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VOL. CCLXII NO. 47 * * * * * * *

SATURDAY/SUNDAY, AUGUST 24 - 25, 2013

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WSJ.com

WEEKENDREVIEW

Our FailedGrand Strategy

REVIEW

n Microsoft CEO Ballmerwill retire within the next 12months, following criticismabout waning growth and astagnant stock price. A1, B1n The Dow gained 46.77points to 15010.51, as compo-nent Microsoft rose 7.3%. B5n U.S. Treasury bonds sawthe biggest one-day pricerally in seven weeks. B5

n The Nasdaq shutdownon Thursday exposed a glar-ing weakness in the plumb-ing of the stock market. A1n BATS Global Markets isin advanced talks to mergewith rival stock-exchangecompany Direct Edge. B1

n J.P. Morgan is looking toscale back its dealings withbanks outside the U.S. B1

n Brazil is struggling with aweakening real, after com-plaining in recent years thatU.S. Fed policy made its cur-rency unworkably strong. B2

n The Netherlands saidABN Amro will get a year toprepare for privatization. B2

n The biggest oil refineryin the U.S. is largely out ofservice after several firesover the past two weeks. B3

n When it comes to Fedeasy-money policy, everyonein Jackson Hole, Wyo., seemsto have an exit strategy. A2

n China is attracting theworld’s pilots, contributingto a global shortage. B3

What’sNews

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Business & Finance

World-Wide

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CONTENTSBooks........................ C5-10Cooking...................... D7-9Corporate News.... B1-4Heard on Street.......B14In the Markets.......... B5Markets Dashboard B6

Opinion..................... A9-11Sports............................ A12Stock Listings.... B10,11Style & Fashion..... D3,4Travel...................... D1,2,10Weather Watch...... B14Wknd Investor.... B7-10

s Copyright 2013 Dow Jones & Company.All Rights Reserved

InsideNOONAN A11

Intrusive Future:‘A Nation of

Sullen Paranoids’

A growing Western con-sensus that Syria used

chemical weapons is basedon evidence from informantsinside rebel strongholds. A1n Residents said they weretrapped as Syrian forcesmoved against rebels in sub-urbs around Damascus. A5

n Nidal Hasan was foundguilty of multiple counts ofmurder in connection withthe Fort Hood shooting. A3n The U.S. soldier who mas-sacred 16 Afghan civilianswas sentenced to life inprison without parole. A3

n Arab help in U.S. securityefforts in the Mideast will bejeopardized if the U.S. cutsmilitary aid to Egypt, Arabofficials have warned. A6

n Chinese prosecutors ze-roed in on the extravagantlifestyle of Bo Xilai’s son. A7

n Indian police made an ar-rest in connection with thegang rape of a magazine in-tern in central Mumbai. A7

n North and South Koreawill allow families rivenby the Korean War to holdreunions in the North. A7

n The stakes are high asthe Interior Department pre-pares to decide on rules forfracking on federal lands. A4

n Recent developmentshave deepened a crisis inthe oil industry in Libya. A6

n San Diego’s mayor agreedto resign amid allegations hesexually harassed women. A2

A growing Western consensusthat Syria’s government usedchemical weapons this weekagainst its own people is basedon information from networks ofinformants in rebel strongholds,who collect tissue samples andvideo evidence for Western andMiddle Eastern spy agencies, ac-cording to U.S., European andArab officials.

The forensic networks, builtup over the last six months byU.S. and allied spy agencies ac-tive in Syria, are playing a criti-cal role in an urgent Americananalysis of what happened whenSyrian forces bombarded sub-urbs around Damascus this week.

If U.S. intelligence agenciesconclude chemical weapons wereused on a large scale, PresidentBarack Obama could opt soonthereafter to order militarystrikes for the first time in theconflict, U.S. officials said.

On Friday, the British govern-ment said that chemical weaponswere the only plausible explana-tion for the intense casualtiesthis week. The White House saidthere was evidence that suchweapons were used. Officialssaid U.S. intelligence agenciescould make a final determinationwithin days.

