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February 28, 2005

AOL tool links AIM buddies to Microsoft Outlook

By Scarlet Pruitt

America Online Inc. (AOL) is offering a beta tool which allows AOL Instant Messenger (AIM) users to see when contacts are online and available to chat through Microsoft Corp.'s Outlook e-mail application. The new application was unveiled Monday along with a string of partnerships that seek to weave AIM into various online sites and applications from CareerBuilder.com Inc., Ruckus Network Inc. and Thomson Corp.

The Outlook integration is aimed directly at business users' desktops using technology from Intellisync Corp.

"This is a big deal," said IDC research manager of collaborative computing Robert Mahowald. "Outlook is a wildly popular client so it puts AIM front and center with users."

The program is available for free download from the Aim.com Web site for users of AIM version 5.9 or higher who use Outlook 2002 or 2003, offering a new level of integration between the two company's products. Microsoft already offers integrated messaging features in Outlook through its own IM services.

The new tool, called AIM Sync, allows users to add contacts from Outlook to their AIM buddy list and matches e-mail addresses with AIM screen names. It then shows the "presence," or availability of contacts to chat online, by placing the AOL "running man" icon in e-mail, address book and phone list views of Outlook. Users who click on an icon can launch a chat or access the buddy's phone number and send a text message to a mobile phone by SMS (Short Message Service).

The integration of presence into e-mail applications underscores the need for users to be able to easily switch between instant messaging (IM) and e-mail functions depending on the urgency of information, AOL said.

The beta tool is also a way for AOL to gain more users for its IM service, since users can invite Outlook contacts who do not have AIM to join up.

While the functionality could be seen as a threat to Microsoft's own MSN Messenger, Mahowald sees it as a minor concern.

"Microsoft's current push is into business IM and they have more eggs in that basket," he said. The company will soon be launching its enterprise IM client for Live Communications Server 2005 code-named "Istanbul," for example, which will allow users to exchange messages with contacts on public IM networks for Yahoo Inc., AOL and MSN.

Meanwhile, AOL is spreading its reach through partnerships with business sites and applications. This is good strategy given that roughly 30 percent of consumer IM accounts are used for business purposes, according to Mahowald.

Under the deal with jobs site CareerBuilder.com, AIM users will be able to link their screen names to their resumes, giving hiring managers and recruiters the opportunity to initiate a chat with prospective employees online.

College digital entertainment network Ruckus is integrating AIM across its services, allowing students to see and chat with online friends. Finally, financial information company Thomson has integrated AIM into its Thomson AutEx trading network.

While there are a variety of enterprise IM applications on the market, they still don't match the popularity of public IM networks. Consumer IM accounts are expected to reach some 240 million by 2008 with an increasing amount of services hooking into enterprise applications, according to a recent report from researcher IDC.

Seeing this opportunity, AOL is encouraging third-party software developers such as Intellisync to create ways to integrate AIM into even more applications and services.

Posted by Chad Dickerson at 04:58 PM

Jef Raskin, creator of the Macintosh, dies at 61

By James Niccolai

Jef Raskin, the lead designer of the first Macintosh computer and a pioneer in the development of user interfaces, died Saturday at age 61. He had been diagnosed recently with pancreatic cancer, his family said in a statement. Raskin joined Apple Computer Inc. in 1978 as employee number 31 and headed the company's Macintosh development team from its inception until 1982. He named the project after his favorite type of apple, changing the spelling for copyright reasons.

He is credited with significantly advancing the design of user interfaces, which in the early 1980s were largely text-based and required users to memorize complex commands. Raskin convinced his peers at Apple that to reach a wider audience, the Macintosh needed an interface that was elegant and easy to use.

"Up to that time, at Apple and most other manufacturers, the concept was to provide the latest and most powerful hardware, and let the users and third-party software vendors figure out how to make it usable," he wrote later on his Web site.

Raskin left Apple in 1982, two years before the Macintosh went on sale, but he continued to influence the design of computers through his writing, lectures and consulting work. Soon after leaving the company he founded Information Appliance Inc., where he designed the Canon Cat computer for Canon USA Inc., although the product was not a commercial success.

His consulting clients have included Intel Corp., Hewlett-Packard Co., IBM Corp. and many other big names in computing. In 2000 he published a book, "The Humane Interface," that is widely assigned at universities.

Raskin was currently at work on a project called Archy, where he hoped to put many of the ideas expressed in his book into software. Archy uses simple commands for common operations in word processing and e-mail, but "doesn't work like anything else on this or nearby planets," meaning users would have to learn it from scratch, he wrote on his Web site.

His son, Aza Raskin, will continue to develop the project, a preview version of which is due out later this year, his family said in the statement.

Raskin's interests were not restricted to computers: He taught the recorder, harpsichord and music theory at San Francisco Community College in the 1970s, and his family described him as an orchestral soloist and composer. He also founded a company that designed and sold radio-controlled model aircraft.

Along with Aza, he is survived by his wife, Linda Blum, and his other children, Aviva and Aenea. Raskin lived most recently in Pacifica, California.

More information about Jef Raskin is available at his Web site, www.jefraskin.com. More information about Archy is at www.raskincenter.org.

Posted by Chad Dickerson at 04:57 PM

France Telecom CEO becomes French minister of finance

By Peter Sayer

Thierry Breton resigned as chairman and chief executive officer (CEO) of telecommunications operator France Telecom SA on Friday, to become minister of finance in the French government. On Sunday, the company's board of directors named his replacement: Didier Lombard, previously the company's senior executive president in charge of technologies, partnerships and new services. Taking up the role of CEO, Lombard said he would continue to follow the strategy set out by Breton, of integrating the company's mobile and Internet businesses alongside its traditional fixed-line communications activities.

Lombard served the French government from 1988 to 1990, when he was technical and scientific director for the French Ministry of Research and Technology, and later became general director of industrial strategy for the Ministry of Industry, according to a statement announcing his appointment.

France Télécom, the former monopoly telecommunications operator in France, has a close relationship with the French government, which still holds 42.2 percent of its shares, according to the company.

Breton, appointed CEO of France Télécom in October 2002, is said to have already refused the job as head of the finance ministry once, in November. Then, the role was offered to Hervé Gaymard, whose resignation Friday was precipitated by a scandal over the use of public funds to rent an apartment for his family.

Posted by Chad Dickerson at 04:57 PM

WORLDBEAT : Digital decorum for the urban masses

By Scarlet Pruitt

You're hip, you're urban, and you're on the go.

Before you leave the house each morning you make sure your headphones are snugly tucked into your ears, ensuring that no matter how bad the commute goes, it's at least to your own soundtrack. As the train doors snaps shut, you shove yourself into the last millimeter of space, and apologize at high volume to your fellow passengers. With your playlist still rolling you buy your newspaper from a man who mouths the price before you nearly get hit by a silent ambulance. Perhaps it's time for some iPod etiquette?

With the growing number of devices now hitting city streets a new question is emerging on how to use them in a way that connects, rather than isolates, you with other people. It may sound basic, but a recent survey on a busy London street indicates that there may be a problem.

"It drives me mad to hear three different peoples' music blasting through their headphones at me on the train," said London commuter Rob Shaw.

And volume is not the only concern. "People leave their iPods on when they go into shops and buy things. Now that's just rude," Shaw added.

Music listeners aren't the only worry as cell phone wielders are also coming under fire.

"I have a friend who texts constantly when she's with other people. It's really antisocial," said one Londoner who declined to be named so as not to offend the texter in question.

"It's rude when you are talking to someone and they are texting or listening to their music," agreed taxi driver Henry Mukasa. "But there is no replacement for a cell phone," he mused.

Ah, the cell phone. Not only does it allow users to break off boring conversations to make or receive calls, it now lets us text during live conversations in a sort of social multitasking. But should friends let friends text and talk? Surely there's some need for digital decorum here.

However people use cell phones, many Britons would seem to agree with Mukasa that they are irreplaceable. In fact, a new survey sponsored by U.K. bank Lloyds TBS PLC found that 63 percent of people polled feel concerned if they leave their cell phone at home. They join an already worrying group of e-mail addicts. The same poll found that 72 percent of respondents felt anxious if they were unable to check their e-mail for a day. >{? These people have a problem and its called Mobile and Internet Dependency Syndrome (MAIDS), according to Lloyds. MAIDS has swept the U.K. with some notably acute cases. Of the 936 Britons polled, 3 percent said they feel "panicky or freaked out" if they leave their mobile phone at home, while a further 1 percent suffer physical symptoms like a racing heart or sweaty palms, the bank said.

The young are particularly vulnerable to the disease, with 33 percent of respondents aged between 16 and 24 saying that they return home to retrieve forgotten cell phones rather than suffer the stress.

When called about the poll, Lloyds had no antidote for the syndrome, but referred to advice given to them by U.K. life coach Gladeana McMahon. Retain a sense of perspective and realize that a day without your mobile phone is not the end of the world, Gladeana said. The life coach recommended that people with severe cases see a stress expert. As for those who text and talk: prioritize.

That advice may help the over-communicators, but what about the isolators or hard-core headphone wearers?

We turned to iPod DJ club promoter Jonny Rocket for some advice. An iPod DJ club, for those not in the know, is a place where people can bring their own music playlist in for a spin and compete against other digital DJs for rewards and recognition.

Rocket sees a lot of iPod users in action and says that their music is both a friend in silence and a group activity. Those who shuffle along (no pun intended) only listening to their own tunes are missing half of the point, he said. That's why Rocket endorses his playlist club (www.ipod-dj.com) -- "to take a personal technology and mutate it into a collective experience."

As for iPod etiquette when users are darting to work, music at full blast, at least take the headphones off and say hello when you're buying your coffee, Rocket recommended. It adds a little human warmth, he added.

Posted by Chad Dickerson at 04:55 PM

February 25, 2005

Mozilla warns of security holes, fixes Firefox

By Joris Evers

Several security vulnerabilities in Firefox and the Mozilla Suite of Internet software put users of the open-source products at risk of hacker attacks, the Mozilla Foundation warned Thursday. The organization released Firefox 1.0.1, which fixes 17 security flaws in the popular Web browser. The most serious flaws could allow an attacker to gain full control over a victim's PC, the Mozilla Foundation said in a statement. Firefox 1.0 was released in November and has since been downloaded more than 27 million times.

Firefox 1.0.1 also includes several fixes to guard against spoofing of Web addresses and the security indicator on Web sites. These vulnerabilities could be exploited for phishing scams, which typically use spam e-mail messages to drive people towards fraudulent Web pages that look like legitimate e-commerce sites.

One of the changes made in Firefox 1.0.1 is in the way the browser handles international domain names (IDNs). These names are now displayed differently to make it easier to spot spoofed Web sites. Because of the way Firefox displayed IDNs, it was possible to register domain names with international characters that resembled other common characters, thus tricking users into believing they were on a trusted Web site.

For protection against possible exploitation of the security flaws, users should download and install the latest version of Firefox, the Mozilla Foundation said. The organization does not offer patches to fix the problems without having to install a new browser.

Most of these flaws also affect the Mozilla Suite, which includes a Web browser, an e-mail client, Internet Relay Chat client and Web page editor. However users of the suite are left vulnerable because no fixes are yet available. Mozilla 1.7.6, the update that fixes the issues, is due out in "a couple of weeks," according to a Mozilla Foundation spokesman.

The public warning of the security vulnerabilities is evidence that the Mozilla Foundation's products give a false sense of security, said Thor Larholm, a senior security researcher with PivX Solutions Inc. in Newport Beach, California.

"The only reason Mozilla and Firefox have a good track record in security with a low number of security vulnerabilities is simply because they don't tell anyone about them," Larholm said via e-mail.

"The Mozilla Foundation has fixed hundreds if not thousands of security vulnerabilities over the last few years without notifying the world and without providing security patches, instead they have simply just told their users to upgrade," he said. "We have to remember that all software has security vulnerabilities, the only difference is in how we anticipate them and inform the world about their existence."

Posted by Chad Dickerson at 11:55 PM

Skype users may soon be sending text messages

By John Blau

Users of the Internet phone service offered by Skype International SA may soon be able to send text messages to mobile phones thanks to a service that went into beta testing on Friday. London-based Connectotel Ltd. has developed technology that allows SMS (Short Message Service) messages to be sent to users of GSM (Global System for Mobile Communications) handsets via Skype's P-to-P (peer-to-peer) network, according to Connectotel's business development and technical director, Spencer Gun.

Skype users could already receive SMS messages using the "SMS to Skype" service launched three weeks ago. Connectotel began a beta test of its "Skype to SMS" service with selected users on Friday, Gun said Friday. The beta test is currently limited to sending messages to the U.K. and it was unclear Friday when the service might be ready for commercial use.

To use the Skype to SMS service, Skype users must first add "smsgateway" to their list of contacts, and then initiate a chat session with that contact. Once they've initiated the session, they can add the U.K. phone number for the person they want to send the message to -- in its full international format -- followed by their message.

With the current SMS to Skype service, the mobile phone user pays to send the message. An international SMS is slightly more expensive than a national SMS, according to Gun.

The Skype to SMS service is free during the beta test period. But there is a cost to providing the service, and Connectotel hopes Skype will participate, according to Gun.

"For the beta test, we have purchased SMS messages in bulk to get a good price of less than 3 pence (US$0.06) per message, so we're currently paying for the service," he said. "What we would like to do is have the billing managed through the existing SkypeOut prepaid service. We're in talks with Skype about this possibility."

With SkypeOut, users must pay into an account, say €10 (US$13), against which they charge their calls. The SkypeOut global rate is 1.7 euro cents per minute.

Skype could not be immediately reached for comment.

Skype uses P-to-P technology to connect users to other users to talk and chat with friends. Skype was developed by the founders of Kazaa P-to-P technology, widely used to share music files. Sharman Networks Ltd. is the company behind the Kazaa file sharing software

Posted by Chad Dickerson at 05:23 PM

Daum to challenge eBay with auction acquisition

By Martyn Williams

South Korean Internet portal operator Daum Communications Corp. is mounting a challenge to eBay Inc.'s efforts in that country with the acquisition of a rival Internet auction site operator. Daum, which recently acquired portal operator Lycos Inc., has purchased a 90 percent stake in online auction marketplace operator Onket for 4.25 billion won (US$4.2 million), Daum said Friday.

Onket was established by Lee Keum Ryong who previously headed Internet Auction Co. Ltd., which is South Korea's number one online auction service and it now owned 99.7 percent by eBay Inc. The Onket stake was acquired from Inicis Co. Ltd., of which Lee is currently CEO and which operates an electronic payment system in competition with eBay's Pay Pal service.

As a result of the acquisition the running of Onket will be handled by Choi U Jeong, who heads Daum's own D&Shop online marketplace service, and the service will be rebranded at Daum Onket from May this year, said Jody Chung [cq], a spokeswoman for Daum. The company will promote D&Shop and Daum Onket side-by-side, the former for conventional online shopping and the latter for online auctions.

"We will conduct an aggressive online marketplace business with Onket, on the basis of our successful experience in e-commerce with our existing D&Shop and the great number of users of our portal," said Chung.

D&Shop has about 9 million users and Onket has more than 3.5 million users, she said. Both sites trail Internet Auction Co. Ltd., which has more than 10 million users, according to local media reports.

Posted by Chad Dickerson at 05:23 PM

NTT develops hydrogen fuel cell for mobile phones

By Paul Kallender

Nippon Telegraph and Telephone Corp. (NTT) has developed a prototype fuel cell that it hopes to commercialize within three years at a size small enough to fit inside mobile phones and other portable consumer electronics devices, the company said Thursday. The prototype is a micro polymer-electrolyte fuel cell (PEFC) that works by combining hydrogen with oxygen, generating electricity and water, and is more powerful than the direct methanol fuel cells (DMFCs) currently being developed by many companies, said Kazuya Akiyama, a researcher at the energy systems project at NTT's energy and environment systems laboratories.

The power density of the NTT cell, which is a measure of the amount of power it can generate relative to its size, is up to 200 milliwatts per square centimeter. When the fuel cell is commercialized it will be able provide a 3G (third-generation) mobile phone that uses 2.5 watts of power with about 9 hours of talk time, Akiyama said in a presentation at NTT's Yokosuka R&D Center on Thursday.

In contrast, a DMFC developed by NEC last year offered a power density of 70 milliwatts per square centimeter. NTT calculates that to match the size of lithium ion batteries used in mobile phones, a fuel cell must have a power density of about 160 milliwatts per square centimeter or more, he said.

"DMFCs can't do it. There isn't enough power," Akiyama said.

NTT believes that the extra power advantage means hydrogen-fuelled PEFCs will be able to replace lithium ion batteries inside mobile phones and in tests the prototype has been able to power a phone long enough to allow a video or voice call, he said.

NTT's prototype is currently 13 millimeters by 42 millimeters by 80 millimeters, weighs 104 grams and it will take 2 years before the company can shrink this so that it can fit inside a cell phone, Akiyama said.

The hydrogen-fuelled PEFC technology does have at least one disadvantage compared to DMFC technology, he said.

Methanol fuel cells can work off small, nonpressurized cartridges of the liquid while hydrogen-fuelled PEFCs require pressurized hydrogen gas. While the hydrogen is only pressurized to 2 or 3 atmospheres, the industry has yet to create a small, safe and standardized container for this.

NTT has designed a hydrogen storage unit that is slightly bigger than an automobile battery that can store 50 liters of hydrogen. In the home, it could be used as a refueling station for a number of types of fuel cells although is too big for portable use.

Building a supply and container infrastructure, creating international packaging standards and making a legal framework to allow transportation of hydrogen canisters will take about 3 years, a year longer than it will take to resolve similar issues with methanol, Akiyama estimated. Regulations to allow passengers to carry methanol fuel canisters onboard commercial airliners should be completed around 2007.

"The fuel canisters we are using are very heavy and we need to make them smaller and lighter, and safety is a big concern," he said.

Posted by Chad Dickerson at 05:23 PM

AOL enters local search market

By Juan Carlos Perez

America Online Inc. (AOL) has launched a local search service designed to let users of its search engine find information tied to a specific place, such as business listings, movie times and events. With this move, AOL joins search engine rivals Google Inc., Yahoo Inc. and Ask Jeeves Inc., which have similar services. The free service is available to both subscribers of the fee-based AOL online service and to Web users at http://localsearch.aol.com.

AOL estimates that about 20 percent of the queries run on its main Web search engine are for local information, so given the interest in this type of search it makes sense for AOL to have this service, said Dariusz Paczuski, vice president of marketing for AOL Search and Directional Media.

Interest from AOL and its rivals in local search is also driven by the new advertising opportunities offered by drawing in local businesses that may not have been interested in having their ads run along with query results that weren't specific to the city or area in which they do business.

For the local search service, AOL is aggregating information from a variety of its existing properties and from several partners. For example, local search results will feature business listings gathered from the AOL Yellow Pages, local entertainment information, reviews and ratings from AOL City Guide, maps and driving directions from AOL subsidiary MapQuest and movie information from AOL's Moviefone.

On the partner side, AOL's local search will feature retail shopping information from CrossMedia Services Inc.'s ShopLocal.com, restaurant information and reservation services from OpenTable Inc., dining certificate offers from Restaurant.com and event-ticket purchasing through AOL Tickets, which in turn partners with several ticketing services.

Future features AOL plans to add to the local search service include local news provided through Topix.net, as well as an index of general Web sites containing pertinent and timely local information that AOL will build in partnership with Fast Search & Transfer Inc.

AOL has hit the bull's eye with its approach to local search by providing not only useful information but also ways for users to act on the information, such as buying event tickets, obtaining driving directions and making restaurant reservations, said Allen Weiner, a Gartner Inc. analyst. "That's one of the most powerful and valuable things I see in this local search service: actions with content," Weiner said.

This service and others Dulles, Virginia-based AOL has unveiled recently make it clear the company is on the comeback trail, but a core issue remains unresolved: AOL's dual strategy of having a proprietary fee-based online service and a public portal open to all Web surfers, Weiner said.

AOL can make AOL.com a world-class Web destination that is in the same league with the offerings from Yahoo, Microsoft Corp.'s MSN Internet division and Google, Weiner said. But AOL will not be able to achieve that goal as long as it has to devote resources and efforts to its proprietary online service as well, he said.

Subscriptions to AOL's fee-based online service have been dropping consistently, and in response the company has begun devoting more attention and resources to AOL.com, whose business model is attracting Web traffic and selling advertising.

