Chrysler turns first profit since bankruptcy

FILE - In this April 28, 2011 file photo, an assemblyman works on an engine for the Chrysler Jeep or the Dodge Durango which are built on the same line at Chrysler's Jefferson North Assembly Plant in Detroit. The company reported first-quarter net income of $116 million and revenues of $13.1 billion on Monday, May 2, 2011. The profit is a milestone in Chrysler's long road back to health after its 2009 bankruptcy. It last reported a profit in 2007. (AP Photo/Carlos Osorio)

DETROIT (AP) -- For the first time in nearly seven years, Detroit's car companies are all making money.
Chrysler, the last of the three to return to profitability, said Monday it earned $116 million in the first quarter on revenue of $13.1 billion. The company, which emerged from bankruptcy protection a little less than two years ago, hadn't reported net income since 2006.
General Motors Co., which also went into bankruptcy in 2009 and took billions in government aid, has reported four profitable quarters and held an initial public offering in November to help repay its loans. Ford Motor Co., which didn't take bailout money but nearly filed for bankruptcy five years ago, recorded its eighth consecutive quarterly profit last week. Ford's 2010 profit of $6.6 billion was the highest in a decade.
"It's kind of miraculous," said Van Conway, a consultant and founder of turnaround firm Conway MacKenzie. "If all of us were to put ourselves back in 2009, could we imagine that GM could have done an IPO and these companies would be enjoying this level of profit? I don't think so."
It's the payoff for cutting staff, plants, car brands and wages during the recession and bankruptcy. At the same time, car sales are rising as the economy improves. Detroit is also taking away customers from Toyota Motor Corp., which was hurt by safety recalls last year and the recent Japanese earthquake.
The results are a triumph for Chrysler CEO Sergio Marchionne, who bet that he could remake the company the same way he turned around Italian automaker Fiat SpA six years ago. But he remains wary of declaring victory.
"Success is incredibly temporary. The first quarter is done, but we've got a lot of quarters to do," he said.
Marchionne said Chrysler expects to earn between $200 million and $500 million this year. That would help the company reach its goal of having a public offering later this year or early next. Investors want to see a string of profitable quarters before the IPO happens.
Chrysler's sales rose 18 percent worldwide in the first three months of 2011. New models are helping. U.S. sales of the revamped Jeep Grand Cherokee SUV jumped 64 percent in the latest quarter. Sales of the Chrysler 200 sedan more than quadrupled over those of its predecessor, the Sebring. The 200 has better materials, handling and fresher styling than the Sebring, which Consumer Reports rated the least reliable family car among 2009 models.
Buyers also paid more for Chrysler's vehicles. The average price paid per vehicle rose $1,000 to $28,300. Chrysler cut its spending on incentives and reduced the number of vehicles going into low-profit rental fleets. Profit margins more than doubled to 3.6 percent.
GM, Ford and Chrysler all reported profits in the last quarter of 2004, but GM and Ford were soon posting billions in losses. Chrysler last reported net income in the second quarter of 2006, one year before it was sold by Daimler AG to private-equity firm Cerberus Capital Management.
Cerberus, which was looking for a quick turnaround, didn't invest the cash needed to weather the worst auto sales decline in more than 25 years. As a result, Chrysler came close to running out of money at the end of 2008. The U.S. government stepped in, authorizing $10 billion in aid and appointing Marchionne to run the company after it emerged from bankruptcy protection in June 2009.
The U.S. government remains a part owner of Chrysler, holding an 8.6 percent stake. Chrysler wants to sever those ties.
The company will soon repay $7.5 billion of the bailout from the U.S. and Canadian governments using a new, $3.5 billion bank loan, a $1.5 billion credit facility and a $2.5 billion debt offering. By repaying the debt, Chrysler will save millions in interest payments.
The U.S. government is also expected to recoup some of the bailout money when it sells its stock in the public offering.
Marchionne said the company has improved fuel economy by a combined 40 percent on its 2011 models. It also plans a significant shift to more efficient engines over the next three years, using technology from its partner Fiat.
Another setback has been the U.S. rollout of the Fiat brand, which the company hoped would lure more American to stylish small cars such as the Fiat 500.
Fiat sold just 500 of the subcompacts in the first quarter, putting it behind where it expected to be. Marchionne said it has taken longer than expected for dealers to get state licenses to sell the cars. Fewer than 50 of the planned 130 U.S. Fiat dealers are now open. The company had hoped to sell 45,000 Fiats here in 2011.
Conway said consumer confidence is improving, which will help car sales. Most companies expect total U.S. sales of around 13 million this year, up from 10.6 million in 2009 but still far from the 17-million level of the mid-2000s.
Marchionne feels bullish about Chrysler. Last month, Fiat, which is also run by Marchionne, said it will spend $1.3 billion to increase its stake in the American company. That will increase Fiat's holdings to 46 percent. Fiat hopes to control 51 percent of Chrysler by the end of this year.

Weak dollar gives US factories strong lift in '11

In this April 28, 2011 photo, a Dodge Durango is assembled at Chrysler's Jefferson North Assembly Plant in Detroit. Manufacturing grew for the 21st straight month in April, though at a slightly slower pace than the previous month (AP Photo/Carlos Osorio)

WASHINGTON (AP) -- The nation's manufacturing sector has expanded this year at the fastest pace in a quarter-century, boosted by a weak dollar that has made U.S. goods cheap overseas.
Strong factory production could help the economy rebound after experiencing weak growth in the first three months of this year. But the construction industry is struggling and manufacturing won't drive enough job growth by itself. Rising prices are also threatening many companies' profit margins.
The Institute for Supply Management said Monday that manufacturing activity expanded in April for the 21st straight month. While the trade group's index dipped to 60.4, it's down only slightly from the previous two months. And February's reading of 61.4 was the fastest expansion in nearly seven years. Any reading above 50 signals growth.
"In April, there was no meaningful slowdown in what has become the most important sector in the economy," said Dan Greenhaus, economic strategist at Miller Tabak.
The index has topped 60 in every month this year, the best four-month stretch in 27 years, said David Resler, an economist at Nomura Securities.
Companies are buying more industrial machinery, heavy equipment, and computers, spurring much of the growth in factory output. And consumers are buying more cars, helping the beleaguered U.S. auto industry recover after General Motors and Chrysler declared bankruptcy two years ago.
Another reason for the growth is the falling dollar. It has declined 8 percent in value this year against a basket of six other currencies. That helped fuel a 7.8 percent rise in exports in the first three months of this year. A weaker dollar makes U.S. goods cheaper overseas, and imports more expensive in the U.S.
The manufacturing sector has expanded in every month but one since the recession ended in June 2009. Still, it represents only about 11 percent of U.S. economic activity and can only do so much to lift the broader economy.
Paul Ashworth, an economist at Capital Economics, said the manufacturing index is at levels that are historically consistent with economic growth at about 5 percent. But growth is likely to be much weaker than that because of subpar activity in other areas.
The home-building industry is on pace to suffer the worst two years for new-home sales since the government began keeping records in 1963. The service sector is recovering at a sluggish pace. Consumers are spending more after getting a cut in Social Security payroll taxes, but most of the extra money is going toward higher priced gas and food.
"That just shows you the gap between manufacturing and the rest of the economy," Ashworth said.
Builders did break ground on more hotels, office buildings and factories in March, lifting U.S. construction spending for the first time in four months. The increase is partly a bounce-back from weather-related declines in January and February.
Still, even with the gain, construction spending stood at a seasonally adjusted annual rate $786.9 billion -- just half the $1.5 trillion pace that economists view as healthy. Many economists say it could take four years for construction to fully recover.
Economists expect construction will add to economic growth in the April-June quarter after subtracting from it in the January-March period. The gains should help growth rebound to roughly 3 percent this quarter, an improvement from the 1.8 percent growth rate in the first quarter.
Manufacturing companies have been reporting healthy earnings gains in recent weeks. Chrysler on Monday reported its first quarterly profit in five years. And Ford Motor Co. said last week that it earned its biggest first-quarter profit in 13 years.
Heavy equipment maker Caterpillar said Friday that profit in the January-March quarter rose five-fold. Demand for its mining and construction equipment soared, more evidence of the growth in U.S. exports. Construction equipment and other U.S.-made goods are in high demand in developing countries such as China, Brazil and India.
A major reason for the weak dollar is the Federal Reserve has kept short-term interest rates at record low levels near zero. Other central banks overseas have begun to increase interest rates to ward off inflation, which makes their currencies more attractive to investors seeking higher returns.
U.S. companies are coping with a steep rise in commodity prices. The survey's prices paid index rose to the highest level in nearly three years. Aluminum, chemicals, corn, oil, plastics and steel were all reported to be more expensive than the previous month.
Many companies are hesitant to pass along the added costs to the consumer, who is coping with 8.8 percent unemployment and slow job growth. Instead, the higher prices are squeezing profit margins. One company in the food processing industry said that higher raw material costs are "putting extreme pressure on profits," according to the trade group's report.
Separate measures of new orders and production both topped 60 for the fifth straight month, though they both declined in April compared to March. The employment index also dipped but showed that manufacturers are still adding jobs. The employment index has risen in the past four months at the fastest pace in 38 years.
Norbert Ore, chairman of the ISM's survey committee, said there was little sign of any impact from the huge earthquake and tsunami in Japan on March 11. Some companies said electronic components, many of which are manufactured in Japan, were in short supply in April, but Ore said that concern existed before the disaster.

