On Wednesday afternoon, NetApp (NTAP) announced that its second-quarter profit came in more than twice that from the same period a year ago. The company raked in 27 cents per share during the quarter, compared to 13 cents per share a year ago. Excluding items, the tech firm would have pulled in 37 cents per share. Expectations called for earnings of 30 cents per share on revenue of $881.6 million. Actual revenue came in at $910 million, handily topping the consensus estimate.

NTAP's CFO, Steve Gomo, attributed the far better-than-expected earnings to improved sales of the company's main storage-area-networking. This product helps businesses build their data storage operations.

It's tough to take on Google (NASDAQ: GOOG). The search engine behemoth owns 65% of the U.S. search market and has a commanding brand presence. Yet, the software maker up the coast isn't known to give up easily. Microsoft (NASDAQ: MSFT) has cut a deal with microblogging site Twitter that should give it an edge in the battle to harness data and make it easier to find. A new deal will feed all those tweets into Bing, the Microsoft search engine.

Twitter is giving Microsoft full access to its data, in a deal announced Wednesday. Bing will provide search functionality for Twitter that you won't find in Google, which seems to have been outbid for the rights to the "tweet-stream." Under the deal, Bing will be able to index and display the tweets almost immediately as they are posted.

According to the Labor Department, initial claims for state unemployment benefits increased 12,000 last week. Last week's advance pushed the total number of claims (669,000) to the highest level since October 1982.

Moreover, the 669,000 claims are up 72% from the same period last year. The four-week average of initial claims increased 6,500 to 656,750; hitting its highest point since October 1982.

For the week ending March 21, the number of people collecting state unemployment benefits increased 161,000 to 5.73 million. Not only is this level 96% higher than a year ago, but it is also a new record (should we sound bells and whistles?).

When it rains, it pours for Sears Holdings Corp. (NASDAQ: SHLD). As if an ailing stock price weren't enough for its chairman, Eddie Lampert, being named the Worst CEO of 2007. a huge slap in the face, a blog post went up over the weekend titled, Sears Exposes Customer Purchase History in Violation of Its Privacy Policy.

The well-written post gives clear, easy-to-understand instructions on how to figure out how much your next door neighbor paid for his plasma TV when he bought it at the neighborhood Sears. After a back and forth, Sears finally took the issue seriously and disabled the bug in their search function on the Sears website.

Turns out that the blog cited above is written by Ben Edelman, an assistant professor at the Harvard Business School in the Negotiation, Organizations, & Markets unit. In Edelman's bio (he's got four degrees from Harvard!), Edelman claims that he wrote about domain name politics, particularly in the context of expired domain names subsequently used for pornography and registered with false WHOIS data. He developed methods for testing internet filtering worldwide, without leaving his office, publishing reports on filtering in China and in Saudi Arabia.

He is a serious dude when it comes to Internet strategy and techniques. Maybe Sears should hire Edelman to run its online division?

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund. Author holds no positions in SHLD.

MOST NOTEWORTHY: Spectra Energy (SEP), ComScore (SCOR) and Data Domain (DDUP) were today's noteworthy initiations:

• Spectra Energy (NYSE: SEP) was initiated with a Buy rating and $32.50 target at Citigroup, with an Overweight rating and $32 target at Lehman Brothers and with an Overweight rating at Wachovia. Citigroup believes SEP provides investors above-average distribution growth driven by stable cash flows with little or no direct exposure to commodity prices. Wachovia is positive on SEP given its multi-year growth profile and high quality assets.

• ComScore (NASDAQ: SCOR) was initiated with an Outperform rating and $28 target at FBRC on valuation. The company was also initiated at Jefferies with a Hold rating and $25 target, citing valuation, although the firm believes the company is well positioned to benefit from the market demand for Web traffic data/analytics. Deutsche Bank initiated shares of ComScore with a Buy rating and $28 target.

• Data Domain (NASDAQ: DDUP) was started at Pacific Crest with an Outperform rating and $30 target and the firm expects growth to exceed 50% annually for at least the next two years.

OTHER INITIATIONS:

• ThinkEquity started shares of Altair Nanotechnologies (NASDAQ: ALTI) with a Buy rating and $6 target.

• ThinkEquity transferred coverage of Blue Coat Systems (NASDAQ: BCSI) with a Buy rating and raised its target to $63 from $51.

• Stifel started shares of ICT Group (NASDAQ: ICTG) with a Buy rating and $20 target.

