Instant View: Holiday PC sales slide for first time in over five years

SAN FRANCISCO (Reuters) - Holiday season sales of personal computers fell for the first time in more than five years, according to industry tracker IDC, as Microsoft Corp's Windows 8 failed to excite buyers and many opted for tablet devices and powerful smartphones instead.
Commentary:
SHAW WU, ANALYST, STERNE AGEE
"Things are getting really tough for Dell, which is not well-positioned in emerging markets. The Asia-based players will continue to grow faster.
"It's frankly become an Asia game. HP is also actually turning around its PC business, and that's one of the reasons Dell is losing a lot of share.
"Windows 8 wasn't going to be as big a catalyst. It's so different, it's almost uncomfortably different from past Windows, and there's a risk that Windows 8 ends up like Vista.
"We're not surprised with the data, and everybody knows the trends are coming, but seeing the numbers seems to crystallize it."
ASHOK KUMAR, ANALYST, MAXIM GROUP
"That's in line to slightly worse than expected. There are multiple factors causing stagnation in the PC market.
"There's been an elongation of the replacement cycle from once every five years to once every 10 years. Historically, about 20 percent of the installed base comes up for refresh every year. Now it's 10 percent.
"There's a lack of compelling reasons to upgrade. Increases in performance have been smaller and there are fewer new applications that require more computing horsepower. In developing markets, the first purchase is not a PC, it's a smartphone, especially in markets where literacy levels are low.
"Then, not least of all, there's the incursion of tablets in the PC market.
"There are no clear compelling product cycles coming in the PC market. What could potentially resuscitate the PC market? Ultrabooks could come down in price to the level of regular laptops: $500 instead of $999. But we may be looking at low single digit growth in the PC market for some time."
AARON RAKERS, ANALYST, STIFEL, NICOLAUS & CO
"Looking at the data from the past few months, I don't think anybody is going to be terribly surprised by these numbers. A lot of people were expecting shipments in the 90 million range.
"I just came from CES and meetings with Intel and Dell. The sense is that until Windows 8 is fully installed and prices start to come down, we will be in this state of negative dynamics in the PC market. I do think that this will lift this year as Windows XP loses support from Microsoft."

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Shine America, Jack Black's Electric Dynamite Producing Comedy Series for Yahoo

NEW YORK (TheWrap.com) - Shine America and Jack Black's Electric Dynamite Productions have partnered to produce "Ghost Ghirls," a new comedy series that will debut in the Spring on Yahoo! Screen, the web giant's video portal.
Jeremy Konner, Amanda Lund and Maria Blasucci created the show, which stars Lund and Blasucci as a pair of hapless investigators on the hunt for paranormal activity. It has begun production on a first season of 12 episodes.
Konner, who directed Funny or Die's "Drunk History" videos, will direct and executive produce with Lund, Blasucci, Black and Priyanka Matoo of Electric Dynamite.
"‘Ghost Ghirls' is the funniest idea for a TV show that we've seen since I've been in the business," Black said in a statement. "Jeremy Konner is an electrifying director, and Amanda and Maria are dynamite comedic talents. I'm very proud to be associated with such a powerful project."
Konner, Lund and Blasucci pitched the show to Eletric Dyanmite, which then brought it to Shine America. Shine is funding it.
No numbers were disclosed, but it has "a very healty budget for a digital series," according to Vivi Zigler, president of Shine 360 and Digital for Shine America.
"This one is pretty broad comedy," Zigler told TheWrap. "There is physical comedy, there's some very funny situational comedy that occurs."
Yahoo also airs Shine's "Who Knew," a news-focused web series.
Black, whose production company is based in Shine America's office building, will make a cameo in the series. He has also recruited assorted friends and comedians like Molly Shannon and Jason Schwartzman to do the same.
"Once Jack starts calling his friends, we almost have a play happening at the set," Zigler said.

