Apple is reportedly planning to make its own movies and TV shows

Apple is in talks as part of a possible move into producing its own original programming, Variety reports. According to the publication, the company is looking to start hiring for a new development and production division in the next few months that would go into operation next year, producing content to rival streaming services such as Netflix and Amazon Prime. It’s not clear whether this new division would produce TV shows, movies, or both, but a unit within the Apple has reportedly already entered discussions with Hollywood executives, reporting back to Eddy Cue.

Variety says that Apple’s plans are in the early stages, but that the company has increased its interest in producing its own TV shows or movies in recent months. The company reportedly made an offer to ex-Top Gear hosts Jeremy Clarkson, James May and Richard Hammond in July, before the trio were eventually snapped up by Amazon. Apple certainly has the coffers to be able to afford such deals, but the company may not have been ready to pull the trigger at the time, having reportedly pushed the launch of its rumored internet TV service back to 2016 at the earliest. New Apple TV hardware is apparently set for a September launch.

It’s too early to say whether Apple intends to follow Netflix’s monthly subscription model exactly, or simply make shows available on iTunes as it has with several independent movies in recent years, but the recent launch of Apple Music has shown the company is not shy of copying other streaming services in terms of payment structure. Apple Music could serve as something of a test bed for Apple’s reported TV ambitions, combining outside content in the form of music with original programming like Apple’s Beats 1 radio station.

It’s understood that Apple has been in negotiations with networks and production companies to feature on its own internet TV service for years, meaning the company may already have the relationships in place to produce its own content. Original programming would be a feather in the cap of any such service, working as shows such as Orange Is The New Black and House of Cards have for Netflix as differentiators in an increasingly crowded market. For now though, Apple has declined to comment on “rumor and speculation.”

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Qualcomm’s new mobile chip will learn how to identify malicious apps

In recent months it seems like machine learning has been primarily used to make nightmarish eye-riddled hellscapes and misidentify Star Trek planets as waffle irons. But we’re not just teaching machines to identify patterns for our own amusement — they could make also make our lives easier. Qualcomm’s new Smart Protect technology could be one such example. The chip maker today detailed the new feature, available on its upcoming Snapdragon 820 processor: a hardware-based anti-malware solution that Qualcomm says will monitor the behavior of apps on a device, detecting and classifying any that are deemed suspicious or anomalous.

Currently most anti-malware apps available on mobile devices rely on a list of known threats, meaning that malicious software can be fairly easily tweaked to bypass their security measures. Rather than relying on these lists to identify nefarious software, Smart Protect will monitor what’s actually happening on your smartphone, tablet, or other mobile device, making it possible to warn users of unexpected activity. Asaf Ashkenazi, director of Qualcomm’s product management, says users will get “nearly instantaneous notifications of detected privacy violations and malicious activity,” and because the technology is baked into the hardware itself, these reports will be possible offline and without draining your phone’s battery excessively.

The feature is set to become available on Qualcomm’s Snapdragon 820 processors when they launch next year. The company says it’s already working with security firms, including Avast, AVG, and Lookout, using an API to tie Smart Protect into their commercially available apps, meaning users will be able to take advantage of its capabilities.

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MouthLab’s ‘tricorder’-style device could analyze your vital signs in real time

With public medical systems across the developed world floundering thanks to insufficient funding and a graying population base, it’s becoming increasingly clear the old model of government-supported healthcare is headed for crisis. While this has caused alarm not dissimilar from that of “peak oil,” we have seen a subsequent upswell in the number of technologies promising to revolutionize the way we practice medicine and making it sustainable for the future. In line with this trend, researchers at John Hopkins School of Medicine released a paper in the September issue of the Annals of Biomedical Engineering revealing that they are in the final stages of perfecting a handheld device called MouthLab that would enable hospital-level vital sign analysis to be done from home without the supervision of medical specialists.

