On Instagram, a Thriving Bazaar Taps a Big Market

Instagram, the picture-sharing application that Facebook bought earlier this year, has not yet figured out a way to make money. But some of its users have.

Peter DaSilva for The New York Times

Services like Prinstagram let people turn their Instagram images into prints, wall calendars and stickers.

These entrepreneurs have realized that they can piggyback on the popularity of Instagram, which has more than 100 million users, and create their own businesses, some of which have turned out to be quite profitable. They join a long line of innovators who have found creative ways to build new services on top of existing sites and platforms.

Services like Printstagram, for example, let people turn their Instagram images into prints, wall calendars and stickers. A group of designers are building a digital picture frame for Instagram photos. Some early users of the service are leveraging their expertise and sizable followings and starting consulting agencies, advising big-name brands on how best to use Instagram themselves.

And others have simply realized that the app is a great place to post photos of things they are trying to sell. Jenn Nguyen, 26, who lives in Irvine, Calif., has 8,300 followers on Instagram, where she posts images of lavishly made-up women who are wearing her brand of false eyelashes.

“When we post a new picture of someone wearing our lashes, we instantly see sales,” she said.

Ms. Nguyen is part of a wave of entrepreneurial Instagrammers who have transformed their feeds into virtual shop windows, full of handmade jewelry, retro eyewear, high-end sneakers, cute baking accessories, vintage clothing and custom artwork.

Those who want to sell things on Instagram have to resort to surprisingly low-tech tactics. Instagram does not allow users to add links to their photo posts, so merchants have to list a phone number for placing orders, or hope their followers will type the Web address of their store into a browser.

Shoppers seem willing to put up with that hassle. Ms. Nguyen said that during a recent holiday sale, she offered Instagram followers a coupon for 35 percent off their orders. That day, she said, she netted 100 orders, about $4,000 in sales, up from her usual $500. In her photo captions she mentions her online store and highlights products that are new or soon to be sold out.

Most of the people taking this sales approach are small-scale entrepreneurs and artists, looking for another way to find customers for their consignment shops and jewelry businesses. Hundreds of larger companies and big-name brands have accounts on Instagram, but only a few have taken steps toward actually selling there. Bergdorf Goodman, the luxury retailer, has posted photographs of women’s shoes and jewelry alongside telephone numbers for the store.

Instagram is a compelling medium “because a photo translates to any language,” said Liz Eswein, one of the founders of the Mobile Media Lab, a digital agency focused entirely on helping companies figure out their Instagram strategies. “It’s easier to get lost in the shuffle on other networks” like Facebook and Twitter, she added.

Ms. Eswein, Brian DiFeo and Anthony Danielle formed the company in March after realizing that their collective Instagram followers — nearly 850,000 — and understanding of the service could be valuable to companies like Nike, Delta, Samsung and Marc Jacobs who were hoping to reach fans of their brands. Now Mobile Media Lab runs promotions and special campaigns for those clients and others.

“We aren’t saying ‘Click here and buy this product’ — it’s more about putting the image in their head and introducing them to a product within the service,” said Ms. Eswein. In that way, it’s closer to traditional advertising, Mr. DiFeo said: “It’s classic marketing. You see an ad on a billboard, or on a bus as it goes by, on TV and now, in an Instagram post. It sticks.”

The mini-industries cropping up on and around Instagram are fueled by the service’s explosive growth. In April, Instagram had 25 million users. Eight months later it has quadrupled that figure and amassed more than five billion photos. In October, the mobile service had 7.8 million daily active visitors, according to comScore, more than Twitter’s 6.6 million.

Both Facebook and Instagram declined to talk about how Instagram might make money directly. But analysts suspect that Facebook will try to weave advertising into the Instagram app at some point, much as it has with its own app.

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Rice Ends Bid to Succeed Clinton as Secretary of State

WASHINGTON — President Obama knew before he picked up the phone on Thursday afternoon what Susan E. Rice, his ambassador to the United Nations, was calling about: she wanted to take herself out of the running for secretary of state and spare him a fight.

By acceding to Ms. Rice’s request, which she had conveyed to White House aides the night before, Mr. Obama averted a bitter, potentially disruptive battle with Republicans in Congress at the start of his second term and at a time when his administration is struggling to reach a politically difficult deal on the federal budget.

In a statement, the president praised Ms. Rice and expressed some anger over the withering criticism directed at her by Republicans because of  comments she made in the aftermath of the lethal attack on the American mission in Benghazi, Libya.

