HUA HIN, Thailand - An escalating
series of cyber-attacks on US media outlets has
deepened concern over the source of the digital
incursions, with the victims pointing directly at
China. Over the past few weeks, the New York
Times, Wall Street Journal and Washington Post all
reported having their servers infiltrated by
China-based hackers allegedly working for the
government spying on news media operating in the
country.
A secret band of Beijing digital
warriors has been blamed for attempting to
identify Chinese sources talking to Western media,
collecting information on how China is being
portrayed, seeking advance warning of upcoming
stories, and stealing passwords and login
credentials.
A former Washington Post IT
employee claimed, "We spent the
better half of 2012 chasing
down compromised PCs and servers. It all pointed
to being hacked by the Chinese. They had the
ability to get around to different servers and
hide their tracks. They seemed to have the ability
to do anything they wanted on the network."
An investigation by the New York Times on
relatives of Prime Minister Wen Jiabao amassing a
fortune worth several billion dollars from
business dealings sparked the wave of attacks. The
Wall Street Journal followed up on the story and
found itself next in the firing line.
Rupert Murdoch, boss of News Corporation,
which manages the WSJ, entered the anti-China fray
by tweeting that hackers had continued their work
over the weekend. A scathing commentary in the
paper added, "Whatever else the Chinese thought
they were doing by hacking us, they didn't stop
the publication of a single article. Now they have
only magnified their embarrassment."
The
three media companies were not alone. Bloomberg
reported attempted but unsuccessful hacking
attempts on its systems originating from China
this week and Thomson Reuters PLC said its Reuters
news service was hacked twice in August. The US
Federal Reserve also confirmed that one of its
internal websites was hacked into this week,
according to Reuters, though the origin was not
specified.
The Barack Obama administration
is considering stepping up action against Beijing
to combat this persistent cyber-espionage
campaign, which has not been limited to media
outlets. Internet companies including Google and
Twitter also claim to have been the victims of
China-based cyber-attacks, as has the Pentagon, US
defense giant Lockheed-Martin, and even Coca-Cola.
The Chinese Embassy condemned the
allegations: "It is irresponsible to make such an
allegation without solid proof and evidence. The
Chinese government prohibits cyber-attacks and has
done what it can to combat such activities in
accordance with Chinese laws."
China's
official Communist Party newspaper, The People's
Daily, stepped up the rhetoric this week by
running a front page article accusing the US of
"fanning the fear" of China and countering the
claims by stating that Chinese websites had
experienced more attacks from US-based IP
addresses than from any other country. Leaked
extracts from Google boss Eric Schmidt's
forthcoming book, The New Digital Age,
accuse China of being the most sophisticated and
prolific hacker of foreign companies and an
Internet menace that sanctions cyber-crime for
economic and political gain.
What is
starting off as a war of words over hacking and
counter hacking could be the genesis of a
cyber-war of global proportions; leading to the
notion that world war three will be a digital one.
Industry Struggling to keep up
with a fast-changing market, a once dominant PC
giant announced this week that it is going private
in a massive US$24.4 billion leveraged buyout. On
Tuesday, Dell stated that the deal would include
chief executive and founder Michael Dell - who
owns 15% of the company stock - private equity
firm Silver Lake, and a $2 billion loan from
Microsoft Corp.
Under the deal,
shareholders will receive $13.65 in cash for each
share of Dell stock. The price represents a 25%
premium over Dell's closing price of $10.88 on
January 11 before rumors of the deal boosted the
price.
Michael Dell stated, "I believe
this transaction will open an exciting new chapter
for Dell, our customers and team members. We can
deliver immediate value to stockholders, while we
continue the execution of our long-term strategy
and focus on delivering best-in-class solutions to
our customers as a private enterprise."
Rival Hewlett Packard wasted no time
stating that it would target Dell customers who
were maybe anxious about what the buyout means for
them. Competitors are not the only problem for the
computer maker; lawsuits have already started to
mount up as investors sue Dell and other company
directors for shortchanging the shareholders.
Lawyers claim the directors are violating
legal duties to shareholders by allowing the
company's founder and a private-equity fund to
"obtain Dell on the cheap". According to the
complaint, Dell is in the midst of a push to
diversify its business away from computer
manufacturing to "one based upon end-to-end IT
solutions".
The company, which has traded
publicly for almost a quarter of a century, is
targeting the repatriation of $7.4 billion of cash
now parked abroad to help finance the deal.
Michael Dell himself will be adding $500 million
of his own cash alongside $250 million from an
affiliate of his investment management division to
help bankroll the largest private equity-backed
buyout since the financial crisis.
His
company, the world's number three computer maker,
has lost more than half its stock value since
January 2007.
Martin J Young is
an Asia Times Online correspondent based in
Thailand.
(Copyright 2013 Asia Times
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