However, despite the erosion in its subscriber ranks, AOL, a Time Warner Inc. subsidiary, still has a significant number of members. Its U.S. subscriber base stood at 22.2 million at the end of the fourth quarter, 2 million less than a year earlier and down 464,000 from the immediate prior quarter.

This means that the fee-based online service still provides significant ongoing revenue for AOL, Weiner said. "AOL is waking up to the power that it has always had and packaging (its content and services) in a way that has tremendous value. But this doesn't negate that they're still pursuing this dual strategy," Weiner said.

Posted by Chad Dickerson at 05:23 PM

EU formalizes UK iTunes pricing investigation

By Simon Taylor

The European Commission, the European Union's (E.U.'s) antitrust regulator, confirmed on Friday it has launched an investigation into whether Apple Computer Inc. is overcharging its British customers for music downloads. A spokesman for the Commission issued a statement saying an inquiry has been started into allegations that prices for downloads from Apple's iTunes Web site in the U.K. are substantially higher than prices for similar services on the company's French and German Web sites.

The Commission is also examining whether U.K. customers are prevented from downloading the same tracks from non-U.K.-based sites, the statement said. Under E.U. competition law it is illegal to segment the pan-European market into national territories in an attempt to obtain higher prices from customers in a specific country.

The inquiry follows a complaint by U.K. consumers' rights organization Which? in September 2004 that found U.K. iPod users were paying €1.14 (US$1.51) per download while prices in France and Germany were €0.99.

The complaint was brought by Which? to the U.K.'s competition authority, the Office of Fair Trading, which referred the matter in December to the Commission. Under E.U. law the Commission is responsible for cases with effects in more than one member state.

Posted by Chad Dickerson at 05:23 PM

Wall Street Beat: Takeover battles, Apple spark trading

By Marc Ferranti

News about Apple Computer Inc.'s iPod line, the continuing U.S. telecommunications sector merger saga, and a budding takeover battle in the Chinese online arena grabbed the attention of investors this week. On Wednesday, Apple updated the iPod family with, among other devices, a new 30G-byte model of its mini digital photo music player, which sells for US$349, or $150 less than the previous 40G-byte version. The company also dropped the price of the 60G-byte version by about $150, to $449.

Apple (ticker symbol: AAPL) shares Wednesday spiked by $2.94, to close at $88.23. Company observers say that Apple is making a healthy profit on iPod devices. For example, a recent analysis from IDC reported that Apple makes 35 percent to 40 percent margin on each iPod Shuffle player sold. An expected drop in flash memory prices will further fuel profits, IDC said.

In the telecom arena, Qwest Communications International Inc. Thursday made a new bid for MCI Inc. in an effort to snatch it away from Verizon Communications Inc. The new offer counters the deal, announced Feb. 14, for Verizon to buy MCI for US$6.7 billion.

MCI (MCIP) shares have ridden the turbulence in the sector to a new 52-week high, closing Thursday at $23.21, up 24.4 percent for the month.

The new Qwest offer is for the same amount that it had tendered earlier, about $8 billion, but this time the company is saying that it will guarantee the price. The acquisition mechanism announced by Qwest would allow for a faster payout to MCI shareholders than the Verizon deal.

MCI had rejected Qwest's earlier offer, after which Qwest publicized the fact that its bid was higher than Verizon's. MCI officials then had to explain publicly that Verizon is larger and more profitable than Verizon and thus a better fit. MCI said it would study the new Qwest offer.

The jockeying for position in the telecom world follows SBC Communications Inc.'s January announcement that it will acquire AT&T Corp. The deal paved the way for further industry consolidation as carriers scramble to fight the new telecom giant.

After the SBC announcement, the value of Qwest shares neared its 52-week high of $5.00, then plunged below $4.00 after the Verizon-MCI deal was announced. But since announcing that it intended to rebid, Qwest (Q) shares have moved back to the $4.00 range. Verizon (V) shares have inched down, closing Thursday at $35.50, 1.71 percent lower than its closing price one week earlier, when Qwest announced its intention to rebid.

Investor interest has also been piqued by a corporate takeover tussle in China. The efforts of Shanda Interactive Entertainment Ltd., China's biggest online-game company, to acquire Internet media company Sina Corp. has boosted the value of Sina on the Nasdaq exchange.

On Feb 18, Shanda announced that, together with related companies, it had paid $230 million for a 19.5 percent stake in Sina. Sina (SINA) shares jumped by $2.82, to $28.42, on the news. Though Sina Tuesday announced a shareholder rights plan, otherwise known as a 'poison pill,' to ward off a takeover, the move did not dim Sina's star significantly, as shares in the company continued to trade in the $27 range. Continued interest in the company is likely due to the fact that a merged Sina and Shanda would be the largest company in the competitive Chinese Internet market.

Telecom manufacturers, meanwhile, see continued price pressure. Ciena Corp. shares lost $0.35 Wednesday, sliding to $2.40, after the company said it does not expect its second fiscal quarter to be better than its first. Part of the problem, the company said, is that although its optical transport business has made some gains, margins on the equipment are low. It forecasts a second quarter loss of $0.05 to $0.07.

Posted by Chad Dickerson at 05:22 PM

February 24, 2005

ChoicePoint's error sparks talk of ID theft law

By Grant Gross

The revelation last week that data collector ChoicePoint Inc. has mistakenly given private information on up to 145,000 U.S. residents to identity thieves has led to renewed calls in Washington, D.C, for a national data privacy law. ChoicePoint, based in Alpharetta, Georgia, reached agreement Feb. 16 with 19 state attorneys general to tell the 145,000 potential victims that ID thieves may have gained access to personal information such as Social Security numbers and credit reports. Potential victims live in all 50 U.S. states, the District of Columbia, Puerto Rico, Guam and the U.S. Virgin Islands.

The ChoicePoint problem points to the need for a national privacy law, said representatives of the Electronic Privacy Information Center (EPIC) and the Center for Democracy and Technology (CDT), both privacy advocacy groups. For most U.S. companies, the only ID theft notification that's required is a California ID theft law, which requires companies doing business in the state to notify customers if their personal information has been accessed by an unauthorized person. The California law went into effect in July 2003.

"There certainly is agreement that we need better notification, exactly because of cases like this," said Ari Schwartz, associate director at CDT. "We're seeing (data companies) selling it to a lot of different people."

ChoicePoint has access to about 19 billion public records, and the company reportedly has information on virtually every adult living in the U.S.

In addition to calls for legislation from privacy advocates, U.S. Senator Dianne Feinstein, a California Democrat, has called for congressional hearings on a piece of privacy legislation she introduced this year. Feinstein's Notification of Risk to Personal Data Act, introduced Jan. 24, would require businesses and government agencies to notify the likely victim when there is a "reasonable basis to conclude" that a criminal has obtained unencrypted personal data.

Feinstein's bill lacks co-sponsors, and a similar bill of hers went nowhere in Congress in 2004. Asked of the bill's chances in 2005, a Feinstein spokesman said the ChoicePoint problems have shown the need for legislation.

"Moving any bill is always a difficult prospect, but now more people are coming to an understanding of the issue of identity theft," the spokesman said.

Feinstein, in a statement, called for the Senate Judiciary Committee to hold hearings on her bill as soon as possible. "I strongly believe individuals have a right to be notified when their most sensitive information is compromised -- because it is truly their information," she said in the statement. "And they have the right to decide what actions they want to take once a breach has been discovered. Unfortunately, data breaches are becoming all too common and current federal law does not require notification to consumers when these breaches occur."

Schwartz and Marc Rotenberg, EPIC's president, questioned whether ChoicePoint would have notified potential victims at all without the California ID theft law. "They've been reckless with people's information," Rotenberg said of ChoicePoint. "We'd like Congress to look into what's happening in this (data collection) industry."

David Bernknopf, a ChoicePoint spokesman, disagreed that the California law is the only reason potential victims learned of the problems. The company first notified the sheriff's office in Los Angeles County in October of the possible data leak because ChoicePoint believed the problem started there, he said.

In November, California law enforcement authorities asked the company not to publicize the problems because of an investigation, and it wasn't until January that investigators identified potential victims in California, Bernknopf said. This month, California authorities notified the company that additional victims outside California existed, and the company then began notifying those people, he added.

It's still not entirely clear how the ID thieves got access to ChoicePoint's data, Bernknopf said. Authorities believe it was the work of a group of people who used IDs stolen from legitimate businesspeople to set up phony businesses that contracted with ChoicePoint for ID checks, Bernknopf said. Among other services, ChoicePoint provides background check documents for businesses and government agencies hiring workers.

"They didn't use their own names as chief executive officers of these companies," Bernknopf said of the fake company scam.

The ID theft "fraudsters," as ChoicePoint calls them, sought names, addresses, Social Security numbers, driver's license numbers, credit reports and public information such as bankruptcies, liens and professional licenses, according to the company.

ChoicePoint remains unsure of how many people will be affected by the scam because the company doesn't know the extent of the thieves' ability to use the personal data, Bernknopf said.

ChoicePoint welcomes congressional hearings about protecting consumer data, Bernknopf added. Company Chairman and Chief Executive Officer Derek Smith, in two books published in 2004, argues that U.S. residents can achieve an acceptable balance between security and civil liberties, although he has also criticized privacy advocates as being paranoid.

"Each of us has a right to privacy; however, none of us have a right to absolute anonymity," Smith said in a statement on his company's Web site.

Smith and his company have also suggested a national debate on privacy and ID theft is needed. "ChoicePoint has brought attention to this issue, because it's the right thing to do," Bernknopf said.

But EPIC has long criticized ChoicePoint for its massive collection of information of innocent people. In December, EPIC called for a U.S. Federal Trade Commission investigation of ChoicePoint, saying the company has skirted Fair Credit Reporting Act rules designed to ensure that credit reports are accurate. EPIC contends that many of the records ChoicePoint sells to law enforcement agencies and financial services companies should fall under the fair-credit rules and be subject to review by the people who are the subject of those records.

Smith, in a letter to EPIC, called the group's charges an "inaccurate, misdirected, and misleading attack."

Posted by Chad Dickerson at 05:33 PM

Singapore's Straits Times to charge for access

By Martyn Williams

Singapore's The Straits Times newspaper will begin charging users to access its Web site from the middle of March, the newspaper's publisher, Singapore Press Holdings Ltd., said in a message to users on Thursday. The newspaper's move comes several months after it began requiring readers to complete a free registration process in order to access the newspaper online. In charging for content it joins a small number of publications around the world that are offering access to the full newspaper online in return for a subscription fee. Other major newspapers doing so include Hong Kong's South China Morning Post, The Wall Street Journal and the Financial Times.

The Straits Times will offer a one-month subscription for S$15 (US$9.20), a six-month subscription for S$72 and an annual subscription for S$120. A subscription will be required from March 15. In contrast a one-year subscription to the printed newspaper in Singapore costs S$276.

"We believe that we have a good and valuable product that users will want to pay for," the newspaper explained in the message. "It's also not a tenable business model to charge for the print edition of the newspaper and not for its online edition."

The newspaper will improve the content of the Web site as it begins the subscription service, it said. Business reports will be posted to the Web site 12 hours earlier at 6a.m., all showbiz gossip and lifestyle features will be online and the newspaper's consumer electronics and health supplements will be available in full on the same day that they are distributed with the newspaper. The archive will also expand from 3 days to 7 days, it said.

Posted by Chad Dickerson at 05:32 PM

Orange sues easyMobile for being orange

By Laura Rohde

Orange SA, France Télécom SA's mobile telephony division, is seeing red over the branding strategy being used by mobile operator easyMobile.com. It launched a trademark infringement suit against the U.K. startup this week to prevent what it sees as misuse of its shade of orange. Orange began the court action after six months of negotiations failed to persuade easyMobile.com to drop the color from its advertisements and marketing materials, the company's U.K. subsidiary, Orange Personal Communications Services Ltd., announced this week. Orange claims that easyMobile.com is attempting to "pass itself off" as Orange by using a similar color.

EasyMobile.com was launched as a low-price, no-frills MVNO (mobile virtual network operator) service in the U.K. last November by Danish telecom company TDC A/S and T-Mobile UK Ltd. The easyMobile brand is licensed from easyGroup (U.K.) Ltd., which has used the color orange in the branding for all of its divisions since its launch in 1998. It also owns easyJet, easyCar and easyInternetCafe.

EasyMobile.com, which is owned by Telmore U.K. Ltd., said it doubts U.K. consumers are being confused by its branding and that it is ready to do battle with Orange.

In an letter made public this week, Frank Rasmussen, who founded Telmore and is now chief executive officer of easyMobile.com, accused Orange of using the issue as a way to short circuit easyMobile's emergence in the U.K. and other European markets.

"I am not a lawyer, but personally I do not believe this court action has anything to do with the use of the color orange," Rasmussen wrote in the letter. "We are going to launch a very strong concept and Orange is facing dramatic changes in the market. Why Orange is choosing to fight in the court is really not clear to me. We certainly don't want to be confused with Orange. Our war is going to be on the real battlefield: who can offer the British customers the best combination of freedom, low price and high service?"

Representatives from Orange and easyMobile.com declined to comment further on the matter.

Posted by Chad Dickerson at 05:32 PM

T-Systems, Siebel offer hosted CRM service

By John Blau

T-Systems International GmbH, the IT services subsidiary of German telco Deutsche Telekom AG, is rolling out a hosted CRM (customer relationship management) service based on technology from Siebel Systems Inc. The hosted Siebel CRM OnDemand service is targeted at small and medium-size companies, initially in the German-speaking countries of Europe, in addition to the Croatia, the Czech Republic, Hungary, Poland, Russia and Slovakia, according to T-Systems spokesman Paul Baur.

"We have a strong presence in the German-speaking region and see a lot of potential for a hosted CRM solution in Eastern Europe," he said. "That's why we are focusing on these countries for now."

Companies pay a fixed monthly price of €70 (US$93) per user and no software license is required. Those subscribing to the service by May 16 will receive the first month free and a 20 percent discount for a one-year contract.

Companies with 200 employees can reduced their CRM costs over a two-year period by as much as 60 percent with the T-Systems hosted CRM offering, compared to systems they operate on their own servers, according to T-Systems.

The IT service provider is delivering the service through its own global web of 32 data centers, with a total storage capacity of more than 2.1 petabytes. The data centers are linked via connections up to 5M bps (bits per second) to a dedicated 20G bps backbone network . Customers can access it via an encrypted Internet connection.

In a next step, T-Systems plans to offer CRM services tailored to specific industries, such as car manufacturing and financial services.

Posted by Chad Dickerson at 05:32 PM

February 23, 2005

Scientists use antispam technology in AIDS vaccine work

By Stacy Cowley

Microsoft Corp. researchers are targeting computer algorithms developed for fighting spam at a very different enemy: HIV, the forerunner of the AIDS (Acquired Immune Deficiency Syndrome) disease. Two Microsoft computer scientists, David Heckerman and Nebojsa Jojic, are part of a team presenting Wednesday at a Boston AIDS research conference an overview of their work on using software programs to uncover patterns in HIV (Human Immunodeficiency Virus) genetic mutation. The pair are collaborating with bioengineers from Australia's Royal Perth Hospital and the University of Washington in Seattle to examine HIV's wild mutation patterns, a better understanding of which researchers see as a key step toward developing broadly effective AIDS vaccines.

Microsoft uses complex data-mining tools to help its Outlook e-mail software and Hotmail e-mail service comb through the vast torrent of incoming messages to separate spam from legitimate e-mail. With spammers ever-adjusting their messages to beat automated filters, spam-detection tools also need to dynamically evolve and flexibly seek out changing patterns.

The catalyst for the alliance between Microsoft's researchers and medical scientists was the idea that software designed to link "VIAGRA" and "V1AGXA" might also be adept at tracking DNA sequence mutations. If scientists can find stable sequences that persist through multiple HIV strains, they can more effectively craft vaccines to target those areas.

Simon Mallal, executive director of the Royal Perth Hospital's Centre for Clinical Immunology and Biomedical Statistics, credits Microsoft's technology with enabling the medical research team to sift through patient data 10 times faster than any previous research technique.

The group's vaccine designs are currently undergoing laboratory testing at Perth and the University of Washington, using immune cell samples taken from HIV-infected patients. Researchers expect to release initial results later this year, but they're already optimistic about the research technique, suggesting it could also be used for work on hepatitis C and other mutating viruses.

Posted by Chad Dickerson at 06:19 PM

Lycos launches dating search engine

By Juan Carlos Perez

Lycos Inc. is making it easier for lonely hearts to find their soulmates online. The company will launch on Wednesday a search engine that only indexes dating Web sites, giving users links to personal profiles found at iMatchup.com Inc., LoveAccess.com Inc., Tickle Inc., True.com and Lycos' own Matchmaker.com. "We did research last year and it revealed that (online) dating customers want a robust and efficient way for searching for dates online," said Curt Degenhart, a Lycos senior product manager.

Lycos Dating Search, as the search engine is called, contains millions of profiles and photos, and Lycos is in the process of striking deals with other online dating providers, he said. The site is at http://datingsearch.lycos.com and there will be a link to it from the main Lycos portal and from other sites on the Lycos network, he said.

Lycos is indexing the full text of the profiles it receives from the dating Web sites, providing in some cases more extensive search capabilities of their content than is possible at the dating sites themselves, Degenhart said.

Lycos Dating Search index will be refreshed on a daily basis, and use of the search engine is free, he said.

After a user runs a query, Lycos Dating Search returns portions of the profiles it finds. To read the full profile, users can click on the search result, which takes them to the original dating site.

Users arriving at the original dating sites from Lycos Dating Search get access to the full text of the profiles even if those profiles are normally not accessible to users who aren't dating-site subscribers, he said. There are no limits to the number of profiles Lycos Dating Search users can view.

Lycos Dating Search provides a variety of features and parameters to frame and narrow queries.

Lycos, a Waltham, Massachusetts-based subsidiary of South Korean Web portal operator Daum Communications Corp., will generate revenue in a number of ways from Lycos Dating Search. Lycos will sell online ads and charge partner dating sites fees. For example, partners will pay Lycos every time a Lycos Dating Search user clicks through to their site and/or every time a user signs up for their service, Degenhart said.

Posted by Chad Dickerson at 04:55 PM

New products let you take your TV on the road

By Martyn Williams

A new generation of products is promising users the ability to remotely access their TVs from around the house on a local network or from around the world via a broadband Internet connection. Three such products made a splash at January's Consumer Electronics Show in Las Vegas and two of them are already available. While all three are slightly different, they all offer similar functions -- and all three systems are completely legal.

Each of these three products supports one-to-one streaming so multiple users can't be viewing the same stream at the same time. This means broadcasters aren't trying to block the systems, according to each of the three companies behind these systems.

Sony Corp.'s Location Free TV system is the most expensive of the three and the only one that doesn't require you to use a PC to view content. A base station for the system is bundled with a dedicated wireless TV. Two TVs are available, the 12.1-inch LF-X1 and the 7-inch LF-X5, and the sets cost US$1,500 and $1,100 respectively.

The base station connects to your TV antenna and up to two additional devices, like a TiVo or satellite tuner, all of which can be controlled from the TVs. Around the home, the TVs receive a high-quality MPEG2 video stream across a dedicated wireless link while when outside of the home they rely on a wired or wireless Internet connection to receive a lower quality MPEG4 stream.

"I took one of these on a business trip to New York and I sat at a Starbucks near Central Park in the morning and watched Japanese television," said Satoru Maeda, a general manager in Sony's Tokyo-based TV group. Maeda was speaking at a Sony event in Tokyo on Friday.

Orb Networks Inc. offers an all-software solution that runs on a PC at home and can be remotely accessed from a PC, PDA (personal digital assistant) or smart phone. Users can access images, video and music files stored on the host PC and, as long as a TV tuner is connected, live television. The system uses Windows Media or Real streaming formats. It's been available since January for Windows XP Media Center PCs and a beta version for Windows XP was released last week. Orb offers the system on a subscription basis and charges either $10 per month or $80 per year for service.

The Orb system can't control additional devices but it does offer access to programs recorded using the Media Center PC software.

"It's spontaneous access to your media," said Joe Harris, vice president of marketing at Orb Networks. "We are able to take any media you have on your home network and bring that to any device that has a browser and a media player connected to the Internet."