The MouthLab device has been referred to as a “check engine light” for the human body, with the potential to greatly cut down on the number of unnecessary ambulance trips and emergency room visits when a patient’s vital signs are good. While the current version of the gadget is capable of assessing four vital sign indicators, as well as blood oxygen levels, future versions are slated to include capabilities that would include saliva biochemical analysis, blood sugar levels, respiration biochemical analysis and metabolic rate. This is where the device begins to sound suspiciously like the tricorder of Star Trek.

With the Qualcomm Tricorder XPRIZE also coming to term this year, the question no longer seems to be whether a tricorder is indeed possible, but rather when it will reach the market. If there is a silver bullet that could save so many bedraggled health care systems across the globe, one of these devices is likely to be it. And of all the tricorder like gadgets boasting such potential (Scanadu Scout etc.), the Johns Hopkins MouthLab is probably the most ambitious.

Thanks to its mouthpiece design, the MouthLab has the advantage of enabling saliva and respiration biochemical analysis. The idea behind these is that many diseases leave biochemical markers that are detectable in one’s saliva and breath. Two of the most common diseases that show evidence of being detectable through the breath are diabetes and lung cancer. Given the soaring rates of diabetes throughout the developed world and more recently in places like India and China, a device that enables the early detection of diabetes could cut down on medical costs significantly and potentially save millions of lives as well.


The Mouthlab includes several ingenious design features not found in other similar devices. Principal among these is the system it employs for measuring  blood pressure and ECG. While many wearables these days offer heart rate monitoring, this functionality cannot detect the kind of heart rhythms that would indicate something like an impending heart attack. For that, one requires an ECG reading. The MouthLab uses contact points on the upper and lower lip as well as a thumb pad to generate an ECG reading comparable to that found in most ambulances and health clinics. The MouthLab unit itself resembles the mouthpiece and regulator found in scuba diving equipment, with an attached box that will display the vital signs measurements. In the proposed consumer version, this data will also be uploaded to an account in the cloud for long-term storage and analysis.

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Microsoft backports privacy-invading Windows 10 features to Windows 7, 8

This post originally reported that a firewall can’t be used to block the Windows connections that bypass the hosts file. There appears to be confusion on this point as to whether the ranges can be blocked on Windows 10 or not and conflicting reports on how the Windows Firewall treats such rules. We discussed the situation with Ars Technica’s Peter Bright, who has confirmed that these new connections can be blocked. Reports that they can’t be may have been confused or related to different OS settings.

Every time Microsoft releases a new version of an operating system, there’s always a few users bitterly unhappy at the company’s decision not to support new features on older products. Microsoft has finally listened to these die-hard devotees of older operating systems. If you felt like Windows 7 and Windows 8 offered you a little too much privacy, rejoice: Microsoft is updating those operating systems with the same telemetry gathering software it deployed on Windows 10.

What? You wanted DirectX 12? has discovered four KB updates for Windows 7 and 8, each of which is described as an “Update for customer experience and diagnostic telemetry.” Each is detailed below:

KB 3068708: This update introduces the Diagnostics and Telemetry tracking service to existing devices. By applying this service, you can add benefits from the latest version of Windows to systems that have not yet upgraded. The update also supports applications that are subscribed to Visual Studio Application Insights.

KB 3068708 is listed as collecting diagnostics about functional issues on systems that take part in the Customer Experience Improvement Program. Determining whether or not you are a member of the CEIP, however, is less than obvious. The KB also notes that “Most programs make CEIP options available on the Help menu, although for some products, you might have to check settings, options, or preferences menus.” This is a recommended Windows update.

KB 3022345: This update has been superseded by KB 3068708, but previously provided the same telemetry-tracking services. It’s not clear how the two updates differ, but if you want to remove all traces of telemetry tracking, you’ll want to remove this update as well.

KB 3075249: This update adds telemetry points to the User Account Control (UAC) feature to collect information on elevations that come from low integrity levels. What this appears to mean is that MS wants more information about the kinds of applications that trigger UAC in the first place, presumably because it wants to know what they do and why they need that access. This update is classified as Optional.

