local clichés paint the region as stricter and more squared away than the rest of Brazil, where most residents are a mix descended from native tribes, Portuguese colonists, African slaves, and later influxes of immigrants from southern Europe.

Rio Grande do Sul state's health secretary, Ciro Simoni, said emergency medical supplies from all over the state were being sent to the scene. States from all over Brazil offered support, and sympathy messages poured in from foreign leaders.

(Additional reporting by Guillermo Parra-Bernal, Gustavo Bonato, Jeferson Ribeiro, Eduardo Simões, Brian Winter and Guido Nejamkis.; Writing by Paulo Prada; Editing by Todd Benson, Kieran Murray and Eric Beech)

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Canada denies Randy Quaid’s request to stay






TORONTO (AP) — Canadian immigration officials have denied U.S. actor Randy Quaid‘s request for permanent resident status in Canada.


A Canadian government official confirmed late Saturday his request for permanent status has been denied. The official spoke on condition of anonymity because they were not authorized to speak publicly. Quaid can appeal the decision to the federal court.






U.S. officials last year refused to seek extradition of the actor and his wife from Canada to face felony vandalism charges in Santa Barbara, California, but authorities in the coastal town say they’ll still have the couple arrested if they return to the states. 


Quaid has sought to stay in Canada, claiming he was being hunted by “Hollywood star-whackers” who had killed his friends David Carradine and Heath Ledger. 


Quaid’s trouble began in 2010 when he and his wife were arrested for causing more than $ 5,000 damage at a hillside home they were renting. 


Randy Quaid is the older brother of actor Dennis Quaid and is best-known for his roles in films such as “National Lampoon’s Vacation” and “Independence Day.” He won a Golden Globe award for his depiction of President Lyndon Johnson in a TV movie in the late 1980s.


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2012 stock report: Pains and gains









If you invested heavily in Illinois companies that provide consulting services, you had little reason to celebrate in 2012.

While the Standard & Poor's 500 index ended the year up 13 percent, most large businesses in the region that counsel other companies on how to improve their operations saw their stock prices drop.

Business support services was one of the few sectors getting clobbered in a 2012 Tribune ranking of Illinois and northwest Indiana stocks' performance.

Stock prices gained at about 70 percent of the 127 companies on the list, and about half outperformed the S&P 500. Bank owners such as Taylor Capital Group emerged from their 2011 doldrums, and Ulta Salon Cosmetics & Fragrance Inc. and Discover Financial Services marked their second consecutive year of soaring stock prices.

The year's biggest decliner, down 76 percent, was Groupon, as once-torrid revenue growth at the daily deals offerer started slowing.

Career Education was the second-worst performer; its stock fell 56 percent. The highly scrutinized for-profit school chain said it would close campuses and cut jobs amid sinking revenue and financial losses.

Sectors boosted by broad gains in 2012 included electrical parts and equipment, industrial machinery, and specialty chemicals.

Of seven Illinois banks on the list, all but one outperformed the S&P 500, with price appreciation of those six ranging from 16 to 86 percent.

In contrast, stocks of four of five professional services firms — Navigant Consulting, Huron Consulting Group, Heidrick & Struggles International and R.R. Donnelley & Sons — closed down 2 to 38 percent.

Each had its own set of issues.

Navigant's services, for example, include advising companies that face disputes, litigation and investigations, including government probes, as well as businesses that need help valuing potential mergers and acquisitions.

"You see fewer government investigations during an election year, as regulators are leaving their jobs, and they don't want to start new ones," said Tobey Sommer, a SunTrust Robinson Humphrey analyst. "Also, worries about the 'fiscal cliff' slowed M&A because CEOs didn't want to look foolish acquiring a company in September ahead of the fiscal cliff when they might have been able to buy it for 20 percent less in January had we gone off."

Meanwhile, Heidrick's troubles included a slowing market for executive searches. In early 2012, analysts expected Heidrick's annual earnings to be in the range of about $1.30 per share. It appears that it will earn closer to 57 cents a share.

Huron's earnings estimates during 2012 were also trimmed, to about $2.10 from about $2.40 a share as the timing of fee payments to its health care consulting business proved volatile.

"Its underlying demand is strong," but an increasing number of clients had signed contracts where a larger portion of revenue was contingent on the outcome of Huron's consulting work, said Randle Reece, analyst with Avondale Partners LLC. That made it harder for the company and the analysts who cover it to predict the timing of revenues, since they are deferred.