“While I deeply regret the unfair and misleading attacks on Susan Rice in recent weeks,” he said, “her decision demonstrates the strength of her character, and an admirable commitment to rise above the politics of the moment to put our national interests first.”

By all accounts, Ms. Rice had been Mr. Obama’s first choice to succeed Hillary Rodham Clinton, though recently he seemed to be signaling that her nomination was far from a foregone conclusion. Her decision to withdraw, which senior officials insist Ms. Rice made without prodding from the White House, clears the way for Mr. Obama to nominate Senator John Kerry, Democrat of Massachusetts and chairman of the Senate Foreign Relations Committee, officials said.

Republicans say Mr. Kerry would sail through a confirmation process, while several senators had vowed to block Ms. Rice’s nomination, citing what they said were her misleading statements about the Sept. 11 attack that killed four Americans, including Ambassador J. Christopher Stevens.

By stepping aside, Ms. Rice will allow Mr. Obama to present a full slate of appointees to his national security team, as early as next week. Among the other candidates for key posts, officials said, is former Senator Chuck Hagel, a Nebraska Republican, for secretary of defense. Like Mr. Kerry, Mr. Hagel, a Vietnam veteran who opposed the Iraq war, would be supported by many of his former colleagues.

Their nominations would also remove a major source of tension between the White House and Congressional Republicans, who had expanded their attack on Ms. Rice from Benghazi to a broader indictment of her record as a policy maker on Africa, her role in securing American embassies in Kenya and Tanzania that came under terrorist attack, and even her personal finances.

Senator Lindsey Graham, a Republican from South Carolina and one of Ms. Rice’s fiercest critics, said Thursday that he respected her decision, but added in a statement that he planned “to continue working diligently to get to the bottom of what happened in Benghazi.”

In a letter she sent to Mr. Obama before her call, Ms. Rice attributed her decision to a recognition that “the confirmation process would be lengthy, disruptive and costly — to you and to our most pressing national and international priorities. The trade-off is simply not worth it to our country.”

Mr. Obama said he accepted her request with regret, describing her in a statement as “an extraordinarily capable, patriotic, and passionate public servant” with a “limitless capability to serve our country” — a line that one official said signaled that Ms. Rice, who will continue in her job at the United Nations, remains a candidate for other senior posts, including national security adviser.

Republicans are eager to see a new appointee, and should it be Mr. Kerry, his party’s 2004 presidential nominee, he would receive a far different reception.  “She made her own decision and I think it’s the right decision,” said Senator John Barrasso of Wyoming, a member of the Foreign Relations Committee. “I think she would have had a very hard time getting through.” Mr. Kerry, by contrast, is “immensely qualified and he would be easily confirmed,” he said.

For his part, Mr. Kerry heaped praise on Ms. Rice. In a statement, he said, “As someone who has weathered my share of political attacks and understands on a personal level just how difficult politics can be, I’ve felt for her throughout these last difficult weeks, but I also know that she will continue to serve with great passion and distinction.”

Jennifer Steinhauer contributed reporting.

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Angry Birds beats Samsung in viral marketing as mobile interest surged in 2012

This past year has shown us how effective leading smartphone and mobile app companies have become at leveraging viral videos. In Ad Age’s top-10 viral videos list for 2012, Samsung (005930) and Rovio each hog two spots. The Angry Birds Space video racked up 109 million views and the Angry Birds Star Wars hit the 41 million view mark. Meanwhile, Samsung managed to get 79 million views for its Galaxy S III video and 42 million views for the LeBron’s Day clip. It’s notable that Rovio’s Angry Birds clips were far cheaper to produce, with no major stars or lavish video production gimmickry.

The smartphone/mobile app industry thus held four of the top-10 viral video slots in 2012 — the rest of the list is a motley crew of names ranging from Invisible Children and Red Bull to Intel and M&M. It is telling that the smartphone/mobile app cluster is the only industry or cultural phenomenon that generated more than one spot on the list. Popular interest in mobile content continues surging.

It might also be a sign of the times that Apple (AAPL) did not hit the top-10. Samsung’s ultra-aggressive promotional efforts have started bearing fruit. What was once a boring, stale copycat brand in 2008 has suddenly started gripping the imaginations of consumers in a completely new way.

But perhaps even more interesting is that a mobile app company with less than 100 million euros in sales in 2011 managed to beat the mighty Samsung marketing machine in 2012. Rovio is in the vanguard of spreading mobile gaming into demographic niches that have never been all that interested in technology or gaming.

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Saints coach: Witnesses lied in NFL investigation

METAIRIE, La. (AP) — Saints assistant head coach Joe Vitt said Thursday witnesses in the NFL's bounty investigation of the New Orleans Saints have lied about him and the organization, and that their stories might change in federal court.

