Why startups shouldn't be afraid of Facebook cloning them

It'll take more than a Poke to knock out Snapchat.

(Credit:
Screenshot by Ben Parr/CNET)

How long does it take a multibillion-dollar technology juggernaut to clone a popular social networking app? The answer: less than two weeks.

I am, of course, talking about Poke, Facebook's clone of Snapchat, the app whose messages self-destruct after 1 to 10 seconds. As many people like to point out, it's perfect for sexting, but there are a lot of other fun and innovative uses for this clever type of messaging.

For all intents and purposes, Poke is almost identical to Snapchat. Snapchat is focused on photos and videos, while Poke adds self-destructing messages and the classic Facebook poke feature to its arsenal. Poke relies entirely on your Facebook friend network, while Snapchat can dig into your contacts and let you share (sexy) photos with strangers.

One key difference: Snapchat already has a loyal user base that sends more than 50 million photos across its network every day, with many of its users teenagers. But Poke is quickly catching up. Within a day of its release, the app rocketed up the iOS charts to become the No. 1 free app in the App Store (it's now at No. 3). Snapchat currently occupies the No. 7 spot.

It's an impressive feat to hit No. 1 in the App Store, even for the world's largest social network. Facebook, unlike other giants, has the ability to quickly approve, build, and release products. The fact that it took just 12 days for this app to become a reality is simply mind-boggling.

Big players entering your market doesn't equal Armageddon

Should entrepreneurs just give up on their app ideas, simply because Facebook could eventually clone them and crush them with a billion users? Of course not, and anybody who thinks that Facebook (or any other big company) cloning a startup's product spells Armageddon for that startup doesn't know what they're talking about.

Remember when Facebook tried to make a Foursquare competitor? How about the time it tried to make a Groupon competitor, and it went nowhere? The same is true of its Quora competitor (Facebook Questions) and even its Craigslist competitor (Facebook Marketplace).

I could go on and on, but the point is clear: a big company launching a clone can be scary, but it doesn't mean Armageddon. There are two other factors to consider: defensibility and vision.

Remember Facebook Questions? It sure didn't stop Quora.

(Credit:
Facebook)

Defensibility

As I have previously explained in depth, a product's defensibility comes from either its technology or its traction. Technology startups' products aren't easy to clone because they have proprietary technology that even the big companies don't have. Just imagine AltaVista trying to clone Google -- it wouldn't have succeeded.

The other type of startup is the traction startup, whose product is defensible because it has a growing network of engaged users. Why use a new social network or app, even one from a large company, if your friends aren't using it?

Instagram is a prime example. There were dozens of photo-sharing apps, but only one with large-scale traction. Facebook knew that Instagram's was so strong that it posed a threat to Facebook itself, so it did the only sensible thing it could: it bought the company.

Snapchat's current users aren't going to immediately abandon the app for Facebook's Poke. They've built up friends, messages, and a history on Snapchat, and they will continue to invite their friends to join. Poke's launch could affect user growth as potential users may choose it over Snapchat, but Poke also brings a lot more attention to the market and may end up boosting Snapchat's growth. How both apps perform in the App Store over the next few weeks will give us a better idea of Facebook's impact on Snapchat.

Defensibility matters, though it's always better if you have proprietary technology that even Facebook can't clone.

Vision

The other thing that people seem to be forgetting in the Poke vs. Snapchat debate is the long-term vision and commitment each team has to its respective products.

Snapchat's founders have been at this since May 2011. They've had time to think about the road map for their product, and they don't have dozens of other products and projects to distract them. Snapchat's founders reportedly turned down an acquisition offer from Facebook. They wouldn't do that if they didn't have a long-term plan they were confident in.

Poke, on the other hand, is essentially a two-week hackathon project led by Zuckerberg and product guru Blake Ross. I doubt they've had time to develop a long-term road map for the product. It's not even clear whether they're going to keep working on the app or simply let it languish in the App Store. Will Zuckerberg divert engineers and resources to developing Poke for the long haul? I doubt he's even thought about it.