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As online voting begins, Oscars take extra steps not to leave voters behind

LOS ANGELES (TheWrap.com) - The Academy opened online voting for the first time in his history on Monday. But in the days leading up to the unprecedented move away from paper ballots, AMPAS also took measures to make sure that chunks of its membership aren't left on the sidelines by the digital revolution.
"We're trying to enfranchise as many members as possible," AMPAS COO Ric Robertson told TheWrap.
Months ago, the organization set up stations in the lobby of its Beverly Hills headquarters where members could register to vote electronically and also receive answers to questions about the process.
In November, the organization extended the deadline for voters to request paper ballots.
And in the week before that new December 14 deadline, AMPAS took an extra step that essentially made that deadline irrelevant. Academy officials, worried about the number of members who hadn't chosen either option, decided to mail paper ballots to every one of its 5,856 members whose dues were current but who hadn't signed up for the online-voting option.
"If you've paid your dues and you haven't registered to vote electronically, we're going to send you a paper ballot whether or not you've asked for one," said Robertson.
That final decision by AMPAS officials, he said, will make the percentage of potential nominating voters commensurate with what it has been in prior years, when all voters whose dues were paid automatically received paper ballots.
"Between those who registered to vote electronically and those who are receiving paper ballots, we're at a number that is similar to what we've had in the past," he said.
As for the breakdown in this first year of online voting, Robertson said that "the majority of voting members" have registered to cast their votes by computer.
The move to online voting, he added, is particularly important this year, when the deadline to return nominating ballots is January 3, two weeks earlier than usual.
"The voting period for nominations is essentially the holiday season," he said. "Whether you're vacationing in Hawaii or working in Mexico, it's now much easier to vote - and you don't have to worry about being out of town while your ballot is sitting in your mailbox back in West L.A."
Still, Robertson admits that not every AMPAS voter has embraced moving into the online age.
"We have some members who are not shy in any way about saying, 'I'm going to vote paper and I'm not changing,'" he said. "But I was really pleasantly surprised that the number of people who registered to vote electronically was higher than I anticipated."
Throughout the year, he added, the Academy has had focus groups with members to explain the online voting process. And though the Screen Actors Guild had its nominations leaked early last week through an error on its website, Robertson insists that the Academy is not worried.
"I am confident about it," he said. "We have taken extensive measures to make sure our system is secure and protected."
While in past years, PricewaterhouseCoopers partners have told TheWrap that a large number of members voted and returned their nominating ballots immediately after receiving them, Robertson said he doesn't expect a similar early rush this time.
"Most of our members are still trying to see the movies," he said. "I don't think too many people are going to be voting right away this year."

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Twitter and Nielsen pair up to publish new "social TV" ratings