In demonstrations and tests of the two systems both delivered impressive results.

The Orb system was tested over several days last week from computers in Tokyo -- both an Apple iMac and Windows-XP based notebook PC -- to a Windows XP Media Center PC in San Jose. On most days the system delivered an uninterrupted stream of several hours of San Jose prime-time television at a reported speed of 491K bps (bits per second) and 30 frames per second. While the image wasn't as clear as conventional television, it was good enough to fill a notebook computer screen and not impact the enjoyment of the programs.

The Sony system delivered comparable results during a shorter demonstration. At CES, a system showed a live stream of TV from a base station back in Tokyo while at the Sony event last week a system was connected to base station in San Diego. The Sony stream was running at about the same bandwidth as the Orb TV system.

As might be expected, changes in bandwidth can have a big hit on the system. At some points during the weekend -- specifically when it was Sunday afternoon in Japan and Saturday evening in California -- the available bandwidth between the two locations couldn't support an uninterrupted Orb TV stream. Similarly, during the Sony demonstration on Friday the link back to San Diego suffered from the same occasional glitches, although the test was too short to determine how frequently this occurs in average use.

The tests also demonstrated the importance of access to recorded content. Because of the 17-hour time difference between Japan and the U.S. West Coast, the TV line-up available during Japan's evening hours consisted largely of overnight shopping programs.

In addition to the Sony and Orb systems, a third product was on show at CES and is promised soon. Sling Media Inc.'s system combines a hardware base station, called a Sling Box, with client software running on a PC. The base station hooks up in a similar manner to Sony's device and can be controlled remotely. Sling demonstrated remote control of a TiVo using its system at CES.

The system streams TV programs using Windows Media and constantly measures available bandwidth and adjusts the encoding to suit current connectivity, said Jeremy Toeman, vice president of product management at Sling Media, while presenting the system at CES. The system also tries to provide an uninterrupted audio stream because research has found people are far more willing to put up with glitches in the picture if the audio remains unaffected, Toeman said.

Sling expects to put the system on the U.S. market for around $250 during the first half of this year and expects versions for Japan and European markets to follow.

Posted by Chad Dickerson at 04:55 PM

AOL to revamp inStore, replicate concept

By Juan Carlos Perez

America Online Inc. (AOL) plans to roll out significant enhancements to its inStore retail comparison shopping Web site in April, as the company simultaneously develops similar Web sites that will replicate the inStore concept for other industries such as travel and autos, an AOL executive said. The inStore enhancements, which AOL refers to collectively as inStore 2.0, will include an improvement to the AOL Wallet service, expanded personalization capabilities and an extended integration with the AOL Instant Messenger (AIM) instant messaging service, said David Lebow, AOL's executive vice president and general manager of AOL Media Networks. AOL is also working hard at building loyalty features into inStore, but those may not be included in the April upgrade, Lebow said. "This new package of enhancements will carry us through to the holiday season," Lebow said.

AOL wants to make it easier for inStore visitors to use the AOL Wallet to do transactions with the vendors whose products can be found on inStore, Lebow said. The AOL Wallet is a service that lets subscribers store frequently used credit card numbers and shipping addresses so that they don't have to enter that information again when they make a purchase online. Another enhancement being contemplated for the AOL Wallet is the masking of actual credit card numbers with virtual ID numbers for additional security, an AOL spokesman said.

Meanwhile, inStore will have new capabilities to remember what shoppers did on their previous visits and, based on that knowledge, make personalized suggestions and offer different options to different shoppers, Lebow said. This would be an extension to the level of personalization already offered through inStore's existing "My Favorite Stores" feature, which lets shoppers create lists of their preferred stores; these lists are displayed for shoppers on the inStore home page and in other sections. "What we want is for the Favorite Stores function to be intuitive so that it remembers what you did last time and takes you back to certain places," Lebow said.

Finally, the new loyalty features will be provided in partnership with companies that specialize in loyalty programs to give shoppers incentives, such as credits at certain stores and cash rewards, Lebow said. "We're examining different options now and are working deeply on this right now," he said. If these loyalty features aren't rolled out in April, they will be added to inStore at some point before the holiday season, he said.

InStore, which was launched in September of last year in partnership with BizRate.com, has been such a success for AOL both in terms of revenue and visitors that the company is taking its concept of a search-driven comparison-shopping Web site and replicating it, Lebow said.

AOL has already announced a partnership with travel search engine Kayak Software Corp. to develop an inStore-like site for travel products that is expected to launch this year. Moreover, similar sites focusing on the auto industry and on personal ads are in the planning stages now, Lebow said. "InStore is very retail oriented, but we'll use its model across categories: search functionality at the center with premium advertising," he said.

At inStore and its forthcoming cousins, AOL generates revenue in a variety of ways, including conventional banner ads, fees for placing stores and products in premium locations on the site and fees for click-throughs to the online partner stores, Lebow said.

Posted by Chad Dickerson at 04:54 PM

UK store expands RFID trial, includes lingerie

By Laura Rohde

U.K. retailer Marks & Spencer PLC (M&S) will extend its ongoing trial of radio frequency identification (RFID) technology for the management of its clothing stock from nine of its stores to 53 in the second quarter of next year. "The feedback so far from our staff has been very positive in that the RFID tags have clearly improved our stock-taking process. What takes up to eight hours a week to do manually can be done with RFID tags in about an hour," said M&S spokeswoman Olivia Ross on Wednesday. "Plus the staff have said that they find the technology easy to use: simply waving a scanner over a rack of clothes."

RFID is a method for storing, receiving and transmitting data using antennas on tags that respond to radio frequency queries. Tags can be read when a remote scanner is passed over them. M&S began a trial of the technology itself in 2003 and then moved on to trial RFID on an item level in April 2004. The current trial is only for men's suiting but will include women's undergarments in 2006, Ross said.

"We are looking to test RFID with size-complex items, and for bras alone, there could be over 40 sizes," Ross said. The extended trial is expected to run through the third quarter of 2006, after which the company plans to continue with additional tests. Ross said there are no plans for what items future trials would include or time lines for when RFID would move from the test stage to being used on a regular basis in M&S stores.

BT Group PLC will be the main contractor on the second phase of the trial, providing M&S with IT services like deployment assistance and maintenance of the RFID readers. BT is also assisting with the implementation of RFID in M&S' food supply chain. M&S has contracted with Intellident Ltd. for the scanner technology, while the microchips are from EM Microelectronic-Marin SA.

M&S is quick to point out that the only purpose in using RFID is for improving its stock-taking process. The RFID tags are not scanned at the checkout, nor is any link made between the garment information held by the tag and the customer's details, such as credit card information, Ross said.

"We don't match personal details to the garment and we will never be doing that," Ross said. "We are open about the trials and the customer feedback we've been getting has been positive. The customers we've polled in the stores using RFID have said they noticed an improvement in stock availability which they like."

In the current trial, the RFID chips are placed inside throwaway paper labels. During the second phase of the garment trial, the chips will be integrated into the paper barcode labels M&S already uses to record the size and cost of the item, and will have the words "Intelligent Label for stock control use" marked on it so shoppers are aware of the RFID chip. The intelligent labels can be read at speeds 20 times faster than barcode labels, M&S said.

The company also provides leaflets to customers in the stores where the tags are used explaining the new technology as well as what M&S is doing -- and will not be doing -- with the information it collects, Ross said.

Peter Harrop, chairman of the Cambridge, England-based RFID specialist IDTechEx Ltd., said that companies planning to use RFID must conduct trials that show customers the technology's benefits, such as well-stocked stores, and address potentially sensitive issues from the outset.

Harrop pointed to the decision by clothing retailers Benetton Group SpA and Prada (I Pellettieri d'Italia SpA) to drop their RFID trials after receiving negative reaction to tags being put in women's lingerie and women's dresses, respectively. "I think Prada was quite surprised by the reaction of women shopping in its New York store who didn't like the idea of the store recording dress sizes," Harrop said.

U.K.-based retailer Tesco PLC, also found itself dealing with protests after it was revealed that during its pilot with Gillette razor blades, the tags were programmed to send instructions for in-store cameras to take pictures of people with the product at the check-out stand. "There was some protest, but Tesco completed the trial, which showed that the technology works," Harrop said. "Tesco has decided to proceed with its RFID trials but to focus on ones that don't have to do with catching criminals for the time being."

Harrop believes several of the privacy campaigners' concerns are contrived and, based on information culled from the 1,300 European RFID case studies IDTechEx has in its database, doesn't think privacy issues will derail the technology's use. "People face more intrusion on their privacy through the use of their mobile phones, which can continuously track their whereabouts, and that hasn't kept people away from that technology," Harrop said. "The main thing that would keep RFID tags from becoming ubiquitous is cost."

Posted by Chad Dickerson at 04:53 PM

Singapore strengthens cyber defenses against terrorists

By Sumner Lemon

The Singaporean government will implement a three-year information technology project designed to strengthen the defenses of the southeast Asian nation against terrorists, criminals and hackers, government officials said Tuesday. "Terrorists are increasingly using infocomm (information and communications) technology and the Internet as a tool to seek funds, recruit members, spread propaganda and plan attacks with members in different parts of the world," said Tony Tan, Singapore's deputy prime minister and coordinating minister for security and defense, according to a written copy of a speech delivered in Singapore on Tuesday.

To defend Singapore's government and businesses from attacks by terrorists or hackers, the Singaporean government plans to spend S$38 million (US$23.4 million) over three years to implement its Infocomm Security Masterplan, Tan said. "We cannot afford to treat the threats from cyber terrorists, cyber criminals and irresponsible hackers lightly," he said.

The Infocomm Security Masterplan, which was developed by Singapore's multi-agency National Infocomm Security Committee, involved extensive consultations with government agencies and the private sector. The plan is designed to strengthen Singapore's IT defenses in three key areas: information protection and risk mitigation; situational awareness and contingency planning; and the development of professional skills and promoting research and development of security technologies, Tan said.

Several security-related projects will be undertaken as part of the Infocomm Security Masterplan, according to the Infocomm Development Authority of Singapore (IDA). Those projects include establishing a National Cyber-Threat Monitoring Center to analyze threat information on a round-the-clock basis and conducting a vulnerability of the nation's critical infrastructure to determine measures required to strengthen IT-related defenses, the IDA said.

Posted by Chad Dickerson at 04:52 PM

Italy's mobile phone taps on overload

By Philip Willan

Italy's largest mobile phone operator, TIM (Telecom Italia Mobile) SpA, has written to public prosecutors' offices throughout the country to warn that its system for intercepting phone calls is close to collapse, a spokesman for the company said Tuesday. "It's simple: the number of phone tap requests is constantly increasing and we have written to the prosecutors' offices to warn them that we are close to the limit and that we won't be able to cope with further requests," a TIM spokesman said in a telephone interview.

Every Italian mobile phone operator is obliged by law to maintain the capacity to intercept calls on 5,000 handsets but the operators have found themselves in difficulty in the face of requests to intercept up to 7,000 phones, according to published reports. Taps must be authorized by a judge and normally last for 15 days, or 40 in the case of organized crime suspects.

The number of requests has been doubling every two years, Justice Minister Roberto Castelli warned recently in a newspaper interview, adding that it is far higher than in other European countries.

In Italy 72 people have their phones under surveillance for every 100,000 inhabitants, according to figures from Germany's Max Planck Institute. That compares with 62 in the Netherlands, 32 in Switzerland, nine in Austria and 0.5 in the United States, the German criminological research institute said.

Asstel, the Association of Italian telecom operators, has responded to the technological and financial crisis by seeking a meeting with the Justice, Communications and Economy Ministries to discuss the upgrading of interception technologies and who should bear the cost.

Magistrates insist the phone taps are an essential instrument in the battle against crime and say investigators have to rely on them because of the difficulty in finding reliable witnesses.

Civil rights campaigners are concerned, however, that the investigative technique involves a massive violation of the right to privacy. "We must switch off this Big Brother which is invading citizens' lives," said Paolo Cento, a lawmaker for the opposition Greens Party.

Posted by Chad Dickerson at 04:51 PM

February 22, 2005

Hackers post Paris Hilton's address book online

By Paul Roberts

Hackers penetrated the crystalline ranks of Hollywood celebrity Saturday, posting the cellular phone address book of hotel heiress and celebrity Paris Hilton on a Web page and passing the phone numbers and e-mail addresses of some of Tinsel Town's hottest stars into the public realm. A copy of Hilton's T-Mobile USA Inc. cell phone address book appeared on the Web site of a group calling itself "illmob." The address book contains information on over 500 of Hilton's acquaintances, including super celebrities such as Eminem and Christina Aguilera. It is not known how the information was obtained, but the release of the contact book may be further fallout from a hack of T-Mobile's servers that came to light in January.

The Hilton address book was posted on the illmob Web site, http://www.illmob.org, early Sunday and is a simple HTML table listing the phone numbers and e-mail addresses for acquaintances, along with other useful information, such as the number of the San Francisco Hilton Hotel and celebrity attorney Robert Shapiro.

The leak is bound to prompt a furious round of unplanned number changes among Hilton's coterie, after fans and curious Web surfers learned of the hack and began dialling their favorite celebrities.

Eminem's phone number was changed. Limp Bizkit front man Fred Durst's voice mailbox was full. Tennis star Anna Kournikova's number was busy, despite repeated attempts to get through. Robert Shapiro's answering machine picked up when called and provided a number to page the star attorney in an emergency.

There was no answer at Hilton's home, nor did sister Nicky Hilton answer calls to her phone.

Reached by phone, actor Kevin Connelly, of the cable television show "Entourage," said he had received between 200 and 300 phone calls since early Sunday, as word of the hacked address book spread across the Internet. Connelly plays opposite Adrian Grenier in the HBO show about a young celebrity and his colorful entourage of old school chums. He declined to comment on whether he knew Hilton or why his name appeared in her T-mobile phone list.

Connelly, who received at least one other call while on the line with this reporter, said he would likely change his phone number Monday to stop the harassment.

It was unclear Sunday how the cell phone contact list was obtained. However, Hilton's was one of a number of celebrity cell phones that was reportedly compromised in an attack on T-Mobile's network that netted information on 400 of the company's customers, including sensitive information from the account of a U.S. Secret Service agent.

In January, the Bellevue, Washington, mobile carrier acknowledged that Nicholas Jacobsen, a California-based hacker, compromised its internal computer systems in 2003 and viewed the Social Security numbers of 400 customers. T-Mobile, which is part of Deutsche Telekom AG, did not immediately respond to requests for comment late Sunday.

Jacobsen pleaded guilty on Feb. 15 to one felony charge of accessing a protected computer and causing reckless damage. He is scheduled to be sentenced in May and faces a maximum possible sentence of five years imprisonment and a US$250,000 fine.

Posted by Chad Dickerson at 05:15 PM

Power outage pulls plug on Wikipedia

By Sumner Lemon

A power outage inside the facility that hosts Wikipedia's servers has forced the free, community-authored encyclopedia offline, according to a message posted on the Wikipedia Web site. At approximately 2:15 p.m. PST on Monday, circuit breakers were tripped inside the colocation facility that houses Wikipedia's servers, taking out power to places inside the facility, the statement said. After several minutes, most of Wikipedia's servers and the switch that connects these servers and links them to the network had rebooted, it said.

Most of the servers quickly came back online, however, Wikipedia's MySQL database had been corrupted by the power outage, the statement said. Currently, Wikipedia is backing up copies the raw data stored in its 170G-byte database and is running recovery procedures, it said.

The statement did not say when the Wikipedia encyclopedia would be available again. In the meantime, the statement referred users looking for information to use cached versions of the Web site available through Google Inc.'s search engine.

Posted by Chad Dickerson at 05:14 PM

EBay eyes open source for development software

By Johan Bostrom

Following a path laid by open source developers, eBay Inc. may open up some of its source code in order to quicken the pace of application development and open up new business opportunities. The company is "currently investigating" the possibility of giving way the source code for its software development kit (SDK), under some form of open-source licensing plan, said Matt Ackley, senior director at eBay’s developer program.

"It's one way to deal with our pace-of-change problems," Ackley said after a keynote speech at the Web Services Edge show this week.

In general, efforts by large e-commerce companies to encourage research and development by third-party developers has fostered innovation.

Developers, attracted by the chance of getting a share of the big e-commerce companies' business, are creating new ways to drive site traffic.

According to eBay, external programmers and entrepreneurs have created more than a thousand applications using the company's SDK and application program interface (API).

EBay claims that 42 percent of the items on its Web site come in through external applications.

"Our biggest challenge is how to let the third-party developers adapt to the rapid changes of our platform," Ackley said. "We don't have the resources to offer SDKs in all languages and update the information as often as we would like. Today, we provide this forum for the developers to contribute their code," Ackley added, referring to SDKs. "What if we actually also contributed our code?"

The idea is welcomed by Alex Poon, a software developer in Los Altos, California. Poon makes a living from successfully implementing his idea to allow mobile phone access to online auctions through eBay’s API.

"From a developer point of view I love open source," Poon said, pointing out that, however, his own company has passed the stage where an open-source SDK would serve its purpose. Since last summer, anyone with a Java-enabled mobile phone in the U.S. can search and bid on eBay items using the Pocket Auction application developed by Poon and his colleague Richard Chen.

"I did my Ph.D on medical informatics and have been working with wireless, pen-based devices. The concept is still the same with mobile phones and we decided to do something other than game applications," Poon said.

Today, Bonfire Media -- comprising Poon, Chen and a third employee -- is selling its product via mobile carriers to customers across the U.S. Pocket Auction not only feeds online auctions with more potential bidders: eBay also receives a fee from Bonfire for use of the API.

EBay's Ackley defends the charge, which ranges from a flat fee of US$100 up to $5,000, depending on how many calls to the auction database that the applications does per day, plus a negotiated fee.

"We think it promotes efficiency. It's kind of like a toll," he said.

Poon seems pleased with the business model. "Well, they allow other people to make money. I think it's fair."

EBay's willingness to work with the developer community and find new ways of making money appears to be shared by other e-commerce sites.

Both Google Inc. and Amazon.com Inc. offer Web service programs and hand out free developer kits.

This doesn't mean, however, that the online giants are ready to give away their wares and databases for free. Alan Taylor, a programmer in Boston, is experiencing Amazon's efforts to balance between embracing the flourishing programmer community and guarding its own business.

Taylor runs the Amazon Light site, utilizing Amazon's free API to bridge search queries to other sites. His site allows a user to locate a book, or any product, in Amazon’s database and simultaneously check if the book is available at the nearest library, create a blog entry about the item or buy it.

Until last week, if the item was a DVD, you could also click and see whether it was for rent at Netflix. Or if it was a CD, one click allowed users to check if the title was available at Apple Computer Inc.’s iTunes music store. The features appeared to be lapped up by users but a step outside of Amazon's rules.

"I got a letter from their Web services team asking me to remove the links to Netflix and iTunes," Taylor said.

"It didn't match up with the license agreement," Jeff Barr, Web services "evangelist" at Amazon.com, said. "The expectation is that traffic comes back when we give away data."

Taylor, who is receiving 7 percent to 8 percent of the value of each Amazon purchase through his application, removed the links. "From a useful standpoint, I think it's kind of a shame."

Taylor also says that this type of reaction obstructs creativity among third-party developers. "It's a little bit of a chill: 'Oh, I don’t want to deal with these giants' legal departments.' As soon as a company put up a single entry barrier they need something really worth while in order to get people playing with it."

However, Taylor welcomes eBay’s examination of an open-source model for at least some of its software.

"It's great if you are talking about true open source, the more open the better," Taylor said.

Posted by Chad Dickerson at 05:14 PM

EU offers privacy guidelines for RFID

By Laura Rohde

The European Union (E.U.) has expressed concern that the use of RFID (radio frequency identification) technology by businesses and governments could violate human dignity as well as data protection rights and has published guidelines for businesses and agencies intending to use the technology. The E.U.'s executive body, the European Commission, tapped its advisory body on data protection and privacy, known as the Article 29 Working Party, to conduct its first assessment of data protection issues related to RFID. The technology is a method for storing, receiving and transmitting data via antennas on tags that respond to radio frequency queries.

"The ability to surreptitiously collect a variety of data all related to the same person; track individuals as they walk in public places (airports, train stations, stores); enhance profiles through the monitoring of consumer behavior in stores; read the details of clothes and accessories worn and medicines carried by customers are all examples of uses of RFID technology that give rise to privacy concerns," the group wrote in its report, published Jan. 19.