I don't know what Snapchat's long-term vision is, but I bet it involves more than photo messages that disappear after 5 seconds. You can bet Snapchat will come fighting back with new features soon, though. Will Facebook care enough to respond? Perhaps. Will Facebook continue development on Poke for the next two or three years in order to keep up with Snapchat? I personally doubt it.

Final thoughts

My point is this: it takes a lot more than a clone to take out a scrappy startup. It also takes a long-term commitment by a juggernaut. For Facebook to take out Snapchat, it will have to constantly add features to Poke and find ways to either contain Snapchat's growth or chip away at its core user base. This is easier said than done, even for a company like Facebook.

Don't be afraid of the juggernaut entering your market, entrepreneurs. If you have a long-term vision, focus on defensibility and build faster than the competition, you'll eventually become the juggernaut.

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Police in India clamp down on protests over gang rape

Even as Indian Prime Minster Manmohan Singh appealed for calm after violent weekend protests over the brutal gang rape of a 23-year-old woman in New Delhi, police in the nation's capital were enforcing a complete clampdown.

Prime Minister Singh urged calm and vowed to protect women as police struggled Monday to quell increasing outrage over sex crimes, following the gang-rape of a student on a bus on Dec. 16.

"There is genuine and justified anger and anguish at this ghastly incident," Singh said in a televised speech."

"We are constantly monitoring her medical condition. Let us all pray for her and her loved ones during this critical time" Singh added.

In light of the protests, the venue of the meeting between Singh and visiting Russian President Vladimar Putin was shifted to the prime minister's residence.

Usually, such meetings are held in Hyderabad House, which is close to India Gate, the scene of protests in the last two days.

The entire central square of India Gate circle and Raisina Hill was cordoned off and a heavy police presence was being maintained on all roads leading to India Gate and other areas of central New Delhi, in an effort to keep protestors away.

Media members have been asked to keep away from the area, to try to stop relentless coverage of the protests.

Earlier in the morning, a number of protesters who had stayed put at India Gate were cleared out. The young demonstrators, who spent a chilly night in the open after they fought a pitched battle with police throughout Sunday, were put on a bus by police.

The government also announced the establishment of a special committee made up of former judges to look into possible changes in the law to provide for quicker trials for suspects and enhanced punishment for those convicted of sexual assault of an extreme nature against women.

Meanwhile, the victim was put back on the ventilator as she battled for her life at a local hospital. Her condition remained critical, though she was conscious and communicating. Her platelet condition has dipped further -- an indication of infection.

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4 Firefighters Shot, 2 Killed Responding to NY Blaze

Two firefighters were shot and killed and two others taken to a nearby hospital after a gunman opened fire on them as they responded to a house fire in Webster, N.Y., this morning, according to authorities and local media.

Officials at Strong Memorial Hospital in Rochester, N.Y., told ABCNews.com that two men were taken there this morning and were in "guarded condition" after suffering gunshot wounds.

"The responding firefighters, when they pulled up on the scene, were ... fired upon by one or more shooters," Webster Police Chief Gerald L. Pickering told reporters this morning.

There is "no active shooter, or shooters" at this time, Pickering said.

The fire spread to three homes on Lake Road, according to officials.

The fire department is back to fighting the blaze after waiting for police to safely evacuate nearby residents and secure the scene.

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Afghan policewoman kills coalition contractor in Kabul: NATO

KABUL (Reuters) - An Afghan woman wearing a police uniform shot dead on Monday a civilian contractor working for Western forces in the police chief's compound in Kabul, NATO said.

The incident is likely to raise troubling questions about the direction of an unpopular war.

It appeared to be the first time that a woman member of Afghanistan's security forces carried out such an attack.

There were conflicting reports about the victim.

A spokesman for the NATO-led International Security Assistance Force (ISAF) said a U.S. police adviser was killed by an Afghan policewoman. Then ISAF said in a statement only that it was a "contracted civilian employee" who was killed.

Mohammad Zahir, head of the police criminal investigation department, described the incident as an "insider attack" in which Afghan forces turn their weapons on Western troops they are supposed to be working with. He initially said the victim was a U.S. soldier.