Alluding to a defamation lawsuit filed by Saints linebacker Jon Vilma against NFL Commissioner Roger Goodell, Vitt angrily said he feels the truth about the pay-for-pain system will come out before U.S. District Judge Ginger Berrigan, who is presiding over the pending case in New Orleans.

"If anybody's keeping a scorecard here, let's take a look at this," Vitt said. He referred back to his first meeting with reporters after the NFL released its bounty probe findings last March, in which he said, "At no point in time did our players ever cross the white line with the intention of injuring, maiming or ending the career of another player. That never took place."

Then, recounting his witness appearance in Vilma's case last summer, he added, "I've testified before a federal judge with my hand on the Bible."

"What's going to happen now is all participants, all these accusations, are going to go to federal court," Vitt continued. "They're going to go to a judge, and from top to bottom, she's going to hear testimony, and the penalty for perjury with her is going to be jail time."

Vitt's comments came a day after The Associated Press reported that former Saints defensive coordinator Gregg Williams testified in recent NFL appeal hearings that he tried to stop the Saints' bounty program, only to be overruled by Vitt. The AP obtained transcripts from the closed-door hearings, which were held for Vilma and three other players who had been punished in the bounty probe.

Those same transcripts show Vitt later denied Williams' allegation and offered to take a lie detector test, adding, "There's a lot of lying going on right now."

Vitt called Williams a liar repeatedly during his appeal hearing testimony, even saying Williams "has lost his mind in some situations."

Saints quarterback Drew Brees has been defending the integrity of his coaches, saying Wednesday it was hard to believe the NFL based its case on the testimony of Williams and former defensive assistant Mike Cerullo, "two disgruntled employees that were fired here because they did not fit the mold of what we are about."

Former NFL Commissioner Paul Tagliabue was appointed by Goodell to handle the players' appeals, and on Tuesday overturned their suspensions. However, he affirmed many of the findings of the bounty probe and found that three players, with the exception of former Saints linebacker Scott Fujita, committed "conduct detrimental" to the league.

Vitt has been serving as the Saints' interim head coach this season, except for six games when he was suspended. Saints head coach Sean Payton was suspended the entire season and general manager Mickey Loomis eight games.

The players had fought their bounty punishment with the help of their union, through the NFL's collective bargaining agreement and in federal court.

"Myself, Sean and Mickey didn't have that right," Vitt said, referring to the fact they did not have union representation. "I've already served my time. Mickey has already served his time. And to be quite frank with you, I don't know what door to knock on Park Avenue (where NFL headquarters are located) to get my reputation back. But again, I'm going to defend our players, I'm going to defend this organization and I'm going to defend our ownership."

Vitt declined to say on Thursday whether he expects to bring any legal action of his own, though he had testified before Tagliabue that he will sue Cerullo.

Although Vilma's case is pending, the judge denied the linebacker's request this week to begin the discovery process that includes the gathering of evidence and deposing of witnesses, and she is still considering an NFL motion to dismiss the case.

When asked if he could take action against Goodell or the league, Vitt responded, "There's nothing. It's history," but then added, "We'll all be before a federal judge. That's coming. We'll all be before the federal judge. And the one great thing about this country — the truth is going to prevail."

___

Online: http://pro32.ap.org/poll and http://twitter.com/AP_NFL

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My Story: Taking on Cancer Again, This Time With the Wisdom of Age

After I finished eight months of treatment for testicular cancer in my mid-20s, my psychologist said, “Well, that was like having five years of therapy all at once.” What he meant was that you learn a lot about yourself in weekly talk sessions, but during a life-threatening illness, the “issues” come at you nonstop. I relished the slow unfolding of myself in the first, but I resented — no, hated — every step of the second. Nearly two decades later, when confronted with the same diagnosis, I finally understood the benefits of that earlier trial by fire, much as I did the wisdom of Ralph Waldo Emerson when he wrote, “The years teach much which the days never knew.”

To be sure, there were benefits to being young — I was 26 — when I was first diagnosed, not the least of which was my competitive swimmer’s body. After almost dying in the I.C.U. and becoming a “patient-in-residence,” I plunged back into the pool (and my day job) just a fortnight after my release.

Ah, the determination — and denial — of youth.

But facing cancer at that young age had more drawbacks than benefits, not the least of which was losing my sense of invulnerability when confronted with the prospect of disfigurement and disability, even death.

