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Tuesday, December 22, 2015

Retailers Will Keep the Lights Burning on Christmas Eve

Target, Walmart and other large U.S. retailers have extended their hours on Christmas Eve in an effort to snag last-minute holiday shoppers.

It's a wider net for consumers during a season in which about 17 percent of shoppers last week said they hadn't starting buying gifts, in a Reuters/Ipsos poll.

Stores staying open until 6 p.m. on Christmas Eve include Kohl's and Best Buy. Walmart will stay open until 8 p.m. Sam's Club will keep the lights on until 8:30 p.m., Toys 'R' Us will go until 9 p.m., and Target's staff will await gift givers until 11 p.m.

About 40 percent of seasonal sales occur during the 10 days before Christmas, said Oliver Guy, retail industry director at Software AG.

"As the last-minute shopping trend continues to grow, retailers are looking to cash in on consumers who procrastinate during the holiday season," he told the E-Commerce Times.

There has been a belief that pushing for earlier sales would help everyone, said Jarrett Streebin, CEO of EasyPost. Retailers and carriers would have time to delivery parcels, and consumers wouldn't have the stress of late deliveries.

Now retailers have stepped up their efforts to accommodate consumers.

"Retailers are realizing that people are human, and despite enticements they will procrastinate," Streebin told the E-Commerce Times.

"If people shopped in advance, there would be no need for same-day or two-day shipping at all. After all, the point of e-commerce is that things can be done at the last minute," he said.

E-Commerce Advantages

The extended Christmas Eve hours may be a consequence of the rise of e-commerce and "instant digital gratification," said Ben Kaplan, CEO of CashStar.

"Aside from free shipping and rush order options, the digital landscape is what's really driving this shift in consumer behavior," he told the E-Commerce Times. "With retailers jumping on board with last-minute coupons and promotions, it's even advantageous for consumers to wait until the eleventh hour."

While the strain of last-minute shopping impacting online and offline retailers alike, e-commerce companies have the upper hand, according to Karma Martell, president of KarmaCom.

Known customers present e-commerce companies with a wealth of data on purchases, wish lists and abandoned shopping cart items between Black Friday and Christmas, he told the E-Commerce Times. That allows them to send targeted, personalized pitches their customers.

"They can also retarget," Martell said. "For anonymous browsers, cookie and other data still allows an e-commerce store to present pop-up shopping opportunities while browsing or retargeting based on items or category viewed."

Card Up the Sleeve

Another trend in online shopping is threatening traditional merchants that have been unable to match the consumer insights stitched together by online retailers: digital gift cards.

Shoppers buying prepaid cards don't have to spend time parking and exchanging goods at a physical kiosk. With digital gift cards, consumers can buy and send presents on Christmas Day.

Digital gift cards can be much more personal than the physical variety, according to Jill Rosen, VP of consumer insights for Gift Card Impressions.

"Today with the rise of digital gifting and technologies, consumers can really make digital gift-giving a lot warmer by using photos, videos, sounds, music and text," she told the E-Commerce Times. "A digital gift card can be a warm gift, something that people will remember and share and talk about because it such a cool experience."

About 70 percent of Americans prefer a digital gift card over a physical one, according study conducted by GCI and The Center for Generational Kinetics. About 50 percent of the study's respondents would rather have a gift card than a physical gift of the same value.

"Consumers have a wealth of information at their fingertips," Rosen said. "They can look up prices, models and version on the fly to see if they'd rather have the cold hard cash or to hold onto something."

Quinten Plummer is a longtime technology reporter and an avid PC gamer who explored local news for a few years, covering law enforcement and government beats, before returning to writing about things run by ones and zeros and the people who make them. If it pushes pixels or improves lives, he wants to learn all he can about it.

Retailers Will Keep the Lights Burning on Christmas Eve

1:20 AM

Target, Walmart and other large U.S. retailers have extended their hours on Christmas Eve in an effort to snag last-minute holiday ...

Monday, December 21, 2015

Sales of video games via downloads may surpass physical copies for the first time this holiday season, The New York Times reported Sunday.

However, games in physical formats continue to dominate sales overall.