After more than 10 years of war, militants are capable of striking Western targets in the heart of the capital, and foreign forces worry that Afghan police and military forces they are supposed to work with can suddenly turn on them.

The policewoman approached her victim as he was walking in the heavily guarded police chief's compound in a bustling area of Kabul. She then drew a pistol and shot him once, a senior police official told Reuters.

The police complex is close to the Interior Ministry where in February, two American officers were shot dead at close range at a time anger gripped the country over the burning of copies of the Muslim holy book at a NATO base.

"She is now under interrogation. She is crying and saying 'what have I done'," said the official, of the police officer who worked in a section of the Interior Ministry responsible for gender awareness issues.

TIPS FOR TROOPS

The insider incidents, also known as green-on-blue attacks, have undermined trust between coalition and Afghan forces who are under mounting pressure to contain the Taliban insurgency before most NATO combat troops withdraw by the end of 2014.

Security responsibilities in a country plagued by conflict for decades will be handed to Afghan security forces.

Many Afghans fear a civil war like one dominated by warlords after the withdrawal of Soviet occupying forces in 1989 could erupt again, or the Taliban will make another push to seize power if they reject a nascent peace process.

At least 52 members of the NATO-led International Security Assistance Force have been killed this year by Afghans wearing police or army uniforms.

Insider attacks now account for one in every five combat deaths suffered by NATO-led forces in Afghanistan, and 16 percent of all U.S. combat casualties, according to 2012 data.

Hoping to stop the increase in the attacks, Afghan Defense Ministry officials have given their troops tips in foreign culture.

They are told not to be offended by a hearty pat on the back or an American soldier asking after your wife's health.

NATO attributes only about a quarter of the attacks to the Taliban, saying the rest are caused by personal grievances and misunderstandings. Last year, there were 35 deaths in such attacks.

Afghan forces are vulnerable to "insider attacks" of their own. In Jawzjan province in the north, a police commander shot and killed five comrades overnight, the Interior Ministry said.

Last year, he defected from the Taliban, said the ministry.

Taliban spokesman Zabihullah Mujahid said in a statement that the commander had rejoined the Taliban. That could not be confirmed.

(Writing by Michael Georgy; Editing by Robert Birsel)

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New industries revitalising China's north eastern region

BEIJING: Once a thriving industrial base, China's north eastern region slipped into depression when several state-owned enterprises shut down in the 1990s as part of economic restructuring.

Still, growth is now slowly but surely returning to the region.

A currency exchange built by the Japanese during World War Two is still in use today in China's northeastern city of Changchun in Jilin Province.

Now home to a bank, the Grecian-style building is a reminder of the city's past, when it was once the capital of Manchuko, a puppet-state under Japanese occupation.

Today, Changchun is better known as China's automobile capital.

But more recently, car sales nosedived following the anti-Japanese protests.

This comes as some major Chinese cities like Guangzhou imposed car ownership restrictions to clean up the air and road conditions.

Chen Werigen, Vice Mayor of Jilin Province, said: "It's impossible we're not affected. But people would now buy cars they like more than before, or cars of better quality and that creates more opportunities for sales. Secondly, we also have a huge rural market that doesn't restrict car ownership. And we're developing new energy vehicles for export. These are the measures we're taking to manage car ownership restrictions in some cities."

But Changchun faces other challenges like the slow growth of private enterprises and poor transport links, with construction of a subway only starting in 2010.

Changchun as part of the northeast was one of the first to industrialise and prosper. But they fell back in the 1990s during the restructuring of state-owned enterprises and hundreds of thousands went jobless.

Things only started looking up after the new millennium when China's central government implemented reforms to revitalise the region.

These include encouraging private companies like Haoyue, China's largest Islamic beef-processing firm by export volume, to set up base.

It now hires 20,000 people at its plant, and accounts for half of China's total exports of beef products to 23 countries, including the Middle East and Russia.

The firm is now diversifying into the production of animal feed, another industry which authorities in the northeast are keen to develop.