Less obvious, but still unsettling, was the loss of my laissez-faire attitude toward life itself. I had always been the kind of guy who focused on the journey (the experience) more than the destination (winning). During backstroke events prior to falling ill I was more interested in watching the clouds race overhead than the swimmer racing in the next lane. This mindset didn’t do much for my success in the pool, but it helped define who I was.

To make matters worse, conventional wisdom says only one thing matters when it comes to cancer: Beating the hell out of it. Suddenly I had to find an emotional depth I hadn’t sought before, a passion for a fight that I didn’t want.

Am I the kind of person who can win this battle? I asked myself early on.

To ensure that I was, I did a complete about-face, saying “No way” to the journey and “Hell, yes” to the destination. Every decision began to turn on life and longevity, and for that I tolerated side effects like hair loss, neuropathy and “dry ejaculation” — because I simply had to win.

I re-read Dylan Thomas, who told me to “rage, rage against the dying of the light,” and I did. I became a rager. And it almost ruined my life.

Not in terms of my health, because in fact my treatment was effective. I was “clinically cured” and chalked up that achievement to my new “Top Gun” mentality. Then I jumped back into daily life — and managed to mess everything up. I applied my new approach to relationships (“My way or the highway”), and got dumped by my boyfriend. In graduate school, I aced my studies but lost friends.

Fortunately, my best friends didn’t hold back on telling me I had become a jerk, and that got my attention. I had upshifted at the start of my treatment, but now I needed to downshift. I struggled to find my pace, but eventually found a middle gear, more vulnerable than I cared to be but also more human.

The second time I was diagnosed, the oncologist sat me down to give me the new installment of the old bad news. I surprised myself and my friends with a very different approach.

I did not rage, which isn’t to say I was happy about this predicament. And I had moved on from my original question to a new one: How can I go through this and still be the kind of person I want to be?

In the intervening years, I had come to realize that cancer victories are not won by personality types, but by a combination of doggedness (choosing the best physician, getting the right diagnosis and treatment), responsibility (doing your own research and taking care of your overall health), and plain old luck.

From that very first day of my second time around, I challenged myself not to shift into that “win at any cost” mentality. That’s where the gift of age and experience came to my aid, even if my older body did not. Over the years I had learned that life was not a series of choices between winners and losers — I knew that way of seeing things to be oversimplified, if not dead wrong. You can be stronger than an ox, never miss a day of work, or swim your lungs out and, damn it, still die.

I could become a jerk again and focus on the end point, or I could accept that the journey is the destination – which I did.

Two months after I had been diagnosed and two days before the surgeon was scheduled to excise my remaining testicle, I had a dream so vivid — “I am cancer-free!” — that I demanded to go on a “surveillance” protocol. Reluctantly my doctor agreed, but by year’s end I had “won” the debate when my so-called tumor was reclassified as a benign nodule.

The years had taught me much — both to listen to my body and to trust in its wisdom. And, most importantly, to find the courage to speak its truth — whether in the doctor’s office or out in the world.

Steven Petrow writes the Civil Behavior column for Booming, addressing questions about gay and straight etiquette for a boomer-age audience. You can find him on Facebook and Twitter.

You can follow Booming via RSS here or visit nytimes.com/booming.

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10 Arrested in Theft of Personal Data

International authorities, with some help from Facebook, have arrested 10 people accused of operating a network of infected computers that stole personal information from millions of victims.

The Justice Department said Tuesday night that the F.B.I. and international agencies were helped in their investigations by Facebook, whose users were among those targeted by the malware, or malicious software, over the last several years.

The agencies arrested people from Bosnia and Herzegovina, Britain, Croatia, Macedonia, New Zealand, Peru and the United States, the F.B.I. said.

The suspects used a chain of infected computers to form what was known as the Butterfly botnet, which spread a piece of malicious software called Yahos, officials said. Versions of the software have long been trafficked among criminals who spread it over social networks and by other means, compromising the security of infected PCs and letting criminals steal personal data, including credit card numbers.

In a statement, the Justice Department said variants of this kind of software had infected about 11 million computers and caused more than $850 million in losses. A Justice Department official said those figures referred to the cumulative damage from the long-running problem, not a measure of the damage done by the people who were arrested.

Mark Hammell, Facebook’s Internet threat researcher, said the company had begun investigating suspicious behavior on its service two years ago. The malware had hijacked some users’ accounts and posted links on their friends’ Facebook pages. A person who clicked on those links could download the software and infect his computer.

Facebook’s researchers reverse-engineered the software to understand how it worked, and eventually traced some of its activities to computer servers controlled by the suspects. That helped Facebook determine the identities of some of the people involved in the crime ring, Mr. Hammell said.