Stocks end lower despite bin Laden death, earnings

NEW YORK (AP) -- The Bin Laden rally lasted all of three hours.
Stocks began climbing Monday morning after news of the death of the world's most wanted terrorist overnight. Strong earnings reports from Humana Inc. and other companies also pushed them higher.
But by lunchtime, the gains were gone. The major indexes wavered throughout the remainder of the day and closed slightly lower.
"As great as the news is, it doesn't have much to do with earnings or the economy," said Jack Ablin, chief investment officer at Harris Private Bank.
The Dow Jones industrial average fell 3.18 points to close at 12,807.36. The average of 30 stocks had been up as many as 65 points in morning trading.
President Barack Obama said late Sunday that bin Laden, the al-Qaida chief who masterminded the Sept. 11, 2001 attacks, had been killed by U.S. forces in Pakistan. The news lifted investors' mood when the market opened.
"It's a feel-good item," said Howard Silverblatt, senior index analyst at Standard & Poor's. "It gives closure to a lot people."
But Silverblatt expected the impact on markets to be temporary once traders shifted their focus to corporate profits and economic news.
Strong earnings over the last two weeks helped the Standard & Poor's 500 index reach its highest levels since the financial crisis on Friday, when it closed at 1363.61.
The S&P 500 index fell 2.39 points, or 0.2 percent, to 1,361.22. It had been up 7 points Monday morning. The Nasdaq composite fell 9.46 points, or 0.3 percent, to 2,864.08.
The dollar dropped against a basket of six major currencies -- the euro, Japanese yen, British pound, Canadian dollar, Swiss franc and Swedish krona -- for the eighth day straight. The dollar index sank to 72.72, its lowest point since July 2008.
Whole Foods Market Inc. fell 5 percent, making it the worst-performing stock in the S&P 500. A Jefferies analyst downgraded the company and said sales could stagnate as shoppers feel the pinch of higher gas prices.
Dish Network Corp., Chrysler Group LLC and Humana Inc. all reported strong earnings. Dish Network's first-quarter net income more than doubled, in part, because of a patent settlement with TiVo Inc. Its stock rose 16 percent.
Humana's profit rose 22 percent. The company benefited from more people enrolling in its Medicare plans. Its stock gained 0.5 percent.
The privately-held Chrysler reported its first profit since leaving bankruptcy two years ago thanks to higher sales.
Israeli drug maker Teva Pharmaceutical Industries Ltd. said it would buy Cephalon Inc. for $81.50 per share, or $6.8 billion. Cephalon's key drugs include the sleep disorder treatment Provigil and the cancer drug Treanda. Cephalon's shares rose 4 percent.
The Institute of Supply Management reported that manufacturing activity increased for the 21st month in April, though at a slightly slower pace than the month before. This was expected by economists. The Commerce Department also reported that builders started work on more projects in March after three straight monthly declines in construction spending.
Roughly three shares fell for every two that rose on the New York Stock Exchange. Trading volume was 4 billion shares.

Post-9/11 changes to industries outlive bin Laden

Security screening at airports will still be a hassle and raise the cost of travel. Laws that turned banks into financial cops will stay in place. And most companies will still spend more to ship goods and secure their computer systems.
Osama bin Laden's death won't reverse the transformation of business that followed the Sept. 11 attacks.
The attacks fueled higher corporate spending on security and intelligence -- costs that have been passed on to consumers. Those surging gas prices that motorists are cursing are higher, in part, because the bin Laden-driven attacks raised fears that terrorists might disrupt the flow of Middle East oil.
No matter what happens next, bin Laden's legacy has meant costs and fees that business and consumers had never faced before and that aren't about to go away.
"The cost of doing business has gone up permanently since 9/11," said Sung Won Sohn, an economics professor for the California State University at Channel Islands.
At the same time, John Silvia, chief economist at Wells Fargo Securities, said bin Laden's death might reduce the perception of risk in trading and doing business, something that could benefit the global economy.
"I would view this as a risk-reducing event," Silvia said.
Stocks began climbing Monday morning after news of bin Laden's death. Strong earnings reports from Humana Inc. and other companies also pushed them higher.
But by lunchtime, the gains were gone. The major indexes wavered the rest of the day and closed slightly lower.
Here's a look at how different industries and sectors were reshaped by the Sept. 11 attacks:
AIRLINES
The terrorist attacks turned the act of flying into a test of patience. Air travel changed from a routine exercise -- almost as simple as hopping on a train -- into a process of seemingly ever-changing rules and procedures and time-hogging scrutiny. The role of flight attendants changed from serving coffee and a meal with a smile to being a first responder with a need for combat training.
In the near-decade since 9/11, passengers have been forced to take off their shoes, throw away containers containing more than 3.4 fluid ounces (100 cubic centimeters) of liquid and, more recently, subjected to full-body scanners if they want to avoid pat-downs that have sparked complaints about invasions of civil liberties.
"Whether or not these rules are effective at making our planes more secure is debatable, but one thing for sure is that they have made going through security more of a hassle for the traveling public," said Anne Banas, executive editor of SmarterTravel.
It also caused deep financial hardships for an industry that had long struggled to maintain profits. Besides having to charge a $2.50-per-flight fee to help bankroll the Transportation Security Administration, most airlines now charge to check baggage, too. That adds $100 to $200 to the cost of flying for many travelers.
The good news: An airline ticket itself costs slightly less than it did before the attacks. That's largely because airlines remade themselves into leaner operations, desperate not to lose money after a wave of bankruptcies triggered by 9/11. The list of post-attack bankruptcies included US Airways in 2002 and 2004, United in 2002, Northwest and Delta in 2005.
Mergers have reduced the number of airlines. The result: Airlines employed about 380,000 people at the end of last year -- down 27 percent from roughly 520,000 from 2000.
ENERGY
Electricity and other energy costs are likely higher than they would be had the Sept. 11 attacks not occurred. Power plants and energy transmission networks are deemed to be potential terrorist targets. So the security costs related to them have risen, with costs passed along to customers.
After 9/11, U.S. oil refineries were subjected to increased and costly security measures that remain in place, says Bill Day, spokesman for Valero Energy, the nation's largest independent refiner. Bin Laden's death prompted Valero to increase security at its 14 refineries as a general precaution.
Michael Lynch, President of Strategic and Economic Research, Inc., says oil has been more expensive over the past decade because traders have worried that al-Qaida could disrupt supplies by attacking refineries, pipelines or ports in the Middle East.
"The right person in the right place could do a lot of damage, and al-Qaida has always had people willing to take more risk than anyone else," Lynch said.
But Lynch says the threat, and the fear premium, have diminished in recent years, in part because attempted attacks failed to do any damage. In 2006, terrorists tried to attack a Saudi oil refinery. And last year, an al-Qaida affiliate took credit for an attack on a Japanese oil tanker in the Strait of Hormuz.
"It will fade more with time because of the death of bin Laden," he said of the fear premium.
TECHNOLOGY
The attacks spurred more demands for more sophisticated computers and software.
The fear of another destructive attack that might target information technology, or IT, forced companies to hustle to upgrade their security software. This included heavy-duty encryption and data-recovery protections. The urgency has been especially felt in banking and government and operators of bridges, tunnels and power plants.
"The one thing 9/11 really brought to life was how organized the terrorists were," said Patrik Runald, who runs the U.S. security lab for Websense Inc., a San Diego-based Internet security firm. "People started realizing, if they're so organized when it comes to physical attacks, what if they were that organized when it comes to cyber-attacks?"
More companies also tried to make their workers more productive to help offset their higher costs in 9/11's aftermath. That goal also helped sell more computers and technology services.
"When businesses want to raise productivity, the first place they look is technology," Sohn said.
PORT SECURITY
Before 9/11, port security focused almost solely on smugglers and thieves. Now, the focus has shifted to international terrorism threats. And that's raised the cost of doing business.
"We are really looking at threats through a different lens," said Aaron Ellis, a spokesman for the American Association of Port Authorities.
There are more guards, and radiation and gamma ray technology is used to scan containers and ships. Unusual shipments like artillery or chemicals draw extra attention.
FINANCIAL COMPANIES
Banks had to shoulder higher costs to obey the Patriot Act after 9/11. Among other things, the law required banks to police their customers more vigilantly to prevent money laundering and detect the transfer of money to terrorist causes. To comply, the banks had to improve their record-keeping and more closely scrutinize new accountholders and the sources of large deposits.
The regulations have been costly to implement, particularly for small financial institutions, according to the most recent information from a 2007 study published in the Journal of Money Laundering Control. "Banks, brokerage firms, and other financial institutions spent over $11 billion in 2002 to strengthen their internal controls," after the Patriot Act was passed. Those same firms spent an average of 61 percent more in the three year period from 2001 to 2004 than they had in prior years.
Brokerages also spent more to guard against possible terrorist attacks. After 9/11, Lime Brokerage in Manhattan invested in backup servers to handle orders in case the primary servers went down. It now has 22 extra servers on standby, one for each primary one. The costs involve millions for redundant fiber-optic lines and software to coordinate the multiple systems.
"We try to be as paranoid as possible," says John Jacobs, head of operations at Lime's offices just north of the World Trade Center site.
Liedtke reported from San Francisco. AP Business Writers Scott Mayerowitz, Jonathan Fahey, Samantha Bomkamp, Pallavi Gogoi and Bernard Condon in New York, Joshua Freed in Minneapolis, Dave Carpenter in Chicago, Jordan Robertson in San Francisco and Christopher S. Rugaber in Washington contributed to this report.