For investors interested in "Dumpster diving," Morningstar Inc. considers Exelon, WMS Industries and Caterpillar to be high quality yet undervalued this year, said Heather Brilliant, chief equities strategist.

Navigant is among the region's beaten-down stocks liked by stock research firm EVA Dimensions LLC. "Its fundamentals are improving, and it's really cheap," said EVA analyst Andrew Zamfotis.

Best of the best

Here are the top three stock gainers of 2012:

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Fire 'rekindles' at Bridgeport warehouse




















A vacant warehouse in Bridgeport continues to burn.




















































A nearly 100-year-old Bridgeport warehouse is on fire again this morning after it was gutted during a 5-alarm fire on Tuesday, according to the Chicago Fire Department.


About 10 a.m., a tower ladder truck was sent to the scene to handle the rekindle at the ruins, according to the fire department.


Last night, as crews began demolishing the warehouse at 3757 S. Ashland Ave., the fire department officially released its conclusion as to how it began.








"In layman's terms, that means something that was burning such as a flame or match got near something that would burn," Langford said.


Langford said the building had no gas or electric service and no one was known to be living there. But the night of the blaze, Fire Commissioner Jose Santiago told reporters that in the past, firefighters had been called to the warehouse for small fires caused when squatters lit fires to stay warm.


The matter has been forwarded to the Chicago Police Bomb and Arson unit to determine if the fire involved foul play, Langford and police said.


Friday morning, a private wrecking company hired by the owners of the building began its demolition, Chicago Fire Department spokeswoman Meg Ahlheim said.


Tuesday night, a fire department battalion chief spotted smoke from the blaze as he drove past around 9 p.m. A third of the department's on-duty personnel were called to fight a fire fed by century-old support timbers. Crews have remained there since, dousing flames from the smouldering debris.


chicagobreaking@tribune.com






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Hackers claim attack on Justice Department website






WASHINGTON (Reuters) – Hackers sympathetic to the late computer prodigy Aaron Swartz claimed on Saturday to have infiltrated the website of the U.S. Justice Department’s Sentencing Commission, and said they planned to release government data.


The Sentencing Commission site, www.ussc.gov , was shut down early Saturday.






Identifying themselves as Anonymous, a loosely organized group of unknown provenance associated with a range of recent online actions, the hackers voiced outrage over Swartz’ suicide on January 11.


In a video posted online, the hackers criticized the government’s prosecution of Swartz, who had been facing trial on charges that he used the Massachusetts Institute of Technology‘s computer networks to steal more than 4 million articles from JSTOR, an online archive and journal distribution service.


Swartz had faced a maximum sentence of 31 years in prison and fines of up to $ 1 million.


The FBI is investigating the attack, according to Richard McFeely, of the bureau’s Criminal, Cyber, Response, and Services Branch.


“We were aware as soon as it happened and are handling it as a criminal investigation,” McFeely said in an emailed statement. “We are always concerned when someone illegally accesses another person’s or government agency’s network.”


(Reporting by Deborah Zabarenko; Editing by Vicki Allen)


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Singer Barry Manilow ill, Broadway comeback delayed






(Reuters) – Singer Barry Manilow on Thursday canceled the opening night and three other performances of his Broadway comeback run after coming down with bronchitis, according to Manilow‘s website.


The cancellations threaten to upend the “Could It Be Magic” singer’s return to Broadway following a more than two-decade absence.






The concerts, which had been slated for Thursday through Sunday, will be made up in February and March, his website said. Manilow, 69, will try to perform on Tuesday, the next scheduled show.


Manilow canceled two preview shows earlier in the week because of the illness, after which his website promised the singer would be ready for opening night “come hell or high water.”


“It turns out the only thing worse than hell and high water is bronchitis,” Manilow‘s website said of the cancellations. “Barry is deeply sorry to disappoint his fans and is doing everything he can to ensure a speedy recovery.”


Manilow has signed on for a 25-show run at the St. James Theatre in New York. The native New Yorker typically performs long-running shows at Las Vegas hotels.


(Reporting by Eric Kelsey; Editing by Jill Serjeant and Xavier Briand)


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Shedd Aquarium looks to slice energy bill









Bob Wengel's job at Shedd Aquarium makes your typical thermostat war seem laughable.


For him, keeping everybody comfortable means manufacturing a 2 p.m. sunset for penguins attuned to the daylight rhythms of South America. It means maintaining 3 million gallons at a cool 58 degrees for blubber-laden whales while also satisfying tiny neon fish that won't tolerate less than 78 degrees.


"The first thing you've got to make sure is that your animals are happy," said Wengel, Shedd's vice president of facilities. "Then, your guests come next and, after that, the people who work here."