“We realized we didn’t have the ability to stop it completely, and at that point, we decided the best response was to escalate this to law enforcement,” he said in an interview. Two of the people who were arrested were the original authors of the malware, he noted. Facebook said its users made up only a small percentage of those who were infected.

Security firms and social networks are generally on the lookout for this particular form of malware, and software to detect and eliminate it has been available for years. The Justice Department urged computer users to take common-sense measures, like antivirus scanning, to guard against the risk of infections, and said people who suspect they have been victimized should file a complaint with the F.B.I.’s Internet crime complaint center at ic3.gov.

Facebook said users who were concerned about being infected could check their computers at on.fb.me/infectedMSE. The malware does not infect Apple computers, Facebook said.

Manos Antonakakis, director of academic research at Damballa, a company that specializes in fighting botnets, said the size of the Butterfly botnet was significant. It was more than double the size of the last major botnet that authorities took down last November, one that used a piece of malware called DNSChanger that had infected an estimated four million computers.

“This is a major achievement for law enforcement,” he said, “and we look forward to many things like this, so we can effectively tackle emerging botnets out there.”

But Dr. Antonakakis said the estimate of 11 million infected machines was probably high, because a computer could be counted as a new device each time it connected to a different network, like the Wi-Fi at a Starbucks or a home router.

The $850 million figure may also be high given that credit card companies typically wipe out fraudulent charges.

Peter G. Neumann, principal scientist at SRI International, an engineering research laboratory, was less excited about the arrests. He said that defeating this particular botnet did not solve the fundamental problem of computer security being too weak. Anybody could easily take the same software and create the botnet again, he said.

“You’re solving a problem that wouldn’t exist if the systems were designed properly,” he said.

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‘Dishonored’ tops a diverse year in video games

The video game universe in 2012 is a study in extremes.

At one end, you have the old guard striving to produce mass-appeal blockbusters. At the other end, you have a thriving community of independent game developers scrambling to find an audience for their idiosyncratic visions. Can’t we all just get along?

Turns out, we can. For while some industry leaders are worried (and not without cause) about “disruptive” trends — social-media games, free-to-play models, the switch from disc-based media to digital delivery — video games are blossoming creatively. This fall, during the height of the pre-holiday game release calendar, I found myself bouncing among games as diverse as the bombastic “Halo 4,” the artsy “The Unfinished Swan” and the quick-hit trivia game “SongPop.”

Some of my favorite games this year have benefited from both sides working together. The smaller studios get exposure on huge platforms like Xbox Live or the PlayStation Network. The big publishers seem more willing to invite a little quirkiness into their big-budget behemoths. Gamers win.

1. “Dishonored” (Bethesda Softworks, for the Xbox 360, PlayStation 3, PC): Arkane Studios’ revenge drama combined a witty plot, crisp gameplay and an uncommonly distinctive milieu, setting a supernaturally gifted assassin loose in a gloriously decadent, steampunk-influenced city.

2. “Mass Effect 3″ (Electronic Arts, for the Xbox 360, PlayStation 3, Wii U, PC): No 2012 game was more ambitious than BioWare’s sweeping space opera. Yes, the ending was a little bumpy, but the fearless Commander Shepard’s last journey across the cosmos provided dozens of thrilling moments.

3. “The Walking Dead” (Telltale Games, for the Xbox 360, PlayStation 3, PC, iOS): This moving adaptation of Robert Kirkman’s comics dodged the predictable zombie bloodbath in favor of a finely tuned character study of two survivors: Lee, an escaped convict, and Clementine, the 8-year-old girl he’s committed to protect.

4. “Journey” (Thatgamecompany, for the PlayStation 3): A nameless figure trudges across a desert toward a glowing light. Simple enough, but gorgeous visuals, haunting music and the need to communicate, wordlessly, with companions you meet along the way translate into something that’s almost profound.

5. “Borderlands 2″ (2K Games, for the Xbox 360, PlayStation 3, PC): Gearbox Software’s gleeful mash-up of first-person shooting, role-playing and loot-collecting conventions gets bigger and badder, but what stuck with me most were the often hilarious encounters with the damaged citizens of the godforsaken planet Pandora.

6. “XCOM: Enemy Unknown” (2K Games, for the Xbox 360, PlayStation 3, PC): A strategy classic returns, as the forces of Earth fight back against an extraterrestrial invasion. It’s a battle of wits rather than reflexes, a stimulating change of pace from the typical alien gorefest.