"While it is clear that digital downloading is growing, according to NPD's quarterly Games Market Dynamics report, we see that within consoles and portables, new physical software represented 67 percent of spending for the 12 months ending September 2015, with digital downloads and DLC representing the remaining 33 percent," Liam Callahan, games industry analyst at the NPD Group, told the E-Commerce Times.

Video game software sales experienced a 7 percent decline, from US$1.07 billion in November 2014 to $993.9 million this year, NPD said. However, hardware sales were up by 2 percent from 2014 to $2.47 billion, driven by bundles and price cuts in Sony's PlayStation 4 and Microsoft's Xbox One.

That decline in sales, coupled with an increase in downloads, has hurt traditional brick-and-mortar retailers such as GameStop, which is one of the industry's top video game sellers. It faced a bleak holiday that included disappointing earnings, and as a result the company saw its stock decline in November.

On the Download

Game publishers largely have driven the shift to downloads by offering downloads via their own services or through third-party services such as Steam.

As for the boom in reports of downloads overtaking physical copies, that could be chalked up to better accounting practices.

"Until recently, online downloads were largely undercounted," said independent video game analyst Billy Pidgeon.

"Now we are seeing that the companies are trying to report those sales more," he told the E-Commerce Times.

"The company's financial reports are really calling out these sales a lot more, and the industry is doing a much better job of tracking these online sales," added Pidgeon.

However, gamers may head to the stores, if not for the games themselves then to make other purchases.

"The retail of download codes via prepaid cards, both for personal use and for gifting, can persist," said Steve Bailey, senior analyst for games at IHS Technology.

"Physical special editions, with higher recommended retail price aimed at high-end appreciators of any given game, can find presence at physical retail," he told the E-Commerce Times.

PC and Console Downloads

High-speed broadband and gaming services have become game changers for industry as well.

"In many ways, downloads are easier for people," noted Pidgeon.

The services allow users not only to buy games but to see what games their friends are playing, and even buy games so that their friends can join them.

"PC games are almost entirely sold via download, and this is an extension of the streaming media culture of the PC," Pidgeon said.

"This is now translating to the consoles, where games and add-on content can be so easily bought, and this combined is keeping people out of stores," he added.

Future of Brick and Mortar

Despite these changes, it's unlikely that physical video game shops will disappear, even if the industry continues to move toward downloads.

"Specialist retailers can still have a place in the gaming landscape, if they focus on providing customers with an expertly curated experience," said IHS' Bailey. "A chance to try out games directly in store, say, accompanied by hands-on help and advice from staff, can still have a place."

In addition, physical shops could have continued merchandising opportunities, which is something retail has long been exploring. That could grow as the sphere of gaming expands and includes areas such as social video and eSports.

"There's also what we call the 'connected toys' segment, such as Skylanders and Disney Infinity, where physical items interact with digital content. Once more, this remains strong potential touchpoint for retailers," said Bailey

The Hard Truth

While online sales likely will remain strong as the devices become more complex, some gamers want to go to the store to try them out in person.

"Virtual reality is still emerging but is a space where retail could play a significant role," suggested Bailey.

"If VR is to be effectively commercialized from a gaming standpoint, there's an enormous amount of demoing and education that has to be offered to consumers, and retailers could become effective showrooms," he added. "Apart from that, certain other physical roles are unlikely to fade -- hardware needs to be sold."

Peter Suciu is a freelance writer who has covered consumer electronics, technology, electronic entertainment and fitness-related trends for more than a decade. His work has appeared in more than three dozen publications, and he is the co-author of Careers in the Computer Game Industry (Career in the New Economy series), a career guide aimed at high school students from Rosen Publishing. You can connect with Peter on Google+.

high tech news technology news Video Game Downloads May Eclipse Physical Format Sales

Video Game Downloads May Eclipse Physical Format Sales

12:07 PM

Sales of video games via downloads may surpass physical copies for the first time this holiday season, The New York Times reported S...

Surprise Success: What to Do When Sales Go Through the Roof

Part 4: Going Big: Preparing to Grow Your E-Commerce Startup.

Success is a good thing. Sometimes, however, surges in orders and sales cause headaches for e-commerce companies.

The key is to expect the unexpected. Planning ahead can help ensure that sales spikes are handled as smoothly as possible.

"It's never too early to start planning for growth," said Marg Hyland, founder of Pegeen.

