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Baidu Travel Service Qunar Reportedly Launching Airline

Chinese Internet search leader Baidu ‘s ( BIDU ) online travel service Qunar Cayman Islands ( QUNR ) has reportedly confirmed that its travel operation is preparing to launch an airline, in conjunction with two other China-based companies. The airline startup, to be operated by Qunar and a pair of Shenzhen-based firms, will mainly operate domestic and short-haul international flights to nearby countries, with Qunar leading online sales efforts, said reports by Marbridge Consulting and Travel Daily Media . Competition sparked the move, with nine airlines indicating that they would be temporarily suspending their cooperation with Qunar since the end of 2015 due to a dispute over passenger charges, according to reports by Marbridge and Reuters . “Airlines are also shifting their strategy toward selling tickets directly to consumers in an effort to reduce marketing costs,” said Marbridge. “For example, China Southern Airlines ( ZNH ) announced on Feb. 23 that it was cutting the price of domestic flights bought through its own website by 60%. These actions by Chinese airlines were a key catalyst in Qunar’s decision to set up its own airline, according to Chinese news media reports.” Qunar — nicknamed the “Kayak.com of China” — operates in a rapidly growing travel search market, but price wars and competition have dented its profits and profit margins. The number of Chinese leisure travelers going overseas topped 100 million in 2014, Reuters reported, saying foreign travel is expected to grow 10% this year despite China’s slowing economic growth. Qunar posted Q3 revenue of $208.5 million, up 164% from the year-earlier quarter, but its adjusted net loss more than doubled, to $98 million, as it invests in marketing, product sourcing and product development. But both the top and bottom lines beat the consensus view of analysts polled by Thomson Reuters by about 11%. Qunar reported a net loss of 87 cents per American Depositary Share. In October, Baidu-backed Qunar announced a share swap with Ctrip.com ( CTRP ), another leading Chinese online travel agency. Baidu stock was down 2% in afternoon trading in the stock market today , near 176, while Ctrip.com was down 3%, and Qunar was down a fraction.

Qunar, Whose Owners Include Baidu, Reportedly Launching Airline

Online travel service Qunar Cayman Islands ( QUNR ), whose owners include Chinese Internet search leader Baidu ( BIDU ), has reportedly confirmed that its travel operation is preparing to launch an airline, in conjunction with two other China-based companies. The airline startup, to be operated by Qunar and a pair of Shenzhen-based firms, will mainly operate domestic and short-haul international flights to nearby countries, with Qunar leading online sales efforts, said reports by Marbridge Consulting and Travel Daily Media . Competition sparked the move, with nine airlines indicating that they would be temporarily suspending their cooperation with Qunar since the end of 2015 due to a dispute over passenger charges, according to reports by Marbridge and Reuters . “Airlines are also shifting their strategy toward selling tickets directly to consumers in an effort to reduce marketing costs,” said Marbridge. “For example, China Southern Airlines ( ZNH ) announced on Feb. 23 that it was cutting the price of domestic flights bought through its own website by 60%. These actions by Chinese airlines were a key catalyst in Qunar’s decision to set up its own airline, according to Chinese news media reports.” Qunar — nicknamed the “Kayak.com of China” — operates in a rapidly growing travel search market, but price wars and competition have dented its profits and profit margins. The number of Chinese leisure travelers going overseas topped 100 million in 2014, Reuters reported, saying foreign travel is expected to grow 10% this year despite China’s slowing economic growth. Qunar posted Q3 revenue of $208.5 million, up 164% from the year-earlier quarter, but its adjusted net loss more than doubled, to $98 million, as it invests in marketing, product sourcing and product development. But both the top and bottom lines beat the consensus view of analysts polled by Thomson Reuters by about 11%. Qunar reported a net loss of 87 cents per American Depositary Share. In October, Baidu-backed Qunar announced a share swap with Ctrip.com ( CTRP ), another leading Chinese online travel agency. Baidu, which had been Qunar’s majority owner, now owns 3% of Qunar, a Baidu spokesman told IBD. The spokesman said Baidu now owns 25% of Ctrip, which owns 45% of Qunar. Baidu stock was down 2% in afternoon trading in the stock market today , near 176, while Ctrip.com was down 3%, and Qunar was down a fraction.