Until now it has also meant forking over $1.4 million for electricity and $154,000 for natural gas each year.


The Chicago cultural institution is in the early stages of a massive energy overhaul aimed at cutting energy consumption by half at the 83-year-old building. Under a plan developed pro bono by a public-private consortium, Shedd plans to swap out light bulbs, buy solar panels and sell "negawatts" (getting paid to power down) to the electrical grid to achieve its goal by 2020.


The idea: To create a road map other cultural institutions can follow.


"What we're talking about is bigger than the Shedd," said Mark Harris, president and CEO of the Illinois Science and Technology Coalition, which led the consortium that developed Shedd's energy saving plan.


The task won't be easy. Keeping 32,500 animals healthy, happy and well-lit takes a lot of, well, energy. Part zoo, part art space, the building is a life-support system for 1,500 species operating under the parameters of just about every time zone on the planet. Lighting clings to nearly every floor, ceiling and exhibit, mimicking sunlight, guiding visitors and attractively framing columns.


Most days a small ocean of water is chilled or run through heat exchangers, with excess heat released through cooling towers on the aquarium roof.


Staff members bike to work, diligently compost and exchange unwanted items instead of trashing them, and for years the aquarium has tracked its energy use and made changes where appropriate. Still, the energy consumed at Shedd has it claiming the carbon footprint of an endless 2,200-car traffic jam.


"If you ask me — 'What is sustainability?' — to someone like me who runs a facility, it's energy, waste, water," Wengel said.


In 2011, Shedd used so much energy that, if harnessed, it could power nearly 1,500 homes for a year.


If done right, Shedd's energy-shaving work will be mostly invisible.


Discerning visitors may notice a lighting change in Shedd's main entrance, where 600 light bulbs in the aquarium's octopuslike chandeliers were fitted this week with highly efficient LED bulbs, a change that will cut $7,000 a year off its electricity bills.


The sunlight that appears to grace the colorful, bustling exhibit of 450 reef dwellers just inside the main entrance is actually six LED lights that were first tested for their ability to mimic natural light.


"The solar on the rooftop will be visible," said Tom Hulsebosch, managing director for energy and utilities for West Monroe Partners in Chicago, the consulting firm that helped create Shedd's energy road map. "They might notice the subtlety of the LED lighting, but a lot of it is really behind the scenes."


Shedd's goal is to create an intelligent aquarium that is constantly communicating its energy needs to Wengel and his staff. That means letting them know in real time if a system is using more power than usual and where inefficiencies lie in everything from HVAC systems to life-support pumps.


According to the road map the coalition developed, the aquarium plans to participate in a program that pays big energy users to power down on days when the electric grid is strained by demand from air conditioners. But first that means finding out what in the aquarium can be safely powered down.


To start with, Shedd is installing individual meters on everything from lighting systems to chillers so it can track and analyze how and when energy is being used. From there it can determine which systems could safely be powered down without harming the animals or causing a disruption to patrons, and which could be used or timed differently to save money.


"They cannot compromise experience both on the visitor's side and on the animal side, and they cannot compromise performance because they have a life-support system they have to maintain. So just the fact that they can do this, with those huge barriers, is an incredible example," said Karen Weigert, chief sustainability officer for the city of Chicago, which worked with a coalition that developed the energy plan. Also part of the coalition were the Institute for Sustainable Energy Development and Citizens Utility Board.


The aquarium would simultaneously switch to a pricing scheme that rewards it for using the most energy at the times of day when demand is lowest and electricity prices are cheaper.


Also on the docket: solar panels with batteries for storing excess energy that could be sold back to the electric grid in the same way that power plants sell their power.


The plans are in line with that of Illinois, which in October 2011 approved a 10-year, $2.6 billion upgrade to the electrical grid that serves Shedd and the rest of the Chicago area. Half of that is being spent to create a smart grid that, according to ComEd, will bring 100-year-old electrical grid technology into the digital age, automatically reporting problems, rerouting power and eliminating the need for meter readers.


With a smart grid, Shedd could power up some systems while powering down others, and sell or buy electricity from the grid in real time according to the demands of the electrical grid.


To pay for these changes, Shedd plans to seek government grants and private donations. In time, say coalition members, those investments will reap dividends, financially, educationally and environmentally.