Bin Laden and the war in Afghanistan: Why the U.S. is not declaring victory yet

The killing of Osama bin Laden in a firefight with U.S. special forces Sunday would seem to be one of the rare recent "champagne moments" in U.S. foreign  policy. But U.S. national security officials and experts were muted in discussing this triumph, opting instead to stress the challenges the United States continues to face from violent Islamist extremism--and to observe that those challenges are nowhere more confounding than in Afghanistan.
"Once the dust settles, there are so few apparently al Qaeda left and their spiritual leader is now dead , that it will raise questions about, what are we really doing in Afghanistan," former deputy secretary of State Richard Armitage told The Envoy Monday. "Intelligence officials have recently said there are less than 100 al Qaeda left. Does this justify having 140,000 [U.S.-led] troops in Afghanistan?"

Armitage and other U.S. regional experts said American policy makers are going to have to take some time--and a good deal of deliberation--to answer that question.
"Obviously, the Taliban has launched their spring offensive and it's unclear exactly what kind of firepower it has," a U.S. official who works on Afghanistan told The Envoy Monday on condition of anonymity.
But the "tie-in" between Afghan insurgents and Osama bin Laden "has always been a bit overhyped in terms of linkages," the U.S. official said. "The administration has said publicly that there are only 90 or so remaining members of al Qaeda. These guys who are carrying out attacks in Afghanistan are not necessarily getting their marching orders from bin Laden."
"Most Taliban members are not fighting for a greater cause," he continued. "Most are fighting because they are jobless and the Taliban pays them."
Other analysts point out there are some broader strategic opportunities opening up for the United States in the region now. "The death of Osama bin Laden provides an opportunity for Pakistan to eliminate its support for the Afghan Taliban and materially affect the length and course of the war in Afghanistan," John Nagl, president of the Center for New American Security and a former senior U.S. military officer and specialist on counterinsurgency, told The Envoy.
Analysts agree that the stunning news of bin Laden's death will give President Barack Obama more political space to reassess the U.S. mission in Afghanistan. But they also note that the U.S. government has been in the midst of this reappraisal for some time already. "I think it does give him more political latitude, but I don't know what he will do about it," Daniel Byman, a former Clinton administration national security official with Georgetown University said of Obama.
The top U.S. commander in Afghanistan, Gen. David Petraeus, had been scheduled to provide his own recommendation on the scale of the U.S. troop commitment to the White House, as initial pullouts are slated to begin in July. But U.S. officials have previously indicated the United States won't institute a major troop withdrawal in Afghanistan until 2014. That's the point at which Afghan President Hamid Karzai has said Afghan security forces will be prepared to take the lead in securing their own country.
Given this and other larger-scale structural issues, observers aren't sure that the death of bin Laden will affect U.S. war planning in the country.
"The U.S. intervened in Afghanistan in 2001 for two related reasons: one was to prevent Afghanistan from being a haven for terrorists," former U.S. Ambassador to Afghanistan Jim Dobbins told the Envoy Monday. "But the second was to prevent Afghanistan from being an ally of terrorists.  Under the Taliban, "Afghanistan was  not just a sanctuary, but an active ally of Al Qaeda," Dobbins explained. "It was the only government in the world that was prepared to support it . . . . That makes it different from Pakistan or Yemen or Somalia."
But the current Afghan government does not actively support Al Qaeda, a reporter pointed out, while bin Laden was actually found in a military town near the capital of ostensible U.S. ally Pakistan--where the U.S. has no forces stationed.
"It's a different government because we intervened and because we stayed," Dobbins responded. Al Qaeda "is in Pakistan because we are in Afghanistan. If we were not in Afghanistan, it would be there."
So almost 10 years after U.S. forces toppled the Taliban in Afghanistan, when will it ever be safe enough to leave?
Dobbins outlined three possible options, any one of which would enable the U.S. to reduce its engagement in Afghanistan.
"The first is: the insurgents break their ranks with Al Qaeda," Dobbins said, noting the Obama administration has pursued explicit talks with the Taliban in pursuit of this goal. "The second is that Al Qaeda goes way."
A third possibility, Dobbins said, is that the current regime in Kabul becomes robust enough that it can prevent a Taliban take-over on its own. This, Dobbins notes, is the factor that "we have the greatest control over"--and so building up the Karzai government's "indigenous capacity to resist the Taliban . . . is where we are spending the most effort."
(Supporters of Pakistani religious party Jamiat Ulema-e-Islam rally to condemn killing of Osama bin Laden in Quetta, Pakistan on Monday, May 2, 2011.: Arshad Butt/AP)