Zhang Guohua, CEO of Haoyue Group, said: "For the next five years, we'll increase our investment in animal feed production. The aim is to make us the biggest manufacturer and seller of animal feed amongst the three provinces in the northeast."

And hopefully that will pave the way for greater economic growth in Changchun in the long term.

- CNA/de

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Revealed: NSA targeting domestic computer systems in secret test

Newly released files show a secret National Security Agency program is targeting the computerized systems that control utilities to discover security vulnerabilities, which can be used to defend the United States or disrupt the infrastructure of other nations.

The NSA's so-called Perfect Citizen program conducts "vulnerability exploration and research" against the computerized controllers that control "large-scale" utilities including power grids and natural gas pipelines, the documents show. The program is scheduled to continue through at least September 2014.

The Perfect Citizen files obtained by the Electronic Privacy Information Center and provided to CNET shed more light on how the agency aims to defend -- and attack -- embedded controllers. The NSA is reported to have developed Stuxnet, which President Obama secretly ordered to be used against Iran's nuclear program, with the help of Israel.

U.S. officials have warned for years, privately and publicly, about the vulnerability of the electrical grid to cyberattacks. Gen. Martin Dempsey, the chairman of the Joint Chiefs of Staff, told a congressional committee in February: "I know what we [the U.S.] can do and therefore I am extraordinarily concerned about the cyber capabilities of other nations." If a nation gave such software to a fringe group, Dempsey said, "the next thing you know could be into our electrical grid."

Discussions about offensive weapons in the U.S. government's electronic arsenal have gradually become more public. One NSA employment posting for a Control System Network Vulnerability Analyst says the job involves "building proof-of concept exploits," and an Air Force announcement in August called for papers discussing "Cyberspace Warfare Attack" capabilities. The Washington Post reported last month that Obama secretly signed a directive in October outlining the rules for offensive "cyber-operations."

"Sabotage or disruption of these industries can have wide-ranging negative effects including loss of life, economic damage, property destruction, or environmental pollution," the NSA concluded in a public report (PDF) discussing industrial control systems and their vulnerabilities.

The 190 pages of the NSA's Perfect Citizen files, which EPIC obtained through the Freedom of Information Act last week, are heavily redacted. At least 98 pages were completely deleted for a number of reasons, including that portions are "classified top secret," and could "cause exceptionally grave damage to the national security" if released, according to an accompanying letter from Pamela Phillips, chief of the NSA's FOIA office.

But the portions that were released show that Raytheon received a contract worth up to $91 million to establish Perfect Citizen, which "enables the government to protect the systems," especially "large-scale distributed utilities," operated by the private sector.

The focus is "sensitive control systems," or SCS, which "provide automation of infrastructure processes." Raytheon is allowed to hire up to 28 hardware and software engineers who are supposed to "investigate and document the results of vulnerability exploration and research against specific SCS and devices."

One job description, for a senior penetration tester, says the position will "identify and demonstrate vulnerabilities," and requires experience using security-related utilities such as Nmap, Tenable's Nessus, Libnet, and Netcat. Raytheon is required not to disclose that this work is being done for the NSA.

The Wall Street Journal disclosed the existence of Perfect Citizen in a 2010 article, which reported the NSA's "surveillance" of such systems relies "on a set of sensors deployed in computer networks for critical infrastructure that would be triggered by unusual activity suggesting an impending cyber attack."

An NSA spokeswoman responded to CNET at the time by saying that Perfect Citizen is "purely a vulnerabilities assessment and capabilities development contract" that "does not involve the monitoring of communications or the placement of sensors on utility company systems."

Marc Rotenberg, EPIC's executive director, said that the newly declassified documents "may help disprove" the NSA's argument that Perfect Citizen doesn't involve monitoring private networks.

The FOIA'd documents say that because the U.S. government relies on commercial utilities for electricity, telecommunications, and other infrastructure requirements, "understanding the technologies utilized in the infrastructure nodes to interoperate on the commercial backbone enables the government to protect the systems."

Neither the NSA nor Raytheon immediately responded to requests to comment from CNET this morning. We'll update this story if we receive a response.