KB 3080149: This update is described in identical language to the first two. “This package updates the Diagnostics and Telemetry tracking service to existing devices. This service provides benefits from the latest version of Windows to systems that have not yet upgraded. The update also supports applications that are subscribed to Visual Studio Application Insights.” It is provided as an Optional update, even though the first was classified a “Recommended” update.

Hard-coded phoning home

One of the assumptions made by various privacy advocates and journalists, including me, is that third-party utilities would be able to shut down the tracking Microsoft deployed in Windows 10. To some degree, that’s already happened, but there are certain new “features” of Windows 10 that can’t be blocked by any OS-level tweaks, including the hosts file. The updates listed above connect to and These addresses are hard-coded to bypass the hosts file and cannot be prevented from connecting. It’s been reported that software firewalls aren’t sufficient to block them, though this is unclear. (See update above).


The only way to block some of these connections is if your router has a firewall you can configure and if that firewall allows you to block HTTPS connections instead of simply passing them through. Some users have reported that they can block these connections, but plenty of other devices can’t, at least not completely. It’s still possible to reduce the amount of information flowing to Microsoft, but disabling it completely seems to be impossible unless you build a software router or replace your current hardware with a dedicated box.

Windows 7’s GPEdit.msc contains a setting that allows users to disable all application telemetry, and another setting that can shut off user participation in the Consumer Experience Improvement Program. Whether these options continue to function after the latest patches isn’t known. Users who do not wish to send Microsoft their own telemetry should uninstall the updates and tell Windows Update to hide them from now on.

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Exclusive: U.S. weighs sanctioning Russia as well as China in cyber attacks

The United States is considering sanctions against both Russian and Chinese individuals and companies for cyber attacks against U.S. commercial targets, several U.S. officials said on Monday.

The officials, who spoke on condition of anonymity, said no final decision had been made on imposing sanctions, which could strain relations with Russia further and, if they came soon, cast a pall over a state visit by Chinese President Xi Jinping in September.

The Washington Post first reported the Obama administration was considering sanctioning Chinese targets, possibly within the next few weeks, and said that individuals and firms from other nations could also be targeted. It did not mention Russia.

A move against Chinese entities or individuals before Xi’s trip, the officials said, is possible but unlikely because of the strain it could put on the top-level diplomatic visit, which will include a black-tie state dinner at the White House hosted by President Barack Obama.

“The Chinese government staunchly upholds cyber security, firmly opposes and combats all forms of cyber attacks in accordance with law,” Chinese Embassy spokesman Zhu Haiquan said in a statement.

He said China wants enhanced dialogue and cooperation with  the United States and that “groundless speculation, hyping up or accusation is not helpful to solve the problem.”

The  Russian Embassy did not respond to Reuters requests for comment.

The U.S. government has suffered a series of embarrassing cyber attacks in recent months, including one on the White House Office of Personnel Management (OPM) that potentially provided a treasure trove of data about government employees to foreign spies.

U.S. officials suspect that attack was linked to China, which has denied any involvement in hacking U.S. databases and says it too has been a victim of cyber attacks.

The sanctions Washington is currently considering would not target suspected hackers of government data, but rather foreign citizens and firms believed responsible for cyber attacks on commercial enterprises, one official said.

If taken, the action would be the administration’s  first use of an executive order signed by Obama in April to crack down on foreign hackers accused of penetrating U.S. computer systems.

The officials declined to name any potential targets, concerned that advance warning would allow them to hide assets.

One U.S. official said that sanctions imposed on individuals or companies would effectively cut them off from using the U.S. financial system, which could be a death-sentence for a serious business venture.

The official also said that entities or individuals from countries other than Russia or China could face sanctions.

Another U.S. official suggested that a decision on targeting Chinese entities could depend partly on whether diplomatic efforts, such as last week’s visit by White House national security adviser Susan Rice to Beijing last week, produce positive results going forward.

Assistant Secretary of State Daniel Russel visits China next weekend for further talks ahead of Xi’s U.S. trip in the second half of September.


U.S.-Russian relations have been deeply strained in recent years, notably by Russia’s March 2014 annexation of Crimea from Ukraine as well as its continued support for pro-Russian rebels fighting government forces in eastern Ukraine.