A top concern of some U.S. of-ficials is the danger that not re-sponding would signal to Syrian

Please turn to page A5

By Adam Entous,Siobhan Gorman

and Cassell Bryan-Low

NetworksOf SpiesAid SyriaGas Probe

In announcing his sudden re-tirement Friday after more thanthree decades at Microsoft Corp.,Chief Executive Steve Ballmerwill leave his successor with theenormous task of reviving one ofthe world’s largest technologycompanies that finds itself besetby competitors on all fronts.

Mr. Ballmer, 57 years old,along with his college buddy andMicrosoft founder Bill Gates,built the company into a profitmachine whose Windows operat-ing system will still powernearly all the 305 million per-sonal computers expected to besold globally this year, accordingto research firm Gartner Inc. Butit will run just 15% of all com-puting devices, if PCs, smart-phones, tablet computers and

other gadgets connected to theInternet are lumped together,given the rise of rivals such asApple Inc. and Google Inc.

Investors cheered the news ofMr. Ballmer’s departure, sendingMicrosoft shares up 7% to $34.75

on the Nasdaq Stock Market.Microsoft remains a behe-

moth financially. It generatednearly $78 billion in revenue inthe year ended June 30—an av-erage pace of $150,000 worth ofsales every minute. The com-

pany’s fat profit, amounting to$21.86 billion last year, remainsthe envy of most industries.

Under Mr. Ballmer’s watch,the company succeeded in limit-ing many threats, including the

Please turn to the next page

BY SHIRA OVIDE

CEO Exit Sets Microsoft on New PathSteve Ballmer, Who Faced Criticism Over Waning Growth, to Leave Within a Year; Stock Jumps 7%

CAMBRIDGE, England—A sub-stance 200 times stronger thansteel yet as thin as an atom hasignited a global scientific goldrush, sending companies anduniversities racing to under-stand, patent and profit from theskinnier, more glamorous cousinof ordinary pencil lead.

The material is graphene, andto demonstrate its potential, An-drea Ferrari recently picked up asheet of clear plastic, flexed itand then tapped invisible keys,triggering tinkly musical notes.

The keyboard made at Dr. Fer-rari’s University of Cambridgelab was printed with a circuit ofgraphene, which is so pliable that scientists predictit will fulfill dreams of flexible phones and elec-tronic newspapers that can fold into a pocket.

It is the thinnest material known. But it is exceed-ingly strong, light and flexible. It is exceptional atconducting electricity and heat, and at absorbingand emitting light.

Scientists isolated graphene just a decade ago,but some companies are already building it into

products: Head NV introduced agraphene-infused tennis racketthis year. Apple Inc., Saab ABand Lockheed Martin Corp. haverecently sought or received pat-ents to use graphene.

“Graphene is the same sort ofmaterial, like steel or plastic orsilicon that can really change so-ciety,” says Dr. Ferrari, who leadsa band of about 40 graphene re-searchers at Cambridge.

Graphene faces hurdles. It isstill far too expensive for massmarkets, it doesn’t lend itself touse in some computer-chip cir-cuitry and scientists are still try-ing to find better ways to turn itinto usable form. “Graphene is acomplicated technology to de-

liver,” says Quentin Tannock, chairman of CambridgeIntellectual Property, a U.K. research firm. “The raceto find value is more of a marathon than a sprint.”

Interest in graphene has exploded since 2010,when two researchers won a Nobel Prize for isolat-ing it. Corporate and academic scientists are nowrushing to patent a broad range of potential uses.

“As soon as I find something, boom! I file a pat-Please turn to page A8

BY GAUTAM NAIK

PATENT FRENZY

Companies, Scientists ScrambleTo Turn Graphene Into Gold

The technology failure thatshut down Nasdaq for more thanthree hours Thursday exposed aweakness in the plumbing of themarket that critics say reflectsyears of neglect by U.S. ex-changes and regulators.