"Make sure your server can handle 10 times the traffic, that you are in an area where the rents are reasonable. You need to be prepared," she told the E-Commerce Times.

Know Your Busy Times

Many companies can predict when their busy periods will be, allowing them to plan ahead.

"Holidays are busy periods for Sugarloom," said Nitya Gulati, the CEO of Sugarloom Cosmetics.

"It's all hands on deck during the holidays to get all the lovely packages and gifts to customers doorsteps seamlessly. We make sure to stock up on all the packaging supplies and stay in constant communication with the local post office to avoid any last-minute hiccups," she told the E-Commerce Times.

Think about the holidays that are specific to your business, and plan for increased sales around those times.

"Our busiest season is Christmas. We also see a large take around Mother's Day and Father's Day," noted Mary Babiez, president of Thoughtful Presence.

"Although our historical data is only a few years, we plan based on the previous one to two years of sales, and combine that with industry data," she told the E-Commerce Times.

In addition to holidays, evenings and weekends can be a surge time for some businesses.

"It's always busy, but even more so when people have time, [such as] holidays, evenings and weekends," said Kelly Fallis, CEO of Remote Stylist.

"We're in the business of saving people time, so we don't do anything differently to prepare. We're always ready," she told the E-Commerce Times.

Planning for busy times isn't an exact science, but it's worth doing the best you can with the information that's available.

"Planning can be difficult, since each year can be very different, but we always have a backup," said Babiez of Thoughtful Presence. "So if data says we need only two part-timers at Christmas and 10 cases of x inventory, I make sure I have a plan for four part-timers and the ability to receive 10 more cases if needed. You always have to think ahead and have plans laid out for the alternative path."

The key with planning ahead is to try to imagine all possible scenarios, get prepared to face them, then monitor and evaluate your responses.

"Whether you are a solopreneur or have a small team, have brainstorming sessions to map out various scenarios with a plan of action for each," said Babiez.

"Constant daily monitoring of your business, your sales and your Web traffic is essential to staying ahead of the curve. You can have the plans in place, but if you're not constantly monitoring, you may not know when is the right time to act. Staying aware, staying on top of your business, and always having a plan are mission critical," she added.

Get Your System Ready

One thing e-commerce businesses can do to prepare for sales surges is to make sure their ordering and fulfillment system is up to date, customer friendly, and able to handle the inevitable boom times.

"Our stylists pick their favorites all the time," said Remote Stylist's Fallis. They "could be seasonal or theme-related, but, long story short, people loving buying what others think is cool. When this happens on our site, we see surges. The handling doesn't require anything different from an operational perspective, but stock is sometimes an issue."

Making sure stock is available, or that customers are aware when it isn't, is vital to a successful strategy.

"We have a double checkout that prevents actually taking the funds until a real live person at Remote Stylist has verified that the manufacturer can actually fulfill the order," noted Fallis. Not being able to fulfill an order "not only provides disappointment but having to refund credit cards and causing shoppers to have to endure additional fees."

Streamlining and automating systems can take time away from other areas of the business, but it's worth the investment in the long run.

"We saw future problems early on and literally took a pause on the sales side to resolve them so we could grow in the future," said Fallis. "Many wouldn't stop the sales train to do this, but it worked better for us, as we ship in two countries and never have one repeat order that's the same, nor [do we] ship from or to the same destination every time."

Focus on Customer Service

Companies can lose sight of individual customers during a sales rush, but providing excellent customer service is vital during such periods.

"It's easy to get caught up in the bigger picture," said Sugarloom Cosmetics' Gulati. "Focus on shorter goals that help to fulfill the overall purpose of the company. Consistent, quality customer service is key. Keep open communication with the customers about the expected shipping timeline to avoid any confusion and earn a loyal happy customer."

Above all, make sure your business has in place strategies to help owners and employees cope with the stress of success.

"While success and expansion are very exciting, they can also be stressful. At times, customer relations can start to wane," said Donovan Janus, CEO of 17hats.

Companies should manage client and project tasks so they know where they are in the workflow and don't miss a beat, he said.