7. “Fez” (Polytron, for the Xbox 360): A two-dimensional dude named Gomez finds his world has suddenly burst into a third dimension in this gem from indie developer Phil Fish. As Gomez explores, the world of “Fez” continually deepens, opening up mysteries that only the most dedicated players will be able to solve.

8. “Spec Ops: The Line” (2K Games, for the Xbox 360, PlayStation 3, PC): This harrowing tale from German studio Yager Development transplants “Apocalypse Now” to a war-torn Dubai. It’s a bracing critique, not just of war but of the rah-rah jingoism of contemporary military shooters.

9. “Assassin’s Creed III” (Ubisoft, for the Xbox 360, PlayStation 3, Wii U, PC): A centuries-old conspiracy takes root in Colonial America in this beautifully realized, refreshingly irreverent installment of Ubisoft’s alternate history franchise.

10. “ZombiU” (Ubisoft, for the Wii U): The best launch game for Nintendo’s new console turns the Wii U’s GamePad into an effective tool for finding and hunting down the undead.

Runners-up: “Call of Duty: Black Ops II,” ”Darksiders II,” ”Dust: An Elysian Tail,” ”Far Cry 3,” ”Halo 4,” ”Mark of the Ninja,” ”Need for Speed: Most Wanted,” ”Paper Mario: Sticker Star,” ”Papo & Yo,” ”The Unfinished Swan.”

Gaming News Headlines – Yahoo! News

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Williams testified he wanted to stop bounties

Former New Orleans defensive coordinator Gregg Williams testified that he tried to shut down the team's bounty system when the NFL began investigating but was overruled by interim Saints head coach Joe Vitt, according to transcripts from appeals hearings obtained by The Associated Press.

According to the transcripts, Williams said that then-assistant Vitt responded to a suggestion that the pay-for-pain setup be abandoned with an obscenity-filled speech about how NFL Commissioner Roger Goodell "wasn't going to ... tell us to ... stop doing what won us the Super Bowl. This has been going on in the ... National Football League forever, and it will go on here forever, when they run (me) out of there, it will still go on."

Williams and Vitt were among a number of witnesses whose testimony was heard by former NFL Commissioner Paul Tagliabue, who on Tuesday overturned four player suspensions in the case. Tagliabue was appointed by Goodell to handle the final round of appeals. The AP obtained transcripts of Tagliabue's closed-door hearings through a person with a role in the case.

Vitt was a Saints assistant who was banned for six games for his part in the scandal but now is filling in for head coach Sean Payton, who was suspended for the entire season. Williams was suspended indefinitely by Goodell. Others who testified included former defensive assistant Mike Cerullo, the initial whistleblower and considered a key NFL witness.

Transcripts portray the former coaching colleagues, all part of the Saints' 2010 Super Bowl championship, as bitterly disagreeing with one another and occasionally contradicting how the NFL depicted the bounty system.

Vitt, Williams and Cerullo appeared separately before Tagliabue and were questioned by lawyers for the NFL and lawyers representing the players originally suspended by Goodell: Jonathan Vilma, Will Smith, Scott Fujita and Anthony Hargrove.

Tagliabue's ruling found that "Saints' coaches and managers led a deliberate, unprecedented and effective effort to obstruct the NFL's investigation. ..."

The transcripts, which could be entered as evidence in Vilma's pending defamation case against Goodell, include numerous testy, and sometimes humorous, exchanges between witnesses and attorneys — and between Tagliabue and the attorneys.

Offering to take a lie detector test, Vitt challenged versions given by Williams and Cerullo. Vitt vowed to sue Cerullo and described Williams as "narcissistic." He referred to both as disgruntled former employees who were fired, even though, publicly, the Saints said Williams' departure for St. Louis was by mutual agreement. Vitt depicted Cerullo as incompetent and said he missed work numerous times and offered bizarre, fabricated excuses for his absences.

Vitt was asked whether he oversaw Cerullo's attempts to destroy evidence related to bounties, which the NFL determined the Saints sanctioned from 2009 to 2011, with thousands of dollars offered for hits that injured opponents and knocked them out of games.

"No. The answer is no," Vitt said. "Cerullo is an idiot."

Williams referred to the case as "somewhat of a witch hunt." He said he wants to coach in the NFL again, "took responsibility so that nobody else had to," and that Vilma has "been made a scapegoat."

Williams stood by his earlier sworn statement that Vilma pledged a $10,000 bounty on quarterback Brett Favre in the Saints' game against the Minnesota Vikings for the NFC championship. But Williams also said that the performance pool he ran was aimed at team bonding, not bounties, and that he saw a difference between asking players to hit hard legally, which he said he did, and asking them to purposely injure an opponent, which he said no one in the organization condoned.