Cyber security was a major issue between China and the United States during the June Strategic and Economic Dialogue that gathers some of the top financial and foreign policy officials in the two governments.

“The United States, as we all know, has sharp disagreements with China over its actions in cyber space,” State Department spokesman Mark Toner told reporters on Monday.

“We have remained deeply concerned about Chinese government-sponsored cyber-enabled theft of confidential business information and proprietary technology from U.S. companies,” he added at his daily briefing.

White House spokesman Josh Earnest declined to confirm the United States was weighing sanctions against Chinese entities, though he said U.S. cyber security concerns were “not a surprise” to Beijing.

“It would be strategically unwise for us to discuss potential sanctions targets because that would only give the potential targets of sanctions the opportunity to take steps that would allow them to evade those sanctions,” he told reporters aboard Air Force One.

He said an executive order signed by Obama in April provided “an additional tool in the toolbox to confront this particular challenge.”

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Ashley Madison gaining ‘hundreds of thousands of new clients’ despite data leak

The parent company of Ashley Madison, Avid Life Media has hit back at claims that women are not avid users of the cheating website

The parent company of the Ashley Madison cheating website has said that “hundreds of thousands” new users have signed up, despite the hacking scandal that saw millions of its clients’ private information spewed on the internet.

“Recent media reports predicting the imminent demise of Ashley Madison are greatly exaggerated,” Avid Life Media, who owns Ashley Madison, said in a statement.

“Despite having our business and customers attacked, we are growing.

Owner of Ashley Madison Noel BidermanOwner of Ashley Madison Noel Biderman

In this past week alone “hundreds of thousands of new users signed up” to the dating platform, the company said, including 87,596 women. And over the past seven days, women reportedly sent more than 2.8 million messages through the platform.

The statement came in response to a recent spate of articles suggesting that the vast majority of users of the site, which facilitates dating for people already in a relationship, are men.

A story published in the Washington Post recently said that, according to the data leak, the company would have created fake female profiles to lure men in. Of more than 35 million records released, only five million actually belong to women, the article found.

Avid Life Media insisted on Monday that in the first half of the year, the ratio of men to women using the site was 1.2 to 1. The difference is, the company said, that fewer payments from women are shown in the leaked data as they are “not required to pay to communicate with men” on the site.

Ashley Madison has been hit by law suits and negative headlines since a hacking group accessed its user database this month, publishing the private information of as many as 32 million users.

The details of more than a million Britons  were leaked onlineMore than a million Britons fear their work and home lives could be wrecked after their details were leaked online by hackers who published the entire database of the Ashley Madison adultery website

Two Canadian firms have launched a $578 million (£375 million) class-action lawsuit against the company whom they accuse of failing to sufficiently protect their clients’ private data.

The leaks from the website, whose slogan “Life is short. Have an affair”,included the email addresses of employees of British, American and European governments.

Last week Canadian police said that at least two clients of the Ashley Madison adultery website may have committed suicide and that others have become the victims of extortion after hackers published their details online.

Avid Life Media is offering a $500,000 reward for information on the perpetrators of the hack.

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Internet users still using weak passwords a year after iCloud leak

Security experts warn than online dangers are increasing but Britons are failing to take proper measures

Security experts believe that many of the issues that existed before the iCloud photo leak still exist today, whether it be human error-based or new vulnerabilities in technology discovered by hackers.

Jonathan Sander from cyber security firm Lieberman Software said: “The consumer’s view of good security is much like their view of good health – they know they ought to get lots of exercise and use unique passwords on every website but they’re not really doing either. They’re both hard to do regularly.

“One good thing about all the breaches in the media is it has forced news programmes to repeatedly bash good practice into most people’s heads. My aging relatives can tell me they are supposed to use complex, different passwords everywhere and be careful about the emails and links they click on. They typically tell me this as they apologise while I’m wiping their machines of their latest malware infections.”

But Mr Sander added that security breaches are not just due to human error.