Apple-FBI Encryption Battle, Facebook Arrest Flash At RSA

SAN FRANCISCO — Apple’s ( AAPL ) encryption battle with the FBI flashed again Wednesday as Silicon Valley bigwigs largely sided with the iPhone-maker during the RSA Conference in San Francisco, Calif., saying the policies of their companies also wouldn’t allow for government backdoor access. The debate at the big annual security event also followed the arrest Tuesday of Diego Dzodan, a Facebook ( FB ) exec in Brazil, who refused to decrypt WhatsApp communications in compliance with a government order. Dzodan’s arrest was yet another flash point in the ongoing battle. Wednesday, a Brazilian judge ordered police to set Dzodan free. At an RSA panel discussion Wednesday Michelle Dennedy,  Cisco Systems’ ( CSCO ) chief privacy officer, said the network gear giant, per policy, wouldn’t provide the government backdoor access to encrypted communications. Silicon Valley companies such as  Alphabet ( GOOGL ), Facebook and Microsoft ( MSFT ) also have sided with Apple. Congress has yet to legislate backdoors, and outdated telecom laws don’t tackle the now-hot topic. The Paris terror attacks and a mass shooting in San Bernardino, Calif., have reignited the issue on Capitol Hill, where legislators are weighing privacy concerns against law enforcement needs. In the latter case, the FBI ordered Apple to decrypt the iPhone belonging to one of the two San Bernardino shooters. Apple is fighting the order. Cisco’s policy would put it in the same hot waters, Dennedy said. “We do not intentionally build in backdoors, and we do not do business with others who do,” she said. “That is our policy.” Dennedy’s position was echoed throughout the discussion, entitled “Can Government, Encryption, Backdoor and Privacy Co-Exist?” Backdoor access can act as a master key to all encrypted communications within a system. Apple’s engineers haven’t created that key, Apple CEO Tim Cook says. Juniper Networks Saw A Backdoor Exploited Intentional or not, backdoor access will backfire, Johns Hopkins University associate professor Matthew Green argued Wednesday. In December, Juniper Networks ( JNPR ) discovered unauthorized code running on an operating system backing their firewalls that let hackers decrypt VPN-protected communications, Green said. Experts have speculated a National Security Agency random-number generator, employed by Juniper, was to blame for the exploited backdoor. “This is the danger with backdoors,” Green said. “Juniper was protecting the Department of Defense and could not keep people from monitoring their code.” Richard Marshall, CEO of Secure Exchange Technology Innovations, says companies need to concentrate on existing vulnerabilities within their systems. “You don’t need a designed vulnerability (such as with a backdoor) when there are so many other vulnerabilities being exploited on a day-to-day basis,” he said. “It’s so much easier for those adversaries to break into our systems and violate our privacy.” But the panelists didn’t side entirely with Apple. Marshall argued that U.S., and other, consumers have accepted the idea of reduced privacy. Chenxi Wang, chief security officer for Twistlock and the panel’s moderator, noted Apple pushed a U2 album out to millions of phones but won’t hand over the keys for government access. “Is this a double standard?” she asked. “This is beyond a double standard,” Marshall said. “This goes to the actual user and their reduced expectation of privacy. It’s a dangerous, slippery slope.” Dennedy, on the other hand, argued that the young-adult millennial generation is “crying” for privacy. Everything from their individualized clothing to the use of Snapchat messaging says as much. And therein lies the opportunity, she said. “People are trusting their commerce, their culture, their families and their communities to us (as corporations),” she said. “We have an ethical obligation to build privacy into their systems.” Her advice for companies? “Educate your users about what they are getting into rather than assuming, because they’ve fallen for your monopolistic practices, that they like it.” Image provided by Shutterstock .