While exchanges have spenthundreds of millions of dollarsdeveloping lucrative, direct pipe-lines and state-of-art computersystems that provide superfastconnections to high-speed trad-

ers, they have spent relativelylittle on the system that con-stantly feeds stock orders andtrades to the rest of the market,according to market participantsand former federal securitiesregulators. It was that second,broader system within the Nas-

daq Stock Market that brokedown, grinding trading to a halt.

On Friday, Nasdaq officials of-fered few new details on theevents that led up to the outage,blaming the breakdown on asoftware error in its “securitiesinformation processor,” or SIP,resulting from a faulty connec-tion with another exchange. ButNasdaq wasn’t more specific,deepening frustration amongtraders and investors worried

about future failures.The Thursday outage high-

lights how much U.S. stock trad-ing is dependent on a sprawlingand fragile computer system.“The national market systemshould not have one point offailure,” said Manoj Narang,chief executive of Tradeworx, aNew Jersey firm that runs ahigh-frequency trading opera-tion. Mr. Narang said that “the

Please turn to page A4

By Scott Patterson,Andrew Ackerman

and Jenny Strasburg

Shutdown Bares Stock Exchange Flaws

Material WorldCumulative number of newpatent applications for graphene

The Wall Street Journal

Source: Cambridge Intellectual Property

’10’052000

As of May 30, 2013: 9,218

2,000

4,000

6,000

8,000

Raging Wildfire Spreads Into Yosemite

BLACKENED BRUSH: A firefighting crew attempts to quell a blaze at Yosemite National Park on Friday. The giant wildfire, which broke out a weekago, has so far covered roughly 105,000 acres, largely outside the park. Nearby residents were urged to evacuate as the blaze threatened homes.

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“I brake for fish,” says asticker on the back of Tony Or-tokales’s car.

It’s the sort of thing an avidangler might have on his bumper,but the license plate reading“H20 CAR” suggests somethingelse. The propellers below thebumper tell therest of the story.

Mr. Ortokales,a 54-year-oldmachinist fromLaconia, N.H., isthe proud ownerof one of the500-odd Amphi-cars remaining in the world.About 4,000 were built. The onlymass-produced amphibious pas-senger car, the German importsold between 1962 and 1967.That’s around the time many cur-rent owners, mainly middle-agedmen, spotted the cars when theywere still children and fell in love.

“I saw one coming out of alake as a kid in South Dakota,and it was like something out ofJames Bond,” says Jon Erdahl, a53-year-old retired media execu-tive from Loudon, N.H. He nextsaw one, with a “for sale” sign onit about a year ago and made anoffer on the spot. “To me, it’s aboyhood dream.”

Jack How-land, a 56-year-old engineerfrom George-town, Mass.,first saw anAmphicar whenhe was 12 onLake Winnipe-

saukee, N.H., and knew he had tohave one.

Mr. Ortokales smiles at thememory of his first encounter: “Isaw this funny-looking car withpropellers, and I didn’t believe itwas real.”

Amphicars draw a crowd.Please turn to page A8

BY SPENCER JAKAB

Ahoy, Driver! An Amphibious CarRefuses to Sink Into Oblivion

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A Flop in the 1960s, the Amphicar IsPrized Today; Rough on Land, Slow on Water

Amphicar Model 770

$603BILLION

2000

2013

$358 $209 $18

Source: FactSetThe Wall Street Journal

Two ErasIn Tech $63$91

The market values of techfirms when Steve Ballmertook over Microsoft in 2000and today.

$290 $127 $203 $2999 $455$2.7

$290 $99

GOOGLE FACEBOOKMICROSOFT CISCO IBM APPLEAOL YAHOO

BILLION

‘Now is the right time,’ saysBallmer in surprise move......... B1

Potential successors, and atimeline of Ballmer’s reign...... B3

Heard on the Street: An instantpayoff for Microsoft................. B14

Latest updates at WSJ.com

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