BEST OF THE WEB: The Silicon Valley entrepreneur who took down his own company

Cyber-attacks are becoming all too common these days, with SMEs being hit left and right by criminals across the world. But it’s not very often that a former founder will try and take down the company over the internet.

Yet, that’s exactly what happened to California company YouSendIt, the online file sharing service. It had a falling out with one of its founders, Khalid Shaikh, who was eventually busted by the FBI for initiating denial of service attacks against the company, bringing down their servers.

As this profile on Inc shows, the attacks were a long time coming, although board members suggest they didn’t see it coming.

Originally, Shaikh had met fellow employee Jan Mahler, and asked him to join Khalid’s older brother and himself in starting YouSendIt. Mahler was hesitant, but joined and soon the business became a success with 300,000 users within a year. In 2004, they earned a $US250,000 investment.

But soon, things became problematic. It was apparent that Shaikh wasn’t suited to business meetings, and would quickly move into speaking about technical details.

Shaikh was cut out of these meetings, and the other co-founders started taking over the funding of the company. YouSendIt received $US5 million in 2005 and the company continued to grow.
Pressure started building from investors, and Shaikh began to feel that he wasn’t appreciated. Eventually, he was told that he wasn’t fitting in with the company.

Some time passed, but Shaikh wanted to test just how well these servers ran when he was gone. So, he launched a piece of software that flooded YouSendIt with traffic – taking the service down for several hours.

“On October 28, 2009, Khalid was indicted on four counts of computer fraud for attacking YouSendIt’s servers,” the report says.

“He was released on a $100,000 unsecured bond. In June 2011, he pleaded guilty to the first count, a felony, for the cyber-attack that took place in December 2008. (No one was ever charged with stealing) Shaikh agreed to pay $48,194 in restitution to YouSendIt.”

A sentencing is now set for April 30. This is a complicated story, but one that demonstrates how quickly loyalties can change, especially in Silicon Valley. And it definitely shows that despite the growth of international cyber-crime, sometimes the perpetrators of an attack can be closer than you think.

Google+ is in trouble, and here’s why

Google+ is in trouble – there’s really no other way of putting it. And this Wall Street Journal piece explains exactly why Google’s social network seems to be floundering.

According to the latest comScore data, users spent an average of three minutes a month on Google+ between September and January, versus six to seven hours on Facebook over the same time period.

And although Google+ is integrating more tightly with search results, it hasn’t managed to carry users across. As the piece points out, Google+ has some original features, such as the Hangouts feature, which allows group video conferences, but the distinctions aren’t big enough to separate it from Facebook.

“Nobody wants another social network right now,” Brian Solis, an analyst at social-media advisory firm Altimeter Group, told the publication. “For those who already use Facebook, Google hasn’t communicated what the value of Google+ is,” he said.

Google keeps saying it’s not trying to be Facebook, but it may be too late for that – even with a long-term plan.

…and the tablets aren’t doing so well either

Speaking of Google underperforming, the tablet market isn’t doing so crash hot either. Speaking at the Mobile World Congress this week, Google’s Andy Rubin said it’s going to try and become the winner in that space this year.

It’s a longshot, and as MG Seigler points out on his blog, it may not even be possible.

“Across all the various OEMs that make Android tablets, 12 million have been sold in total. Ever. For context, Apple sold 15 million iPads last quarter.”

“Obviously, Google needs to do better in the space. And they should be able to. Quite honestly, it would be hard to do much worse given the interest in the space (thanks mainly to the aforementioned iPad) on both a consumer and OEM level. But Rubin’s excuse as to why the Android tablets are selling so poorly is suspect at best.”

Put simply, Rubin’s reasoning is that there isn’t a way for consumers to view Android as a recognised platform.

“Okay, if that’s true, why isn’t the same true for Android phones, which are obviously selling very well?” Seigler points out.

Google is in trouble in a lot of ways and needs to amend its strategy if it wants to win in the mobile space.

How long can Apple rule the smartphone market?

This week’s Mobile World Congress has seen the release of a wide array of mobile devices, and has brought up some interesting questions as well – just how long can Apple survive as the leader in smartphone sales?

The tech giant is recording record mobile profits, but there’s a small threat growing as competitors, such as Samsung, start making mobiles for much, much less.

And analysts are taking notice. Canaccord Genuity analyst Michael Walkley tells the New York Times that Apple’s lead should be extended through this year but after that, the future grows a little greyer.
“I cannot say with certainty that five years on, Apple will still be on top,” Walkley said, noting that Apple and HTC did not even make smartphones six years ago. “I assume they will be, but it is difficult to predict anything in this dynamic market.”

It’s hard to see Apple dropping out of the smartphone race, but as the piece points out, smartphones are slowly becoming just “phones”. The norm. Where Apple stays in that race is hard to predict.