"The Shedd's in a unique position. It's been there for 100 years and it's going to be there for another 100 more; so, when you look at a 15-year return on investment, that's not too bad," Hulsebosch said.


jwernau@tribune.com





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PepsiCo to take controversial ingredient out of Gatorade









Responding to consumer concerns, PepsiCo today announced that it will remove brominated vegetable oil, an emulsifier, from citrus-flavored Gatorade.

Mississippi teenager Sarah Kavanagh had launched an online petition in November that drew recent media attention, including a story in the Chicago Tribune on Monday, but the company said the reformulation project was sparked by earlier customer complaints.

“While our products are safe, we are making this change because we know that some consumers have a negative perception of BVO in Gatorade, despite being permitted for use in North American and Latin American countries,” Gatorade spokeswoman Molly Carter said in a statement. “As part of this process, we began working on an alternative ingredient to BVO for the few Gatorade flavors that contain BVO more than a year ago.”

Some countries, including those in the European Union and Japan, do not allow the use of brominated vegetable oil in food. The U.S. Food and Drug Administration’s last review of the chemical, conducted in the 1970s, called for more toxicological testing that was never performed.
 
Kavanagh, whose petition noted that the chemical shares an ingredient, bromine, with some flame retardants, was ecstatic when she heard the news.
 
“When I went to Change.org to start my petition, I thought it might get a lot of support because no one wants to gulp down flame retardant, especially from a drink they associate with being healthy,” she said. “But with Gatorade being as big as they are, sometimes it was hard to know if we’d ever win. This is so, so awesome.”

In an interview, Carter said the company needed a year to make sure the new formulation “would not affect taste or functionality. So we did a lot of sensory testing to make sure we had the right batch and we feel strongly we do.”
 
Carter said BVO will be replaced with sucrose acetate isobutyrate, “one of the flavor emulsifiers we use internationally.”
 
She said she expects the newly formulated drinks to be on shelves over the next few months. Consumers can check for brominated vegetable oil in the list of ingredients and “until then they can drink other (non citrus) flavors that do not contain it.”
 
Carter said there is no current plan to remove BVO from PepsiCo’s Mountain Dew but the company is always evaluating “formulas to ensure they meet the high standards our consumers expect.”

Coca-Cola, which uses the chemical in Orange Fanta and Powerade, said in a statement that the ingredient improves the stability of some products by preventing ingredients from separating.

“While we are confident in the safety of our beverages, we continuously look for ways to improve our products and take consumers’ concerns into account,” the statement said.
 
Change.org said Kavanagh’s petition attracted more than 200,000 supporters and was one of its most popular.
 
“Her campaign is a great example of the shift in power we’re seeing between businesses and their customers,” said Pulin Modi, senior campaigner at Change.org. “Companies like Gatorade can no longer sit back as thousands of consumers are asking for a change -- they’re compelled to do something about it.”

meng@tribune.com
Twitter @monicaeng



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Everything You Need to Know About Kim Dotcom’s Mega






Click here to view the gallery: Hands On With Mega


Mega — the long-anticipated file sharing and cloud storage site from Kim Dotcom — is now open to the public.






[More from Mashable: Google Glasses Spotted and Two Other Stories You Need to Know]


Thanks to its association with the now-defunct Megaupload — and the legal issues facing its founder Kim Dotcom — the amount of press, user interest and hype surrounding Mega is greater than any file hosting/cloud storage launch in recent memory.


According to Dotcom, more than 1 million users signed up for Mega in the first 24 hours. On Twitter, the larger-than-life entrepreneur has continued to share usage stats and traffic graphs that compare Mega with perennial cloud favorite, Dropbox.


[More from Mashable: 9 Fresh YouTube Shows You’ll Love]


If you’re curious about the inner workings of Mega, how it works and how it handles security, we’ve got you covered.


The Phoenix of Megaupload


Mega is the spiritual successor to Kim Dotcom’s last business, the insanely popular file-hosting service Megaupload. Last year, the U.S. Department of Justice shut down Megaupload and pursued criminal charges against Dotcom. Dotcom, a New Zealand citizen, is actively fighting U.S. extradition orders.


Megaupload was targeted by the DoJ because of its role in illegally distributing copyright material — including digital copies of movies, TV shows, books, music and software.


Rather than try to start a new service eschewing the potential for copyright material to be uploaded and shared, Dotcom is positioning Mega as a service that cares about and protects its user’s privacy. In fact, Mega’s tagline is “the privacy company.”


How It Works


On the surface, Mega is a bare-bones cloud storage host. After signing up for accounts, users can upload files and folders of all types to the service. Those files can then be shared with others.