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Reliving the holiday favorite "A Christmas Story"

(CBS News) 'Tis the Season for "A Christmas Story," the 1983 film whose memorable story is being re-told on Broadway. Mo Rocca sets the stage:

If "Miracle on 34th Street" and "It's a Wonderful Life" are the frankinscense and myrrh of Christmas movies, then the gold may very well be 1983's "A Christmas Story."

If you haven't seen "A Christmas Story," well, it's the tale of 12-year-old Ralphie Parker. Set in 1940s Indiana, it's something of a cockeyed look at Christmas.

Peter Billingsley, as Ralphie, can't get a break in expressing his Christmas wish for a Red Ryder BB gun - not even from Santa! - in the 1983 movie "A Christmas Story."

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MGM/UA

Ralphie's dad obsesses over a leg lamp he won in a contest. ("It reminds me of the Fourth of July!") A pack of dogs makes off with Christmas dinner. And Santa is anything but jolly.

"I've read where you've called it the 'Seinfeld' of Christmas movies - what do you mean by that?" asked Rocca.

"Well, in some ways it's the commitment to the mundane," said 41-year-old Peter Billingsley. If he looks familiar, that's because he played Ralphie.

"It's those simple little things that drive you crazy around Christmas. It's not the big ideas. It's, you know, trying to get the tree and trying to get your little brother to eat, trying to cook a turkey, all those things."

Now Billingsley is one of the producers of "A Christmas Story" - the Broadway musical.

Twelve-year-old Johnny Rabe plays Ralphie, and 10-year old Zac Ballard is Ralphie's younger brother Randy - the one who memorably pigged out on mashed potatoes.

"I never want a stunt man to do that," Ballard said.

"What's your motivation?" Rocca asked.

"What do you mean by 'motivation'?"

"I don't even know what I'm asking," he replied. "Whatever you're doing, it's great."

This family favorite was originally a series of stories by radio commentator Jean Shepherd in, of all places, Playboy magazine.

The stories became a book, which then became a movie.

When asked what the number one thing is people say when they come up, Billingsley said, "'That's my family' or 'You were me' or 'That's my mom,' 'That was my dad.' And it seems like that Midwest area is relatable to everyone in the country. It feels kind of like everyone's street."

The movie wasn't a box office hit, but then cable TV turned it into one of the greatest comeback stories ever told. A 24-hour marathon on TBS, watched by almost 50 million people last year, has been playing since 1997 - making it the yule log of Christmas movies.

Fans of the film, known as "Ralphies," include Brian Jones.

In 2004 he found on eBay the Cleveland house used as Ralphie's home. He bought it sight unseen. He did not tell his wife.

The "Christmas Story House & Museum" in Cleveland Ohio, where the 1983 movie was filmed.

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CBS News

"How long did it take for your wife to forgive you?" Rocca asked.

"The day I opened it" as a museum, Jones said. "When she saw we had a line down the block, like four or five people wide. Then she realized I wasn't as crazy as I seemed."

Open to the public since 2006, the home is a shrine to Ralphie, with pilgrims lining up around the block to visit.

There's a leg lamp in the window, and a kitchen sink visitors can hide under, just like Randy did.

"People will try and squeeze there. I can fit under there. I'm 6'3", about 200 pounds. So I still fit."

That is what you call a super fan.

Jones helped pay for the house by selling - you guessed it - leg lamps.

Of course, the leg lamp also made it into the Broadway musical, along with a show-stopping tap-dance number.

And if the young cast of the musical is any indication, "A Christmas Story" still has legs.

When asked who had seen the movie before they appeared in the musical,many members of the kids' ensemble raised their hands.

Mo Rocca meets members of the cast of "A Christmas Story" on Broadway.

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CBS News

"Tell the truth - was there anyone here who really wasn't a fan of the movie?" Rocca asked.

Jeremy raised his hand: "I'm Jewish!"

When asked what he thought the message of the movie was, Luke said, "It's one big family that's crazy and then at the end, and they all say it's crazy, but it comes to one thing called love."

Zach offered another take: "It's also a heartwarming story. I think it's the best Christmas story ever!"