"The game is about a mental toughness on top of a physical toughness," Williams testified at one point. "You know, it's not golf."

Williams, however, acknowledged he suggested Favre should be knocked out of the game.

"We want to play tough, hard-nosed football and look to get ready to play against the next guy. ... Brett is a friend of mine, and so that's just part of this business," Williams said. "You know, at no time, you know, are we looking to try to end anybody's career."

Williams described player pledges to the pool as "nominal" and said they rarely kept the money they earned, either putting it back in the pool or offering it as tips to equipment personnel. In the case of the large amounts pledged during the playoffs, Williams described it as "air" or "funny money" or "banter," adding that he never actually saw any cash collected or distributed and had no idea what would have happened to the money if Cerullo collected it.

Cerullo testified that league investigators misrepresented what he told them, and that, during the playoffs following the 2009 regular season, he kept track of large playoff pledges on note pads but didn't collect the money.

Cerullo said hits for cash started with Williams telling the staff that "Sean kind of put him in charge of bringing back a swagger to the defense ... so he wanted to brainstorm with us as coaches what we thought we could do. ... At one point in one of those meetings, Joe Vitt suggested (his previous teams) had a pay-for-play, pay-for-incentive program that the guys kind of bought into and kind of had fun with, and, you know, that was his suggestion. At that point, Gregg also admitted that other places he was at, they had the same type of thing. And at that point, Gregg kind of ran with it."

Cerullo described pregame meetings during the playoffs, when the Saints faced quarterback Kurt Warner of the Arizona Cardinals and then Favre.

He said Vitt told players Warner "should have been retired" and "we're going to end the career tomorrow of Kurt Warner." Cerullo also quoted Vitt as saying of Favre: "That old man should have retired when I was there. Is he retiring, isn't he retiring — that whole (thing) is over, you know, tomorrow. ... We'll end the career tomorrow. We'll force him to retire. ..."

Cerullo testified that, once word came that the NFL was investigating, Williams told him to delete computer files about bounty amounts and that Vitt checked on his progress.

Asked what motivated him to come forward as a whistleblower with an email to the league in November 2011, Cerullo replied: "I was angry for being let go from the Saints."

Later, he testified: "I was angry at Joe Vitt, and I wanted to show that I was fired for lying and I witnessed Joe Vitt lying and he still had a job. So, that was my goal of reaching out to the NFL."

The transcripts also portray Tagliabue's command of the proceedings, including his efforts to rein in the lawyers.

"I'm going to intervene much more significantly, going forward," Tagliabue interjected at one point, "because I am extremely concerned that this is getting to be cumulative, confusing and useless, and I do not preside over proceedings that are cumulative, confusing and useless."

There also were lighter moments, such as when Tagliabue announced: "I thought I was going to get through this proceeding only by drinking coffee. I'm getting to the point where I need a Bloody Mary."

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Connect with Brett Martel on Twitter at http://twitter.com/brettmartel

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Eli Lilly to Conduct Additional Study of Alzheimer’s Drug

The drug maker Eli Lilly & Company said on Wednesday that it planned an additional study of an experimental Alzheimer’s drug that failed to improve the condition of people with the disease, saying that it remained hopeful about the drug’s prospects.

The newest study is expected to get under way in the third quarter of 2013 and will focus on patients with mild Alzheimer’s disease. Lilly released results of two clinical trials in August that showed the drug, called solanezumab, did not significantly improve either the cognition or the daily functioning of people with mild and moderate forms of the disease. But despite that failure, the results also gave some reason for hope: when patients with mild Alzheimer’s were separated out, the drug was shown to significantly slow their decline in cognition.

In a statement on Wednesday, the company said it decided not to pursue approval of the drug based on existing study results after it met with officials from the Food and Drug Administration. A Lilly executive said, however, that the company was still optimistic.

“We remain encouraged and excited by the solanezumab data,” David Ricks, a senior vice president at Lilly and president of Lilly Bio-Medicines, said in the statement. “We are committed to working with the F.D.A. and other regulatory authorities to bring solanezumab to the millions of patients and caregivers suffering from this devastating disease who urgently need this potential treatment.”

The Lilly drug is the second Alzheimer’s treatment to fail in clinical trials this year. Pfizer and Johnson & Johnson stopped development of a similar treatment, bapineuzumab, after it, too, was not shown to work. Both drugs target beta amyloid, a protein in the brain that is found in people with Alzheimer’s disease.