The resulting guidelines include gaining unambiguous consent from individuals where RFID is used and providing clear information to the so-called data subjects including the presence and location of RFID tags and trackers, what sort of data is being collected and how it is being processed. The E.U. also wants individuals to be made fully aware that they have the right to gain complete access to any personal data being collected and stored on them as well as the right to check on the accuracy of the data.

The global RFID market is forecast to be worth US$7.26 billion by 2008, according to a study by IDTechEx Ltd. released Monday. The Cambridge, England-based RFID specialist estimates that by 2008, 46.8 billion tags will be sold for the tracking of medicines, baggage, animals, books and tickets while another 15.3 billion tags will be sold for pallets and cases.

Additionally, by 2010, 48 percent of RFID tags by volume will be sold in East Asia, followed by 32 percent to North America, IDTechEx said.

The E.U. data protection working group said that such widespread use creates a variety of data protection concerns. "The problem is aggravated by the fact that, due to its relative low cost, this technology will not only be available to major actors but also to smaller players and individual citizens," the report said.

The group said it was seeking to provide guidelines not only to those using RFID technology but to manufacturers of RFID tags, readers and applications as well as RFID standardization bodies. For example, the International Organizations of Standardization has developed some sector specific standards for the use of RFID tags on freight containers, transport units and animals, while the International Civil Aviation Organization, which is affiliated with the United Nation, has developed global standards for passports that include RFID chips.

The working group's report urged such standardization bodies to include data protection features in technical specifications. It also called for the use of encryption on tags and applications to prevent unauthorized disclosure of the data collected and stored.

Less likely to be welcomed by businesses is the group's desire to make it easy for individuals to disable RFID tags. "When the individual has a right to withdraw his/her consent or object to the process and the subsequent right to disable the tag, both manufacturers and deployers of RFID technology should ensure that such operation of disabling the tag is easy to carry out," the report said.

The Article 29 Working Party group said it is seeking public consultation until March 31.

Posted by Chad Dickerson at 05:14 PM

Europe takes lead on improving online privacy notices

By Scarlet Pruitt

Despite concern voiced by some Internet users that their privacy is not being adequately protected when they surf and shop online, Web site privacy notices, with their micro-font, epic length and droning legalese, have done little to reassure them. Europe may be leading the way in making online privacy notices more palatable, however, thanks to a European Union plan that proponents hope will spread worldwide. The E.U.'s committee on data privacy, also known as the Article 29 Working Party, issued a guidance on corporate privacy notices late last year, calling for layered, easy to read privacy statements.

The guidance, which is not mandatory, is beginning to take hold as companies such as Microsoft Corp. and Proctor & Gamble Co. have already rolled out revamped notices. Privacy statements are considered crucial in telling Internet users how their personal information will be used by companies. They explain whether data can be sold to third parties, for instance, and what the users' rights are in accessing or correcting data.

The working party coordinated with privacy experts and corporate leaders to call for layered privacy notices in which information is presented in three tiers: short, condensed and full. Each layer should contain certain relevant information, such as the full name of the Web site controller and the purpose for processing information, and users can click through from the short notice to the full notice, depending on their level of interest.

The plan calls for using straightforward, easy to understand language and authors of the guidance say that although the information is provided in a more succinct form the privacy statements should still be complete. These sort of multilayered notices are also being examined by the Organization for Economic Cooperation and Development (OECD) and Asia Pacific Economic Cooperation (APEC), and advocates hope they will become the global standard for communicating privacy online.

It may help that some of the first companies to adopt layered notices, such as Microsoft and IBM Corp., are global concerns that seek to offer consistent information across their various online properties.

Microsoft, for example, has already launched the layered privacy notices on its MSN sites in France, Germany, Belgium, Spain, the Netherlands and the U.K. and has plans to roll them out on other global sites, according to Peter Fleischer, Microsoft's director of regulatory affairs. IBM has layered notices on its European sites, as well as on its main U.S. property.

But reader-friendly privacy notices are still relatively rare and it may take a while to compel companies to follow the new guidelines.

Proponents of the new notices argue that they are key to fostering a sense of trust in online business, as well as making citizens fully aware of their online rights.

The U.S. and other countries have the same sort of concerns around improving online privacy, but consensus on a solution seems harder to come by.

"In Europe, unlike the U.S., the regulators have been focusing on the harmonization of privacy notices for many years," Fleischer said.

The U.S. still has to negotiate a consensus with the various stakeholders, such as corporations, regulators and privacy groups, he added.

That said, certain U.S. groups such as financial services regulators are studying the layered notices and advocates hope that the standards will soon cover the worldwide Web.

"The layered notice is so compelling, it's inevitable they will be rolled out further," Fleischer said.

Posted by Chad Dickerson at 05:13 PM

Microsoft enters IPTV deal with Alcatel

By Scarlet Pruitt

Microsoft Corp. Tuesday announced plans to further roll out its Internet Protocol TV (IPTV) software under a global agreement with French telecommunications equipment company Alcatel SA. Together they will market an integrated IPTV delivery product using Alcatel's network access equipment and system integration services and Microsoft's TV IPTV Edition software.

Under the deal, Alcatel will make Microsoft its preferred network access and system integration partner, while Microsoft TV will serve as the French company's preferred software partner on global IPTV sales, they said.

The companies will also partner on developing and customizing applications for broadband providers, as well as integrating software into networks.

Microsoft has also reached IPTV deals with SBC Communications Inc., Verizon Communications Inc. and BellSouth Corp., among others.

Posted by Chad Dickerson at 05:13 PM

Microsoft, Otto team on e-commerce

By John Blau

Microsoft Corp. and Otto GmbH & Co. KG, one of Europe's largest mail-order and online retailers, have agreed to collaborate in the area of e-commerce application development, the companies said Monday. The primary aim of their partnership will be to jointly develop online shopping applications -- based on Microsoft Windows technology -- across PC, TV and wireless platforms.

One of the projects, Digital Lifestyle Shopping, will be based on Microsoft Windows XP Media Center Edition 2005.

Microsoft plans to demonstrate the interactive shopping system at the Cebit trade show in Hannover, Germany, next month and later in the year at the IFA consumer electronics show in Berlin.

The Otto Group, with annual revenue of around €14 billion (US$18 billion), has also agreed to join Microsoft's Smarter Retailing initiative. The initiative aims to help retailers improve sales and operations by delivering advanced applications for digital devices such as smart phones and PDAs (personal digital assistants) as well as RFID (radio frequency identification) tags.

Posted by Chad Dickerson at 05:13 PM

Yahoo to launch music download service in Japan

By Martyn Williams

Yahoo Japan Corp. has tied up with Sony Corp. affiliate Label Gate Co. Ltd. and will soon launch a music download service, the company said Monday. The download service will be based on Label Gate's existing Mora download service and offer around 73,000 songs from 39 domestic record companies. The files will be encoded in Sony's ATRAC3 data compression format and be playable on compatible devices including some models of cellular telephones, NetMD-type MiniDisc players, ATRAC CD players and the recently launched PlayStation Portable, said Nozomi Yamaguchi, a spokeswoman for Label Gate in Tokyo.

The songs will cost between ¥158 and ¥368 (US$1.50 and $3.50), said Yamaguchi.

Yahoo Japan attracts around 39 million visitors per month and is consistently ranked as Japan's number one web destination.

Label Gate began operations in 2000 with support from a handful of record companies and has steadily attracted the support of additional companies. It relaunched its own Web-based download service under the Mora name in April 2004 and in October launched a second service, called Music Drop, that provides music in the Windows Media format. In late 2004 the monthly download rate began to pick up and after breaking 100,000 downloads in October and 200,000 downloads in November it passed the 300,000 monthly download mark in December.

Posted by Chad Dickerson at 05:12 PM

New York Times Co. buys About.com for $410 million

By Stacy Cowley

The New York Times Co. said Thursday it will pay US$410 million in cash to purchase online content network About.com Inc. from current owner Primedia Inc. The companies expect to close the deal by early April. About.com is a rare survivor from the dot-com boom. The New York venture launched in 1997 as The Mining Company, then sold in 2000 to Primedia in an all-stock deal initially valued at $690 million. Primedia envisioned the site as a linchpin for its strategy of online-and-offline content synergy, but the publishing company struggled with strategy execution, debt and management changes.

The New York Times Co. called About.com "highly profitable" and said the Web site network will complement the company's existing digital assets, such as the Web site for its New York Times newspaper and its boston.com portal built around The Boston Globe newspaper. The company said it will run About.com as a distinct business unit and maintain the About.com brand name.

Posted by Chad Dickerson at 05:12 PM

February 18, 2005

Salesforce.com Q4 rises 82 percent

By Stacy Cowley

Salesforce.com Inc.'s fourth-quarter revenue rose 82 percent over last year's fourth-quarter total, to US$54.6 million, the company said Thursday as it released its financial results. The San Francisco-based hosted CRM (customer relationship management) software provider went public last year and has been one of the fastest growing companies in the enterprise software market. Per-share earnings were $0.03, a penny above the consensus forecast of analysts polled by Thomson First Call, and net income was $3.6 million, up from a $765,000 loss last year.

Sales and marketing expenses remained the publicity-loving company's largest expenditure, totaling $28.4 million during the quarter -- significantly outpacing the company's $3.2 million investment in research and development.

For its 2005 fiscal year, ended Jan. 31, Salesforce.com had revenue of $176.4 million, up 84 percent from 2004. Net income for the year was $7.3 million.

Salesforce.com ended the quarter with a reported 13,900 customers and 227,000 paying subscribers. For 2006, the company forecasts revenue of $282 million to $287 million.

Posted by Chad Dickerson at 01:30 AM

February 17, 2005

Fired Google blogger reflects, moves on

By Juan Carlos Perez

Mark Jen's first day as a Google Inc. employee, Jan. 17, also marked the debut of his "Ninetyninezeros" blog, which he intended would serve as a personal journal of his experiences as a Google employee. Little did he know at the time that his tenure at Google would be quite brief. In the next week, Jen, an associate product manager in Google's AdSense advertising unit, praised and criticized his new employer in a candid way about a variety of topics, such as the intranet, his work laptop, a sales conference and compensation.

The blog (http://99zeros.blogspot.com), which Jen naively thought would mainly interest his friends and family, became extremely popular. (Its single-day record is about 60,000 unique visitors.) This was a far cry from Jen's previous technically-oriented blog, which he published while working for 18 months at Microsoft Corp.'s Redmond, Washington, headquarters before moving to San Francisco to join Google. He quickly found out there is a large audience in the so-called blogosphere interested in a view of life inside Google.

It turned out his superiors at Google, which ironically owns the popular Blogger service, also read Ninetyninezeros. On Jan. 26, Jen disclosed in his blog that he had been asked to remove some information from prior postings that Google considered to be sensitive information about the company's finances and products. Then he went over a week without posting. Rumors abounded among tech industry bloggers over Jen's fate. On Feb. 9 Jen finally disclosed that Google had fired him on Jan. 28. -- eleven days after starting on the job -- and that this blog had "either directly or indirectly" been the reason. If the blog was the cause -- Jen says Google gave him no explanation for firing him -- he joins a growing list of employees who have lost their jobs because of things they have written in their blogs.

Jen, a Michigan native who graduated from the University of Michigan in 2003 with a bachelor's degree in computer engineering, is currently trying to move on and find a new job. Google declines to talk about Jen other than to confirm he was an employee there. But in this exclusive interview with IDG News Service, Jen, who is soft-spoken and courteous, chuckles often and doesn't sound bitter, shares the lessons he learned from his experience as Google's most notorious blogger, the mistakes he made and his future plans.

IDGNS: Are there any lessons you learned that you can share with others who may be in a similar position of blogging about work in their personal blogs?

Mark Jen: I've learned quite a few lessons from this entire episode. First of all, I learned that blogging is a public forum and ideas you express are going to be read by more people than you think. That's a crucial lesson. Another lesson is to clear up with your employer before you blog what exactly (it considers) acceptable and unacceptable. Make sure they have a definitive policy, or talk with your manager at length about what is and isn't okay. Also, you have to be sensitive to your corporate culture and that was one of my biggest mistakes. I hadn't really gotten a good feel for how Google operated at the time. Now I look back and realize I should have been a little bit more sensitive on that front. Those are the big lessons I learned and I'll be moving on with that knowledge.

IDGNS: Would you be willing to blog about your work experiences at your next job?

Mark Jen: I'll continue to blog, but the content of my blogs will be consistent with any particular requirements of my employer. If the company I work for doesn't care and is willing to let me have an open forum, I'll blog however I feel. But if I take a position with a company that has some specific policies around blogging, then of course I'll adhere to those policies. But in general I'll be blogging from here on out. It's a very interesting space and there's a huge community built up around it. There's a huge value there.

IDGNS: What's the traffic like to your blog?

Mark Jen: It's dying down. I was just about to blog about the traffic at my blog. At its peak a little over a week ago when the stories first started to break (about my termination) ... my blog hit over 100,000 page loads (in a single day.) In total I'm approaching 400,000 (page loads) overall.

IDGNS: What did Google tell you about ending your employment there?

Mark Jen: They've never given me a straight answer. I've requested an official statement or reason as far as why I was terminated but I wasn't given any such reason. Of course, it's well within their rights to refuse to give me a reason. I was an at-will employee in the state of California so they really don't need to give me a reason for terminating me. I definitely was surprised at being terminated. It's a shocking thing.

IDGNS: But you feel the blog played a significant part?

Mark Jen: Yeah, definitely. My blog either directly or indirectly was the reason for my termination.

IDGNS: So they didn't say the reason had been your work performance, or that they thought you weren't right for the job?

Mark Jen: No, nothing like that. There was no talk about my performance at all. Performance wasn't an issue.

IDGNS: Are you going to make a claim against Google in any way?

Mark Jen: No, I'm not interested in that. I don't think that's going to be productive.

IDGNS: So this chapter is closed for you and you're moving on?

Mark Jen: Right.

IDGNS: How do you feel about your status right now? Are you shell-shocked or depressed about this whole situation? Are you amused? Do you think all this attention is going to help you as you look for other job options?

Mark Jen: Initially I was a bit shocked and it took a little bit to process the event. But now it's more of a matter of just moving on. I've got a lot of good leads for new positions and also a lot of options open. So I learned my lessons from this episode and I'm moving on to bigger and better things.

Posted by Chad Dickerson at 05:25 PM

Vint Cerf and Robert Kahn win major computing award

By Robert McMillan

The Association for Computing Machinery (ACM) is finally giving networking technology a little respect. On Tuesday, the 58-year-old organization for computing professionals announced plans to award Internet pioneers Vinton Cerf and Robert Kahn its prestigious A.M. Turing Award. Awarded annually since 1966, the $100,000 Turing Award is named for British mathematician Alan M. Turing. Past recipients include mouse inventor Douglas Engelbart and Ken Thompson and Dennis Ritchie, the creators of Unix.

The 2004 award is the first to be given for work in computer networking, said Virginia Gold, a spokeswoman for the ACM. It will be presented at a June 11 event in San Francisco, she said.

News of the award came as a "huge surprise," Cerf said in an e-mail interview. "Historically this award has gone to people more involved in fundamentals of computer science. It is a stunning honor to be included in the list of earlier awardees," he said.

"The importance of networking is only just being demonstrated, so this recognition does not strike me as late," he added. "It would not surprise me to find that others who have made fundamental contributions to the networking of computing will be recognized in the future."

Cerf and Kahn developed the notion of an Internet Protocol (IP) while working on a Defense Advanced Research Projects Agency (DARPA) project in 1973. The next year they published a paper on the Transmission Control Protocol (TCP), which could be used to route messages that were broken up into packets of data.

In 1988 Cerf joined long-distance telecommunications company MCI Inc., and he has played key roles in many groups that put the Internet on the map, including the Internet Society and the Internet Corporation for Assigned Names and Numbers. He is senior vice president for technology Strategy at MCI.

Kahn is chairman, chief executive officer and president for the Corporation for National Research Initiatives, which he founded in 1986.

Posted by Chad Dickerson at 05:24 PM

Ringtone to be released as UK music single

By Laura Rohde

Many popular songs have been turned into mobile phone ringtones, but the tables have been turned and a ringtone is set to be released in the U.K. as a music single in April. The distinctive "Crazy Frog" ringtone is described on the crazyfrog.co.uk Web site as sounding like "someone pretending to make race car noises" and has been downloaded 1 million times, according to Republic Media, the London-based public relations company promoting the single.

A group calling itself Pondlife took the ringtone and turned it into a song called "Crazy Frog Chorus," which will be released in the U.K. by Tug Records on April 4. One of the four members of Pondlife is Wes Butters, a DJ on British Broadcasting Co.'s (BBC) Radio One, who warned the music listening public the song will be polarizing.

Tug Records, in Fuerth, Germany, could not immediately be reached for comment.

The ringtone has been heavily promoted in the U.K. though television advertisements featuring an animated silver frog with rolling bug eyes and a severe underbite who wears a motorcycle helmet, goggles and vest.

Ringtone downloads account for 10 percent of the world's music market, or US$3 billion in business annually, according to Text Media Ltd.

Posted by Chad Dickerson at 05:23 PM

Italian DJ hit with record MP3 piracy fine

By Scarlet Pruitt

An Italian DJ is being slapped with a record fine of €1.4 million (US$1.8 million) after being caught with what are believed to be thousands of pirated MP3 music files and hundreds of illegally downloaded video clips, an international recording industry group said Thursday. Italian police discovered the DJ playing the allegedly pirated music in nightclubs near Rome. It ordered the fine against the individual, whose identity was not revealed, after a raid of the suspect's home turned up none of the originally purchased music, a spokeswoman for the International Federation of the Phonographic Industry (IFPI) said. The DJ may also be subject to further criminal sanctions, the industry group said.

The suspect was caught with more than 2,000 allegedly pirated MP3s and 500 video clips. The fine imposed by Italian police is the largest in Europe against an individual for MP3 piracy, the IFPI said.

The recording industry group said it was pleased with the amount of fine since the DJ was making money touring clubs with the music, while the original artists had not been properly compensated.

The DJ was discovered as part of a police operation targeting radio stations and clubs around Rome, the IFPI said.

Posted by Chad Dickerson at 05:23 PM

Bugs delay AOL Netscape beta

By Joris Evers

America Online Inc. (AOL) is delaying the release of the first public test version of a new Netscape Web browser until the end of the month to fix some last-minute bugs, the company said Wednesday. The beta version of the Netscape 8 browser was scheduled to be publicly available on Thursday, but the release date will slip by a week or two, an AOL spokesman said in a statement sent via e-mail. An early version of the browser seen by the IDG News Service late last month crashed many times under normal use.

The new Netscape browser is designed to protect users from scams and malicious code while surfing the Web. For example, the browser includes a feature that adjusts the browser security settings based on a list of known malicious Web sites to protect users from phishing scams.

With the release, AOL is taking aim at Microsoft Corp.'s dominant Internet Explorer (IE) Web browser, which has had many security vulnerabilities. In addition, AOL is looking to piggyback on the popularity of Firefox, the open source Web browser that was released in November and has since been downloaded more than 25 million times.

In an about-face, Microsoft on Tuesday said it would release a test version of a new IE browser midyear. Previously the company had said it would not release a new browser until it ships the next version of Windows, code-named Longhorn, in 2006. There has not been a new version of IE in four years. The new IE 7.0 will also address security issues such as phishing, Microsoft said.

Phishing scams are a prevalent type of online attack that typically combines spam e-mail messages and fraudulent Web pages that look like legitimate e-commerce sites. The attacks are designed to steal sensitive information such as user names, passwords and credit card numbers.

Netscape 8 is based on Firefox but also supports the IE browser engine. AOL released a preview version of the browser to a select group of testers in late November. The Netscape browser doesn't include the IE engine but uses the engine that is included in Windows. As a result, the Netscape 8 browser only works on Windows computers.

Posted by Chad Dickerson at 05:23 PM

New MyDoom worm uses search engines to spread

By Scarlet Pruitt

Internet users are being threatened by yet another variant of the MyDoom mass mailing worm, which is spreading in part by using e-mail addresses found through popular search engines, security experts warned. The new variant was first spotted late Wednesday and reports from computer users suggest the worm is already circling the globe, according to Graham Cluley, senior technology consultant at Sophos PLC.