 Nielsen Holdings NV, the television viewership measurement company, said on Monday it will partner with Twitter to publish a new set of ratings that measure chatter on Twitter about TV programming.
The new measurement, dubbed the "Nielsen Twitter TV Rating," seeks to tap into the stream of viewer commentary and armchair musings generated on "second screens" - the smartphones and tablets perched on Twitter users' laps while they watch, say, Monday Night Football or the latest episode of "Homeland" on their TVs.
The new ratings, to be launched next fall, arrive at a moment when media and advertising industry executives say they are observing a shift in TV viewing habits that include the rise of "second screen" use.
But significant questions remain for advertisers over how best to interpret the data and whether a Twitter ratings system is meaningful at all.
In September, Nielsen ratings showed that TV viewership for Viacom Inc's MTV Video Music Awards, which coincided with the Democratic National Convention, plummeted by more than 50 percent from a year ago. Yet social media chatter tripled, according to the research firm Trendrr.
Brad Adgate, an analyst at Horizon Media, said advertisers will view the Twitter ratings as a useful layer of information about a show's popularity, but it is "not going to be close to the currency" of existing ratings metrics.
"It lets producers and creative directors know if the storyline is working, like a huge focus group," Adgate said. "But I don't think you can translate comments to ratings for a show. Right now I think the bark right now is bigger than its bite."
The new ratings will measure the number of people discussing a show on Twitter, as well as those who are exposed to the chatter, to provide the "precise size of the audience and effect of social TV to TV programming," Nielsen said.
"As the experience of TV viewing continues to evolve, our TV partners have consistently asked for one common benchmark from which to measure the engagement of their programming," Chloe Sladden, Twitter's vice president of media, said in a post on the company blog on Monday. "This new metric is intended to answer that request, and to act as a complement and companion to the Nielsen TV rating."
Mark Burnett, executive producer of NBC's hit "The Voice," argued that advertisers should value programs that can attract a high level of social media engagement from viewers. Deeply embedded social media elements, such as live Twitter polls, were critical in driving "The Voice" to the top of the Tuesday night ratings among viewers between 18 to 49, Burnett said.
"If you're an advertiser, wouldn't you want to know whether people are watching this show passively or if they're actively engaged in the viewing experience?" Burnett said. "Five years from now this will make traditional television ratings seem archaic."
For Twitter, the partnership with a recognized measurement company like Nielsen emphatically punctuates a year-long effort by its media division to bring second-screen usage into the mainstream.
Twitter's convergence with television has been on display during sporting and major news events, which have provided some of the biggest viewership moments for both broadcasters and the social media company.
During the Summer Olympics in London, Twitter set up a page for the event that displayed photos from inside an event venue or athletes' tweets to complement what was being broadcast on NBC. Advertisers like Procter & Gamble Co, for instance, which advertised heavily during the Games, tried to bridge the two mediums by airing an ad on TV, then sending out a tweet soliciting viewer feedback about the ad.
As news organizations tallied votes on election night in the United States on November 6, worldwide Twitter chatter hit a peak of more than 327,000 per minute, the company said this month.

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Florida man sentenced to 10 years in "hackerazzi" case

LOS ANGELES (Reuters) - A Florida man who pleaded guilty to hacking into the email accounts of celebrities to gain access to nude photos and private information was sentenced to 10 years in prison by a federal judge in Los Angeles on Monday.
Former office clerk Christopher Chaney, 36, said before the trial that he hacked into the accounts of film star Scarlett Johansson and other celebrities because he was addicted to spying on their personal lives.
Prosecutors said Chaney illegally gained access to email accounts of more than 50 people in the entertainment industry, including Johansson, actress Mila Kunis, and singers Christina Aguilera and Renee Olstead from November 2010 to October 2011.
Chaney, who was initially charged with 28 counts related to hacking, struck a plea deal with prosecutors in March to nine felony counts, including wiretapping and unauthorized access to protected computers.
"I don't know what else to say except I'm sorry," Chaney said during his sentencing. "This will never happen again."
Chaney was ordered to pay $66,179 in restitution to victims.
Prosecutors recommended a 71-month prison for Chaney, who faced a maximum sentence of 60 years.
TEARFUL JOHANSSON
Prosecutors said Chaney leaked some of the private photos to two celebrity gossip websites and a hacker.
Johansson said the photos, which show her topless, were taken for her then-husband, actor Ryan Reynolds.
In a video statement shown in U.S. District Court in Los Angeles, a tearful Johansson said she was "truly humiliated and embarrassed" when the photos appeared online, asking Judge S. James Otero to come down hard on Chaney.
Prosecutors said Chaney also stalked two unnamed Florida women online, one since 1999 when she was 13 years old.
Chaney, a native of Jacksonville, Florida, was arrested in October 2011 after an 11-month FBI investigation dubbed "Operation Hackerazzi" and he continued hacking after investigators initially seized his personal computers.
Shortly after his arrest, Chaney told a Florida television station that his hacking of celebrity email accounts started as curiosity and later he became "addicted."
"I was almost relieved months ago when they came in and took my computer ... because I didn't know how to stop," he said.