The free plan gives users 50GB of file storage. There are no hard limits on file size, meaning users can use Mega as a way to back up photos, documents and other data. Obviously, this means users can use Mega as a way to store media content — video files, music, DVD images — as well.


For now, Mega is optimized to work on desktop web browsers. Mega strongly encourages users to use Google Chrome. And while Mega has big plans for developers and client-side apps, for now, the only way to access files is via the web browser.


Files can be uploaded to the service using drag and drop or a file-upload menu. Users can create folders in the file manager.


Uploads and downloads take place in parallel. If you upload a large number of files at once, each file uploads one at a time. In the future, Mega says users will be able to change the upload order. If you need to upload or download multiple files at once, simply open a new Mega tab in your browser and select that file.


You can upgrade to a higher-tiered storage plan from within your account. Mega doesn’t sell these plans itself; instead it has resellers who sell vouchers for a service. A 500GB storage plan with 1TB of enhanced bandwidth is 9.99 euros a month or 99 euros a year (a little over $ 110 U.S. dollars). That’s cheaper than most of its competitors.


The Importance of Passwords


It’s very important to remember the password you select when setting up your Mega account. The password is a big part of how Mega encrypts data on both ends.


During the sign-up process, Mega uses your password to create a 2,048-bit RSA key. This is the key that tells the system you are who you say you are. If you forget your password, you’re not going to be able to get into your account.


Right now, Mega doesn’t even have a password reset or recovery feature. In the future, Mega says it will have a reset mechanism but it will only allow users access to files or folders they have file keys for (more on file keys below). Users won’t be able to access other files until or unless they remember their password.


Because your Mega password is also your master encryption key, it’s important that users choose a secure password. We recommend using a password manager and printing a copy of the password to store in a safe place.


Understanding File Security


Mega is focused on end-to-end encryption. This means that files are encrypted both on upload and on download. With most traditional file hosts or cloud storage lockers, a public link to a file also includes a file path. With Dropbox, for example, the public or shared link includes the file name.


With Mega, things are a bit different. While users can share specific files to other Mega users or via email, the URL to a file doesn’t contain a file name; instead, a cryptographic key is appended to the URL. Without this key, you can’t access the file. Once decrypted by the server, a user has the option to download the linked file.


Mega’s promise, in other words, is that users control who has access to their files and accounts and no one else.


For important files or folders, users might want to make a note of the file key and keep it in a safe place — if they are worried about getting locked out of their account.


How Safe Are Your Files


Since Mega is touting itself as “the privacy company,” it’s important to look at how the company stores files and content.


The end-to-end encryption scheme is only part of how Mega secures data. Still, some are already criticizing the service, noting that it’s not as secure as it says it is. An article for Forbes cites two professionals who have problems with Mega’s security.


Matthew Green, a cryptography professor at John Hopkins University, is particularly critical of the way Mega uses JavaScript to verify its encryption method telling Forbes that “it makes no sense.”


Mega has responded to Green’s claims on its own blog, noting that its scheme “basically enables us to host the extremely integrity-sensitive static content on a large number of geographically diverse servers without worrying about security.”


Meanwhile, at Ars Technia Lee Hutchinson raises concerns about how Mega comes up with its crypto key at sign-up, as well as how the company handles deduplication, or how it eliminates duplicate copies of data.


Again, Mega has taken to its blog to attempt to clarify its policies and the way it handles data.


While Mega’s crypto system certainly doesn’t seem any less secure than any other file locker, we do agree with critics who note that the system might be more about giving Mega culpability against claims that it knows infringing content is on its servers, rather than about protecting that data itself.


The service is still in beta and much of its code is available via open source, so security purists might want to watch how Mega’s system evolves before trusting it with important, sensitive data.


Will Mega Stick Around?


While security experts can quibble and argue over the way Mega uses cryptography and how it stores data on its array of servers, the bigger issue, for us, is long-term survival.


While I would argue that most users who actively used Megaupload were not using it as a traditional cloud service, the fact remains that when the service was shut down, user files went with it.


Already anti-piracy groups are campaigning to shut down payment processors to Mega’s resellers. One of the reasons Mega isn’t taking payments itself and is instead using resellers is to prevent those groups from shutting down payment processors or trying to seize funds.


This is worrisome because in addition to outside capital, Mega needs professional accounts to keep its site working.


It’s too early to say if Mega will be around for the long haul or not, but our advice is not to use Mega as your only file storage solution. Keep backups of crucial files on disk or other cloud-based services.


What do you think of Mega? Let us know in the comments.


This story originally published on Mashable here.


Linux/Open Source News Headlines – Yahoo! News





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