The worm proliferates by e-mailing itself through its own SMTP (Simple Mail Transfer Protocol) engine, according to Sophos. When it infects a computer it scans the hard disk for e-mail addresses and then takes the domains of the addresses it finds and queries search engines such as Google Inc., Yahoo Inc. and Lycos Inc. looking for similar addresses, Cluley said.

If it finds the address JohnDoe@yahoo.com, for instance, it will use a search engine to look for other addresses at the yahoo.com domain to send itself to, Cluley explained.

A similar MyDoom variant appeared last July and managed to slow some search engines as it flooded them with queries. Cluley said he doubts the new variant will have the same effect since this outbreak is not as severe. Additionally, search engines have taken measures to prevent being crippled by the worm again, Cluley said.

The latest worm was created by repackaging an older MyDoom variant in an encrypted "wrapper" so that antivirus software could not recognize it, Cluley said. The method is just one of the clever ways hackers use to hide their attacks and antivirus firms should be aware of the ruse, he added.

Internet users should make sure their antivirus software is up to date to avoid infection.

Posted by Chad Dickerson at 05:23 PM

Online auction providers grapple with fraud

By Juan Carlos Perez

As con artists lurk in the dark corners of online auction marketplaces scamming buyers, auction sites are having to deal with the persistent specter of fraud, which some believe is seriously harming buyer participation and sales in this very popular and large e-commerce medium. In January, a coalition of eBay Inc. sellers warned that, in their view, fraud is eroding the integrity of that marketplace and challenged eBay to implement concrete measures to address the issue. "The members of this organization feel this is the number one issue that is impacting their business and their ability to grow on the eBay marketplace," said Jonathan Garriss, executive director of the Professional eBay Sellers Alliance (PESA), which groups about 600 large eBay sellers that collectively generate over 70 million eBay transactions and US$1 billion in eBay gross merchandise volume annually.

Meanwhile, the U.S. government has also identified fraud in online auctions as a real problem. On Feb. 1, the U.S. Federal Trade Commission (FTC) in its "National and State Trends in Fraud & Identity Theft" study for 2004, reported that online-auction fraud last year made up 16 percent of all consumer complaints, or about 100,000, second only to identity theft with 39 percent. In the sub-set of Internet-related complaints, online auction fraud topped the list with 48 percent.

Fraud in online auctions can take a variety of forms. Most commonly, buyers may pay for an item but not receive it, or receive an item that doesn't match the description of the one advertised by the seller. However, some buyers also commit fraud by not paying for goods or by lying about not receiving merchandise. "Most of the complaints are basically about someone offering to sell something and then the consumer will send payment and never receive the item," said Deborah Matties, a staff attorney at the FTC.

EBay, by far the largest online auction marketplace, estimates that only around 1 in 10,000 of its transactions are proven fraudulent, but PESA argues that, even if fraud is rare, incidents get wide media coverage and are likely to discourage many potential buyers from participating in online auctions.

Garriss believes the fraud problem is partly to blame for eBay's slower growth in 2004 compared with 2003 in areas such as listings, consolidated net revenue and gross merchandise volume. This slower growth and eBay's missed earnings expectations in 2004's fourth quarter drove eBay's stock price down after its fourth-quarter 2004 financial report. The day after the report, eBay's stock closed at $83.33, from the previous day's $103.05 close. Since then it hasn't reached $90.

"We do think there is room for improvement on making the eBay auction marketplace a safer environment for shoppers," said Garriss, chief executive officer of Gotham City Online, a shoes and accessories seller on eBay. Specifically, PESA would like eBay to be more stringent in screening sellers who are new to the marketplace and want to sell either very expensive merchandise or sell in large volumes. PESA suggests possibly putting restrictions on these buyers until their identity has been thoroughly checked out and they have established a good track record on the marketplace.

But placing limits on sellers who haven't acted improperly is something eBay will not entertain, said Hani Durzy, an eBay spokesman. "While we respect the opinion of all community members, we will not engage in any screening before any wrongdoing has occurred. All the people in (PESA) at one point started off as brand new sellers as well. Had seller screening been in place where sellers would be severely limited if they hadn't sold anything before, everybody in (PESA) would have been affected at one point as well," he said.

Durzy says eBay has implemented many tools and information for buyers and sellers to educate themselves about the best way to conduct themselves during an auction. For example, all eBay buyers and sellers are evaluated by the peers they do business with, so everyone has a ranking and anyone can read their feedback trail. If there are problems, eBay has a section of its Web site called Security Center where members can lodge complaints and bring eBay in as a mediator.

Beau Brendler, director of Consumer Reports WebWatch, the online investigative arm of Consumer Reports, says reputable online auction sites such as eBay are trying to do a lot to prevent and combat fraud, but there is only so much they can do within the reality of an auction environment, where the presiding principle generally is "buyer beware." "Online auctions are perfect venues for fraud in the same ways that offline auctions are," Brendler said.

Some common-sense practices buyers are urged to follow include:

• Pay only with a credit card or via eBay's PayPal service; avoid sending checks, cash or money orders or wiring money.
• If purchasing an expensive item, use an escrow service, because they acknowledge receipt of your payment but don't release the funds to the seller until you confirm receiving the item in good condition.
• If using an escrow service, make sure it is a reputable one.
• Check the feedback others have left about the seller, a common feature on sites such as eBay.
• Look for listings with clear details and pictures of the item.
• If the deal sounds too good to be true, it probably is: walk away.

Still, there is a tipping point at which a critical mass of users can sour on an online auction marketplace, an executive warns. This is why online auction sites have to be as vigilant and aggressive as possible, said Patrick Byrne, chairman and president of e-commerce provider Overstock.com, which launched its online auction business, Overstock.com Auctions, in September and has seen it grow steadily. "Fraud is like a weed. Once you have too much of it in the marketplace, then you don't know who to trust anymore. The whole thing starts getting very shaky," Byrne said.

Posted by Chad Dickerson at 05:22 PM

February 16, 2005

Vonage says traffic blocked by ISP

By Stephen Lawson

VOIP (voice over Internet Protocol) service provider Vonage Holdings Corp. has reported to the U.S. Federal Communications Commission (FCC) that a broadband Internet provider deliberately blocked Vonage customers' calls. Vonage users who are customers of the broadband provider reported late last year that they suddenly couldn't use the Vonage service, said Brooke Schulz, vice president of corporate communications at Vonage, in Edison, New Jersey. Vonage did some troubleshooting and discovered that network ports over which its calls traveled had been deliberately blocked, she said. Vonage then manually rerouted its calls through the network as a temporary solution to the problem, Schulz said. Schulz declined to name the broadband provider.

VOIP technology breaks up voice calls into data packets and sends them over IP networks, a transmission method that is more efficient than traditional telephone switching, generally leading to lower phone bills. Calls made on a VOIP service may travel over the broadband data network of a consumer's phone company or cable provider while bypassing that provider's own voice calling service.

Vonage believes deliberate blocking of its calls is illegal, according to Schulz.

"We think it's infringing upon the customer's right ... to use the service to the best of their ability and to suit their needs," she said.

Vonage met with the FCC earlier this month to discuss the problem but has not filed a complaint, Schulz said. The company is now waiting for a response from the FCC before it decides how to proceed, she said. An FCC spokeswoman declined to comment.

The incident Vonage discussed with the FCC was particularly disconcerting, Schulz said, but Vonage is also investigating other possible cases of call blocking.

Vonage has been a trailblazer in VOIP, expanding its local service to 44 U.S. states and coming up against regulatory challenges in the process. In a closely watched ruling last year, the FCC ruled that Vonage's DigitalVoice service could not be regulated by the states, after the Minnesota Public Utilities Commission moved to regulate DigitalVoice like a traditional telecommunications service.

Vonage has approximately 400,000 customers, most of them in the U.S. and Canada, Schulz said.

Posted by Chad Dickerson at 04:53 PM

Airbus preps Superjumbos for cell phone use

By Laura Rohde

European aircraft manufacturer Airbus SAS plans to include in its new Superjumbo A380 planes an optional voice and data system that can allow passengers to use their mobile devices in flight, the company announced Tuesday. The service, including onboard mobile telephony and Internet access for passengers, will be offered through the OnAir joint venture to airline companies purchasing the A380. The system could be fitted on other models from Airbus as well as on planes from U.S. rival The Boeing Co., OnAir said.

OnAir, in Geneva, was created last year by Airbus with Dutch airline IT services provider SITA Inc. and Tenzing Communications Inc., which sells products to enable in-flight e-mail and SMS (short message service). The European Union's Directorate General for Competition approved the joint venture on Jan. 27 and the companies incorporated OnAir Feb. 1. OnAir has 50 employees, most of whom are based in Seattle, where Tenzig is also located.

Airbus last year successfully completed an in-flight trial of mobile phones and infrastructure equipment based on GSM (Global System for Mobile Communications) technology using an Airbus A320 flight-test plane. Tested services included GSM telephony, Web browsing, e-mail and connectivity to a VPN (virtual private network). The trial, announced last September, also tested several wireless computing services, such as 3G (third generation); WCDMA (Wideband Code Division Multiple Access) technology; WLAN (wireless LAN) using the Wi-Fi standard 802.11; and short-range Bluetooth.

As part of the agreement announced Tuesday between Airbus and OnAir, the companies have begun the development phase of the system and are in the process of selecting suppliers for the different service components. The service should become commercially available in 2006, Airbus and OnAir said.

Airbus, in Blagnac Cedex, France, is planning to launch the 555-passenger A380 plane in 2006.

No airline has committed to installing the OnAir system, according to George Cooper, OnAir's chief executive officer, who spoke Tuesday on a webcast news conference. He added that airlines in Europe, the U.S. and Asia have already expressed interest in the OnAir services, though he declined to give any company names.

Cooper said that OnAir is committed to creating a system that allows airlines to offer an affordable service to its passengers while in the air. "The price you pay should be no more than standard roaming charge in Europe," he said.

Cooper also acknowledged the concern of some passengers that fights, particularly long-haul journeys, may be disrupted if other passengers are able to use their cell phones. "We continue to research these issues," Cooper said, "but, in anticipation of such a need, our system will give cabin crew complete control of the system, allowing them, for example, to switch to SMS-only mode when it is 'night' in the cabin."

But before passengers can begin using their mobile phones in the air, OnAir will need approval from European telecommunications regulators as well as the U.S. Federal Communications Commission (FCC). Airbus said it believes it is close to obtaining the green light in Europe.

Separately on Tuesday, the FCC announced a proposal in coordination with the Federal Aviation Administration to relax its current ban on cellular telephone use in airborne aircraft. The FCC said it was seeking public comment on what spectrum bands should be included in the proposal, as well as on ways that the 800MHz cellular spectrum could be used to provide a communications link between airborne aircraft and the ground.

Posted by Chad Dickerson at 04:53 PM

February 15, 2005

Gates promises IE 7 by summer

By Joris Evers

Microsoft Corp. by midyear plans to release a test version of a new Internet Explorer (IE) browser that better protects users from scams and malicious code while surfing the Web, the company announced Tuesday. Additionally, responding to a surge over the past year in online scams involving spyware, Microsoft has decided not to charge for its antispyware product, Chairman and Chief Software Architect Bill Gates said in a keynote address at the RSA Conference 2005 in San Francisco.

"We have looked hard at the nature of this problem and have made the decision that this antispyware product will be available at no additional cost to Windows users," Gates said. "I am very excited that we have this technology and it really addresses a burning need for our users."

Microsoft bought antispyware software maker Giant Company Software Inc. in December and released a beta of Windows AntiSpyware in January. Until Tuesday's announcement the company had not said whether it would sell the product or give it away. Other companies, including traditional antivirus vendors, offer antispyware products.

In addition to its free consumer product, Microsoft will offer a for-pay antispyware product for corporate users that will support enterprise needs for management and deployment, said Amy Roberts, a director in Microsoft's Security Business and Technology Unit. Roberts could not say when the enterprise antispyware product will be available.

A second beta version of the consumer Windows AntiSpyware product is scheduled to be available in the first half of this year, Roberts said in an interview after Gates' keynote.

With the increasing phishing threats and perhaps competitive pressure, Microsoft has changed its plans for IE. Previously the company's plans called for a new version of the ubiquitous browser to be included in the next version of Windows, code-named Longhorn, due in 2006.

"We have decided to do a new version of Internet Explorer," Gates said. The new IE 7 will "add new levels of security," he said. A first beta is due in mid-2005.

While scant on details for IE 7, Gates said the security enhancements will protect customers against phishing and other malware. The features will also be included in the version of IE for Longhorn. IE 7 will be for users of Windows XP with Service Pack 2. Roberts could not say when the final version of IE 7 would be available.

IE is part of Windows and is used by most Web users, but it has a bad security reputation. Other browsers such as Firefox, Netscape and Deepnet Explorer are exploiting that reputation to steal market share. America Online Inc. later this week plans to release the first public test version of a new Netscape browser that offers phishing protection.

Phishing scams are a prevalent type of online attack in which spammers send e-mail messages to dupe recipients into visiting fraudulent Web pages that look like legitimate e-commerce sites to steal sensitive information such as user names, passwords and credit card numbers.

In his keynote at the opening of the annual security conference, Gates also updated attendees on Microsoft's efforts to build a single Web site for patches for Microsoft products. A test version of the delayed patching service, dubbed Microsoft Update, is slated to be available next month, Gates said.

Microsoft Update will support Windows XP, Windows 2000, Windows Server 2003, Office 2003, Exchange Server 2003 and SQL Server, according to Roberts. A final version of the update service is due in the first half of this year, at around the same time the company plans to release Windows Update Services (WUS), she said. WUS is a free Windows Server add-on for businesses that allows users to download and deploy patches.

On the issue of antivirus protection, Gates reiterated his company's intention to buy Sybari Software Inc. and to add its antivirus engine to Sybari's server antivirus product. Gates also said that a consumer antivirus product would be available from Microsoft by the end of 2005. This will be a paid product or service, Roberts said.

Microsoft's decision to give away the antispyware products makes sense, but spells trouble for third party spyware companies, said Pete Lindstrom, research director at Spire Security LLC.

"Spyware is a huge consumer issue and it's becoming a bigger enterprise issue, but it's a desktop issue, so it makes sense for Microsoft to (give away antispyware)," Lindstrom said. However, vendors such as WebRoot Software Inc. will have to find a way to differentiate. "They're not going to be able to compete on cost," he said.

At least one attendee found Gates both more engaging and more humble than last year, when Microsoft's founder declared an intention to end spam within a year -- a goal he acknowledged was not met in this year's speech.

"Instead of making promises I didn't believe (Gates) could keep, he was demonstrating substantial improvement in many areas that are important, like internal development processes," said Bruce Schneier, founder and chief technology officer of Counterpane Internet Security Inc.

Also on Tuesday at the RSA Conference Microsoft announced that the Enterprise Edition of its Internet Security and Acceleration Server 2004 firewall and caching product should be available this March. The product was originally due by the end of last year.

Paul Roberts of the IDG News Service contributed to this story.

Posted by Chad Dickerson at 11:04 PM

Blogging comes to Demo@15

By Ephraim Schwartz, InfoWorld

Blogging got its share of attention at Demo@15, as the conference that highlights future products brought to its stage companies that are taking blogging in new directions. In one of the fastest presentations ever seen at Demo, Five Across demonstrated its Bubbler blog application in two minutes, making its point that Bubbler is a rapid-fire blogging tool.

As he entered the stage, CEO Glenn Reid recorded a short message while his partner, David Aune, vice president of marketing, took a picture of the audience. Arriving at the computer set up on stage, Aune preceded to type in text on his blog that went live as he typed. In the meantime, the recording and the photo were sent wirelessly to the computer and the audience watched the screen as the blog was updated almost immediately with audio and photos.

iUpload may get business users of blogs flushed with excitement as well.

Leveraging the current popularity of blogging, iUpload's Perspectives is a blogging application that allows portions of any blog to be password-protected. As such, while a blog site might have content for a general audience, only part of that audience would be able to log in to a special marketing campaign or promotional offer.

A tool called Authoritative Perspectives allows users to target blogs to any uniquely defined group or even a single user.

Pluck, a personal Web information tool, allows users to save text in folders from numerous sources, such as Web links, RSS feeds, and downloaded PDF files. Once stored in a folder, users can publish any part of the content of a folder on a blog by using what it calls publicly available Web folders.

Bloggers can determine what part of their private folders they wish to publish, and with the click of the publish button it will be posted to the blog.

WhatCounts demonstrated BlogUnit Series, a 1U hardware device plus software that manages corporate blogs before they are published.

The blog software is centrally controlled and can be linked to both LDAP and Radius servers to control approvals before publishing, content viewing, and broadcasting.

Versioning and workflow control also allows content managers to roll back to previous versions of a post and maintain an audit trail of all versions.

Posted by Chad Dickerson at 10:08 PM

RealNetworks, Siemens join media delivery offerings

By Laura Rohde

RealNetworks Inc. and Siemens AG have extended their global reseller partnership to sell software that combines their media delivery technologies, the companies announced Tuesday at the 3GSM World Congress in Cannes. Siemens, the German electronics giant, has integrated Helix DNA media technology, the foundation for RealNetwork's products, with its own media delivery software and is offering the combined end-to-end streaming software package to mobile operators, the companies said.

The joint Semens and RealNetworks media delivery software had previous only been available to Vodafone Group PLC, which has been using the combined software since June 2003 to distribute audio and video content to users of its Vodafone Live wireless data service.

RealNetworks already has similar relationships with Nokia Corp. and Sweden's Telefonaktiebolaget LM Ericsson.

According to Lee Joseph, director for RealNetworks Europe, the operators that RealNetworks targets as customers in many cases already have working relationships with companies such as Nokia Corp., Ericsson or Siemens, and by blending its offerings with as many manufacturers as possible, the RealNetworks' product becomes more appealing to operators.

Representatives from Siemens could not immediately be reached for comment.

Last week, RealNetworks announced it had strengthened its relationship with Nokia and will work in partnership with the Espoo, Finland, company to develop media technology including the Helix DNA client media engine. RealNetworks also outlined the changes to it mobile licensing model designed to provide more flexibility to handset manufacturers and allow software components like RealAudio and RealVideo to be licensed separately.

Helix DNA is an open, multiformat platform for digital media creation, delivery and playback. RealNetworks has been reaching out to operators to use Helix as the basis for mobile content such as music, news, sports and entertainment that can then can be streamed across both 2.5G and 3G (third- generation) networks using RealAudio and RealVideo as well as formats that are compliant with 3GPP (3G Partnership Project) specifications.

According to RealNetworks, there are currently about 70 mobile phone operators worldwide that have installed the infrastructure in their networks needed to stream content in RealNetworks' format.

"Last year at 3GSM, there were 27 operators using Helix and the year before that we didn't announce any operators as users," Joseph said. "We want to show that the market is developing quickly and content is beginning to flow over the networks."

RealNetworks said on Tuesday that is it anticipating numerous carriers in Europe, Asia and North America to launch commercial video content services over both 2.5G and 3G networks throughout 2005. Additionally, the company cited estimates from Strategy Analytics Ltd. that in 2009, over 182 million people will use mobile video content services worldwide, generating revenues of just over US$6.64 billion.

Posted by Chad Dickerson at 04:46 PM

Monster extends reach with French buy

By Laura Rohde

Monster Worldwide Inc. will acquire French job-search Web site Emailjob.com for US$26 million, the company announced Monday. Monster Worldwide, the owner and operator of online career network Monster.com, said the purchase will strengthen its position in France, which the company considers a key European market. Additionally, users of Emailjob.com will gain extended reach from Monster's position as a global resume and jobs network, the company said.

Monster, in New York, intends to utilize Emailjob.com's regional office structure and popularity with small and medium-sized to boost Monster France's presence in the local market, the company said.

Emailjob.com, launched in 1998, is owned by Dutch publishing company Reed Elsevier PLC. The site posted revenue of about $9 million in 2004. The acquisition is not expected to have an effect on Monster's earnings in 2005, the company said.

Monster Worldwide will add the French concern to its growing network. Earlier this month, it announced that it had paid $50 million for a 40 percent stake in ChinaHR.com Holdings Ltd., the holding company for the Chinese job-recruitment Web site ChinaHR.com.