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Massachusetts fines Morgan Stanley over Facebook IPO

BOSTON (Reuters) - Morgan Stanley , the lead underwriter for Facebook Inc's initial public offering, will pay a $5 million fine to Massachusetts for violating securities laws governing how investment research can be distributed.
Massachusetts' top securities regulator, William Galvin, charged on Monday that a top Morgan Stanley banker had improperly coached Facebook on how to disclose sensitive financial information selectively, perpetuating what he calls "an unlevel playing field" between Wall Street and Main Street.
Morgan Stanley has faced criticism since Facebook went public in May for revealing revised earnings and revenue forecasts to select clients before the media company's $16 billion initial public offering.
This is the first time a case stemming from Morgan Stanley's handling of the Facebook offering has been settled.
Facebook had privately told Wall Street research analysts about softer forecasts because of less robust mobile revenues. A top Morgan Stanley banker coached Facebook executives on how to get the message out, Galvin said.
A Morgan Stanley spokeswoman said on Monday the company is "pleased to have reached a settlement" and that it is "committed to robust compliance with both the letter and the spirit of all applicable regulations and laws." The company neither admitted nor denied any wrongdoing.
Galvin, who has been aggressive in policing how research is distributed on Wall Street ever since investment banks reached a global settlement in 2003, said the bank violated that settlement. He fined Citigroup $2 million over similar charges in late October.
"The conduct at Morgan Stanley was more egregious," he said in an interview explaining the amount of the fine. "With it we will get their attention and begin to take steps in restoring some confidence for retail investors to invest."
Galvin also said that his months-long investigation into the Facebook IPO is far from over and that he continues to review the other banks involved. Goldman Sachs and JP Morgan also acted as underwriters. The underwriting fee for all underwriters was reported to be $176 million at the time, or 1.1 percent of the proceeds.
As lead underwriter, Morgan Stanley took in $68 million in fees from the IPO, according to a Thomson Reuters estimate.
Massachusetts did not name the Morgan Stanley banker in its documents but personal information detailed in the matter suggest it is Michael Grimes, a top technology banker who was instrumental in the Facebook IPO.
The report says the unnamed banker joined Morgan Stanley in 1995 and became a managing director in 1998, dates that correlate with Grimes' career at the firm. It also says the banker works in Morgan Stanley's Menlo Park, California, office, where Grimes also works.
Grimes did not immediately respond to a request for comment, and was not accused of any wrongdoing by name.
The state said the banker helped a Facebook executive release new information and then guided the executive on how to speak with Wall Street analysts about it. The banker, Galvin said, rehearsed with Facebook's Treasurer and wrote the bulk of the script Facebook's Treasurer used when calling the research analysts.
A number of Wall Street analysts cut their growth estimates for Facebook in the days before the IPO after the company filed an amended prospectus.
Facebook's treasurer then quickly called a number for Wall Street analysts providing even more information.
The banker "was not allowed to call research analysts himself, so he did everything he could to ensure research analysts received new revenue numbers which they then provided to institutional investors," Galvin said.
Galvin's consent order also says that the banker spoke with company lawyers and then to Facebook's chief financial officer about how to prove an update "without creating the appearance of not providing the underlying trend information to all investors."
The banker and all others involved with the matter at Morgan Stanley are still employed by the company, a person familiar with the matter said.
Retail investors were not given any similar information, Galvin said, saying this case illustrates how institutional investors often have an edge over retail investors.

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China to improve land compensation scheme to help stability

 Chinese officials will this week discuss improving compensation for expropriating farmland, state media said on Monday, in a move to help deal with growing rural anger about forced land seizures.
A draft amendment to the Land Administration Law will remove a previous ceiling for calculating compensation which has been judged to be too low and also ensure money is paid out before land is expropriated, the official Xinhua news agency said.
Compensation will in future include rural residences, crops already planted, a relocation allowance and social security fees, the report added.
"Farmers' protests over land seizures have occurred in villages across the country in recent years, prompting calls for better protection of farmers' property rights," Xinhua said.
It did not say when the new rules would go into effect and provided no other details.
Some academics have pushed for the government to grant farmers greater control over their land, conflict over which is rising, a worry to the stability-obsessed ruling Communist Party.
Chinese farmers do not directly own most of their fields. Instead, most rural land is owned collectively by a village, and farmers get leases that last for decades.
In theory, villagers can collectively decide whether to apply to sell off or develop land. In practice, however, state officials usually decide. And hoping to win investment, revenues and pay-offs, they often override the wishes of farmers.
The number of "mass incidents" of unrest recorded by the government grew from 8,700 in 1993 to about 90,000 in 2010, according to several government-backed studies. Some estimates are higher, and the government has not released official data for recent years.
Conflict over land requisitions accounted for more than 65 percent of rural "mass incidents", the China Economic Times reported this year, citing survey data.

