Zappos.com

According to an entry posted on the company blog on Sunday, online shoe and clothing giant Zappos has suffered a massive security breach compromising some data on as many as 24 million customer accounts. In an email to employees, CEO Tony Hsieh said the company was attacked by "a criminal who gained access to parts of our internal network and systems through one of our servers in Kentucky." Hsieh also said the company was cooperating with authorities in an "exhaustive investigation."

Hsieh continued:

Because of the nature of the investigation, the information in this email is being sent a bit more formally, and unfortunately we are not able to provide any more details about specifics of the attack beyond what is in this email and the link at the end of this email, but we can say that THE DATABASE THAT STORES OUR CUSTOMERS' CRITICAL CREDIT CARD AND OTHER PAYMENT DATA WAS NOT AFFECTED OR ACCESSED.

Below the notice to employees, Hsieh attached the text of the email sent to customers. Zappos account holders were advised that unauthorized access had been gained to "one or more of the following: your name, e-mail address, billing and shipping addresses, phone number, the last four digits of your credit card number (the standard information you find on receipts), and/or your cryptographically scrambled password (but not your actual password)."

Customers were advised--capslock advised, no less--to "PLEASE CREATE A NEW PASSWORD," as one of the company's security measures was to go ahead and existing passwords.

Zappos also clearly anticipates a huge customer response (perhaps backlash?) to the news:

Due to the volume of inquiries we are expecting, we realized that we could serve the most customers by answering their questions by email. We have made the hard decision to temporarily turn off our phones and direct customers to contact us by email because our phone systems simply aren't capable of handling so much volume. (If 5% of our customers call, that would be over 1 million phone calls, most of which would not even make it into our phone system in the first place.)

[Zappos]

Now Polyvore, a site where users can clip items from anywhere on the web and mix and match them to create "look books," is trying to bring some data-driven web analytics to this world.

The beta tool, Style Analytics, will launch tomorrow on Polyvore's site for anyone to try out. It would enable brands to see how thousands of users are experimenting with their products, what items they are matching them with and what style trends are emerging around them.

"The fashion industry, from designing to merchandising and marketing is inefficient and not data driven," Jess Lee, Polyvore's co-founder and head of product management, told All Things D. "Our goal is to open it up and make it more democratic and more data driven."

The tool will undoubtedly help mainstream brands recognize how real people are using their items and what trends they can capitalize on. It will be interesting to see if high fashion designers deign to sample data from the great unwashed masses as their source of inspiration.

Check Out Diana Eng's Fashion From The Future Here >>

bpopper at observer dot com  - @benpopper

When users first go to Hunch they answer a series of questions. At the end, the site delivers recomendations to them about everything from poetry to food to clothing. 

To do this, Hunch has to compare a user's answers to more than 30 billion other interactions between people, places and things they have recorded in their system. 

That's a pretty intense calculation to pull off, and Hunch has purchased and perfected a very special machine to do it. 

As Peter Warden at ReadWriteWeb details, Hunch decided against the current trend, which is to buy an army of cheap servers and network them together to solve big problems. 

Instead they went with a single super powered server which the Hunch team tweaked to optimize it for TasteGraph calculations.

"I have to admit I was surprised that he was apparently swimming against the tide by working within a single uber-machine rather than using an army of dumb boxes," wrote Warden, "but as [Hunch] explained their requirements it all started to make sense."

The Observer won't pretend to understand the finer points of IT and server deployment. But its cool to see a NY startup going against the grain and building a unique machine to power their platform.

bpopper [at] observer.com | @benpopper

The building's enormous size and position directly over an important fiber optic line make it one of the "world's choicest pieces of Internet real estate."

Wall Street caught on to this early, moving electronic trading units in back in 2001 to gain millisecond speed advantages in high-frequency trading.

But with the major exchanges transfering their computers out to Jersey, the building is more attractive to Internet firms like Google, which want fast net access, not proximity to NYSE servers.

Google will certainly be adding humans to the building as well -- probably sales and marketing staff -- as they go head to head in the booming business for local ads with firms like Facebook and Groupon. But don't be surprised to see more floors of this massive property dedicated to data centers.

bpopper [at] observer.com | @benpopper

But now Mint.com has released a breakdown of exactly which shops are raking in the most dough per visit.

The data is based on activity from Mint's more than 4 million users, and is being released as part of the launch of Mint Data, which lets users compare their financial habits to those of other folks on Mint.

The data needed a little cleaning. Apparently being a top shop in terms of purchase per visit is no gaurantee of longevity. Mint's original list had Institute at #6 and Freelance at #10, stores which are now out of business or under new managment.

Most of the top names are easy to recognize, but a few random ones snuck in there. Anyone familiar with Electronic, a computer and camera store at 580 8th Ave, New York, New York, which takes in more money per visit than Hugo Boss, John Varvatos and Bergdorf Goodman?

Check out the top ten shopping spots >