Monster, which reported revenue of $845.5 million in 2004, said last week that it received 3.3 million new and updated resumes during January, a 23 percent year-on-year increase.

Posted by Chad Dickerson at 04:46 PM

New era of telecom giants

By Grant Gross

Verizon Communications Inc.'s announcement Monday that it intends to acquire MCI Inc. for US$6.7 billion, the third multibillion-dollar telecommunications merger announced since mid-December, effectively ends a two-decade experiment in which the U.S. government attempted to break up a huge telecom monopoly. The Verizon/MCI deal, coupled with the Jan. 31 announcement that SBC Communications Inc. plans to acquire AT&T Corp. in a deal worth $16 billion, means two of the three largest long-distance carriers will be swallowed up by SBC and Verizon. SBC and Verizon are two of the four surviving regional Bells that traditionally focused on local telephone services after the court-ordered breakup of the old AT&T in 1984.

In many ways, the mergers, if approved by state and federal regulators, would end an evolution where phone companies traditionally offering local service and carriers traditionally offering long-distance had already begun to look a lot like each other.

Verizon and SBC, in the last five years, have started offering long-distance products to customers, and AT&T and MCI have attempted to compete with local telephone packages. The two recent mergers point to a future where giant telecom carriers offer a wide range of services to a wide range of customers -- from phone, television and Internet service for individual customers to huge long-distance and data networks deployed at the world's largest enterprise businesses.

"The competitors are getting larger and offering everything: telephone, cable TV, wireless, Internet," said Jeff Kagan, an independent telecom analyst, responding by e-mail. "There is still lots more action to go. Cable television companies and baby Bells are going to start to compete with the same bundles. We will stop calling them phone companies and cable companies and start to call them all communications companies."

Add the SBC and Verizon deals to the December announcement that long-time long-distance carrier Sprint Corp. plans to merge its wireless operations with Nextel Communications Inc. and spin off its local phone business, and the result will be fewer telecom options for the largest enterprise businesses.

Kagan cheered the move toward fewer telecom giants offering a wide range of services, saying it's good for the long-term health of the telecom industry, and two or three huge companies should provide enough competition to keep prices reasonable.

"It's been 20 years since the phone company was broken up, and now it's coming back together again, except there are multiple providers and it's a much bigger industry," he said. "Telecom has gone through amazing change in the last 20 years and it's becoming a much healthier place after the next several years of consolidation and change. I'd say the historic shift in telecom is under way, and now that it has started, it's happening quickly."

Other analysts disagreed. With two giant telecom carriers, the largest companies can expect higher prices for telecom products and services, said Ken McGee, group vice president and research fellow at Gartner Inc. While both SBC and Verizon expect to eventually save billions of dollars in their acquisitions, partly through laying off thousands of workers, large companies will have fewer options for price shopping, he said.

"There aren't five providers out there to which you can turn over all your traffic, as there were five years ago," McGee said. "Five years ago, there were viable alternatives out there for every vendor."

Businesses with telecom contracts expiring in the next year may have a window of opportunity to negotiate low rates before the SBC and Verizon deals win government approval, added Pete Wilson, executive vice president of Telwares Communications LLC, a firm that advises enterprises on telecom contracts.

"Longer-term consolidation, once it runs its course, will bring an end to price wars and a cessation of year-over-year write-down of rates for enterprises," Wilson said by e-mail. "This move will assist in ushering in a more application, IP-driven environment where the challenge shifts from negotiating low prices to correctly evaluating and judging capabilities in an increasingly value-added telecom marketplace."

For smaller businesses, the two huge mergers may not bring a lot of change, said Yosef Rabinowitz, managing director of TBRC Cost Recovery LLC, a telecom expense management firm for small and midsize businesses. Rabinowitz has steered most of his customers to regional long-distance carriers because AT&T and MCI haven't offered competitive packages to smaller businesses, he said.

"We've moved some clients to other carriers after (MCI) made little or no serious effort to keep their business, not surprising after all the layoffs of the last couple of years," he said.

The 1984 court-ordered breakup of the old AT&T, which followed a 1982 antitrust settlement between the U.S. Department of Justice and AT&T, has been coming apart for years. As SBC, Verizon and the other regional Bells moved into the long-distance market, the U.S. Federal Communications Commission (FCC) in the last two years has moved to limit requirements from the Telecommunications Act of 1996 in which the four regional Bells had to share parts of their networks with competitors at discounted prices.

The '96 Act attempted to encourage broad competition among telecom carriers by requiring the regional Bells to share the network facilities they largely inherited after the breakup of the old AT&T monopoly. The FCC, pushed by outgoing Chairman Michael Powell, moved in the last two years toward "facilities-based competition," favoring the regional Bells. Powell argued that the old network-sharing rules discouraged the incumbent Bells from investing in new technologies and discouraged competitors from investing in their own facilities.

Some analysts called the old government-enforced competition dead once the recently announced deals go through.

"Together with the acquisition of AT&T by SBC, the U.S. fixed market has now been completely reshaped," said Julian Hewett, chief analyst at Ovum Ltd. "With the wonderful perspective of hindsight, the competitive industry structure imposed by the enforced breakup of AT&T in 1984 can be seen as a failure. Everything has changed: in those days, all the profit was in long-distance; today, the profit is in local access. The power has moved back to the Baby Bells, and the separation of local access and long distance has disappeared."

The Verizon deal with MCI leaves the two remaining regional Bells, Qwest Communications International Inc. and BellSouth Corp., potentially without merger partners, although Sprint's fixed-line assets may still be in play. While the SBC and Verizon deals make those companies international players, Qwest and BellSouth don't need to merge, Kagan said.

Qwest had made a bid for MCI in recent weeks. "BellSouth and Qwest ... can continue to compete in their regions instead of nationally -- no problem," Kagan said. "But the wave of mergers isn't done yet. There will be many more over the next few years."

Posted by Chad Dickerson at 04:46 PM

Alcatel, Intel team on WiMax, Linux

By Peter Sayer

French telecommunications equipment manufacturer Alcatel SA is collaborating with Intel Corp. on two network technology projects that could lower infrastructure costs for network operators, the companies announced Tuesday. Alcatel and Intel have agreed to jointly develop WiMax broadband wireless access technology, and hope to bring products based on the "nomadic" version of WiMax to market in mid-2006, said Marc Rouanne, chief operating officer of Alcatel's mobile communications group, at a news conference on the sidelines of the 3GSM World Congress in Cannes.

Several versions of the WiMax standard, also known as IEEE802.16, are being defined. Alcatel already resells products from Alvarion Ltd. that meet Revision D of the standard, for fixed wireless access. Revision E, the focus of Alcatel's collaboration with Intel, concerns nomadic applications, in which the user will move to the coverage area of one base station, turn on their computer and stay there for a while, not roaming from one cell to another. A typical application might be a wireless Internet access hot spot.

The two companies have already worked together on WiMax technology for 18 months, during which time they stabilized the standard, Rouanne said. Alcatel is aiming to bring the technology to market at a price somewhere between DSL (Digital Subscriber Line) fixed broadband and 3G (third-generation) mobile telecommunication systems.

Alcatel also announced plans to redesign its entire range of network core products. New equipment will run Linux and will be based on the Advanced Telecom Computing Architecture (ATCA). The move to Carrier Grade Linux began two years ago; newly announced on Tuesday is Alcatel's commitment to ATCA, a project on which it is also collaborating with Intel. Alcatel will build its equipment using Intel application and network processors.

ATCA is an open standard for carrier-grade blade servers being developed by the PCI Industrial Computer Manufacturers Group. Compared to typical blade server configurations, ATCA aims to provide higher I/O capacity and reliability, two areas of particular concern for network operators.

At the 3GSM World Congress, Alcatel showed an ATCA-compliant Serving GPRS (General Packet Radio Service) Support Node, a network component that coordinates data communication between cells in a mobile phone network. The company's 5020 Softswitch for fixed telecommunication networks is also ATCA compliant. Alcatel expects to complete the renewal of its range by the end of next year, Rouanne said.

Alcatel also announced a deal to resell CDMA (Code Division Multiple Access) radio access equipment from ZTE Corp. of Shenzhen, China. Alcatel plans to incorporate ZTE's equipment into its product range. "CDMA was the missing part of our portfolio," Rouanne said.

Another 3G mobile radio access technology, HSDPA (High Speed Downlink Packet Access), is the subject of ongoing interoperability tests between Alcatel, which makes the network equipment, and Qualcomm Inc., which makes chipsets for mobile wireless modems, the companies announced Tuesday. HSDPA is an addition to the UMTS (Universal Mobile Telecommunications System) standard, and can increase data rates to 14M bps (bits per second), far above the range of 384k bps to 2M bps supported by basic UMTS. Alcatel's current 3G network infrastructure products can support HSDPA with a simple software upgrade, according to Rouanne.

The 3GSM World Congress runs through Thursday at the Palais des Congrès.

Posted by Chad Dickerson at 04:44 PM

Motorola unveils new phones, Skype deal

By John Blau

Motorola Inc. unveiled on Monday a range of new handsets and announced an agreement with Skype Technology SA, the Internet phone service provider. After launching the ultra-thin clamshell RAZR phone last year, Motorola will add three new handsets: the special-edition black RAZR V3, the SLVR V8 and the PEBL V6, said Ron Garriques, executive vice president, at a news conference at the 3GSM World Congress in Cannes.

The RAZR V3 and the SLVR V8 phones feature the same rounded, thin design of the initial RAZR phone, which Garriques said has sold well. The phones will be available in the second quarter.

The PEBL V6 has a smooth, oval design with a dual hinge mechanism, enabling the phone to be opened with one swift motion.

Additional features of the phones include support of higher-speed EDGE (Enhanced Data for Global Evolution) technology, MPEG4 for shooting and replaying home videos and an embedded VGA (video graphics array) camera.

Motorola also provided a peek of its long-awaited music phone with Apple Computer Inc.'s iTunes music player software. The company expects to ship the product by the end of the year.

Motorola also became the first major handset supplier to sign an agreement to preinstall Skype software on a range of its phones, according to Garriques. "We'll be putting Skype client software on a number of handsets," he said, without specifying which handsets.

Skype has more than 25 million users worldwide.

Asked if the Skype service could draw away minutes from mobile phone operators, Garriques said no. "I think this service could be chargeable," he said.

After launching six 3G (third-generation) mobile phones last year, Motorola plans to launch 16 new models this year, according to Garriques. In Cannes, the company unveiled three new models: the E1120, and A1010 and the E1060.

Motorola also launched the D1100 PC card, its first mobile device based on new HSDPA (High Speed Downlink Packet Access) technology. This new technology adds greater downstream speeds to 3G devices, up to 14M bps (bits per second).

Riding the tide of new product releases at the wireless show, Motorola unveiled a pair of whacky new sunglasses, called RAZRWire, which use integrated short-range Bluetooth technology to connect to users' mobile phones via a tiny microphone. The product is targeted at cyclists, skateboarders, rock climbers and golfers, who want to keep their hands free.

The company also showed a Bluetooth-enabled motorcycle helmet.

The GSM Association selected Motorola to supply the first handsets for the Emerging Market Handset program, aimed at providing low-cost handsets in emerging markets. The phones will be available for less than US$40.

Posted by Chad Dickerson at 01:12 AM

February 14, 2005

Nokia, Microsoft deliver e-mail and music to phones

By Peter Sayer

Nokia Corp. announced a partnership with Microsoft Corp. to deliver music and e-mail to users of its mobile phones, but ruled out the possibility of building Microsoft's operating system software into its products. Software supporting Microsoft Exchange Server's ActiveSync protocol for synchronizing e-mail, calendar and contact information will be a feature of future Nokia phones, thanks to a deal announced by the two companies at the 3GSM World Congress in Cannes on Monday.

"Part of becoming more IT aware (as a company) is an appreciation for de facto standards, and ActiveSync is the de facto standard," said Nokia Executive Vice President of Enterprise Solutions Mary McDowell, defending the company's decision to bow to Microsoft's might, rather than use its market leadership to push the software giant into supporting open synchronization protocols.

Support for ActiveSync will allow future phones based on Nokia's Series 60 and Series 80 smart phone software to synchronize information with Exchange servers over the air. Nokia will continue to support the Open Mobile Alliance (OMA) Data Synchronization Protocol and its own Nokia PC Suite software, which enable synchronization between a phone and a local PC.

However, Nokia's collaboration with Microsoft will only go so far. "There are no discussions to develop a Pocket PC phone," said Anssi Vanjoki, executive vice president and general manager of Nokia's multimedia business unit, speaking at a news conference in Cannes on Monday.

Microsoft and Nokia announced another collaboration Monday, working with online music store Loudeye Corp. to deliver music to mobile phones.

Nokia will work with Loudeye to build a "white label" music store that mobile network operators can rebrand to sell music to their customers. Nokia chose Loudeye because of its extensive music catalog, said Vanjoki.

Future music-oriented handsets from Nokia will play Windows Media Audio files, and include Windows Digital Rights Management to prevent unauthorized copying of music. "On the Internet, music is a phenomenon that's accessed, stored and managed on PCs," and Microsoft was the right partner to work with in that market, he said.

The companies will also work to develop a plug-in for Windows Media Player to handle music files in AAC (Advanced Audio Coding) format and OMA Digital Rights management.

"Customers will be able to enjoy their music on their Nokia phone or PC, download it on either platform, and transfer it between the two," said Amir Majidimehr, corporate vice president of Microsoft's Windows Digital Media Division.

The 3GSM World Congress, at the Palais des Congrès in Cannes, runs through Thursday.

Posted by Chad Dickerson at 05:50 PM

Verizon sweeps up MCI in $6.7 billion deal

By Grant Gross and James Niccolai

Verizon Communications Inc. has agreed to acquire MCI Inc. in a deal valued at US$6.7 billion, the companies announced Monday, ending weeks of speculation about a likely deal. Verizon said the acquisition would accelerate its plans to become a significant player in the enterprise services market, giving it a broader reach globally, a suite of advanced Internet Protocol-based services and a large base of business and government customers.

"From a customer perspective, the overwhelming theme is that customers want to have simplified delivery, one-stop shopping and a single point of contact," said Michael Capellas, president and chief executive officer at MCI. "(The deal) increases customer confidence in everything we do. At the end of the day, there's no question, our future is brighter together."

Getting regulatory approval for the deal is likely to take as much as a year, the companies said. Verizon must also win the approval of MCI's shareholders. The boards of directors at both companies have approved the agreement, they said in a statement. The U.S. Department of Justice, the U.S. Federal Communications Commission and several state public utilities commissions must also approve the deal.

Verizon will pay $4.8 billion in shares and $488 million in cash to buy MCI. MCI, meanwhile, will pay its shareowners quarterly and special dividends of $4.50 per share, worth $1.46 billion, bringing the total value of the deal to $6.7 billion, the companies said.

Ivan Seidenberg, Verizon's chairman and chief executive officer (CEO), called the deal "a natural and logical extension of Verizon's strategy to transform our company to serve growth markets and offer broadband technologies." The deal will make Verizon the second largest telecom carrier, behind the merged SBC/AT&T, and will allow the combined company to offer products that are "much more compelling in the marketplace," Seidenberg said during a conference call Monday.

The companies will figure out their branding strategy, organizational structure and other details closer to the completion of the deal, they said. Verizon will take on MCI's net debt when the deal closes, projected to be about $4 billion.

The two companies plan to lay off about 7,000 employees because of the deal, including IT workers, engineers, sales staff and corporate support staff, officials said. Verizon anticipates savings of $500 million in the first year of the deal, and $1 billion a year in the third year and later. Savings will come from job cuts, an IT overhaul at MCI and real estate consolidation, said Doreen Toben, chief financial officer at Verizon.

Officials from both companies said the marriage makes sense by combining Verizon, traditionally a regional local phone service carrier, with MCI, which has focused recently on enterprise and government customers, as well as global IP-based (Internet Protocol-based) services. With an MCI IP backbone that reaches across the U.S. and into more than 140 other countries, Verizon will save about $100 million a year on long-distance carrier charges, Toben said.

The deal comes two weeks after SBC Communications Inc. said it plans to acquire AT&T Corp. in a deal worth US$16 billion, and is likely to spark a guessing game among industry insiders over possible additional merger deals.

Qwest Communications International Inc., which had been trying to broker its own deal with MCI, now finds itself on its own, and analysts last week speculated over plans that BellSouth Corp. and Sprint Corp. might have plans for a deal with a competitor or with each other.

Although the SBC/AT&T deal sparked speculation of new mergers in the telecom industry, Verizon and MCI have been discussing a deal since about the third quarter of 2004, Seidenberg said.

Neither MCI nor Verizon is new to the world of mergers.

Verizon itself was formed through a $53 billion merger, completed in June 2000, between Bell Atlantic and GTE, both of which were created after the government-ordered breakup of the old AT&T in 1984. WorldCom Inc. merged with the original MCI Communications Corp. in September 1998 in a $37 billion deal that, at the time, was the largest corporate merger in U.S. history. The deal created MCI WorldCom Inc.

Verizon went on to riches and in 2004 had $67.8 billion in annual revenue, making it the world’s largest telecom company. Verizon, which started as a local phone service carrier, has focused in recent months on enterprise telecom services and on delivering fiber-to-the-premises service to some customers. Verizon's fiber deployment will allow it to offer television services that compete with cable TV.

MCI WorldCom's fate would be very different. A massive accounting scandal enveloped the company after an internal audit in June 2002 uncovered US $3.8 billion in accounting errors. In July 2002, WorldCom declared bankruptcy, and the accounting misstatements eventually reached a total of $11 billion. In March 2004, a month before the newly renamed MCI emerged from bankruptcy, the company issued a report reducing pretax income for 2000 and 2001 by $74.4 billion.

Before the company declared bankruptcy, WorldCom CEO Bernard Ebbers resigned in April 2002, amid questions about more than $360 million in personal loans he received from the company. In March 2004, Ebbers was charged in federal court in New York with conspiracy and securities fraud. Scott D. Sullivan, WorldCom's former chief financial officer, pleaded guilty and agreed to cooperate with prosecutors.

Ebbers' trial began in the U.S. District Court for the Southern District of New York in January 2005.

After emerging from bankruptcy, MCI reported a $3.4 billion loss in the third quarter of 2004. On Monday, MCI reported fourth-quarter revenue of $5 billion, down 10 percent from the fourth quarter of 2003.

MCI's operating income before depreciation and amortization was $775 million, but the operating income included incidental items of $270 million.

Trading in shares in both companies has been volatile during recent weeks as investors adjusted their portfolios to take into account the expected acquisition. The value of MCI (ticker symbol MCIP) shares declined in early Monday morning trading, by $1.33, to $19.42, while Verizon (VZ) shares moved up by $0.69 to $37.00.

Posted by Chad Dickerson at 04:23 PM

Vodafone tests high-speed wireless technology in Tokyo

By Martyn Williams

Vodafone KK, the Japanese unit of Vodafone Group Plc, began trials in Tokyo on Monday of a technology that could be used to upgrade its 3G network to offer multi-megabit per second data transmission. It will be one of the first such trials of the technology anywhere in the world. The company will trial the technology, called HSDPA (high speed downlink packet access), for about four months, said Matthew Nicholson, a spokesman for Vodafone in Tokyo. The trial, a license for which was received from the Japanese government on Monday, will use equipment from Telefonaktiebolaget LM Ericsson, he said.

HSDPA is an upgrade to the existing WCDMA (Wideband Code Division Multiple Access) technology that allows data to be transmitted at speeds several times faster than the 384k bps (bits per second) currently available.

Several carriers around the world are looking at HSDPA. Most of them talk of an upgrade path that will initially bump transmission speeds to around 3M bps, and later to about 14M bps.

Among them, Japan's NTT DoCoMo Inc. has said it plans to offer commercial service by the end of March 2006, while in Europe the U.K. operator mmO2 PLC recently announced plans to offer HSDPA services, first on the Isle of Mann and then on the British mainland. Cingular Wireless LLC in the U.S. has also talked about offering the upgrade on its 3G network in the future.

Last week Tokyo-based wholesale broadband Internet provider eAccess Ltd. said it hopes to begin tests of HSDPA in April, with a view to applying for a license to operate wireless services when the government offers additional wireless spectrum. Vodafone has also said it plans to test the system in New Zealand.