Freelance writer Vivian Wagner has wide-ranging interests, from technology and business to music and motorcycles. She writes features regularly for ECT News Network, and her work has also appeared in American Profile, Bluegrass Unlimited, and many other publications. For more about her, visit her website. You can also connect with Vivian on Google+.

high tech news Surprise Success: What to Do When Sales Go Through the Roof technology news

Surprise Success: What to Do When Sales Go Through the Roof

3:56 AM

Part 4: Going Big: Preparing to Grow Your E-Commerce Startup. Success is a good thing. Sometimes, however, surges in orders and sa...

Sunday, December 20, 2015

Ready or Not, Enterprise Appification Is Here

Portfolios of task-oriented mobile apps for employees, contractors and business partners have been transforming the way enterprises conduct business, Apperian reported last week.

Companies that have launched mobility initiatives have customized and deployed one or more apps that have streamlined business operations, according to "Deploying Mobile Apps That Matter: 2015 Enterprise Mobile App Trend," the firm's analysis of 2 million app deployments.

Apps proliferated after a mobility initiative was launched, the report says.

The report covers companies with a handful of mobile apps in use, as well as those with several hundred deployed across the organization. However, the number of custom apps deployed appeared to have little or no bearing on their combined effectiveness.

Enterprise apps were less about brand indoctrination and more about getting the job done. They were used as tools for sales, marketing, office productivity, expense management, human resources and other areas.

The most effective enterprise apps save employees the trouble of searching for the information they want or need, said Scott Borg, director of the U.S. Cyber Consequences Unit.

"Instead, they push out the specific information to employees that is needed to guide and optimize their work," he told the E-Commerce Times. "This is easier to do if there are specific apps for specific work situations."

Tech companies have been leading the way, with hardware companies deploying the most enterprise mobile apps and IT services firms following in second place, according to the report.

The Appification of the Enterprise

The Apperian report is evidence of the enterprise's evolution from consumerization to appification, said Andy Abramson, CEO of Comunicano. Enterprises have matured from tolerating the bring-your-own-device phenomenon to embracing it and putting consumer hardware to work.

"By going the appification route, you end up with greater efficiencies, better security, better redundancies, higher scalability -- and if you choose properly, greater reliability," he told the E-Commerce Times.

Previously, the likes of Microsoft, IBM and SAP dominated the working world, noted Abramson. They built and empowered workstations, but even Microsoft has acknowledged the ascendance of mobile and cloud technologies, and the company has embraced appification.

Workers now are using tablets and mobile phones to accomplish tasks that once required a workhorse workstation.

Good With the Bad

With apps in force across the workforce, there are new benefits -- but some of the same problems linger.

One of the benefits of appification has been scalability, Abramson said.

"The rapid acceptance in enterprise of cloud-based solutions like Salesforce Basecamp, Slack, HipChat, Zendesk and so on is all giving rise to the app economy, as opposed to the software economy," he pointed out. "You're no longer installing software on your computer. You're buying seats."

For example, take Slack's model, Abramson suggested. If a company buys more seats than it can use, it's eligible for a refund. Under the old model, a company that bought too many installations of a program had to count the unused keys as a loss.

The rise of custom apps for enterprises also has been good for the developers companies often place under contract, he said. MeetingMogul, for example, started out as a conference planning app for a global bank but grew into its own platform.

For all of the good things the rise in apps delivers, there remains the chronic issue of compatibility, noted Gary Schare, president of Browsium.

"Look at your phone -- 10 apps have been updated overnight," he told the E-Commerce Times.

IT departments usually aren't in the position to deploy an app and change it constantly, Schare said.

"Now you have to think about how to build mobile apps for the enterprise and maintain them, because everything around it, including the OS, is changing constantly," he said. "You have to have some really sophisticated tools to ensure that apps continue to run, as you have 100,000 employees in your company carrying around smartphones with mission-critical applications."

Another issue is app bloat, according to the U.S. Cyber Consequences Unit's Borg.

Releasing too many apps can make it harder for employees to choose the right one at the right time. On top of that, some apps are becoming "too elaborate" to be truly useful, he said.

"Worse, each additional app tends to increase the opportunities for a cyberattacker," Borg warned. "The processes used to load and update apps tend to be especially vulnerable to exploitation if they aren't managed with security as the top priority."