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Russia investigates protest leader for theft of party funds

Russian authorities have opened a third criminal investigation into opposition leader Alexei Navalny, saying on Monday that the critic of President Vladimir Putin is suspected of stealing millions of dollars from a political party in 2007.
Navalny, 36, the most prominent leader of large street protests that erupted last December against Putin's nearly 13-year rule, already faces up to 10 years in jail if convicted on existing charges of theft from a state timber company.
Earlier this month, investigators also charged Navalny and his brother of cheating a mail-transport company out of $1.79 million. That move followed a December15 opposition rally at a memorial to victims of Soviet-era repressions outside the headquarters of the FSB security service, formerly the KGB.
Navalny, a lawyer and anti-corruption blogger, denies any wrongdoing and says the accusations aired by the Investigative Committee, a federal agency that answers to Putin, are intended to persuade him to stop his opposition activities.
"Aie, aie, aie, yet another case against me. Investigative Committee, what are you doing? ... That's enough," Navalny tweeted minutes after the new investigation was announced.
The Interfax news agency quoted him as saying the charge was "absolutely absurd".
On its website, the Investigative Committee said it suspects an advertising company headed by Navalny stole up to 100 million roubles ($3.24 million) paid it by the liberal, pro-business Union of Right Forces Party (SPS) for campaign advertising.
It said there was evidence Navalny's company, Allekt, siphoned the money off into bank accounts of shell companies.
A former SPS party leader, Leonid Gozman, dismissed the charges as nonsense and said the party had no accusations or complaints against Navalny, Interfax reported.
Navalny said the fact that investigators had initiated the case without a complaint from the party showed that it was politically motivated, and he vowed not to give up his activism, Interfax reported.
The Investigative Committee said it had encountered the evidence related to SPS while investigating its case against Navalny on the timber theft charge.
Navalny is a key leader of an opposition council, elected in an online vote in October, that is trying maintain the momentum of a protest movement that drew crowds of up to 100,000 people onto Moscow's streets at its peak last winter, but failed to prevent Putin winning a six-year third term as president.
Since then, pro-Kremlin lawmakers have passed a series of laws that the opposition say are intended to stifle dissent. Several opposition leaders and dozens of activists are facing criminal charges or investigation.

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Ukraine central banker named first deputy prime minister

