Rising from the ashes

It is always unfortunate when a company has to let some of its people go in order to keep the boat afloat.

In the next two weeks, heads may roll at ABS-CBN Broadcasting Corp., which just reported a net loss of P144 million in the first quarter of 2005 – the first in its history as a listed company – from a net income of P124 million in the same period last year.

According to company president Luis Alejandro, whether or not the 5,000-strong workforce will be trimmed down will depend on the impact of the savings that will be generated from such an exercise. He blames the dismal first quarter performance to unfavorable trends that began last year such as the loss in primetime ratings in September in the mega Manila area, and the rise in operating costs brought about by programming changes.

A three-point recovery plan has been laid out to hopefully bring back ABS-CBN to profitability. First, to recover primetime ratings leadership, several new programs ranging from fantaserye to traditional soap operas will be introduced. Everybody clearly remembers how rival GMA Network was caught unprepared by the phenomenal popularity of the Taiwan telenovela Meteor Garden, something even ABS-CBN chairman Gabby Lopez least expected. But GMA got the upperhand when Mulawin became a big hit and everyone knows what followed next. ABS-CBN failed to come up with a primetime program that will lure viewers back and this is one challenge that will definitely make primetime viewing very interesting in the next few months.

Second, to optimize production costs and margins, conscious effort will be made to balance ratings, revenues, and margins. Production cost in the first quarter grew 15 percent due to new shows and fantasy-type soaps that sadly did not bring in as much revenues as expected. Hopefully, the increased ad load of ABS-CBN’s news programs now being observed to the point that news accounts for only 20 minutes is not what Alejandro meant.

Lastly, general and administrative expenses will be reduced, which includes reviewing the manpower complement, in a bid to bring EBITDA margin up to 30 percent by year-end. Let’s just hope that before any employee is done away with, highly paid talents like Kris Aquino will be willing to accept a pay cut.

The world of viruses

2004 has been a very interesting year for virus outbreak, with a total of 30 incidences, a record-high. According to Trend Micro, of the 30 outbreaks, 28 are medium-risk while two are high-risk (variants of Netsky and Sasser). As observed for the past three years, majority of virus outbreaks usually occur in the first quarter. Last year registered a record-high of 12 outbreaks in the first quarter alone and the alerts for the first and second quarters are mostly an offshoot of the Bagle-MyDoom-Netsky war, all of which tried to outdo each other in latching onto hapless users’ terminals as well as eliminating traces of the competition in the system memory. The situation improved towards the latter part of the year with the arrest of the Sasser worm author brought about by a clampdown on authors of malicious worm programs. Bagle and MyDoom however resurged in the third quarter of last year.

Bagle, Netsky and MyDoom dominated the scene, causing 25 of the 30 outbreaks. These worms actually simply took off where previous mass mailers of 2003 such as MiMail and SoBig took off, using run-of-the-mill spamming techniques to propagate, proving that e-mail is still the most effective propagation conduit.

According to Trend Micro’s anti-virus consultant Jamz Yaneza, certain variants of Bagle and MyDoom worms arrive in zipped file attachments that require passwords which are also given in the same e-mail message. Surprisingly, they still manage to infect, which means that some users are willing to go to great lengths to open the attachment with seemingly no awareness of basic virus routines.

Also last year, Trend Micro, a world leader in anti-virus services, documented a total of 16,800 malware detections with Trojans comprising the bulk. In the same year, there was a significant increase in profit-driven attacks as evidenced by the increase in both programs, phishing (fraudulent e-mail that is socially engineered to bait recipients into divulging sensitive information such as credit card numbers, PIN, social security numbers which usually mimic most bank notifications) incidences, and spam volume, the latter swelling to comprise 60 percent of all e-mail messages in 2004. More than the problem of unsolicited junk e-mail flooding one’s inbox, spam also brings with it the tide of fraud and phishing, resulting in costly losses for unwitting victims, Yaneza noted. From May to Nov. 2004 alone, Trend Micro registered a total of 9,709 phishing mails mostly targeting Citibank.

Based on the general trend of malicious code and Internet-based attacks last year, Trend Micro gives out the following forecasts for 2005:

• Blended threats will continue to hound Internet users.

• Most malware programs will continue to employ anti-virus and anti-security routines to ensure infection

• The foreseen increase in the usage of Web traffic redirection and spoofing techniques will require more stringent surfing policies

• Use of non-standard file types to circumvent attachment filters will demand better file type recognition

• IRC and P2P communication will continue to be weak security links requiring moderation policies

• Spam and phishing will continue to be a major concern causing e-mail glut and will require better filtering services

• Time between vulnerability discovery and exploit release will continue to get short, requiring proactive assessment tools.

By the way, mobile phone virus that uses multi-media messaging (MMS) to send the virus randomly to those in one’s phone directory can be prevented. Mobile users can go to Trend Micro’s website to download for free their mobile-anti-virus product which I understand can be availed for free until June 30. After this date, let’s hope that our cellular phone service providers will take up the cost of protecting their subscribers from virus attacks as is being done by telcos in other countries.

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