Enterprise Appification Is Here high tech news Ready or Not technology news

Ready or Not, Enterprise Appification Is Here

7:08 AM

Portfolios of task-oriented mobile apps for employees, contractors and business partners have been transforming the way enterprises...

Thursday, December 17, 2015

Apple on Thursday announced some personnel moves that suggest CEO Tim Cook's future vision for the company.

He named Jeff Williams (pictured above) chief operating officer, elevated Johny Srouji to Apple's executive team by making him a senior vice president, broadened the powers of Senior Vice President of Worldwide Marketing Phil Schiller to include supervision of Apple's App Store across all its platforms, and added Tor Myhren as the new vice president of marketing communications.

"As we come to the end of the year, we're recognizing the contributions already being made by two key executives," Cook said in a statement.

"Jeff [Williams] is hands-down the best operations executive I've ever worked with, and Johny [Srouji]'s team delivers world-class silicon designs which enable new innovations in our products year after year," he added.

Loosening Reins

Williams joined Apple in 1998 as head of worldwide procurement. In 2004 he was named vice president of operations. Since 2010, he has overseen Apple's supply chain, service and support.

Making Williams COO is a sign that Cook feels confident in loosening the reins to Apple a bit, noted Patrick Moorhead, founder and principal analyst at Moor Insights and Strategy.

"When you add a chief operating officer, it says that Tim Cook needs to spend more time on strategy and the future of the company and less time on day-to-day operations," he told the E-Commerce Times.

"It's a classic growth move you make when you feel comfortable about how operations are going," he said.

IP in Apple's Future

Srouji has been vice president for hardware technologies at Apple for eight years. He oversees custom silicon and technologies, such as batteries, application processors, storage controllers, sensors silicon, display silicon and other chipsets.

With Srouji's elevation to senior vice president, Apple may be recognizing the significance his role will be to the future of Apple.

"Hardware is a very important part of Apple's business," said Tim Bajarin, president of Creative Strategies.

"But it's not just hardware," he told the E-Commerce Times. "His role includes overseeing the silicon business, which to us is equally important to Apple's future."

Srouji's promotion was also a promotion of enabling technologies at Apple, Moorhead noted.

"Enabling technologies are going to be more important to Apple in developing more of its own intellectual property in the future," he said.

"This says we will see more homegrown enabling technologies from Apple," Moorhead added.

Outside Hire

Schiller now leads nearly all developer-related functions at Apple. His duties also include worldwide product marketing and international, education and business marketing.

He will be charged with advancing Apple's ecosystem, Cook said.

"In many ways, the whole app ecosystem is just an extension of Apple's marketing," Bajarin said. "It makes a lot of sense for Phil to oversee that."

The only outside move Apple made was the hiring of Myhren, chief creative officer of Grey New York, who is replacing retiring 18-year Apple veteran Hiroki Asai.

Under Myhren's leadership, Grey won Adweek's Global Agency of the Year award in 2013 and 2015.

Bringing in someone from the outside to run advertising is an interesting move, Moorhead observed.

"It's interesting that there wasn't anyone inside Apple who could have taken that role," he said.

More Changes Needed

Apple usually brings in outsiders when it doesn't have the in-house talent for an initiative. It brought in people from the outside when it planned to enter the retail market, and it did so again when designing the fashion aspects of the Apple Watch.

"I wouldn't expect them to bring in an outside guy to run advertising and merchandising because Apple has good people internally to do that," Moorhead noted.

Apple has problems that won't be addressed by appointing a new COO or advertising director, according to Trip Chowdhry, managing director for equity research at Global Equities Research.

"Apple's stock has underperformed by every metric. Investors have zero confidence in Apple's executive team," he told the E-Commerce Times.

"This reshuffling at the secondary level isn't going to make any difference," Chowdhry added, "unless the CEO, CFO and the head of the retail channel is replaced."

John Mello is a freelance technology writer and contributor to Chief Security Officer magazine. You can connect with him on Google+.

Cook Rearranges Apple's Executive Suite high tech news technology news

Cook Rearranges Apple's Executive Suite

8:58 AM

Apple on Thursday announced some personnel moves that suggest CEO Tim Cook's future vision for the company. He named Jeff Willi...

