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Top tech stories of 2013: Big Brother, wearables, and the struggles of aging tech giants

Marc Ferranti | Dec. 10, 2013
Politics collided with the world of technology this year as stories about U.S. government spying stirred angst both among the country's citizens and foreign governments, and the flawed site got American health-care reform off to a rocky start.

Ballmer quits Microsoft

Steve Ballmer's announcement in August that he would be leaving Microsoft after more than three decades was an industry milestone but did not come as a shock. Ballmer, who will depart within 12 months of the announcement, took over as CEO from Bill Gates in 2000, leading Microsoft as revenue increased from $22.9 billion to $78 billion. Known industry-wide for his booming voice and manic exhortations at Microsoft meetings, Ballmer broadened the company's product portfolio beyond Windows and Office by, among other efforts, building up its data center, Xbox and search businesses. But Ballmer, a math-whiz Harvard classmate of Gates hired as the company's first business manager, operated under increasingly intense criticism for missing out on the mobile revolution and being outflanked by Steve Jobs as Apple soared in the consumer market with the iPod, iPhone and iPad. Microsoft's languishing share price is a sign that investors lack confidence in the company's ability to innovate under a baby boomer associated with the PC era. It will be up to Microsoft's next CEO to lead the company's transformation into a devices and services business, and ensure that its bold but controversial $7.2 billion acquisition of Nokia, announced shortly after Ballmer's resignation, is successful.

Bitcoin sparks a gold rush

Bitcoin was at once one of the most hyped and bewildering technology-related phenomena of the year. The most popular of the so-called "crypto currencies," Bitcoin is a peer-to-peer payment system devised in 2009 by a developer using the name Satoshi Nakamoto. It uses open-source cryptographic algorithms to enable transactions and create units of digital currency called bitcoins. Bitcoins are created or "mined" as computers on the network solve mathematical problems used to verify transactions. As speculators and tech faddists fueled the buzz, bitcoins skyrocketed in value from under $20 at the beginning of the year to $1,200 by December. Transactions are processed free or for low fees, and because no personal information is exchanged, are anonymous and touted as more secure than credit cards. Some of these qualities also attract criminals and when U.S. authorities shut down the Silk Road contraband website they also seized a cache of bitcoins. In early December the French central bank issued a warning about bitcoin volatility and a China central bank ban against banks dealing in bitcoins caused the giant search engine Baidu to stop taking them as payment. The value of bitcoins plunged by more than $500 over the next 48 hours. Bitcoin's volatility presents risks that it may remain just a niche payment system for the Web and a vehicle for speculators.

BlackBerry's death rattle

Diehard BlackBerry fans thought the company had a chance for survival when in January then-CEO Thorsten Heins debuted the touchscreen BlackBerry Z10 and a handset with a physical keyboard, the BlackBerry Q10. Both devices were designed around the BlackBerry 10 platform. The company had replaced co-CEOs Jim Balsillie and Mike Lazaridis a year earlier, after losing ground to Apple and Android devices that offered sleeker interfaces and bigger app stores. But the BlackBerry 10 phones were too little, too late. For its August quarter, the company reported a $965 million net operating loss. Then, the company announced it would cut 4,500 workers and go private in a $4.7 billion sale to Fairfax Financial Holdings. But Fairfax could not get financing for the deal, and in November the company appointed ex-Sybase CEO John Chen as chairman and interim CEO and accepted a US$1 billion loan from a consortium led by Fairfax. At this point, though, it is hard to see how a cash infusion can keep the company intact and solvent.


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