On Scene in Abbottabad at Bin Laden's Last Stand

Sohaib Athar was jolted upright by the low-flying buzz of helicopters passing over his home next to Abbottabad's Jalal Baba auditorium. In this sedate garrison town ringed by jagged peaks, the gentle thrum of the day is reduced to a whisper by night. "The helicopter was circling around for five to six minutes," Athar tells TIME. "It's not commonplace here." In what soon became among the world's most read tweets that day, Athar alerted his Twitter followers: "Helicopter hovering above Abbottabad at 1AM" on Sunday morning Pakistan time. For the next half hour, he live-tweeted what he was hearing, without the faintest inkling that his tweets were the first public record of Osama Bin Laden's final moments. In less than 24 hours, Athar's name was trending and his followers had swollen incredibly from some 800 to now 55,000 - and counting.
Moments after Athar first heard the helicopter, the force of a loud explosion rattled him. "I heard the blast and everything shook in my room," he says, sitting in the Coffity cafe that he and his wife run. The sound was keenly recognizable to the couple; it was the reason why they had left their native Lahore, where suicide bombs have wrought terror regularly over the past two years. "But unlike the aftermath of those blasts, there were no ambulance sirens." All he could hear was the sound of a car racing through empty, quiet streets. And then the familiar sound of a helicopter in flight returned, before it, too, faded away. (See Osama bin Laden's obituary.)
Naturally alarmed, Athar reached out to friends over Facebook, asking them what they had heard. Two of them, living as far as six kilometers away, felt the explosions. Zabiullah Khan, 20, a college student says that he saw the helicopters arrive. "There were two black gunship helicopters," Khan says with a tone of certainty. "I couldn't see them clearly in the night, but it was obvious that they weren't Pakistani. We don't have gunship helicopters." He was convinced that the helicopters were American. "I began to wonder if the Americans were invading us," he says, recalling the recent history of strained relations between the two countries. His fears were heightened when he saw what he says was a flash moments before the explosion.
The home where Bin Laden had been hiding since at least last summer is located in the Bilal Town neighborhood of Abbottabad. (Update: An American source tells TIME that he may have been at the location upwards of five or six years.) It is less than a kilometer away from Pakistan's Military Academy at Kakul - the country's equivalent of West Point Academy. "It's a respectable middle class area," says Azim Durrani, another student who heard the raid. "The people who live there are doctors and different kinds of professionals. They drive Corrolas and Hondas." The morning after the raid, the army was keen to not allow anyone else to catch a glimpse. Within moments of President Obama's speech, they had setup checkpoints athwart all nearby major roads and sealed the neighborhood itself. A Der Spiegel journalist who managed to forge his way through was arrested for one hour, his camera confiscated, and the images of the notorious compound wiped. ABC News managed to broadcast images from what appeared to be a bloody bedroom in the compound. (Watch President Obama's announcement of Osama bin Laden's death.)
The compound doesn't quite fit the descriptions of a mansion, as some have labeled it. The walls are 12 feet high walls and about 13 inches thick - enough to shield the tall terrorist leader from public view. The property itself is spread over an area slightly smaller than an acre. The house is a great deal smaller, rising over two-storeys. In other ways, it was unremarkable but sometimes noticed. Muhammad Riaz, 34, a construction worker who lives in the neighborhood says that he had viewed it with some suspicion. Unlike other homes in the Thanda Chuha area of Bilal Town, he was unfamiliar with its occupants. "I know that it was owned by a Pashtun man, who had come from elsewhere, called Akbar," Riaz says. "It's just five minutes away from my house." Like others, he denies ever glimpsing Bin Laden.
See pictures of the battle against the Taliban
See TIME's 2001 cover story on the 9/11 attacks

For Riaz, the mystery of the explosion swiftly faded. "We rushed out of the house immediately," he says, echoing the words of several residents across Abbottabad who hastened out on to the streets out of panic. "When we came outside, I saw the helicopter on fire, there was smoke rising out of it." The images were also broadcast that night on Pakistani television. The helicopter, Riaz says, had fallen out of the sky and plunged on to the compound, damaging at least a boundary wall. U.S. officials have said that the helicopter suffered a mechanical failure. None of the Americans involved in the raid were hurt, President Obama said in his speech. Part of the reason for the rigidly enforced perimeter was that Pakistani authorities were attempting to remove the wreckage from the scene, behind hastily erected tarpaulins. (Update: A U.S. source tells TIME that the helicopter crashed not because of mechanical failure but because the compound's walls were too thick and high that, when the aircraft hovered above them, its rotors could not generate enough aerodynamic lift to keep the chopper aloft.) (See pictures of people celebrating Osama bin Laden's death.)
When Athar and his friends realized who the target of the half-hour raid was, they were shocked. "I don't know what to say," says a visibly incredulous Durrani. "What does one say in these situations?" For years, he had heard of Bin Laden's name. He had heard that he might even be in Pakistan. "We never thought he would be here, though." The raid itself seems so surreal as to merit a fantasy comparison. "It reminds me of the game Call of Duty: Modern Warfare that I play on my Xbox."
Similar feelings of bewilderment were much in evidence throughout the rest of the town, as residents tried to return to their ordinary lives, but often wearing expressions of head-scratching bemusement. Other residents demand proof. "We heard rumors before, then he shows up in a video," says Durrani. While a series of opinion polls in previous years have registered frightening levels of support for Bin Laden, the reaction to the current news has not reflected this. There used to be great shows of support for the man some perceived as a champion of their anti-American hostility. In Abbottabad, feelings about Bin Laden's death almost don't register. "We aren't happy and we're not sad," says Mohammed Ishtiaq, a junior government officer, echoing many. (See pictures of Osama bin Laden's Pakistan hideout.)
In some ways, Abbottabad was the ideal hiding place for bin Laden. Squeezed between the Pashtun-dominated frontier, where militancy has thrived in recent years, and the bustling heartlands of the Punjab, the Hazara region is an oasis of relatively prosperous calm. From the capital Islamabad, the journey is a slow three-hour drive, snaking up and around sometimes dizzying bends. Along the way, visitors pass sensitive military installations, but also plush fields that reveal a view of rising mountains. Named after Major James Abbott, a 19th century colonial officer, the town is an exhibition of colonial and martial traditions. Burn Hall, a near replica of a British boarding school, is sprawled over several acres on the west of the town.
It was the orderly calm and surrounding beauty that lured Athar and his wife here. Bin Laden's presence and death may give him reason to revisit that view. "It's ironic," he says. "I left Lahore because of the bombs, then I come to Abbottabad and find out that Bin Laden lived here." Like many Pakistanis, he is now confronted by two pressing questions. Why weren't the country's much-vaunted intelligence agencies able to track the arch-terrorist down? And if they did already know where he was, why did they choose to hide it?

Obama keeps poker face after bin Laden order

AP – FILE - In this April 30, 2011 file photo, President Barack Obama attends the White House Correspondents’ …
WASHINGTON – In a remarkable 36 hours of his presidency, Barack Obama carried a momentous secret and gave no hint of it as he consoled tornado victims, delivered a college commencement address and cracked jokes at a black-tie dinner.
What few insiders knew was that Obama gave the go-ahead Friday for the military operation that would end with the death of terrorist leader Osama bin Laden, target of the world's most intense manhunt.
After giving his consent, Obama, wife Michelle and daughters Sasha and Malia left the White House on a busy day of travel, with three stops in two states.
In Alabama, one of several Southern states battered by fierce tornados, Obama assumed his role as consoler in chief as he and the first lady got an up-close look at communities in Tuscaloosa that had been flattened by the twisters.
Next stop: Cape Canaveral, Fla., even though Endeavour's launch, the next to last one before the shuttle fleet is retired, had been scrubbed for technical reasons well before Obama left Alabama. He stuck to his schedule, touring NASA facilities with his family. He also met privately with wounded Rep. Gabrielle Giffords, D-Ariz. Her husband, Mark Kelly, is the shuttle commander.
The president also delivered an evening commencement address at Miami Dade College before returning to Washington.
Obama wore a poker face throughout the weekend.
On Saturday, Obama attended the White House Correspondents' Association annual dinner and lobbed a few barbs at Donald Trump after having endured weeks of attacks by the prospective Republican presidential candidate over whether Obama is U.S.-born.
On Sunday, Obama headed for the Andrews Air Force Base golf course, as he does on many weekends when the weather is nice. But he only played nine holes, instead of his customary 18, and left after about four hours. The reporters who accompany him on public outings thought the chilly, rainy weather played into his decision to leave hours earlier than usual.
Actually, Obama was headed for a meeting to review final preparations for the operation against bin Laden.
In retrospect, there were some meager clues that something may have been going on. Obama went straight to the Oval Office in his golf shoes, instead of to the residence as he normally does after golf. Photos showed him looking tense and clench-jawed.
All became clear late Sunday when Obama told the nation shortly before midnight that bin Laden had been killed at the hands of U.S. forces.