 Ukrainian President Viktor Yanukovich on Monday named Serhiy Arbuzov - who has until now run the central bank - first deputy prime minister in the new government, making him an important player in upcoming talks with the IMF.
The appointment to the No.2 government position also makes Arbuzov, who is a member of Yanukovich's inner circle, a likely successor to Prime Minister Mykola Azarov.
Ukraine's government resigned on December 3 after October's parliamentary election and its members have since served in an interim capacity, apart from Azarov who was reappointed on December 13.
The first major task of the new cabinet will be to secure a new bailout program from the International Monetary Fund.
An IMF mission is due to visit Ukraine late in January for what are expected to be tough talks on nailing down a new stand-by arrangement to help Ukraine repay, or refinance, more than $9 billion debt falling due to foreign creditors in 2013.
This includes $6.4 billion already owed to the IMF which Ukraine says it hopes to refinance.
The IMF has urged Kiev to cut subsidies on household gas and heating prices but Azarov has so far refused to take the unpopular step. However, Kiev may have to become more flexible.
Arbuzov, 36, will take over as first deputy prime minister from Valery Khoroshkovsky who quit the cabinet this month in protest at Azarov's re-appointment.
According to a separate decree issued by Yanukovich on Monday, Arbuzov will be in charge of economy, trade, state finances, agriculture and social policy.
Yanukovich's office also announced that Yuri Kolobov, Arbuzov's former deputy at the central bank, would keep his job as finance minister.
The president named former Energy Minister Yuri Boiko and former regional governor Olexander Vilkul as deputy prime ministers.
It was not clear who would succeed Arbuzov at the central bank but last week Boris Pryhodko, head of treasury at state-run Oshchadny Bank, was named its new first deputy chairman.
FAMILY TIES
Arbuzov emerged from relative obscurity to become a major figure in Kiev in September 2010 when he was named first deputy chairman of the central bank in a surprise reshuffle.
Less than four months later, Yanukovich named him central bank head, a position he has held since.
Before joining the central bank, Arbuzov, who was born and educated in Donetsk - Yanukovich's home region and power base - spent four months working at the state-owned Ukreximbank and his earlier career as a financier was in the private sector.
In particular, Arbuzov had worked at the Ukrainian Business Bank, a Donetsk-based lender which according to Ukrainian media is linked to Yanukovich's elder son Oleksandr.
Arbuzov's mother Valentina Arbuzova is the chief executive of the All-Ukrainian Development Bank, another private bank owned by Oleksandr Yanukovich.
Upon taking over the central bank, Arbuzov reshuffled its senior management but largely continued the policies of the previous administration such as maintaining the hryvnia's peg to the dollar.
Although Arbuzov comes across as media-shy and avoided open arguments with the government, official statements and leaked documents from the central bank indicated his opinions on economic matters sometimes differed from those of Azarov.
In June 2011, for example, UNIAN news agency published a leaked letter in which Arbuzov told Azarov his government was losing credibility after refusing to carry out reforms advised by the IMF.
More often than not, though, the government and the central bank worked together smoothly and Azarov has avoided public criticism of Arbuzov's policies.
The two will need to work hard to revive Ukraine's economy which shrank by 1.3 percent year-on-year in the third quarter as global demand for steel, the main Ukrainian export, fell.

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Afghan policewoman kills US adviser, police say