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Departing Secretary of State Clinton's Legacy of Firsts

After 31 years of public service, Secretary of State Hillary Clinton leaves the limelight behind.

On Friday, President Obama nominated Sen. John Kerry, D-Mass., to take her place as secretary of state, leaving Clinton to help him move in and then bow out.

Over the past three decades, Clinton has served her country in one way or another, a tenure that was full of firsts.

She was the only first lady to refuse the traditional cookie bake off and the first secretary of state to visit more than 100 countries. She served under the first black president and was the first first lady to have an office in the West Wing of the White House. Clinton was the first secretary of state to visit East Timor, and the first first lady to later win elective office. And long before she ever appeared on a ballot, Clinton was the first child born to Hugh and Dorothy Rodham.

Hillary Clinton Through the Years

Her departure from the State Department does not come as a surprise. For the past year, she has made clear her intentions to step down and said her goodbyes at outposts all over the world.

"It's important for me to step off this incredibly high wire I've been on," Clinton said after casting her ballot in November's presidential election, "to take stock of the rest of my life."

Laurent Gillieron/AFP/Getty Images

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Recently, she told ABC's Barbara Walters she's looking forward to taking a step back, "maybe do some reading and writing and speaking and teaching."

In October, she took the blame for State Department security failures that led to the death of four Americans, including Ambassador Christopher Stevens, in Benghazi, Libya. It was a move that signaled a willingness to put politics aside and embrace responsibility.

I take responsibility," Clinton said a month after the attack in an interview in Lima, Peru. "I'm in charge of the State Department's 60,000-plus people all over the world, 275 posts.

"The president and the vice president wouldn't be knowledgeable about specific decisions that are made by security professionals," Clinton said, a clear attempt to absolve a president who was up for re-election of blame with little regard for her own popularity.

At the end of November, Clinton reflected on her accomplishments as secretary of state over the past four years in two wide-ranging speeches on foreign policy.

Her four years of work focused on advancing rights for women and religious minorities across the globe, helping to maintain the tenuous peace between Israelis and Palestinians, discouraging Iran from obtaining nuclear weapons and, in her own words, "advancing a new approach to development that puts human dignity and self-sufficiency at the heart of our efforts."

Clinton reflected on her travels to more than 112 countries, calling it "shoe-leather diplomacy," and emphasizing the importance of being on the ground.

"I have found it highly ironic that, in today's world, when we can be anywhere virtually, more than ever people want us to show up, actually," she said at the Newseum in Washington, D.C. "Somebody said to me the other day, 'I look at your travel schedule.  Why Togo?  Why the Cook Islands?'  No secretary of state had ever been to Togo before.  Togo happens to be on the U.N. Security Council.  Going there, making the personal investment, has a real strategic purpose."

Though Clinton took political heat this year for her role in the Benghazi attack, her global colleagues joked and prodded her about a second presidential run at each increment of her long-term farewell. The popular Democrat continues to deny she'll run.

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Egyptians back new constitution in referendum

CAIRO (Reuters) - An Islamist-backed Egyptian constitution won approval in a referendum, rival camps said on Sunday, after a vote the opposition said would sow deep social divisions in the Arab world's most populous nation.

The Islamist Muslim Brotherhood, which propelled President Mohamed Mursi to power in a June election, said an unofficial tally showed 64 percent of voters backed the charter after two rounds of voting that ended with a final ballot on Saturday.

An opposition official also told Reuters their unofficial count showed the result was a "yes" vote, while party spokesmen said there had been a series of abuses during the voting.

The main opposition coalition, the National Salvation Front, responded to the defeat by saying it was moving towards forming a single political party to challenge the Islamists who have dominated the ballot box since strongman Hosni Mubarak was overthrown two years ago.

Members of the opposition, taking heart from a low turnout of about 30 percent of voters, pledged to keep up pressure on Mursi through peaceful protests and other democratic means.

"The referendum is not the end of the road," said Khaled Dawoud, a spokesman for the National Salvation Front. "It is only the beginning of a long struggle for Egypt's future."