• B. Riley started shares of Charles & Colvard (NASDAQ: CTHR) with a Buy rating and $8 target.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

In a move to appease officials of the European Union, Google Inc. (NASDAQ: GOOG) has announced that it will again shorten the amount of time it keeps individual user statistics. Previously, Google kept user data indefinitely. It then shortened the time frame to a maximum of two years. Now, Google has again announced a reduction in the data retention time frame to a maximum of 18 months, but Google's privacy attorney Peter Fleischer, in a letter to a group of officials advising the European Union on privacy policy, cautioned that the time frame may need to be increased again to conform with future data retention laws.

So, when thinking about Google and what data it may or may not be keeping about you, bear in mind that in some ways it is duty bound by law to keep those records. Not all data retention issues are decided at Google's home office. Google knows full well that for its own consumer profiling purposes a 120 day time frame is quite sufficient to create a profile that would successfully outline a consumer's habits and enable Google to then provide personalized data returns based on those usage habits.

If you're nervous about what data may be kept regarding your internet usage habits, you're better served by taking "Big Brother" to task about it rather than Google. In most instances, it's a matter of government regulation and it's not just a Google issue.

Texas Instruments Incorporated (NYSE: TXN), the wireless chip developer and manufacturer, guided toward the mid point of its targeted revenue range.

TI narrowed revenue guidance to $3.4 billion to $3.5 billion, from a range of $3.3 to $3.6. While this updated guidance might not propel the stock much higher, following a very strong rally following the March quarter results, it will most likely not lead to much of a selloff either.

The investment strategy for TI: use any market pullbacks during the summer to initiate or add to your position. As with National Semiconductor Corporation's (NYSE: NSM) results last week, an upswing is just beginning in this industry that could last a number of years. The voice-data wireless upswing is one you do not want to miss.

Data from the U.S. and Japan suggest economic activity is slowing for the more mature economies around the globe. U.S. retailers are coming in light on revenue -- and remember that close to 70% of U.S. GDP is consumer driven. However, emerging-market economies appear to be growing nicely, with China being of particular note, growing GDP 11.1% in the most recent quarter, above its 9% target rate.

China officials have been attempting to get growth back to its 9% GDP target for quite some time, so far without much success. And the economies of other commodity-focused counties continue to do well.

Is the Fed responsible for the world's economy or just that of the U.S.? This is a very difficult question to answer. However, the last time world leaders let broad-based inflation pick up, in the late sixties and early seventies, it culminated in the breakdown of the Bretton Woods agreement and the global economy went through decades of hell. Emerging markets were the most severely punished.

This is a serious issue the central bankers of the larger and more mature economies need to address. Is it worthwhile for the mature economies to approach a recession while emerging markets attempt to slowdown their economies? We will see. They must be discussing that issue right now.

Word continues to come through the financial news wire that major software and Internet companies are rapidly expanding their outsource business information storage and processing systems. It's obvious to me that this is one of the focus intents of Google Inc.'s (NASDAQ: GOOG) expansion in data centers. More companies are opting for outside warehousing of data storage and processing. More office desks are becoming populated with networked "dumb" terminals in place of the networked PC.

I myself utilize more than one outside source for the storage of data. Photobucket hosts a selection of my digital images as backup and I have text data backups in a few key places. For me the practice is limited to the storage of duplicate copies of non-proprietary information but for many it's becoming an essential part of business as usual.

The worldwide market for data storage and processing services is predicted to reach nearly $20 billion by 2011. I think that's a conservative estimate. I'm of the belief that the proposition is to become much more than just online file cabinets. Companies such as Oracle Corp. (NASDAQ: ORCL) can typically assist in reducing business data storage costs by as much as 12% and that's just the tip of the iceberg. Outside data handling frees up in house resources making them available for increased productivity and improved performance capabilities. In the very near future, the nature of in house data systems will begin to be looked at from a much more streamlined perspective.

Last week, the Transportation Security Administration became aware that an employee lost an external hard drive containing employment records of 100,000 TSA employees from January 2002 through August 2005.

Oops.

The data, which included names, social security numbers, dates of birth, payroll information and bank account routing information, among other things, was discovered missing from the TSA Headquarters Office of Human Capital. The names included various personnel and even U.S. Sky Marshals.

I'm not going to discuss how this puts our Sky Marshals, the travel industry and the American public at great risk, but you all know the potential Pandora's Box that was just opened.

While the TSA notified the FBI and Secret Service to help find the lost hard drive, they failed to notify their workers with as much haste.