An Afghan policewoman shot and killed an American adviser outside the police headquarters in Kabul on Monday, the latest in a rising tide of insider attacks by Afghans against their foreign allies, senior Afghan officials said.
The woman, identified as Afghan police Sgt. Nargas, had entered a strategic compound in the heart of the capital and shot the adviser with a pistol as he came out of a small shop with articles he had just bought, Kabul Governor Abdul Jabar Taqwa told The Associated Press.
The woman was taken into Afghan custody shortly after the attack.
Earlier, she had asked bystanders where the governor's office was located, the governor said. As many Afghans, the policewoman uses only one name.
A NATO command spokesman, U.S. Air Force Lt. Col. Lester T. Carroll, said the woman was arrested after the incident. The slain adviser was a contractor whose identity wasn't immediately released.
The attack occurred outside the police headquarters in a walled, highly secure compound which also houses the governor's office, courts and a prison. Kabul Deputy Police Chief Mohammad Daoud Amin said an investigation was under way.
"We can confirm that a civilian police adviser was shot and killed this morning by a suspected member of the Afghan uniformed police. The suspected shooter is in Afghan custody," Carroll said.
The killing came just hours after an Afghan policeman shot five of his colleagues at a checkpoint in northern Afghanistan late Monday. The attacker then stole his colleague's weapons and fled to join the Taliban, said deputy provincial governor in Jawzjan province, Faqir Mohammad Jawzjani.
More than 60 international allies, including troops and civilian advisers, have been killed by Afghan soldiers or police this year, and a number of other insider attacks as they are known are still under investigations. NATO forces, due to mostly withdraw from the country by 2014, have speeded up efforts to train and advise Afghan military and police units before the pullout.
The surge in insider attacks is throwing doubt on the capability of the Afghan security forces to take over from international troops and has further undermined public support for the 11-year war in NATO countries. It has also stoked suspicion among some NATO units of their Afghan counterparts, although others enjoy close working relations with Afghan military and police.
As such attacks mounted this year, U.S. officials in Kabul and Washington insisted they were "isolated incidents" and withheld details. An AP investigation earlier this month showed that at least 63 coalition troops — mostly Americans — had been killed and more than 85 wounded in at least 46 insider attacks. That's an average of nearly one attack a week. In 2011, 21 insider attacks killed 35 coalition troops.
There have also been incidents of Taliban and other militants dressing in Afghan army and police uniforms to infiltrate NATO installations and attack foreigners.
In February, two U.S. soldiers — Lt. Col. John D. Loftis and Maj. Robert J. Marchanti, died from wounds received during an attack by an Afghan policeman at the Interior Ministry in Kabul. The incident forced NATO to temporarily pull out their advisers from a number of ministries and police units and revise procedures in dealing with Afghan counterparts.
The latest known insider attack took place Nov. 11 when a British soldier, Capt. Walter Reid Barrie, was killed by an Afghan army soldier during a football match between British and Afghan soldiers in the restive southern province of Helmand.
More than 50 Afghan members of the government's security forces also have died this year in attacks by their own colleagues. Taliban militants claim such attacks reflect a growing popular opposition to both foreign military presence and the Kabul government.
In Sunday's attack, Jawzjani, the provincial official, said the attacker was an Afghan policeman manning a checkpoint in Dirzab District who turned his weapon on five colleagues before fleeing to the militant Islamist group.