WASHINGTON – In a remarkable 36 hours of his presidency, Barack Obama carried a momentous secret and gave no hint of it as he consoled tornado victims, delivered a college commencement address and cracked jokes at a black-tie dinner.
What few insiders knew was that Obama gave the go-ahead Friday for the military operation that would end with the death of terrorist leader Osama bin Laden, target of the world's most intense manhunt.
After giving his consent, Obama, wife Michelle and daughters Sasha and Malia left the White House on a busy day of travel, with three stops in two states.
In Alabama, one of several Southern states battered by fierce tornados, Obama assumed his role as consoler in chief as he and the first lady got an up-close look at communities in Tuscaloosa that had been flattened by the twisters.
Next stop: Cape Canaveral, Fla., even though Endeavour's launch, the next to last one before the shuttle fleet is retired, had been scrubbed for technical reasons well before Obama left Alabama. He stuck to his schedule, touring NASA facilities with his family. He also met privately with wounded Rep. Gabrielle Giffords, D-Ariz. Her husband, Mark Kelly, is the shuttle commander.
The president also delivered an evening commencement address at Miami Dade College before returning to Washington.
Obama wore a poker face throughout the weekend.
On Saturday, Obama attended the White House Correspondents' Association annual dinner and lobbed a few barbs at Donald Trump after having endured weeks of attacks by the prospective Republican presidential candidate over whether Obama is U.S.-born.
On Sunday, Obama headed for the Andrews Air Force Base golf course, as he does on many weekends when the weather is nice. But he only played nine holes, instead of his customary 18, and left after about four hours. The reporters who accompany him on public outings thought the chilly, rainy weather played into his decision to leave hours earlier than usual.
Actually, Obama was headed for a meeting to review final preparations for the operation against bin Laden.
In retrospect, there were some meager clues that something may have been going on. Obama went straight to the Oval Office in his golf shoes, instead of to the residence as he normally does after golf. Photos showed him looking tense and clench-jawed.
All became clear late Sunday when Obama told the nation shortly before midnight that bin Laden had been killed at the hands of U.S. forces.

Social media and the security risks they pose for business

Each week we ask chief technology officers (CTOs) and other high-profile technology decision-makers three questions.

Nir Zuk says applications like Salesforce.com and WebEx pose a security dilemma for businesses

This week it's Nir Zuk, the co-founder and chief technical officer of Palo Alto Networks.
Palo Alto Networks is a network security company which helps businesses enable the use of modern applications such as Facebook, WebEx and Salesforce.com.
The company is privately held, with investments totalling $65m from leading venture capital firms Globespan Capital Partners, Greylock Partners, JAFCO Ventures, and Sequoia Capital. Palo Alto Networks is based in Sunnyvale, California, and says it is enjoying triple-digit growth.

What's your biggest technology problem right now?

I think that the biggest challenge right now in our space is the change that the internet is going through in terms of the kind of applications that enterprises are using.
The technology that's been available until recently for protecting enterprise networks is technology that is 15 years old, from the mid-'90s, that was developed at a time when the internet was basically web browsing and e-mail. There was no Facebook, no WebEx, no Twitter.
Nowadays the internet is very, very different than it was in the mid-90s. Until a few years ago, when I was talking to other CTOs in the industry, what I heard from them was that they didn't care about this kind of technology.
They didn't care about Facebook, they didn't care about Twitter, they didn't care about applications like Google Docs. They hadn't seen the value of these applications in their business.
However, now that more and more businesses are seeing the value in these things, they have a big dilemma.
Are they going to allow these applications to go through their network, knowing that their current security infrastructure cannot secure these applications?
Or are they going to block these applications, potentially holding their business back from using these kind of technologies, and really losing some competitive edge compared to their peers?
So the problem right now is that the incumbent vendors, the vendors that sell network security technology today, cannot really bridge the gap between these applications and the need to secure the use of them.

What's the next big tech thing in your industry?

I think the next big thing in our industry is a derivative of what I've just said, that's technology that takes all the network security infrastructure today, which includes scanning for malware, scanning for exploit of vulnerabilities, scanning for data leakage, and extends it from basic web-browsing and e-mail to all applications.
With that, companies will be able to use these applications and secure them as they use and secure basic web-browsing and e-mail today.
They'll be able to make these applications as secure as web-browsing and e-mail, and will not have to compromise either their security or their ability to interact with the internet, their customers and their peers using modern communication tools.

What's the biggest technology mistake you've ever made - either at work or in your own life?

I don't know that I have a huge technology mistake but I have a related mistake.
In the past I was involved in another network security company, and at some point we got an offer to acquire the company for a lot of money, for about $4bn, from a much bigger company, a networking company - not a security company.
And back then my thought - and that of the other executives - was that if we sell to a bigger company, a networking company in general that sells routers and switches, we'll be able to expand our market; we'll have more money for research and development; we'll have more money for marketing our products and will have a better reach to customers.
That was a big mistake. It was just a huge mistake.
We quickly found out that security companies have to be specialised, and once you get swallowed by a big networking vendor you lose focus on security, and customers just leave you.
It happened to us, it happened to other companies that were bought by large networking vendors, and the stand-alone security companies were having a much easier time selling to their customers.
That was a mistake, and basically what happened, after a year I had to leave and start a new company to specialise in network security, and build everything from scratch.
Now we're pretty big - and I don't think we're going to repeat that mistake again.

Near field communication transforms travel in Japan

You will find their like plastered all over Japan. This one is printed on a Tokyo bus stop, so she clicks the camera shutter and peers happily at the result.

Her prize? A timetable appears instantly on the phone's screen, plus the estimated arrival time of the next bus.
When the oddly retro-style bus arrives, she uses her phone to pay by swiping at the front as a Londoner might flutter an Oyster smartcard on entering the Tube.
Ahead of the curve
This is travel Tokyo-style.
And although these types of convenient dodges are slowly appearing in the West (those information-laden barcode tattoos are known as QR codes in the UK, and e-wallets are appearing on phones outside Japan), the country has been experimenting with such technology for more than five years now, and more advanced travel guiding tech besides.

Japanese mobile phone - keitai - with NFC chip

So where better to examine the props that will dominate all our traveller and travel industry tomorrows?
Granted, an Anglo-Saxon smartphone, an iPhone, a Google phone and their ilk can be handy on the road but they lack, so far, many of the tools so useful to travellers in Japan on their so-called feature phones.
With the right clam-shell, iridescent "keitai", subscribers get a seriously high-resolution camera, a projector, and the all-important radio chip that works as a train/air/entrance ticket/boarding pass.
This radio tag can also check you into hotels and even open the room's door for you.
They also act as e-wallets. With up to 50,000 yen credit siphoned into the phone, customers use it to buy groceries at convenience stores, pay the taxi driver and persuade Japan's ubiquitous vending machines to cough up.
Flights of fancy
Japan's leading airline, All Nippon Airways (ANA), has been using such e-wallets to compete with the country's formidably fast trains for more than five years.
"The major drawback of flying compared to train travel is, of course, the time spent at the airport," says ANA spokesman Ryosei Nomura.
"With ANA's all-in-one ticket and boarding pass in your phone, you can arrive and board your plane within 15 minutes."
Dubbed SKiP, the service relies on Osaifu-Keitai (literally "wallet mobile") technology developed by comms giant NTT.

ANA passengers using their phone as a ticket can be on the plane within 15 minutes

As the NFC [near field communication] chip-based tech relies on dedicated readers which are available only in a few other countries besides Japan, the service so far applies just to domestic flights.
Users could even conceivably buy their air ticket using their phone at a convenience store with such readers.
The system has a number of advantages over plastic smart cards, too, such as being able to automatically recharge credit via the internet, says Mr Nomura.
With GPS in mobiles as standard, years ahead of the UK, the keitai has also evolved into a seriously useful navigation tool here.
Something called the Total Navigation site does exactly what it says on the tin, using 3D-rendered info on your screen. Hold it in your grip and the phone vibrates telling you when to turn.
Just as well: you need all the hand-holding you can get in the vastness of a capital without street names like Tokyo.
Deciphering menus
Tech also comes to the aid of the linguistically challenged.
Despite the cosmopolitan nature of Tokyo, menus are invariably in Japanese. So to have a phone that snaps a potential meal and describes in English what it is - mock-up meals are only sometimes displayed in the window - is obviously a godsend.