The referendum committee may not declare official results for the two rounds until Monday, after hearing appeals. If the outcome is confirmed, a parliamentary election will follow in about two months.

Mursi's Islamist backers say the constitution is vital for the transition to democracy, nearly two years after Mubarak was ousted in a popular uprising. It will provide the stability needed to help a fragile economy, they say.

The constitution was "a historic opportunity to unite all national powers on the basis of mutual respect and honest dialogue for the sake of stabilizing the nation," the Brotherhood said in a statement.

RECIPE FOR UNREST

The opposition accuses Mursi of pushing through a text that favors Islamists and ignores the rights of Christians, who make up about 10 percent of the population, as well as women. They say it is a recipe for further unrest.

The opposition said voting in both rounds was marred by abuses. However, an official said the overall vote favored the charter.

"The majority is not big and the minority is not small," liberal politician Amr Hamzawy said, adding that the National Salvation Front would use "all peaceful, democratic means" such as protests to challenge the constitution.

The vote was split over two days as many judges had refused to supervise the ballot, making a single day of voting impossible.

During the build-up to the vote there were deadly protests, sparked by Mursi's decision to award himself extra powers in a November 22 decree and then to fast-track the constitutional vote.

The new basic law sets a limit of two four-year presidential terms. It says the principles of sharia, Islamic law, remain the main source of legislation but adds an article to explain this. It also says Islamic authorities will be consulted on sharia - a source of concern to Christians and others.

ABUSES

Rights groups reported what they said were illegalities in voting procedures. They said some polling stations opened late, that Islamists illegally campaigned at some polling places, and complained of irregularities in voter registration.

But the committee overseeing the two-stage vote said its investigations showed no major irregularities in voting on December 15, which covered about half of Egypt's 51 million voters. About 25 million were eligible to vote in the second round.

The Brotherhood said turnout was about a third of voters.

The opposition says the constitution will stir up more trouble on the streets since it has not received sufficiently broad backing for a document that should be agreed by consensus, and raised questions about the fairness of the vote.

In the first round, the district covering most of Cairo voted "no," which opponents said showed the depth of division.

"I see more unrest," said Ahmed Said, head of the liberal Free Egyptians Party and a member of the opposition Front.

He cited "serious violations" on the first day of voting, and said anger against Mursi was growing. "People are not going to accept the way they are dealing with the situation."

At least eight people were killed in protests outside the presidential palace in Cairo this month. Islamists and rivals clashed in Alexandria, the second-biggest city, on the eves of both voting days.

(Writing by Edmund Blair and Giles Elgood; editing by Philippa Fletcher)

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UBS tampered with Swiss franc rates since 2001: report

GENEVA: Swiss banking giant UBS, which last week was slapped with $1.5 billion in fines for manipulating global interest rates, also tampered with Swiss franc interest rates for more than a decade, a Swiss newspaper reported on Sunday.

"The bank did not only contribute to manipulating global interest rates on the dollar, the British pound and the yen, but... also systematically played with interest rates on the Swiss franc," Le Matin reported.

Quoting findings in a US justice department probe, the paper said there was evidence that UBS traders had manipulated the rates from 2001.

UBS was hit with the second-largest banking fine ever last week by US, British and Swiss authorities after they revealed evidence of massive misconduct in the setting of the Libor rate, a global reference that affects products from student loans to mortgages.

The United States also filed federal charges of felony fraud against UBS Securities Japan, where it estimated that the bank raked in hundreds of millions of dollars over three years with slight rate adjustments.

"The principle was the same in Switzerland, where the division in charge of the UBS treasury each day gave indications of what the ideal rates would be" for the bank's business, Le Matin said, adding such rates not only impact UBS's bottom line but also the entire Swiss economy.

The paper criticised Switzerland's financial regulator Finma for not looking further back than 2007 when it calculated UBS's misdeeds in Switzerland, and also lambasted the Swiss national bank for not releasing numbers on how much the bank had cost the Swiss economy.

The Swiss portion of the bank's massive fine amounted to just 59 million Swiss francs (US$64 million).

- AFP/xq

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