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Analysis: Ethnicity and ICC cases heat up Kenya presidential race

Alliances forged by Kenya's main presidential contenders for elections in March are lining up a repeat of a largely ethnic-based contest for political power which exploded into bloodshed in the 2007 vote.
Prime Minister Raila Odinga and Uhuru Kenyatta, son of Kenya's founder president, lead the two main opposing camps for the March 4 presidential and parliamentary elections.
The head-on rivalry between Kenyatta, from the predominant Kikuyu tribe, and Odinga, a Luo, raises the specter of the tribal clashes that followed the 2007 election and killed more than 1,200 people, uprooting thousands more from their homes.
"I don't want to be a pessimist... but, historically, every time the Luo and the Kikuyu have been on different sides there has been violence," said Mzalendo Kibunjia, who heads a national agency formed to reconcile tribes after the violence.
"What do you expect? Our politics are about ethnicity. In Africa, democracy is about ethnic arithmetic not ideology."
Another factor that could lead to post-election instability for East Africa's economic powerhouse is Kenyatta's date a month after the March vote with the International Criminal Court (ICC). The former finance minister faces a trial in the Hague over his alleged role in the election violence five years ago.
Should Kenyatta win the presidency and then travel to the court hearings, a power vacuum could result soon after his inauguration. The ICC accuses him of directing youth from his Kikuyu ethnic community to fight Odinga's Luo kinsmen during the 2007/2008 bloodletting. He denies any wrongdoing.
To win in the March 4 first round, a candidate needs to gain an outright majority from the 14.3 million registered voters. An immediate victory for either contender is not assured, which could then mean a nail-biting run-off in April.
Odinga leads the race according to most opinion polls, but Kenyatta is running close second. The closeness of the political contest is exacerbating the ethnic tensions, and vice-versa.
Kenyan polls since independence from Britain in 1963 have often been marred by tribal violence, typically stemming from long-standing disputes over land. But the bloody feuding after the 2007 vote was by far the worst in Kenya's history.
Luos say Odinga was robbed of victory by the incumbent, President Mwai Kibaki, a Kikuyu in a bitter and close vote. Many Kikuyus argue Odinga's Luo tribe got off easier than they did in the ICC probe of the 2007 events, and so are determined to have the election go their way this time.
There are those who believe the ICC's pursuit of alleged ringleaders of the 2007 killings could act as a deterrent.
"I doubt there will be violence of the scale we witnessed last time. Kenyans are extremely wary of the ICC and its activities in the country," said Ken Wafula, a rights campaigner who works in Rift Valley, epicenter of the clashes.
"Fear of running foul of the ICC will serve as a restraint."
ICC FACTOR
The charges from the war crimes court against Kenyatta, a deputy prime minister and scion of independence hero Jomo Kenyatta, is undoubtedly a hindrance to his presidential bid.
He has teamed up in the Jubilee alliance with former cabinet minister William Ruto, who was indicted with him by the ICC for inciting youth to fight in 2007.
The other men charged are the head of the civil service, Francis Muthaura, and radio presenter Joshua Arap Sang.
Kenyatta's arch-rival Odinga has formed a competing alliance, the Coalition for Reform and Democracy (Cord) backed by Vice President Kalonzo Musyoka, to try to break the traditional Kikuyu dominance over the presidency.
Two of Kenya's three presidents since independence have been Kikuyu, the exception being former president Daniel Arap Moi, a Kalenjin like Ruto.
Although Kenyatta and Ruto have insisted they will cooperate with the ICC, most Kenyans do not believe the two will appear at the Hague should they win the election, according to a survey by pollster Ipsos Synovate released in early December.
In a country where the political elite has long been considered above the law, many believe Kenyatta would see becoming president of the nation as a way of spurning the ICC.
They point to the example of Sudanese President Omar Hassan al-Bashir, who has defied a 2009 ICC indictment for alleged war crimes committed by his forces in the western Darfur region.
A failure by an elected president of Kenya to cooperate with the ICC would concern foreign investors and Western governments, which have urged Kenyan leaders to be tough against impunity.
"This election is one issue: ICC, nothing else," said anti-corruption campaigner and political commentator John Githongo.
Political commentators said Kenyatta, if elected, could end up being afraid to leave his country like Bashir.
Kenya, East Africa's largest economy, and its assets are at risk of a discount similar to the 'Khartoum' one being given by investors to Sudan, said independent analyst Aly Khan Satchu.
In the past three decades, Kenya has had its lowest growth periods in, or just after, election years, the World Bank says.
The government has forecast growth of around 5 percent this year, up from 4.3 percent last year, but any flare-up could affect tourism and investment and regional trade and transport.
"The Jubilee alliance where two ICC indictees have teamed up is entirely problematic," Satchu said.
"Kenya is more deeply embedded and interconnected with the global economy than most African countries and in some respects that alliance is the equivalent of giving the two finger salute to the international community. There will be consequences and particularly economic ones (sanctions)."
Rights groups have also filed a suit at the Kenyan High Court challenging Ruto and Kenyatta's suitability for elective office, given their ICC cases at the Hague.
"GAME OF NUMBERS"
Odinga faces challenges too after falling out with several of his former allies who helped him in the last vote, including deputy prime minister Musalia Mudavadi. This has somewhat weakened his third attempt to win the presidency.
Analysts say much of the campaigning by Odinga and Kenyatta will focus on swing tribes, including Mudavadi's Luhya ethnic community, Kenya's second-largest, to try to tilt the vote.
"This game is a game of numbers. It does not require magic, this is the strategy," says Ruto.
Odinga and Kenyatta's rivalry mirrors an old feud that goes back to when Odinga's father was vice president to Kenyatta's father. They fell out, and Odinga's father, Jaramogi Oginga Odinga, became a vocal opposition critic of Jomo Kenyatta.
Odinga and Kenyatta have vowed to focus on issues, such as improving the economy, rather than ethnic differences or the ICC issue, to avoid whipping up emotions during the campaigns.
But Kenya is already hurting from violence this year in the coastal east where hundreds have been killed in tribal clashes over land and water, the most recent this week.
Such battles over resources have occurred for years, but human rights groups blame the latest fighting on politicians seeking to drive away parts of the local population they believe will vote for their rivals in the elections.
This is reinforcing the fears of a repeat of the ethnic mayhem that followed the disputed 2007 vote.
"This kind of violence can engulf the entire nation. It takes incitement by leaders preaching hate," Kibunjia said.

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