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Keitai .... have become touchstones for survival.”

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With some restaurant businesses this is catching on, as Japan looks to foreign tourists for badly needed revenue.

Other applications allow you to bring up menus, reviews and translations by other users just by focusing your mobile's camera at the restaurant itself.
Visitors to Japan can try out some of these services by renting domestic phones at the airports. Unfortunately, not all such resources are available on the airport pick-up phones.
But your correspondent was able to attempt a cashless journey from Tokyo through Kyoto to Fukuoka in the south starting with Ana's SKiP service for flights. No maps, no guides, just the omnipotent keitai.
The all-in-one nature of the mobile makes this possible, as does Japan's bent for convenience.
'Swiss army knife'
Such cramped, intensely urban, highly stressful lifestyles have made the Japanese super-reliant on, and worshipful, of convenience, says Ama Chan.
Keitai are the totems of that reverence and have become touchstones for survival. The keitai rules.

Public mobile-phone charging point on a Kyoto street

Travellers of the near future may want to emulate the light-footed Japanese, shearing off excess baggage such as guidebooks, laptops, camera - even books - and depending solely on the Swiss army knife of the road warrior - the keitai.
In Kyoto, the Hyatt Regency has started the ball rolling with an iPhone rental service that knows where guests are and beams text, video and graphics to inform, help and guide them.
"Of course many overseas visitors bring their smartphones with them, but most don't have a data plan that makes it economic sense to use their phone for downloads," says the hotel's manager Ken Yokoyama.
"The next step was to augment the service with tips from the concierge.
"After that we would like to develop a phone-based service that will think and act like a concierge, to give simple advice - where to eat, for example. The next step after that will be to totally personalise that service."
Mr Yokoyama envisages a massive database covering all Kyoto'a concierge knowledge melding into one serious, well-informed, location-specific travel application laid within the compass of the traveller's hand.
Real-world view
Augmenting city guides will not stop there. Something called "augmented reality" (AR) is already evolving into a valuable tool for travellers.

Augmented reality app Sekai Camera lets users hang "tags" that can be seen through an iPhone

Like the iPhone, such AR apps know where users are, and beam location relevant info to their phones. This is viewed superimposed on the camera viewfinder on the mobile's screen.
London already has Tube help in this form, while others such as Layar can perform the neat trick with restaurants, mentioned earlier.
Japan's version of this application, Sekai (World) camera, works the same magic, but adds tagging and social networking.
Like other AR apps it calculates your position, then using the camera, displays location-specific information graphically on top of your real-world view.
But the genius of Sekai Camera is that individuals and businesses can add their own information. They just point a smartphone camera at the landscape, adding "tags" that can include text, images, and sound that can be picked up by others in the area later.
Tags can translate into coupons from businesses (a free Guinness when you stop at a bar serving the black stuff, for example) or travel tips from friends.
Such apps are not just confined to Japan. They are available now at a smartphone near you.
But Japan still holds the lead with applications of tech for travel.
Overnight stay
The county's hotel industry is also benefiting from a dash of hi-tech gloss. Check into the entirely swish 9h (nine hours) capsule hotel in Kyoto and you might experience the teched-up future of budget hotels.

Guests at the 9h capsule hotel in Kyoto can relax in super hi-tech 'pods'

Ultra-futuristic, the Kubrick-inspired pods go for about 4000 yen a night via their website.
Kyoto might be rich in heritage but this doesn't stop it over-dosing like the rest of urban Japan on hi-tech treats. For evidence, visitors might want to check out the phone chargers available in even the most venerable temples.
The futuristic travel experience that 9h offers (perhaps a model for a Mars trip accommodation?) includes a pod, not a bedroom, with a "Sleep Ambient Control System", that "lulls to a comfortable sleep". The same system awakens guests with light, not an alarm clock.
Spartan, functional, but fun for a night.
For sci-fi visions of how we might travel smarter in the future Japan obviously has plenty to show us. But the West is catching up fast.
Smartphones such as the iPhone and their apps are changing the way we travel, and how the travel industry attracts and aids such tourists.
Where most, outside of Japan, are still adjusting to life seen through the prism of the mobile, in Japan it is now second nature.
These early adopters are worth watching just to see how the tech will usher in new services for getting about and how to capitalise on our new-found travel touchstone - the mobile.

Stephen Harper's Conservatives win Canadian election

Stephen Harper has headed two minority governments since 2006

Prime Minister Stephen Harper's Conservative Party has won a majority of seats in Canada's general election, according to provisional results.

The Conservatives have won or are ahead in 167 of the country's 308 electoral districts.
The New Democratic Party (NDP) is set to come second, with the Liberals trailing, Canadian media projected.
If the results are confirmed, Mr Harper would head a majority government for the first time.
Canadians voted on Monday in the country's fourth general election in seven years.
Mr Harper went into the vote having headed two successive minority Conservative governments since 2006. His party held 143 seats in the House of Commons prior to the dissolution of the last government.
The Liberals have historically been the main party in opposition when the Conservatives have held power, but the NDP now appears to have taken over that role.
The separatist Bloc Quebecois, which seeks independence for the predominantly French-speaking Canadian province of Quebec, suffered heavy losses, retaining only four seats out of the 47 seats they previously held, according to early results.

Mr Harper's government was forced into an election after a no-confidence vote in parliament.

It was found to be in contempt of parliament because of its failure to disclose the full costs of anti-crime programmes, corporate tax cuts and plans to purchase stealth fighter jets from the US.
Opinion polls in the run-up to the election had suggested the left-leaning NDP was experiencing an unexpected surge in popularity and threatened to quash Mr Harper's hopes of winning a majority government.
"I just want to make sure our country keeps going, creating jobs, and that we do not take a risk of a minority parliament that drives us off the cliff economically," Mr Harper said earlier on Monday.
Mr Harper, a 52-year-old career politician, warned a win by the NDP could lead to out-of-control spending and higher taxes.
NDP leader Jack Layton, who favours high taxes and more social spending, has been a critic of Alberta's oil sands sector, the world's second largest oil reserves.
Mr Harper also said the Liberal Party, the largest opposition party, led by Michael Ignatieff, could not be trusted to handle the economy.

Geithner secures more time to break US budget stalemate

Despite the extension Timothy Geithner wants an urgent resolution to the deadlock

US Treasury Secretary Timothy Geithner has secured more time for Congress to negotiate a deal to increase the borrowing limit of the US.

Stalemate over the talks means the US risks defaulting on its debts because it will be unable to borrow beyond its $14.3 trillion (£8.6tn) limit.
Mr Geithner had previously said the deadline for a deal was 8 July.
But in a letter to Congress he said that better tax receipts meant the deadline could be extended to 2 August.
Republicans want to tie any agreement on the US budget to spending cuts, especially in the healthcare programme.
The Obama administration has proposed a $4tn package of budget cuts, but the Republicans say they do not go far enough.
Despite pushing back the deadline, Mr Geithner nevertheless warned Congress of the need for a urgent resolution to the impasse.
He said in his letter: "While this updated estimate in theory gives Congress additional time to complete work on increasing the debt limit, I caution strongly against delaying action."
Last month, ratings agency Standard & Poor's warned that the failure to agree a budget deal was damaging the financial credibility of the US.
In a surprise move, which hit share prices on both sides of the Atlantic, S&P downgraded its US credit rating outlook from stable to negative, increasing the likelihood that the rating could be cut within the next two years.

Air France cockpit voice recorder recovered

The discovery of the Air France cockpit voice recorder marks the end of a long search

The cockpit voice recorder from an Air France plane that crashed into the Atlantic two years ago has been found, French investigators have said.