“People have been given conflicting advice. They’re told to protect special accounts like their Microsoft or Google account if they use those for their primary email, but then that makes them feel they can’t hit the ‘Login with Google’ button without compromising their security.

Experts say internet security can be confusing  Photo: Alamy

“People can get easily confused by all the details one has to master to do personal security well on today’s internet. As the internet morphs into the internet of things, pulling in more and more devices to be connected and services to be offered, it’s likely to get a lot more confusing before it’s done.”

Ken Westin, a senior security analyst for software firm Tripwire said that the number of risks to security online have actually increased in the last year.

“More data from our devices is being stored in the cloud and attackers are well aware of this. They are continually looking for ways to compromise cloud-based storage and eventually they will find them.

“As consumers, we’ve placed a great deal of trust in the companies that provide cloud-based services to ensure that our data is secure but we also know that it’s not possible to make any system 100% secure. The only thing that stands between the data we store in the cloud and cyber attackers is some determination and skill on their part and a bit of luck.”

But Ben Johnson, chief security strategist at cyber security firm Bit9 + Carbon Black said that the key names in cloud computing are taking protection seriously.

“Cloud security is usually as good or better than storing your information in other places. Having said that, by its nature, people and businesses use the cloud to store more and more data in a single, or at least smaller number of places. It’s like taking all the gold in the world and putting it in one place. If you can secure that one place, everyone is better, but it also creates an incredibly enticing and lucrative single target.

“There will always be weaknesses, but overall most cloud services are fully embracing security as a first-class priority. Apple, Google, Amazon and others are being trusted with lots of information and therefore have to put significant effort into security. I trust those services and I think you should too.”

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How to manage your estate in the digital age

A new digital storage business wants to smooth the path of sorting out your estate, from saving your passwords to sending messages to your loved ones

Simon Stewart’s eureka moment, if you can call it that, came when he lost a large number of documents on a flight back from Australia.

Among them was the personal and irreplaceable account of a recently deceased relative’s emigration to the country many decades before. A priceless thread in the tapestry of his family’s story had unravelled between the armrests or in the overhead locker – and been lost forever.

Once his annoyance had abated, the managing director of Jefferies investment bank got to thinking that there must be a better way in this digital age to store all the important flotsam and jetsam of our lives – the multitude of photos, videos, various passwords and legal documents that now accumulate over the course of the average life.

The result of those musings is Lexikin, a kind of digital vault in which users can store items for posterity. If this initial impetus was sentimental, the end result is practical. Anyone who has ever had to sort out a family member’s estate will know how complicated it can be.

Even the most organised people can leave behind reams of paper and files in assorted boxes and filing cabinets. Invariably, the crucial pieces of information will not be where they are supposed to be.

“When my father died, there were 10 filing cabinets of stuff to go through – it took months,” says Stewart. “With Lexikin, you should be able to find everything you need in a couple of hours.” And it is not just time that the service can save. “I had a friend whose sibling died and they had to pay £12,000 to prove the estate.”

In an ever-more digitised world there are a number of new things to consider. What will happen to your Facebook account when you’re gone? Or your YouTube videos? Or, more importantly, the photographs and files that you have stored in the cloud?

Lexikin is free to use – for as long as you’re alive. Your executor pays a £100 fee to gain access to the account on a user’s death.

Stewart argues that this is relatively small beer when you consider the lawyers’ fees and HMRC fines that could potentially be avoided.

In addition to uploading legal documents and digital passwords, Lexikin provides the facility to leave written or video messages that can be read or viewed after you have died and potentially linked to important milestones for which you won’t be around (like a daughter’s wedding, for example) and update instructions for your children’s guardians.

Facebook logo and computer users

How does Lexikin make money? As well as providing the storage facilities, essentially for free, it introduces users to potential service providers – be they lawyers for drawing up wills or wealth management and insurance providers.

It is entirely up to the user whether they employ these services. But Stewart claims to have negotiated much lower fees for Lexikin’s collective user base than individuals could find on their own.

Users can, for example, get a will drawn up for £195 (£25 of which goes to Lexikin). Stewart says: “Most reputable lawyers will charge in the region of £500. You can get wills for less, but I wouldn’t recommend it.”