If you didn't know by now, the TSA, a division of the Homeland Security Department, is responsible for the security of the nation's transportation system, including airports and train stations. The TSA has not yet mastered protecting computer hardware and their employee's private information.

Despite the fact that the TSA claims it follows strict data protection laws and has "zero tolerance for employees not following policies on data protection," they still earned a D in computer security from the House Committee on Oversight and Government Reform. To make things even worse, 2006 was the first year the Department of Homeland Security scored a passing grade.

This past Monday, the Washington Post scolded the TSA and the government saying, "This is getting ridiculous," and "... Uncle Sam's track record is horrendous."

But the TSA is not the only government organization losing things.

• The IRS lost 490 laptops during 2003-2006, many with unencrypted data
  

• The U.S. Department of Transportation lost a laptop with the personal information of 133,000 Florida residents in July of 2006.

• Personal data from 26.5 million U.S. military veterans was stolen from a Department of Veteran Affairs data analyst who took information home last May (The data was later recovered).

• The U.S. Census Bureau and the Department of Agriculture exposed 63,000 farmers to Identity theft last month.

For additional security breaches from the government see here.

It's true that most Americans worry about identity theft. If you happen to be one of the victims that I mentioned above, or fear that your own identity is at risk, Crediteria.com has a great worksheet for you.

A 25% price decline in home prices is still required to revert back to the mean, according to Tom McManus, chief investment strategist at B of A. McManus said in a conference call yesterday that when compared to rents and household income, a considerable adjustment in home prices is still required, even after the recent price weakness.

If that drop were to occur quickly, it could be very disruptive to the overall economy, but the more likely scenario is for the adjustment between home prices and their affordability to occur over a five-year period.

What was also scary was the relationship between housing prices and investors' buying momentum. Investors sentiment appears to be super high for these stocks despite the poor performance for this group. This compares with energy where the group has performed well, but investor sentiment remains very low. A bullish sign for energy, not for housing.

McManus's point: no need to bottom fish in housing yet.

Last week, commodity and company earnings sent some seriously mixed signals.

Gold, historically a pretty good indicator of excess money flowing through the economy, took off, jumping over $20 an ounce. Gold has been in a tight trading range the past year or so, a sign that Fed policy was correct by halting rate increases. However, it is tough to read what last week's rally was all about.

Housing data, conversely, an important component of the overall economy, was simply awful. Reports from the home improvement retailers -- Home Depot (NYSE: HD) and Lowe's (NYSE: LOW) -- were exceptionally weak, with same store sales down 5% to 11% depending upon the month you wanted to look at.

However, macro data such as employment and wage growth remain good, but employment is a lagging, not a leading, indicator.

With that said, in addition to gold, a lot of other commodities took off during the week.

In the tech world, semiconductors, one of the most hypersensitive economic indicators, fundamentals have been deteriorating since November 2006 and there is little evidence this market has bottomed.

Signals are too confusing to be comfortable with the market. Most indexes have had great rallies since the fall. It is time to take some money off of the table. There is little evidence that 1st quarter earnings will be that good.

In addition, another consideration is a seasonal factor. The Fed tends to add more money to the economy in the second half of the year and slows down money supply growth in the first half of the year. This is a reason why the market's performance tends to be weakest during the April through September time period and stronger from October through March.

These mixed signals tell me to start pruning your portfolio. We are in for a bumpy ride and it will be nice to have some cash on the sideline to do some buying when market volatility and investors' fear increases.

Several weeks ago, AOL admitted it "screwed up" by releasing 20 million search records of over 600,000 AOL users. Yesterday the Electronic Frontier Foundation filed a formal complaint with the Federal Trade Commission asking the FTC to investigate AOL's breach of consumer privacy. The complaint also wants the FTC to require AOL to strength its privacy protection policies in light of the inadvertent release. The Electronic Frontier Foundation maintains that there was enough information released to allow a few individual users to be identified.

AOL removed the data set from the website intended for academic research purposes, but the information had already been copied and possibly circulated by the time AOL acted. AOL spokesperson Andrew Weinstein stated "AOL did not provide any personally identifiable information to a third party," according to Ellen Nakashima of The Washington Post. The Electronic Frontier Foundation submitted a confidential brief to the FTC asserting that AOL did just that. In addition to the complaint regarding invasion of privacy, the Electronic Frontier Foundation also lodged a complaint against AOL for deceptive or unfair trade practices.