The discovery comes two days after the airliner's flight data recorder was also retrieved from the ocean.
Both recorders are said to be in good physical condition.
The Airbus A330 was flying from Rio de Janeiro in Brazil to Paris when it went down on 1 June 2009, killing all 228 people on board.
"We can now hope to find out what truly happened within the next three weeks," French Transport Minister Thierry Mariani told French radio.
France's Bureau of Investigation and Analysis (BEA) said the so-called black box would be shipped back to France, probably by the end of next week.
"The outside appears to be in relatively good shape," a spokeswoman said, adding it would be possible to see if the recorder was usable only once it was opened in France.
Long search
Last week, the French search team found the outer casing and then the memory unit of of the flight data recorder. The crucial unit was located on Sunday and delivered to a search vessel.
The wreckage was discovered last month after a long search of 10,000 sq km (3,860 sq miles) of sea floor.
Air France flight 447 went down after running into an intense high-altitude thunderstorm, four hours following take-off from Rio de Janeiro.
Those on board came from more than 30 countries, though most were French, Brazilian or German.
Experts say the data in the two flight recorders is the only hope of finding out why the plane crashed into the sea.
The cockpit voice recorder - one of the so-called "black boxes" - contains vital information about the pilots' reactions.
The flight data recorder collects in-flight data from the plane's instruments, such as altitude, speed and rudder position.

Sony warns of almost 25 million extra user detail theft

A further 25 million gamers have had their personal details stolen as a result of security breaches at Sony.

As well as the Playstation Network, which has been down since 20 April, the company has now taken its Sony Online Entertainment (SOE) service offline.
It said credit card details and other personal information have been taken from an "outdated database".
Last week, Sony admitted that the personal details of 77m Playstation users may have been stolen by hackers.
Since the breach was revealed, shares in Sony have dropped by 4% amid calls for the company's CEO Howard Stringer to stand down over the crisis.
'Cyber attack'
In a message to its customers, Sony said: "We had previously believed that SOE customer data had not been obtained in the cyber-attacks on the company."
However, it added that "on 1 May we concluded that SOE account information may have been stolen".

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If you are asked for this information, you can be confident Sony is not the entity asking”

End Quote Sony statement

Sony was quoted by the Associated Press (AP) news agency as saying that the latest incident occurred on 16 and 17 April.

This was earlier than the larger Playstation user security breach, which occured on 20 April.
Sony admitted the scale of the problem to users on 27 April.
This new attack goes beyond users of Playstation hardware, affecting PC and Facebook gamers - potentially an additional 25 million people.
Sony said that names, home addresses, e-mail addresses, dates of birth, phone numbers and gender information was taken.
Additionally, direct debit details of around 10,700 customers in Austria, Spain, the Netherlands and Germany were stolen, as were the credit or debit card details of some 12,700 non-US customers.
Broader investigation
Sony explained that the information included card numbers and expiry dates, but said that it was taken from a 2007 database which was securely encrypted.
The company added: "There is no evidence that our main credit card database was compromised. It is in a completely separate and secured environment."
Spokeswoman Taina Rodriguez told AP that there was no evidence as yet that the stolen information had been used for illicit financial gain.

Sony Online Entertainment's Fortune League is a Facebook-based multiplayer game

However, in its statement, Sony has warned customers to be aware of any contact via e-mail, telephone or postal services purporting to be official Sony correspondence.
"Sony will not contact you in any way, including by e-mail, asking for your credit card number, social security number or other personally identifiable information.
"If you are asked for this information, you can be confident Sony is not the entity asking. When SOE's services are fully restored, we strongly recommend that you log on and change your password."
It warned customers who may use the same passwords for other services to change them immediately.
The suspension of SOE, which is based in San Diego, California, left multiplayer games including DC Universe and Facebook-based Fortune League unavailable.
"We have had to take the SOE service down temporarily," the company said.
"In the course of our investigation into the intrusion into our systems we have discovered an issue that warrants enough concern for us to take the service down, effective immediately," it added.
Powering up?
The company had previously said that it would get the Playstation Network up-and-running again this week.
It has also promised assistance for users who have been affected by the hack.

Kazuo Hirai is seen as a frontrunner to take over Sony Corp

"We will provide a complimentary offering to assist users in enrolling in identity theft protection services and/or similar programs.
"The implementation will be at a local level and further details will be made available shortly in regions in which such programs are commonly utilised."
On Sunday, top Sony executive and head of the Playstation unit Kazuo Hirai led an apology for the attacks.
"We apologise deeply for causing great unease and trouble to our users," he said.
"These illegal attacks obviously highlight the widespread problem with cyber-security."
It said users would soon see a phased re-introduction of gaming, movie and music download services.
Users on paid services will be granted 30 days of additional time on their subscriptions, along with one day for each day the system is down.
"We deeply regret the inconvenience this has caused and appreciate your continued patience and feedback," the company said.

Hashan Tillakaratne stands by match-fixing allegations

 

Former Sri Lanka captain Hashan Tillakaratne has vowed to reveal full details of match-fixing that he alleges took place during his career.

Tillakaratne and ex-team-mate Arjuna Ranatunga claim fixing has been common in Sri Lankan cricket since 1992.
The Sri Lanka Cricket Board called on the pair to substantiate the claims and queried why they have only emerged now.
Tillakaratne says he will provide the International Cricket Council with information "at the appropriate time."
The 43-year-old added: "I made a statement to the provincial council, I said that I still maintain my stand on the allegations.
"After I came out with these allegations [at the weekend] I have been getting a lot of nuisance calls, death threats, but definitely I will expose all those who are involved in a time to come."
When asked why he has not followed the established procedure of working with the ICC's anti-corruption unit, Tillakaratne replied "I will do that in the days to come."
Several international players including South Africa's Hansie Cronje, India's Mohammad Azharuddin and Ajay Jadeja, and Pakistan's Salim Malik have been found guilty of match-fixing and served bans in the past decade, although Jadeja and Malik later had their bans quashed.
Most recently, Pakistani players Salman Butt, Mohammad Asif and Mohammad Amir were banned for five years or more after being found guilty off corruption by the ICC.
Tillakaratne played 83 tests for Sri Lanka from 1989 to 2004, scoring 4,545 runs including 11 centuries.
He scored 3,789 one-day runs from 200 matches between 1986 and 2003.

Pakistan defends Bin Laden role

Pakistan's President Asif Ali Zardari has denied that the killing of Osama Bin Laden in his country is a sign of its failure to tackle terrorism.

In an opinion piece in the Washington Post, Mr Zardari said his country was "perhaps the world's greatest victim of terrorism".
Bin Laden was shot dead by US forces in the Pakistani city of Abbottabad - Pakistan was not involved in the raid.
US officials said Bin Laden must have had a support system in Pakistan.
Bin Laden, 54, was the founder and leader of al-Qaeda. He is believed to have ordered the attacks on New York and Washington on 11 September 2001, as well as a number of other deadly bombings.
He was America's most wanted man but had eluded them for more than a decade.
But US officials say they are "99.9%" sure that the man they shot and killed in a raid on a secure compound in Abbottabad and later buried at sea was Bin Laden.
They said a video had been made of Bin Laden's burial but have not said yet whether it, or any photographs of Bin Laden's body, will be released.
'Enormous price'
The compound in Abbottabad is just a few hundred metres from the Pakistan Military Academy - the country's equivalent of West Point or Sandhurst
White House counter-terrorism chief John Brennan said it was "inconceivable that Bin Laden did not have a support system" in Pakistan.
But in his opinion piece, Mr Zardari said Pakistan had "never been and never will be the hotbed of fanaticism that is often described by the media".
"Such baseless speculation may make exciting cable news, but it doesn't reflect fact," he said.

---

The early morning serenity makes it all more extraordinary that the world's most wanted man was hiding here and ultimately killed here. People are still stunned by the news he was living among them.
President Zardari has said he could not possibly have known he was there, but the Pakistanis are going to have a very tough time deflecting that criticism.
Mr Zardari - and other officials including the prime minister - have talked about security co-operation with the US over years, ultimately leading to this point. But they have had to concede that this was solely a US operation.
It is interesting they are stressing so much that the Pakistanis were not involved, because they are worried about a militant backlash.
There are thousands of Islamist militants still living in the tribal areas - for them Bin Laden was a hero. So it is not just the authorities but the public that is worried about the repercussions on the streets. It is civilians that have borne the brunt of the war on terror and they are really fearful that Osama Bin Laden's death is not going to bring an end to that at all.