Lexikin, which is marking its official launch by sending a coffin into space, is also working with a number of big name charities like Great Ormond Street Hospital and Help for Heroes so that the system can be used to bequeath a legacy from one’s estate.

Lexikin is, essentially, a one-stop shop for shuffling off this mortal coil with your affairs in order. It faces the same difficulty as all estate planning services – getting potential customers to confront their own mortality.

However, Stewart thinks that there is an advantage in providing a more rounded service for the Facebook generation: “I think that people will be attracted to it for the sentimental stuff and then find that it’s a practical service that can save them a lot of money.”

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UK lags behind Europe in adopting driverless car tech

As trials for driverless vehicles take place around the world, Britons have been slow to buy cars with semi-autonomous features

Britons lag behind their European peers when it comes to adopting semi-autonomous technology in their vehicles, despite the Government’s attempt to put the UK at the forefront of the driverless car revolution.

Just 19pc of Ford cars sold in the UK in the last year were fitted with parking assistance technology, compared to one in three cars sold across Europe, according to Ford Car Buying Trends 2015.

As many as 72pc of cars sold in Switzerland came equipped with Active Park Assist, which uses sensors to guide the vehicle’s steering system into a parking space, while six in 10 cars bought in the Netherlands, Norway, Spain and Germany incorporated this feature.

Of the 22 countries featured in the report, just five were less willing than the UK to purchase vehicles with semi-autonomous driving tools.

In July, the Government launched a £20m research and development fund dedicated to testing driverless cars, as part of the £100m committed in this year’s Budget to researching “intelligent mobility”.

This followed the establishment of the world’s first code of practice in the UK, developed by the Department of Transport, allowing Britain to start testing driverless cars in Bristol, Coventry, Milton Keynes and Greenwich in south-east London.

Google unveils first 'fully functional' driverless car. The internet giant posted a picture online of the white, bubble-shaped car, the most complete self-driving vehicle it has yet put together Google’s driverless car, unveiled in December 2014  Photo: Google/EPA

The global autonomous vehicles industry, which has seen Google and Apple compete with traditional automakers, is expected to be worth £900bn by 2025, boosting the UK economy to the tune of £51bn by 2030.

However, the Ford report suggests that British drivers have not yet embraced technological steps towards autonomous vehicles.

While more than half of Ford cars bought in Europe in the last year were fitted with Adaptive Cruise Control, allowing cars to maintain a constant distance behind the vehicle in front even if it is travelling at a slower speed, just 42pc of British buyers opted for this feature.

Turkey was the biggest adopter of speed control, with 86pc of cars bought in the last year including this technology, followed by Finland with 84pc, Sweden with 79pc and France, the Netherland and Switzerland with 75pc.

ATNMBL is a concept vehicle for 2040 designed by Mike & Maaike ATNMBL is a concept vehicle for 2040 designed by Mike & Maaike  Photo:

While 13pc of cars sold across Europe in the last year came with Active City Stop, which automatically applies the brakes if a driver does not react to traffic ahead – rising to nearly 60pc in Sweden and Norway – just 3pc of drivers in the UK bought a car with this feature.

The report also found that 3pc of cars bought in Britain had Lane Keeping Aid, a tool that alerts drivers if they veer outside their lane, compared to 51pc in Sweden, 28pc in Norway and 21pc in Switzerland.

“While manufacturers including Ford are working toward autonomous vehicles, our customers are already embracing many of the smart technologies that make driving and parking easier and safer,” said Roelant de Waard, European vice president of marketing, sales and service at Ford.

“We are seeing increasing demand for features that relieve the stresses of driving, and make it more enjoyable. For example, people have very quickly become accustomed to systems that help them to find a suitable parking space and reverse into it.”

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East Palo Alto: Life on the other side of Silicon Valley’s tracks

Wedged between techie territories like Palo Alto and Menlo Park, this once down-and-out California town is trying to turn itself around while still keeping its identity. We paid a visit on Road Trip 2015.