Congress Passes Budget Bill With Controversial Cybersecurity Provision

Congress on Friday passed an omnibus budget bill that included the Cybersecurity Information Sharing Act, or CISA.

The Senate earlier this year passed CISA, which many conservative and liberal politicians, high-tech firms, and privacy and civil liberty advocates oppose.

The latest version includes amendments that will allow corporations to freely share customers' information with the government.

"This is the worst version of CISA yet, and we are deeply disappointed by its likely passage," Mark Jaycox, legislative analyst at the Electronic Frontier Foundation said before the vote. "Such key legislation should not be sandwiched into a 2,000-plus-page federal spending bill."

Truth in Government

The legislation "should have followed the normal process -- a formal conference committee bill that's sent back to the House and Senate separately for an up-or-down vote," he told the E-Commerce Times.

Adding CISA to the omnibus budget bill "is why folks don't trust the government," said Rob Enderle, principal analyst at the Enderle Group.

"It's fundamentally antidemocratic," he told the E-Commerce Times.

Objections to the Latest Version

This version of CISA essentially lets private firms monitor their systems and access information flowing through them so long as they declare that it is being done for cybersecurity purposes.

Private organizations will be able to hand data, including private personal information, over to the federal government with legal immunity as long as they categorize it as cyberthreat information.

Further, there will be few, if any, restrictions on how the government can use the data it receives.

"Removing some of the legal restrictions on sharing cybercrime or threat data with the government is a win," Erik Knight, president of SimpleWan.

"However, it's a blow to individual privacy rights," he told the E-Commerce Times.

Data shared with the U.S. National Security Agency is useless without personally identifying information, and "almost negates the use for the NSA," Knight said. It "will just show trends, not necessarily prevent any kind of active threat."

On the other hand, "without restrictions on even protecting this data, most private data could become public, especially if the government has another data breach," he said.

Too Much Information

The U.S. Department of Homeland Security is concerned about the flood of information that will come down the pipeline with the passage of CISA.

The bill's authorization to share data with any federal agency "will increase the complexity and difficulty of a new information sharing program," DHS Deputy Secretary Alejandro Mayorkas wrote in July in response to a query from Sen. Al Franken.

Further, it "could sweep away important privacy protections, particularly the provisions in the Stored Communications Act limiting the disclosure of the content of electronic communications to the government by certain providers," he said.

The administration "should work harder to make more efficient use of the information they currently have legal access to before moving to violate our privacy to get more information they can't effectively use," Enderle said.

"The latest attack [in San Bernardino, California] was conducted by people who acted like terrorists on social media, and [federal agencies] couldn't even pick that up," he noted.

Opposition to CISA

Rep. Jim Jordan, chairman of the House Freedom Caucus, on Wednesday reportedly offered an amendment to the government funding bill that would have removed an undisclosed cybersecurity measure, among other things. It was filed to the House Rules Committee.

Fight for the Futurehas set up the ObamaDecides campaign opposing CISA. President Obama must sign the bill into law.

CISA "will not do anything to prevent cyberattacks," said campaign director Evan Greer. It "gives companies an incentive to share data because they can then pass the buck to government when there's a problem."

Google and Facebook "haven't done enough," she told the E-Commerce Times, and are "hiding behind their industry body."

Richard Adhikari has written about high-tech for leading industry publications since the 1990s and wonders where it's all leading to. Will implanted RFID chips in humans be the Mark of the Beast? Will nanotech solve our coming food crisis? Does Sturgeon's Law still hold true? You can connect with Richard on Google+.

Congress Passes Budget Bill With Controversial Cybersecurity Provision high tech news technology news

Congress Passes Budget Bill With Controversial Cybersecurity Provision

8:20 AM

Congress on Friday passed an omnibus budget bill that included the Cybersecurity Information Sharing Act, or CISA. The Senate ear...

Federal prosecutors in New Jersey on Tuesday charged three men in a US$2 million identity theft scheme to hack corporate computer systems and blast spam messages to more than 60 million people.

Timothy Edward Livingston, 30, of Boca Raton, Fla., Tomasz Chmielarz 32, of Rutherford, N.J., and Devin James McArthur, 27, of Ellicott City, Md., were charged with conspiracy to commit fraud and related activity in connection with computers and conspiracy to commit wire fraud, according to U.S. Attorney Paul Fishman's office. Livingston and Chmielarz also were charged with fraud and related activity in connection with electronic mail.