The technology could be an important tool for carriers in markets such as the U.S. and Japan, where competing operators use different technologies. CDMA2000 1x EvDO, used in both markets, already supports 2.4M bps data transmission and so pushing WCDMA's transmission rate higher will be important if fast data transmission becomes a key selling point.

Other high-speed data technologies also exist, including Flash (fast low-latency access with seamless handoff) OFDM (Orthogonal Frequency Division Multiplexing), which was developed by New Jersey-based Flarion Technologies Inc. The technology can support data transmission at about 3M bps and Vodafone is also testing that system in Japan.

Posted by Chad Dickerson at 04:23 PM

Microsoft, eBay, Visa form Phish Report Network

By Paul Roberts

To make it easier to identify and react to new scam Web sites, Microsoft Corp., eBay Inc. and Visa International Inc. are launching a program to share information about online identity theft scams known as "phishing attacks," they said Monday. The companies will use the RSA Conference in San Francisco this week to unveil the Phish Report Network, an antiphishing service that aggregates reports of phishing attacks and issues alerts about new phishing Web sites to subscribers. The service is being sponsored by end-point security company WholeSecurity Inc., according to a statement from WholeSecurity.

Phishing scams are online crimes that use spam to direct Internet users to Web sites designed to look like legitimate e-commerce sites, but which are controlled by thieves. Users are asked to provide sensitive information such as passwords, bank account information or credit card numbers, often under the guise of updating an account.

Reports of online identity theft scams have grown steadily for more than a year. In December, more than 1,700 active phishing Web sites were reported, a 10 percent jump from the previous month, according to data released by the Anti-Phishing Working Group (APWG).

More than 9,000 unique e-mail messages linked to phishing scams were identified by the APWG in December, an increase of 6 percent from the month before, and a 38 percent increase over the number reported in July, according to an APWG report.

The scams are notoriously hard to shut down because those behind them often use compromised computers scattered around the globe to host phishing Web sites and to distribute the spam messages advertising the sites. The average duration of a phishing Web site was almost six days in December, with some sites operating for as long as 30 days before being shut down, the APWG reported.

The Phish Report Network is a voluntary, subscription-based service that will help coordinate response to phishing scams between the companies targeted by phishers, such as eBay, and organizations that can play a role in shutting down the scams, such as ISPs (Internet service providers) and antispam technology companies, according to information on the group's Web site, www.phishreport.net.

Visa, eBay and Paypal Inc., eBay's online payment division, will report new phishing scams to the Phish Report Network. Those reports will be stored in a central database of phishing attacks maintained by WholeSecurity, where the information will be sorted into aggregated “safe lists� and “block lists� of known phishing sites. ISPs and other companies will then use those lists to update filters, black lists and other systems used to block traffic to and from the phishing sites, WholeSecurity said.

The network is just the latest industry effort to thwart the identity theft scams, which some fear are undermining public confidence in online commerce.

In June 2004, a consortium of companies from across different industries called the Trusted Electronic Communications Forum (TECF) said it was going to tackle the problem of online identity fraud.

That group has representatives from leading retail, telecommunications, financial services and technology companies, including Charles Schwab & Co. Inc., Fidelity Investments Inc., IBM Corp. and Siebel Systems Inc. The TECF was formed to take on long-term and short-term approaches to combat the phishing problem, including new technology and technology standards, best practices and legal action against suspected identity thieves, according to a statement.

The Phish Report Network is available immediately. Companies can sign up by visiting www.phishreport.net.

Posted by Chad Dickerson at 04:22 PM

Interview with PalmSource CEO David Nagel: Linux is the future

By John Blau

As competition intensifies in the market for smart phone OSes (operating systems), PalmSource Inc. is looking at ways to carve out a piece of market share. Earlier this month, the company acquired China MobileSoft Ltd. (CMS) in a move aimed not only at gaining additional smart phone expertise but also Linux know-how.

At the 3GSM World Congress in Cannes, PalmSource unveiled four new applications that draw on its recent CMS acquisition.

IDG News Service interviewed David Nagel, president and chief executive officer of PalmSource, shortly before the start of the wireless conference and exhibition, which runs through Thursday.

IDGNS: You appear to be making some significant shifts in your strategy, moving beyond PDAs to smart phones and even Linux. Why?

Nagel: Two years ago, we began to see the real growth opportunities in the handheld-computing market were shifting from stand-alone devices, like the original Palm Pilot, to devices that combine features of the handheld computer with communicator devices, whether it's a smart phone or a BlackBerry-type device. We began refocusing our development efforts to serve that market, which we saw as the future.

Last summer, we brought out a product called Cobalt, which was our smart phone operating system. We have a number of products in development based on Cobalt.

IDGNS: And Linux?

Nagel: Before I talk about Linux let me talk about China first. At about the same time we began our smart phone shift, we began to look at China, which we view as a market with enormous growth potential, particularly in the smart phone or communicator segment. There are 320 million subscribers in China today. It's the largest mobile market in the world, adding roughly 5 million new subscribers every month.

We also realized that to succeed in China, we will need to have more Chinese development and customer support presence. We considered either building our own development group or acquiring a company. Initially, we thought we would build a development group. But we soon realized that this would be difficult and would take time. So we looked around for a company that already had a capability there. That search led us to China MobileSoft. We closed that acquisition (two weeks ago).

IDGNS: Why CMS? Did it have something PalmSource lacked, like Linux expertise?

Nagel: CMS has three kinds of products. The first are wireless applications, like multimedia messaging, WAP browsers, e-mail and games. These applications are typically shipped with smart phones, which combine the capability of a handheld computer with a phone. They are also in feature phones. These phones are positioned in the middle between high-end smart phones and low-end basic phones, which offer telephony and messaging. Feature phones are like smart phones with all kinds of applications but they are closed devices. You buy them as an appliance. They come with preinstalled applications, which you can't load, and they have a proprietary operating system.

The second type of product in the CMS portfolio is a feature phone operating system. The feature phone market today is actually much larger than the smart phone market. Of the some 600 million mobile phones sold worldwide per year, several hundred million are feature phones. China is the largest market for feature phones.

The third product type is a smart phone platform, similar to Palm OS, but based on the Linux kernel and services. This was interesting to us. The more we looked at the work CMS had done with Linux and the direction we were taking with Cobalt, we saw a lot of benefits in using Linux as a foundation for our future offerings.

IDGNS: What kind of benefits?

Nagel: First of all, when you build an open platform for mobile phones, you find yourself confronted with an extensive set of forward looking developments that you need to support, such as a whole variety of different micro processors and radio modules -- each requiring a significant amount of software to integrate with your basic platform. In the case of Linux, the work required to develop all these drivers is already done. Many chip makers do a reference port of their chips and create the software for integrating those chips to standard embedded Linux.

IDGNS: So with Linux, you're able to avoid a certain amount of development work?

Nagel: Typically, the first release of a chip is just made available with Linux drivers. You may have to modify these drivers or improve them. But the basic work is done.

IDGNS: And manufacturers don't do this right away for the other operating systems, such as Windows Mobile, Symbian and even PalmSource?

Nagel: Yes, that's correct. Most, if not all chip makers, now ship an initial implementation that runs on Linux. Implementations for the other operating systems follow. So again, by moving to a Linux platform, we avoid a lot of work. This translates into cost savings in development.

IDGNS: Does Linux also open doors in China?

Nagel: Indeed. Linux has really become the government-supported platform of choice for the IT sector in China. Windows, of course, is also in China and has widespread use on desktops. But it's quite clear that the Chinese government has made a series of decisions to support the development of Linux to ensure at least one alternative to the Microsoft monopoly. If you want to do business in China, having an offering based on Linux is a much better start than having one based on some other operating system.

IDGNS: Are you primarily interested in using Linux in products targeted at the Chinese market or worldwide?

Nagel: We first thought Linux would be very valuable in the Chinese market. But now, we believe it makes a lot of sense to use Linux in a broader context moving forward. We will be porting our Cobalt application level and all user interface programs to run on top of Linux rather than running on a micro-kernel that we originally made as part of Cobalt.

IDGNS: How much of your OS software will be Linux, how much PalmSource?

Nagel: The micro-kernel part of a platform is maybe 15 percent of the total code base. But it's a very important 15 percent and the part that obviously determines the basic character of the product. We believe Linux is the operating system of the future for a wide range of devices, not only for handhelds but also embedded devices, appliances, consumer electronics.

IDGNS: You aren't the first to look at Linux in the mobile phone space? How will you differentiate?

Nagel: There is only a small number of smart phones in the world today using versions of Linux. They haven't been particularly successful for a couple of reasons. The time required to boot up a Linux-based phone, for instance, is too long, as it is, by the way, with Symbian and Windows Mobile -- between 20 and 45 seconds. This is unacceptable. People expect phones to come on in a couple seconds. So work is necessary to decrease the boot time. Another problem is power management. CMS has already done some development work to improve boot time and power management in battery-operated devices such as smart phones.

IDGNS: Will the shift to Linux put a squeeze on Cobalt and some of your other operating system development work?

Nagel: We believe that by putting our software on top of Linux, we are providing a powerful combination. We offer tens of thousands of applications already created for Palm OS. That's a real benefit. People typically buy handheld devices because of their applications. With our huge number of applications and recognized user interface, we believe we bring enormous value to the Linux community and, at the same time, are able to take advantage of Linux virtues to create a new platform for wireless devices.

IDGNS: When can we expect to see your first Linux-based product?

Nagel: We haven't announced any availability. We just closed the deal with CMS. My engineers would shoot me if I gave them a date they hadn't fully absorbed.

IDGNS: What about security? Will the move to Linux help?

Nagel: With Cobalt, about a third of our effort in developing that program was focused on delivering a really secure platform. Security is absolutely essential in wireless, whether wireless networking for computers or wireless networking for phones and devices. We want to avoid the horrible security problems that exist in the Microsoft PC world. Most of the software releases that Microsoft sends out today are security patches.

We believe smart phones should develop along a much more secure path from the beginning and view Linux as an inherently better platform than Windows from a security point of view. It's a newer platform. People have been able to take an advantage of what people have learned painfully in the Windows context.

IDGNS: What exactly are you doing to ensure security?

Nagel: We support a capability for signed code. Imagine a piece of code that has a signature on it, basically saying that this is a trusted application. Unless the code has been signed by some legitimate signing agency, which often is the carrier or wireless operator, you can't load the application on the smart phone. We also provide a lot of the encryption capabilities as well as secure VPN technology.

IDGNS: Today's phones offer just about everything you can imagine -- e-mail, music, photography and now even TV. What application is still missing?

Nagel: Over time nothing. These little devices will be as powerful as today's desktop computers but, of course, with smaller screens. Ease of use is crucial -- that's our OS hallmark. It doesn't do you any good to buy a smart phone that has 30 functions if you can't figure out how to use them. We enable these devices to be used by ordinary people without having an IT staff standing behind them to explain how to do something. Mobile devices can't behave like computers. They have to be much more refined.

IDGNS: Is the PDA dead?

Nagel: It's not dead. We still see 3 to 4 million of these devices being sold with our operating system. What we're finding, though, is that the market is evolving. There are people, like my wife, who still use a PDA. Although she has a smart phone, she just recently bought a new PDA because she does digital photography and uses it as a photo album. Some people will want a combined device, others will want two. The market will sort this out.

Posted by Chad Dickerson at 04:22 PM

February 12, 2005

Fiorina to get millions, home security

By Joris Evers

Two days after the ouster of Carly Fiorina, Hewlett-Packard Co. (HP) on Friday detailed the severance package for its former chairman and chief executive officer in a regulatory filing. Fiorina will get a cash payout of US$21.38 million, and a sum of $50,000 for financial counseling, legal and outplacement services, according to the filing with the U.S. Securities and Exchange Commission.

Fiorina also gets to keep her PC equipment and technical support for a three-month period, HP said in the filing. Additionally, HP will provide the former executive with administrative support for a six-month period and maintenance of her home security system for a one-year period, according to the filing.

The $21.38 million cash payout consists of a $14 million payment that represents 2.5 times Fiorina's base salary and targeted annual cash bonus as well as a $7.38 million payment that is part of an HP incentive program called the long-term performance cash program, according to the filing. In addition, Fiorina will receive an unspecified cash payment for the balance of her unused vacation time.

The $14 million is payable in six months after the agreement date, with interest at an annual rate of 2.78 percent, HP said. The severance agreement is dated Feb. 8. It is subject to a seven-day revocation right on the part of Fiorina. If she does not revoke it, the agreement will become effective on Feb. 15, HP said in the filing.

Posted by Chad Dickerson at 12:42 AM

February 11, 2005

EU regulators agree create level VOIP playing field

By Simon Taylor

National telecoms regulators in 25 European Union (E.U.) member countries have agreed to create a level playing field to allow voice over Internet Protocol (VOIP) services to compete against traditional networks. The move should mean the elimination of several barriers that have kept the take-up of VOIP in Europe to a fraction of levels seen in the rest of the world.

The European Regulators Group (ERG), which met in Brussels on Friday, agreed to create a regulatory environment in which VOIP services can flourish.

The group issued a statement setting out how it would ensure that current legislation was applied consistently across the 25 E.U. member states to ensure that VOIP providers did not face unnecessary hurdles to competing with fixed and mobile service operators.

For example, regulators are planning to address the question of number allocation. In some countries, like Germany, VOIP service providers are given numbers starting with the 032 prefix, regardless where the service is based. But this can hold back VOIP providers if potential customers prefer a local number because it would win them more business.

The ERG statement says that "numbering plans should be technologically neutral" and the same number ranges should be available for both traditional voice and VOIP services.

Another issue bothering VOIP providers is the requirement to provide free calls to emergency services and in some cases provide caller identification. Because VOIP services do not operate from a fixed point, this can cause problems in routing calls to the nearest network or providing information about the caller. Regulators also pledged to deal with this while urging the industry to develop technological solutions to any limitations on providing information.

A spokesman for the European Commission, which handles promoting competition though fair application of regulation, pointed out that VOIP use is far lower in the E.U. than in other parts of the world.

According to the spokesman, Japan has 4.9 million VOIP users and one million people use the technology in the U.S. However, Germany, for example, has 10,000 VOIP users.

The spokesman said that VOIP's take-up depends on broadband Internet access. Currently 6.5 percent of the E.U.'s population has broadband access, the spokesman said, and the target is to raise this figure to 50 percent by 2010. To do this the E.U. has to offer a range of attractive services over the Internet, he said.

E.U. Information Technology Commissioner Vivian Reding said that the Commission favored an "open, pro-competitive approach to Voice over IP in all member states." She said that VOIP has the potential to "radically change" the existing market structure and may have a bigger impact on consumers and businesses than email.

Posted by Chad Dickerson at 10:31 PM

Skype coming to Wi-Fi, cell phones

By Stephen Lawson

Skype Technologies S.A.'s VOIP (voice over Internet Protocol) software will now come installed on mobile handsets from Carrier Devices Ltd.'s i-mate brand that are equipped with Wi-Fi as well as cellular capability. Newly manufactured i-mate PDA2 and PDA2K Pocket PC phones will come with Skype's software for making calls over the Internet. The handsets will be equipped out of the box for users to start making Skype calls, Skype said in a statement Thursday.

The phones use Microsoft Corp.'s Windows Mobile 2003 software for Pocket PCs and have both GSM/GPRS (Global System for Mobile communications/General Packet Radio Service) and Wi-Fi wireless LAN capability. Carrier Devices also plans to put the Skype software in its i-mate JAM, a smaller version of the handset. With the Skype software, users can make calls over a broadband Internet connection through a Wi-Fi network, bypassing the provider of GSM/GPRS service.

Skype makes peer-to-peer VoIP software that lets users make voice calls to any other Skype user on the Internet for free. Through the Luxembourg-based company's SkypeOut service, users can make calls to fixed-line and mobile phones in countries around the world at a fraction of the cost of conventional international phone calls. Skype's software can be installed on some other Windows-based phones.

Earlier this month Skype announced a deal with Hutchison Global Communications Ltd., a fixed-line carrier in Hong Kong, for a co-branded VOIP service. Last year Skype joined with Siemens AG to offer a USB (Universal Serial Bus) adapter device for some Siemens cordless phones that lets users make Skype calls.

I-mate, based in Dubai, has carrier and distributor partners across the Middle East, Europe, Africa, Russia, Asia, Australia and New Zealand. It is now planning a U.S. launch, according to the statement. I-mate will spotlight its deal with Skype at the 3GSM World Congress next week in Cannes, France.

MORE LINKS:
• Ecommerce Times
• Pocket Lint

Posted by Chad Dickerson at 05:03 PM

EBay sees e-commerce potential in China

By Martyn Williams

EBay Inc. executives this week called China the "largest e-commerce opportunity today" and reaffirmed the online auction company's plans to invest US$100 million in the country during 2005. "We are doubling down in China because the potential for Internet commerce in that country is simply extraordinary," Meg Whitman, eBay's chief executive officer, said at the company's analyst conference in San Jose, California, on Thursday. China's current online population already exceeds that of Germany and the U.K., two of eBay's most important markets, and by 2009 is expected to surpass that of the U.S., she said in remarks that were webcast.

"Behind that growth will be 170 million middle-class households by 2010," Whitman said. "In short, five to 10 years from now, (a company's) share of e-commerce in China is likely to be the defining measure of business success on the Net."

EBay entered China in 2002 when it bought one third of EachNet.com Corp. for $30 million. It acquired the remaining two thirds a year later for an additional $150 million and finished integrating the site with eBay's international network in September last year. That integration means that products listed for sale at the eBay EachNet can appear on eBay sites in other countries, and vice-versa. EBay also added a number of new features to the service.

The integration process caused growth to slow at eBay EachNet but, with the work now complete, eBay has earmarked $100 million in spending this year to promote the new service, Whitman said in January when eBay announced its financial results.

"As you think about 2005, (investment) goes into more product development, it goes into customer support, trust and safety," she said in January, according to a transcript of the earnings conference call. "It goes into online advertising, offline advertising, and we are accelerating that spending because the market is growing so rapidly."

The goal of the investment goes beyond China's Internet auction sector, she said.

"What we are focused on there is not only our leadership position in the marketplace business, but securing the leadership position in e-commerce overall in China," Whitman said in January.

She added this week: "We are on a tear to be the undisputed winner in China and the additional $100 million investment we announced last month should be a sign of an unmistakable commitment and an unstoppable determination to win that market."

Whitman dismissed eBay's rivals in China as "a bunch of small competitors ... nipping at our heels," but in fact they include names such as Yahoo Corp., which has a joint venture in China with Sina Corp., and Hong Kong-based Alibaba.com Corp., which is well known in the region. The latter operates a major business-to-business portal under its own name as well as the Taobao.com consumer-to-consumer site. In July last year Alibaba.com said it would invest 350 million renminbi ($42 million) into Taobao.com.

Elsewhere in Asia, eBay reported good business at its South Korean unit, Internet Auction Co. Ltd., of which it owns 99.7 percent.

"Internet Auction achieved $1 billion in gross merchandise volume faster than any Korean retailer has ever done," Whitman said at the analyst conference this week. "One out of every two Koreans between the ages of 20 and 40 are registered Internet Auction company users."

EBay also operates Asian services in Australia, Hong Kong, India, Malaysia, New Zealand, the Philippines, Singapore and Taiwan. It counted 27 million users and 100 million listings in the region in 2004, and its revenue from business in the region last year was $157 million.

EBay's excursions in Asia haven't all gone well, however. Its Japanese service was launched in early 2000 and then closed in March 2002, after it failed establish a significant business in the face of competition from Yahoo Corp., which arrived earlier in the country, and some local companies.

MORE LINKS:
• TheStreet.com
• Keralanext

Posted by Chad Dickerson at 05:03 PM

FCC proposes licenses for in-flight broadband

By Stephen Lawson

The U.S. Federal Communications Commission (FCC) wants to set up a process for licensing in-flight broadband services, potentially fostering more competition in the nascent business. Two airlines -- Lufthansa AG and Scandinavian Airlines System (SAS) -- already offer full-fledged Internet access for passengers on some flights to U.S. cities. With these services, data travels from the planes to the Earth-based Internet via satellite using a set of frequencies called the Ku band. The same technology is used on some government planes and private aircraft. But the only company currently allowed to offer the service on airliners is The Boeing Co., which has a special "non-conforming use" license for its Connexion by Boeing service, according to the FCC.