How great is the divide between rich and poor in Silicon Valley? Fifty feet.

The defining border separating Palo Alto — home to tech billionaires such as Facebook’s Mark Zuckerberg and Google’s Larry Page, as well as the family of Apple’s late co-founder, Steve Jobs — and East Palo Alto, a small town known for murder, gangs and poverty, is a creek named San Francisquito.

This now-dry creek is roughly 50 feet across. It’s nothing more than a messy tangle of trees, bushes and vines.

“This creek comes from the Santa Cruz Mountains,” said Carlos Martinez, East Palo Alto’s city manager, as he looked across the divide toward Palo Alto. “These are two different worlds on each side of the creek.”

East Palo Alto serves as a stark illustration of the growing divide caused by the tech boom. The Palo Alto side of the creek is flush with tech money — and it’s not unusual for people to throw down millions for a single-family home — while nearly a fifth of East Palo Alto residents live below the poverty line. With the tech industry raising the cost of living and pushing folks out of other cities, East Palo Alto is one of the latest communities to attempt the balance between gentrification and preserving its roots.

Those roots are, admittedly, short. East Palo Alto is one of the youngest cities in California. Incorporated in 1983, the town was established with high hopes that its own local government could bring the area’s residents the same things that its prosperous neighbor Palo Alto already had: jobs, homes, health care and safety. And it’s been working ever since to achieve those goals.

The town has seen some progress. It’s gone from being the per capita murder capital of the US in 1992, with 42 homicides, to having just 5 murders last year. It’s erected sprawling shopping centers to bring in revenue and jobs, cleaned up toxic waste sites, built dozens of new homes and converted the old county dump into a shoreline park on the edge of the San Francisco Bay. Now East Palo Alto is dealing with another problem: the expanding reach of the world’s top tech companies and the influx of their employees.

“Residents are worried about being displaced from the community that they’ve grown up in,” said East Palo Alto Mayor Lisa Yarbrough-Gauthier, who was raised in the town. “How do we preserve our community and stay relevant?”

East Palo Alto’s beginnings

East Palo Alto is a small town. It covers only 2.5 square miles and has roughly 30,000 residents. Two central streets run through the city, and at their crossroads is a nondescript three-story beige building with darkened windows. Inside are the police headquarters, library and city hall. Next door is a McDonald’s.

When East Palo Alto was founded it was abysmally poor. Previously an unincorporated area of San Mateo County, it was a place mostly forgotten. It was the location of the county dump, a hazardous materials recycler, a pesticide plant, a smattering of shops and not much else — except the McDonald’s.

“When East Palo Alto incorporated, it didn’t have enough revenue to survive. The largest revenue generator was McDonald’s,” Martinez said. “The city had to do something about that.”

What followed was an explosion of development. The city tore down a rough-and-tumble area called Whiskey Gulch that was filled with local stores and watering holes, and in its place built a Four Seasons luxury hotel and office complex.

“That enabled the city to survive,” Martinez said. “Still, it wasn’t enough.”

Next, East Palo Alto built a massive big-box shopping mall. Today, one can find Home Depot, Ikea, Sports Authority, Taco Bell, Nordstrom Rack and many more stores here. Beforehand, this area was the location of a high school and a residential neighborhood. The city had to relocate thousands of people to build this commercial center.

“The community went through a lot of disruption,” said Martinez, who at the time worked as director of East Palo Alto’s Redevelopment Agency and was in charge of these projects. “But that was the price for cityhood and to be financially viable.”

In the process of dislocation, many residents were forced to leave East Palo Alto. But the city also built new residential subdivisions within the town’s borders. In one area, behind the Ikea shopping complex, rows of similar looking two-story homes in various shades of brown line the streets of several blocks. Twenty percent of these homes are designated for low-income housing. But those without that designation are being bought for as much as $800,000, said Martinez.

Prime location

Buyers are snapping up East Palo Alto’s homes for a reason: It happens to be strategically placed right in the middle of Silicon Valley, one of the wealthiest and most expensive regions on Earth. Home prices in San Mateo County hit an all-time high this year, with the average sale price for a single-family house costing $1.3 million, according to the California Association of Realtors.