The defendants face up to 20 years in prison and $250,000 in fines on the wire fraud charges, and up to five years in prison and $250,000 in fines on the email and computer conspiracy charges, according to prosecutors.

In addition, the indictment indicates $299,653 held in several Wells Fargo bank accounts in Livingston's name or the corporate name are subject to forfeiture, as well as a Scottrade account in Livingston's name, a 2006 Ferrari F430 Spider Convertible, which was seized in July in Ft. Lauderdale, Fla., and a 2009 Cadillac Escalade.

Michael Koribanics, attorney for Chmielarz, told the E-Commerce Times on Tuesday that his client planned to enter a not guilty plea at a hearing scheduled for later in the day before U.S. Magistrate Judge Michael Hammer in Newark federal court.

His office was investigating the allegations, Koribanics added.

McArthur was scheduled to appear Tuesday before U.S. Magistrate Judge Beth Gesner in Maryland; however, no information was immediately available about representation.

Livingston had an initial appearance earlier Tuesday before U.S. Magistrate Judge Alicia O. Valle in Ft. Lauderdale, Fla., and was being detained pending a Friday bail hearing, prosecutors said. His attorney Jeffrey Cox, of Boca Raton, Fla., was not immediately available for comment.

The Allegations

Starting in 2011, Livingston and others operated a company called "A Whole Lot of Nothing," which specialized in sending spam email on behalf of clients, prosecutors alleged.

Their clients ranged from legitimate business such as insurance firms that wanted to send out bulk emails to customers, to illegal pharmacies that sold narcotics without a prescription, according to the allegations.

Livingston typically charged anywhere from $5 to $9 for each email that resulted in a completed transaction, prosecutors said.

The corporate victims allegedly included an unnamed telecommunications firm based in New York, a technology and consulting firm in New York, a credit monitoring firm based in Texas, and a telecommunications firm based in Pennsylvania.

The ISPs started using blocking software to help cut down on the spam messages, but in January 2012, Livingston allegedly solicited Chmielarz to write computer programs designed to conceal the identity of the sender and bypass the spam filters.

The two men are accused of using proxy servers to send out spam, and enlisting botnets to help avoid spam blockers, the prosecutors said.

Livingston also registered certain websites in the name of "Mark Lloyd," an alias he used, based on the allegations.

The two men hacked into the accounts of certain individuals and then took control of some of their corporate victims to further the spam email campaign, according to the prosecution.

Livingston and Chmielarz allegedly worked together with the third defendant, McArthur, to steal confidential information of corporate victims, including databases containing the personally identifiable information of millions of Americans.

Livingston and Chmielarz in 2013 began discussing a third corporate victim, according to the charges.

Livingston allegedly told Chmielarz in an online chat that he needed to scrape the website of a third corporate victim, the prosecutors alleged, and later paid Chmielarz to write a program that stole the information of 10 million people from a database of that company.

McArthur worked as a sales representative at a fourth company from February 2014 to February 2015. By August 2014, he allegedly provided Livingston with access to a remote administration tool to steal from that company, including the names, addresses, email addresses and phone numbers of current, former and potential customers.

The fourth company had more than 50 million people in its corporate database, and Livingston and McArthur allegedly gained access to 25.4 million records, the prosecutors claimed.

Pervasive Problem

Spam messages are among the most common means of accessing personal data.

An average of 1.5 million deceptive emails are sent, particularly to business users, on a daily basis, according to GreatHorn, which has analyzed more than 20 million emails in the past two months.

"This problem isn't only pervasive -- it's also incredibly effective," said GreatHorn CEO Kevin O'Brien.

"Over 90 percent of all known data breaches start with this kind of an attack," he told the E-Commerce Times.

These types of attacks cost one company more than $47 million, O'Brien said, with the chief financial officer targeted four times.

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

high tech news technology news Three Charged in Hacking Case That Spammed 60M

Three Charged in Hacking Case That Spammed 60M

3:01 AM

Federal prosecutors in New Jersey on Tuesday charged three men in a US$2 million identity theft scheme to hack corporate computer sy...