"Pakistan had as much reason to despise al-Qaeda as any nation. The war on terrorism is as much Pakistan's war as it is America's."

He said Pakistan, which has suffered repeated terror attacks on its civilians and security services, had "paid an enormous price for its stand against terrorism".
"More of our soldiers have died than all of Nato's casualties combined. Two thousand police officers, as many as 30,000 innocent civilians and a generation of social progress for our people have been lost. "
Mr Zardari added that Pakistan would not be intimidated by threats from al-Qaeda.
US officials have said Pakistan was not involved in the operation to kill Bin Laden.
But Mr Zardari said that although the two countries had not worked together on the operation, "a decade of co-operation and partnership between the United States and Pakistan led up to the elimination of Osama Bin Laden as a continuing threat to the civilised world".
Mr Zardari gave no explanation as to how Bin Laden had been able to live in relative comfort in Pakistan, but simply said he "was not anywhere we had anticipated he would be".
The BBC's Syed Shoaib Hasan in Islamabad says the Pakistani government is in a very difficult position - domestically the public are angry, while the US now wants to know whether any other wanted figures have found sanctuary there.
The silence from Pakistan's security service is perhaps the most surprising aspect so far, says our correspondent.
'Geronimo'
US President Barack Obama watched the entire operation in real time in the White House with his national security team.
Mr Brennan said: "The minutes passed like days."
CIA director Leon Panetta narrated via a video screen from a separate Washington office, with Bin Laden given the code name Geronimo.
Mr Panetta's narration lasted several minutes. "They've reached the target... We have a visual on Geronimo... Geronimo EKIA (enemy killed in action)."

President Obama: "We were reminded again that there is a pride in what this nation stands for"

Mr Obama said: "We got him."
Bin Laden, his son Khalid, trusted personal courier Sheikh Abu Ahmed and the courier's brother were all killed, along with an unidentified woman.
Bin Laden was shot above his left eye, blowing away a section of his skull, and was also shot in the chest.
Bin Laden's wife was shot in the calf and was one of nine women taken into custody by Pakistani authorities, along with 23 children, a US official quoted by Associated Press said.
The CIA is now said to be going through a large number of hard drives and storage devices seized in the raid.
The BBC's Andrew North in Washington says the White House is still discussing whether to release the video of Bin Laden's burial from an aircraft carrier in the Arabian Sea, which some Islamic scholars have said did not conform with tradition.
Our correspondent says many people will want proof that Bin Laden is dead but the White House will be concerned about the reaction if the video, and still photographs of the body, are released.
Mr Obama hailed the death of Bin Laden as "good day for America", and said the world was now a safer and a better place.
He also praised the "heroes" who carried out the operations and, in a speech to congressional leaders, called for them to show "the same sense of unity that prevailed on 9/11".
After Mr Obama announced the news on Sunday night, there were jubilant scenes in Washington, New York and around the US.
But the US said the threat of terror attacks was not over, warning Americans of the possibility of al-Qaeda reprisal attacks.
Security has been increased at embassies and airports.
The US has closed its consulates in Lahore and Peshawar in Pakistan, but the embassy in Islamabad and consulate in Karachi have been reopened.

Augmented reality goes beyond gimmicks for business

The people at Lynx cannot help but be pleased with the success of their latest deodorant.

Their new fragrance has emerged as their second-best-selling variant after just a few months on the market, thanks in large part to an innovative advertising campaign.

The campaign was fronted by Kelly Brook posing as a voluptuous fallen angel, but what made it unique was a stunt at London's Victoria Station, known by its orchestrators as Angel Ambush.

Commuters who happened to walk across a particular spot suddenly saw themselves on a vast video screen next to the departures board and, as they watched the screen, they discovered that they were not alone.
An angel, generated using augmented reality technology, fell to earth and appeared to interact with the unsuspecting humans, creating a stir and a viral YouTube clip that has since been viewed more than 750,000 times.

“Start Quote

Augmented reality is all about creating a fantasy experience that people can interact with”

End Quote Becca Sawyer Mindshare

"We didn't know if it would work, either technically or in terms of how people would respond to it," said Becca Sawyer of Mindshare, the advertising agency that came up with the Angel Ambush idea.

"We just thought it would be fantastic if an angel could seem to appear in real-life. Augmented reality is all about creating a fantasy experience that people can interact with."
Although the stunt may have looked cutting edge, it was actually a relatively simple application of augmented reality: a technology that is a capable of more than just stunts.
Hold it, buy it
Some experts have commented that Angel Ambush was not 'real' augmented reality at all, because the virtual angel was just a layer of video manipulated by a human operator, rather than an independent 3D object.
According to Myles Peyton, UK Sales Director at tech firm Total Immersion, the true commercial power of augmented reality lies in its ability to let consumers virtually hold and interact with products that are fully and accurately modelled in the virtual world.

"We know that the longer somebody touches a product, the more likely they are to purchase that product. So by giving them a virtual product, it can drive and uplift sales."
"We're seeing augmented reality move from being a gimmick, to being a trend. It's going to explode", said Mr Peyton.
Total Immersion specialises in so-called web mashups, where an online user sees a video reflection of themselves coupled with a 3D object that they can control, such as camera that responds accurately to button presses, or a pair of glasses that lets the user switch the frame or colour scheme.
Mashups have been around for a while. In 2008, analysts at Gartner recognised them as key to making augmented reality one of its top ten disruptive technologies by 2012.
With that date just around the corner, it is debatable whether augmented reality has lived up to expectations. Nevertheless, Mr Peyton is convinced that the technology has reached a tipping point.

Brought to life: a shopper examines a 3D Lego model before deciding whether to buy

He quotes a more recent forecast from ABI Research that the augmented reality market will be worth $3bn (£1.8bn)by 2016, compared with just $21m in 2010.
The reason for such confidence in augmented reality derives not from major leaps in the technology itself, but from a separate revolution: the emergence of the smartphone.
A small window on another world
Mr Peyton takes out his smartphone and points it at a piece of paper. The paper bears the image of some rough terrain, rather like a satellite photo of Mars, and this image is immediately replicated on the phone's small LCD screen via it's built-in camera.
As soon as that happens, a tiny yellow robot appears on the screen and animates, apparently roving around the rough terrain.
The 3D illusion is easily maintained by the phone's processor: the view of the robot changes smoothly and accurately as the phone is moved relative to the piece of paper, revealing different angles, making it look closer or further away, and triggering different behaviours.
This ability to bring life to an inanimate image is what so excites people in marketing and advertising, because exactly the same thing can be applied to a billboard poster or an advert in a newspaper.
A consumer can point their phone at such an image and see a whole new layer of information, designed to connect them to a brand or product and deliver extra information in an engaging way.

How to change a printer cartridge: an augmented reality app gives 3D visual instructions on a smartphone

There is considerable excitement about mobile augmented reality in other sectors too.
Instruction manual 2.0
Metaio is a Germany-based augmented reality company with a long history of developing industrial applications for clients such as Volkswagen.
In one example, they shot video of an existing car production line in full swing, and then processed virtual 3D components for a new car through that video in order to detect compatibility problems before real-life production even started.
Now, they are looking to bring that level of precision to smartphones, to give businesses a new way of guiding individuals through the use of their products.
"Imagine a service engineer who needs to fix an engine," says Metaio's Jan Schlink.
"He points his smartphone at it, and he sees a 3D model on the screen, guiding him exactly through each stage of the repairs."
The same approach could be used for any type of product, from changing a printer toner cartridge to following a cooking recipe.
"We have a vision that this will become a totally new user interface," says Mr Schlink.
"The smartphone is the catalyst for all of this: holding your phone up to an object and getting rich digital information from the internet that is tightly registered to that object. We say that is a paradigm shift."