“There are many people who want to buy in this area,” Martinez said. “Because you have Google, you have Facebook.”

East Palo Alto’s eastern border abuts the San Francisco Bay. From that windy edge of town, one can see miles of wetlands where snowy egrets search for fish, and the outline of the Diablo Mountain Range hazily looms in the distance. Here, people bike and jog along a wide dirt path that hugs the shoreline.

Standing on the spit of land, Martinez pointed to a cluster of buildings a few miles south. That’s NASA’s Ames Research Center, he said. And nearby is Google’s campus. Then, turning 180 degrees, he pointed to the north and said Facebook is right over there.

East Palo Alto has a jogging trail on the edge of the San Francisco Bay wetlands, which affords views of NASA’s Ames Research Center and Google’s campus.Dara Kerr/CNET

But this strategically attractive location poses a dilemma for its residents. While the average price for an East Palo Alto home is lower than the average for the rest of Silicon Valley — at around $574,600, according to real estate site Zillow — it’s still far beyond the means of most of the city’s population. Eighteen percent of East Palo Alto residents live below the poverty line and the average yearly income per person is $18,385, according to the US Census. For comparison, the average yearly income for all Californians is $29,527.

“Many of our residents are a paycheck away from missing rent,” Martinez said. If they have to spend extra money for a broken-down car or sick child, “that’s enough for them to be evicted.”

As home prices and rents rise in other parts of Silicon Valley, more people are moving to East Palo Alto or buying houses there as investments. The main reason for this is the city’s proximity to tech companies and Stanford University, which is just four miles away.

If you can’t afford a million-dollar home, you’re going to move to where you can afford, so that you can be closer to work,” said Mayor Yarbrough-Gauthier.

A just city

A far cry from your typical frilly Silicon Valley eatery is Taqueria La Cazuela, a popular Mexican restaurant located in one of the older residential neighborhoods of East Palo Alto. It’s in a bright green hut that has black metal bars over the windows and is surrounded by an elbow-high chain-link fence. Inside, owners Gabriel Sanchez and Mayra Rivera sling home-cooked fare, like enchiladas michoacanas, chicken mole and pork carnitas tacos.

“This is a family restaurant,” Sanchez said. “We are trying to make a difference here in East Palo Alto.”

Oftentimes during lunch, the line runs out the door. The scene inside feels much like being transported to Mexico, with the crowd speaking mostly in Spanish. Roughly 61 percent of East Palo Alto’s population is Latino, according to the US Census, while 15 percent is black, 7 percent is Asian and 7 percent is white.

Given its racial and income diversity, East Palo Alto has a different feel from the neighboring white-majority towns such as Palo Alto, Menlo Park and Mountain View. Some people fear that as East Palo Alto gets more expensive, with longtime residents leaving and new people moving in, what’s unique to East Palo Alto could be lost.

“Being surrounded by the top five-star dot-com companies gives us so many possibilities for tomorrow,” said Albert Macklin, pastor of New Sweet Home Church, who has spent his entire life in East Palo Alto. “At the same time, we still don’t want to lose the foundation of what East Palo Alto is and who we were and become a city that we’re not.”

To combat gentrification, the city has instituted some of the strictest rent control laws in the state of California and also designated a good portion of housing stock to low-income housing. Additionally, it’s looking to create more jobs where East Palo Alto residents can work. Along with courting chain retail stores, the city has zoned one portion of the town for light industrial businesses, like carpentry shops, bakeries and small manufacturers. And in May, the city’s Ravenswood Family Health Center began seeing patients without health insurance at its new state-of-the-art facility.

“Our overall goal is to create a city that is a just city,” Martinez said. “A city that is diverse in terms of income and ethnic composition, that is financially stable and that provides a good level of services for its residents.”

But East Palo Alto has its work cut out for it. Along with gentrification, it continues to play catch-up with neighboring cities, as well as fight a high crime rate and poverty.

So that 50-foot creek between it and Palo Alto? It might as well be a gulf.

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