Lilly shares closed at $49, down 3.2 percent.

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Study Shows a Pattern of Risky Loans by F.H.A.

A new and extensive analysis of 2.4 million loans insured by the Federal Housing Administration in recent years shows a pattern of risky lending that could generate $20 billion in losses and harm thousands of the nation’s most vulnerable borrowers. By ignoring risks in loans it insured in 2009 and 2010, the study concludes, the F.H.A. is imperiling both borrowers and taxpayers who stand behind the agency.

The analysis emerged less than a month after the F.H.A.’s auditor submitted a troubling report on the financial soundness of its insurance fund. In mid-November, the auditor estimated that the fund, which backs $1.1 trillion in mortgages, has a value of negative $13.5 billion. In other words, if it were to stop insuring loans today, the F.H.A. fund could not cover the losses anticipated on loans it has already insured.

The new study of the potential risks in recent F.H.A.-insured loans is illuminating because it provides a level of detail, including where government-backed loans are, that is usually missing from agency analyses. In addition, the report’s loss estimates are somewhat surprising given that the loans it examined were made after the mortgage crisis became evident.

The loan analysis was conducted by Edward Pinto, a resident fellow at the American Enterprise Institute, a conservative organization. But its findings were based entirely on foreclosure estimates made by the F.H.A.’s auditor as well as detailed individual loan data like ZIP codes and borrower credit scores.

Officials at the Department of Housing and Urban Development, which oversees the F.H.A., were briefed on the study’s findings earlier this week.

George Gonzalez, a spokesman for F.H.A., disputed the findings of the analysis. “The assertion that F.H.A. is setting up potential homeowners for failure by insuring 30-year, fixed-rate, fully documented loans for underserved borrowers is not supported by the information presented,” he said. “Selective use of F.H.A. data ignores that F.H.A. has successfully provided access to mortgage financing for millions of creditworthy borrowers for almost 80 years.”

The mission of the F.H.A., created in 1934, is to provide “homeownership opportunities for first-time homebuyers and other borrowers who would not otherwise qualify for conventional mortgages on affordable terms, as well as for those who live in underserved areas where mortgages may be harder to get.” It was founded to save homeowners from default during the Great Depression.

In recent years, the F.H.A. has been increasing its participation in the market. After the mortgage crisis, traditional lenders withdrew from the business and borrowing to buy a home became much more difficult. The F.H.A., as well as Fannie Mae and Freddie Mac, have stepped in to fill that void. While Fannie and Freddie have tightened their loan standards, the F.H.A.’s underwriting requirements have remained liberal.

To receive F.H.A. backing on their loans, borrowers must have a credit score of at least 580 out of a possible 850, and they are required to put down at least 3.5 percent. F.H.A. allows the borrowers whose loans it insures to have a monthly housing debt payment of around 30 percent of their incomes.

Still, 40 percent of the 2010 loans in the F.H.A.’s insurance portfolio were made to borrowers whose total monthly debt payments were greater than 50 percent of their monthly incomes, the study found, a dangerous level.

F.H.A. does not adequately monitor the risks in the loans it backs, the study said. Moreover, it does not charge guarantee fees appropriately adjusted to reflect these risks. For example, the study notes that F.H.A. levies the same insurance premium for a borrower with a 3.5 percent down payment, a 580 credit score and a 50 percent total debt-to-income level as one who puts 20 percent down, has a 720 credit score and 25 percent debt-to-income.

The concentration of loans backed by the F.H.A. in areas of subpar family incomes is another warning flag, according to the study. Of the 2.4 million loans studied, some 44 percent were made to borrowers in ZIP codes where the median family income was below that of the corresponding metropolitan area. These loans will most likely generate foreclosure rates averaging 15 percent, the study concluded, well above the overall 9.6 percent average the F.H.A.’s auditor has projected for those years.

That so many F.H.A.-insured loans are going to at-risk families concerns Mr. Pinto. “The F.H.A.’s underwriting policies encourage low- and moderate-income families with low credit scores to make a risky financing decision,” he said, “one combining a low score with a 30-year loan term and a low down payment. This sets up for failure the very families and communities it is the F.H.A.’s mission to help.”

Because of the potential for borrower harm that Mr. Pinto sees in F.H.A.’s practices, he said the agency should reduce mortgage terms to 20 years, so that homeowners can build up equity more easily. Or the agency should insure loans only for borrowers who carry lower overall debt loads.

“The F.H.A. should set loan terms that help homeowners establish meaningful equity in their homes with the goal of ending their dependence on F.H.A. lending,” he said.

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