The agency now wants to formalize the licensing process for the so-called AMSS (Aeronautical Mobile Satellite Service), said an FCC spokeswoman who asked not to be named. It hopes to let service providers get licenses quickly while also ensuring that the spectrum is used efficiently and in-flight broadband doesn't interfere with other uses of the Ku band, she said. Among those other uses are government Space Research Stations, satellite uplinks for electronic transactions at gas stations and cable television networks that receive broadcast content via satellite, the spokeswoman said.

The FCC has outlined a proposal for the new regulations in a Notice of Proposed Rulemaking (NPRM), which was published on the FCC Web site Wednesday. The NPRM examines frequency allocation in the Ku band and seeks comment on how to protect other users from interference from AMSS. The NPRM also proposes rules for licensing AMSS networks and seeks comment on a system to let foreign-licensed aircraft antennas operate in U.S. airspace. The public will be able to comment on the NPRM for 75 days following its publication in the Federal Register, which will probably occur in the next few weeks, the FCC spokeswoman said. Replies to those comments will be accepted until 105 days after the Federal Register publication date. The FCC will then take that input and set its policy, and those affected can later ask it to reconsider that policy, the spokeswoman said. The FCC would not comment on when its policy is likely to come out.

Boeing is still studying the NPRM, company spokesman Terrance Scott said.

"My guess is that this is the FCC trying to go and formalize that process, and we welcome that," Scott said. The new framework isn't likely to significantly change the Connexion by Boeing service but should bring more regulatory certainty, he said. For one thing, the special license Boeing has now carries a 10-year term; under the new framework the company believes it would get a license for a standard 15 years, according to Scott.

Connexion by Boeing had its first commercial launch on airliners in May 2004. In addition to Lufthansa and SAS, the service is offered outside the U.S. on Japan Airlines System Corp. and All Nippon Airways Co. Ltd. The technology currently offers a 5M bps (bits per second) downstream link to the plane and 1M bps upstream, Scott said. The downstream connection could be upgraded to 20M bps if necessary to meet demand, he added. Passengers can share that Internet connection via an on-board wireless LAN. According to Boeing, the service is comparable to a home broadband connection. It gives passengers access to e-mail, the complete Web and corporate intranet resources for prices ranging from US$14.95 for a flight under three hours to $29.95 for flights over six hours. Passengers can also pay $7.95 plus $0.25 per minute on flights under three hours or $9.95 plus $0.25 per minute for longer flights.

Consumer acceptance of Connexion by Boeing has met the company's expectations, Scott said. He declined to give more specifics about its success.

One other prospective service provider, Aeronautical Radio Inc. (ARInc), has also applied to offer a service similar to Connexion's. It is currently testing its AMSS with the FCC's approval, according to the NPRM. ARInc was still reviewing the NPRM and unable to comment on Thursday.

Posted by Chad Dickerson at 05:02 PM

UK Parliament passes biometric ID card plan

By Laura Rohde

The U.K. Parliament's House of Commons easily passed a bill on Thursday to establish a system of potentially compulsory biometric identity cards and a central database of all of its citizens. However, the bill's primary sponsor, the Secretary of State for the Home Department, said the ID card bill may hit stiff opposition in the House of Lords. The Identity Cards Bill, introduced to Parliament on Nov. 29, seeks to create by 2010 a system of ID cards with embedded chips that carry personal information and biometric identifiers. The information will include each citizen's name, address and biometric information such as fingerprints, facial scans and iris scans, all of which will be included in a massive database called the National Identification Register.

The ID Cards Bill, which is expected to cost up to £5.5 billion (US$10.3 billion) to implement, was approved in the House of Commons by a vote of 224 to 64. The plan calls for a standalone biometric ID card to be issued alongside a biometric passport. It would most likely become compulsory for everyone living in the U.K., including children, by 2012. The U.K. population is about 60 million.

The vote came on the same day that the U.S. House of Representatives approved its own version of electronic ID card legislation in a 261-161 vote. The U.S.'s Real ID Act would require states to issue driver's licenses and other ID cards with physical security features such as a digital photograph and other basic data, using what the bill describes as machine-readable technology. That could include a magnetic strip or RFID (radio frequency identification) tag.

U.K. Prime Minster Tony Blair and Secretary of State for the Home Department Charles Clarke have said the biometric ID cards are a crucial part of the government's fight against identity fraud, illegal workers, illegal immigration, terrorism and abuse of programs such as the National Health Service (NHS). The Labour government has indicated that they want to get the ID card law in place before the general election expected in May.

"The reason why this measure is supported not only by the Government but by the police and the security services is that people believe that, particularly when we have biometric passports and the biometric technology available, we can construct an identity card that gives us the best possible protection against crime and terrorism," Blair said in the House of Commons on Wednesday. "I do not think it is wrong or a breach of anyone's civil liberties to say that we should have an identity card. Most people carry some form of identification anyway. I think it is long overdue, and we should get on and do it."

Still, Clarke indicated this week that the bill may face opposition in the House of Lords, where it is now headed. The House of Lords is the second of the U.K.'s two Houses of Parliament and has the power to block bills passed in the House of Commons.

The U.K. has already determined that a chip with biometric facial identifiers will be included in all newly issued British passports by the end of 2005. The U.K. Passport Service (UKPS) would use that information and technology as a basis for the ID card plan, a spokesman for the Home Office said.

UKPS recently completed a six month trial of biometric technology involving 10,000 volunteers, and plans to issue the findings within the next few months, the spokesman said.

The trial, run by Atos Origin SA, tested three biometrics types: electronic fingerprint, an iris scan and a full face scan. Atos Origin was responsible for the delivery and installation of the equipment and the software used for the trial; NEC Corp. supplied the fingerprint identification system; Identix Inc. the fingerprint capture and facial matching technology, and Iridian Technologies Inc. the iris recognition technology.

Despite the government's apparent faith in the accuracy of biometric technologies, some banks and credit card companies have yet to implement them on the grounds that they are not accurate enough.

"We've found that the false positive (identifications) are still too high," said Johan Gerber, associate vice president of MasterCard International Inc.'s risk products division, in an interview earlier this week. "We don't feel that it's ready to roll out just yet."

MasterCard is interested in using biometric technology in credit cards in the future and biometrics are already used on a much smaller scale to grant access to regular visitors of some of its offices, he added.

Groups such as the Law Society, the professional body for lawyers in England and Wales, have expressed concerns that the ID card program tries to achieve too much and that the Home Office has not shown that the program would stop identity fraud. Additionally, security experts have warned that such a massive database could be subject to attacks by hackers, terrorists or other criminals.

According to Ovum Ltd. analyst Graham Titterington, the legislation lacks measures to ensure the accuracy of the data being entered or to allow individuals to check their information in the database.

Richard Allan a Member of Parliament (MP) and board member of the Parliamentary Office of Science and Technology, has opposed the ID Cards Bill because he sees the technology behind it as unproven and too expensive. Allan is active in several technology groups for MPs including the Internet Group and the eDemocracy Group

"There are so many unknowns about the biometric technology," Allan said in a posting on his Web site blog, "... that it would be irresponsible to approve the scheme at present."

Posted by Chad Dickerson at 05:02 PM

Information privacy proposed for Japanese constitution

By Martyn Williams

An influential Japanese politician has suggested including the right to information privacy as part of a proposed revision to the country's constitution. "(My proposal) calls for the collection of such information, the storage, utilization and transfer of such information to require consent or a valid rationale by law for specific circumstances, otherwise such activities would be banned," said Yukio Hatoyama, a member of Japan's lower house of parliament, the House of Representatives, and ex-leader of the main opposition Democratic Party of Japan.

Hatoyama was speaking at the Foreign Correspondents' Club of Japan this week to outline his suggestions for a revised constitution, which are contained in a book he published on the subject last week. His comments come amid growing public interest in Japan about the amount of personal information held by government agencies and companies.

People should have the right to know what information about them has been gathered and how it is being used, and should be able to ask for amendments to information they think is incorrect, he said.

Japanese citizens tend to be less concerned than those in Western countries about the collection of personal information by the authorities. Many provide details voluntarily about their households to the local koban, or neighborhood police office, and few raise questions about requests for identifying documents from private companies. However, things are slowly starting to change.

A recent run of highly publicized information leaks from major companies -- some of which resulted in the names, addresses, e-mail addresses and telephone numbers of millions of people being leaked -- have caused unease in Japan. Some of the information found its way into the hands of fraudsters and was used to scam people out of large sums of money.

Changes in some laws are underway, although Hatoyama's suggestion of enshrining such a right in the constitution would take the proposed laws a step further.

Japan's current constitution came into effect on May 3, 1947, and was drawn up at a time when the country was under the control of Allied military forces in the wake of its defeat in World War II. With the 60th anniversary of the document approaching, a general shift in political power in East Asia, and the involvement of Japan's Self Defense Forces overseas in places such as Iraq, a debate is beginning about changes or a wholesale rewriting of the constitution.

Posted by Chad Dickerson at 05:02 PM

Software CTOs call for US cybercrime commission

By Grant Gross

A group of chief technology officers (CTOs) from major software vendors on Thursday called on U.S. President George Bush's administration to convene a national commission to address cybercrime and identification theft. The 15 CTOs, whose companies are members of the Business Software Alliance (BSA) trade group, met with congressional and White House leaders to discuss issues that concern them, including cybercrime, patent reform and more federal funding for research.

The group asked Bush administration officials, including John Marburger, director of the White House Office of Science and Technology Policy, and Phil Bond, undersecretary for technology in the U.S. Department of Commerce, to consider a cybercrime commission that would bring together computer users, lawmakers, enforcement officials and technology companies to talk about ways to fight ID theft and other online crime.

A commission could address a variety of solutions, including public education, new legislation and international treaties, the CTOs said during a press briefing. The national commission could raise the profile of cybercrime issues among lawmakers and consumers, said Chris Voice, vice president of technology at Entrust Inc., a security software vendor. "We don't want to say the sky is falling, but we wanted to bring people together ... and have a dialog," he said.

Several members of BSA market cybersecurity products, and the CTOs said their companies have technological solutions to many cybercrime activities. But help from the U.S. government is needed, particularly to encourage other countries to pay attention to cybercrime issues, said Craig Mundie, CTO at Microsoft Corp.

Mundie also suggested that U.S. laws lack strong cybercrime penalties. A criminal who steals one car can spend more time in jail than a hacker who causes millions of dollars in damage with a virus, he said.

New legislation dealing with cybercrime could be one idea to emerge from the commission, Mundie said.

With new, sophisticated cybercrime activities, including phishing schemes, lawmakers and consumers need to pay more attention to cybercrime, added Christopher Bolin, CTO at antivirus vendor McAfee Inc. Scammers using phishing tactics typically send out fraudulent e-mail targeting users of financial institutions or other e-commerce sites. The e-mail often tells recipients there's a problem with their accounts, and that they need to re-enter their bank account or credit card number at a bogus Web site designed to look like the legitimate e-commerce site.

"It's a completely different guy at the other end that we're used to dealing with," Bolin said. "This is not a pimple-faced kid who, when he gets a girlfriend, stops writing viruses. This is a guy with a business plan."

The White House officials did not commit to a cybercrime commission but seemed receptive to the idea, said Robert Holleyman, BSA president and chief executive officer.

Posted by Chad Dickerson at 05:01 PM

Microsoft again delays CRM update

By Stacy Cowley

Microsoft Corp.'s famously slippery ship dates are sliding once again when it comes to the company's long-delayed Microsoft CRM 2.0 update. Microsoft said Thursday it is expanding the software's feature set and delaying its release-to-manufacturing until the fourth quarter of 2005. The move comes one week after Microsoft installed ex-PeopleSoft executive Brad Wilson as its new general manager of its CRM (customer relationship management) product. Partners say the delay is no surprise. Though Microsoft most recently said it would ship CRM 2.0 in the middle of this year, after delaying a planned 2004 release, those involved with the software say Microsoft was clearly not going to meet that deadline.

Microsoft ran a small alpha test of its updated software but hadn't yet begun a planned broader beta test, according to Mike Snyder, principal of Chicago-based Sonoma Partners LLC, a services firm that specializes in Microsoft CRM. "Obviously we'd like it sooner, but I don't think anyone will be surprised by this," he said.

Yankee Group analyst Sheryl Kingstone echoed that. "We knew it was going to be majorly delayed," she said, citing Microsoft's quietness about planned new features and the pace of its development work. She thinks Microsoft is right to hold off on a release until it can perfect the software. "The worst thing they could do is rush a product to market," she said.

The delay means that almost three years will pass between the initial release of Microsoft's CRM software, in early 2003, and its first comprehensive update. Last year it released a 1.2 version that addressed a number of the most critical gaps and bugs, but customers say the current software still lags competitive offerings.

"We've basically stopped using it until version 2 is available," said Michael Kruger, information systems manager for Designer Doors Inc., a door maker based in River Falls, Wisconsin. His company picked Microsoft CRM as its sales management software in late 2003, but soon hit major problems with lackluster Outlook synchronization and reporting capabilities.

"We're disappointed. We were hoping (version 2) would be ready soon," Kruger said. "However, I'm pleased they're not going to release it until it's ready. All things considered, I'd rather wait for the right product."

Microsoft has been tight-lipped about what new features will be added in version 2.0, but it said Thursday that the expanded scope of the software now calls for enhanced process workflows with all parts of the CRM suite, including new marketing and service automation features; simplified installation procedures; and component services enabling easier integration with other applications and data sources.

Microsoft CRM is Microsoft's bid for a share of the business applications market, where vendors such as SAP AG and Oracle Corp. dominate the high end and hosted service providers such as Salesforce.com Inc. are increasingly gaining traction with smaller businesses. Sonoma Partners' Snyder cited Salesforce.com as the main rival he encounters on new business pitches. Microsoft, in Redmond, Washington, claims a customer base approaching 3,500 companies for its CRM software.

Yankee Group's Kingstone said that in retrospect, Microsoft should have held off on releasing its CRM software into the market if it was going to need such a long development time before the 2.0 release. However, she sees the midmarket CRM space as an open field, in which vendors are better off focusing on slow, solid development rather than racing to capture market share.

Despite the compromises Designer Doors has made, Kruger said he still feels Microsoft CRM was the right choice. "I do believe that when version 2 is out, it will be close to the best product on the market," he said.

Posted by Chad Dickerson at 05:01 PM

February 10, 2005

TV is coming to a mobile near you

By John Blau

Just when you thought your mobile phone had about all the features you can handle -- telephony, messaging, gaming, music and photography -- guess what? Another is on the way: TV. Mobile phone manufacturers and network operators around the globe are tuning into mobile TV big time. And many of them plan to use the mammoth 3GSM World Congress, which begins on Monday in Cannes, France, as a backdrop to tout their new products and services.

The surge in interest comes as the cell phone industry explores new ways to generate revenue beyond its cash-cow telephony business. For sure, mobile TV could be a new money spinner, provided the technology works and the service is affordable. Early developments are encouraging.

For those not familiar with mobile TV, the service has two primary and potentially competing distribution channels. This distinction is often overlooked.

With one, mobile phones receive regular TV broadcasts using special antennas. With the other, the signal is transmitted over the mobile network as a stream of video data. The big difference between the two is broadcast's one-to-many relationship versus mobile's one-to-one.

The broadcast technology isn't entirely new. Some countries, notably Japan and South Korea, have been working on it for the past few years. Unfortunately, each has developed its own standard. That's a problem for the global mobile market.

The Japanese format, called ISDB-T (Integrated Services Digital Broadcasting - Terrestrial), is still undergoing field tests. The South Korean format, DMB (Digital Media Broadcasting), is featured in a phone that LG Electronics Inc. unveiled in November. Rival Samsung Electronics Co. Ltd. is following with its own DMB-enabled phone.

The mobile TV picture in the U.S. is still a bit fuzzy. The country's digital broadcasting standard ATSC (Advanced Television Systems Committee) lacks a mobile component. Qualcomm Inc. is trying to fill that void with its own proprietary MediaFLO (forward link only) multicasting technology -- an alternative to digital broadcasting.

The technology, which would also accommodate the streaming of content over 3G networks, transmits in the 700-megahertz range and requires 30 to 50 times fewer towers than a cellular network. Qualcomm has announced plans to provide a chip that promises playback at up to 30 frames per second.

But a European format, DVB-H (Digital Video Broadcasting - Handheld), also appears to be gaining traction in the U.S. Last year, Finnish mobile phone maker Nokia Corp. and cell-tower operator Crown Castle International Corp. began trials of the technology in Pittsburgh.

Indeed, DVB-H has the potential of becoming a global standard, which, in turn, could help drive down production costs. The format is backed by some of the world's largest handsets makers, including Motorola Inc., NEC Corp., Nokia, Siemens AG and Sony Ericsson Mobile Communications AB. The European Telecommunications Standards Institute (ETSI) selected it as a standard in November.

The DVB-H standard has addressed -- and largely resolved -- two problems plaguing mobile TV: frame rates and battery life, according to Jouni Kämäräinen, director of rich media technology at Nokia. The standard, he said, supports rates of up to 25 frames per second, compared to earlier formats that ranged from one to five. By comparison, standard TV broadcasts have rates of between 25 and 30 frames per second.

As for battery life, DVB-H temporarily shuts off tuner chips between broadcast bursts, a technique known as time slicing. The result is a huge increase in battery life, according Kämäräinen. "In our pilots, we have achieved up to four hours of uninterrupted TV viewing, compared with 15 to 30 minutes with other technology," he said.

Nokia has been testing broadcast mobile TV with its new model 7710 smart phone and an attachable DVB-H receiver. The company is also developing models that will integrate the receiver into the handset.

Phones equipped with DVB-H receivers have a few advantages. For one, many users in one spot, say a soccer stadium, can receive the same signal simultaneously. That makes live coverage relatively easy. For another, the broadcast service can support more than 30 channels.

Perhaps the only significant drawback of DVB-H is cost. Digital broadcasters must invest in new hardware and software to build a network that supports this standard, in addition to securing licensed spectrum, according to Mark Heath, an analyst with Analysys Ltd.

That's going to take some time. Analyst group Gartner Inc. doesn't expect real-time mobile TV services to be commercially available in Europe until 2007 at the earliest.

This gap, however, could be an opportunity for mobile operators. "While digital broadcasters carefully weigh an investment in DVB-H, 3G operators could push their video streaming services," Heath said.

In Europe, several operators are doing just that, including Hutchison 3G UK Ltd., Vodafone Group PLC and Mobilkom Austria AG & Co. KG.

In the U.S., Verizon Wireless Inc. and Sprint Corp. have launched similar forms of mobile TV service.

Mobile TV delivered over a cellular network has a couple of advantages, according to Heath. First, many new 3G networks are now up and running, and desperate for business, he said. Second, they are well suited for providing chunks of content on demand; for example, watching condensed news programs whenever you want. And finally, from an operator's perspective, a sophisticated back-end billing system can easily manage payments for premium content.

And the disadvantages? There seems to be really only one, but it could be significant: capacity.

If several hundred customers want to watch streamed video content in roughly the same area at the same time, their mobile phone operator must provide sufficient network capacity, which is costly.

"If mobile TV becomes really popular, which is possible, then both the broadcast and video streaming channels will be necessary and can complement each other," Heath said. "Customers could use the broadcast service to watch a live sports game and the video streaming service to download a music clip or an entertainment program on demand."

Even if mobile TV is being hyped by the mobile phone industry as the next big application, users will ultimately determine its success. Which brings us to the issue of screen size. Frame rates and resolution are improving but images are -- and will remain -- difficult to make out and view for long periods on a small screen.

That's why some mobile operators see the future of mobile TV not in movies or entire shows but in condensed content streamed to handsets on demand. "I'm keen to watch 30 seconds or two minutes or even four minutes of news or sports or a video clip, but I'm not going to watch a movie or soap opera on a small screen," said Boris Nemsic, chief executive officer (CEO) of Mobilkom Austria. "It's just too hard on my eyes."

Pricing, too, will be critical. Consumers may balk at fees that add up quickly on top of their monthly bill. "I'd like to watch some TV while I wait for customers," said a taxi driver in Düsseldorf, Germany. "But if the service is pricey, I can't afford it. My disposable income is limited for this sort of thing."

Where the nascent market for mobile TV is headed is anyone's guess. But one thing is certain: it's gaining momentum.

So stay tuned.

Posted by Chad Dickerson at 04:28 PM

Yahoo fires up toolbar for Firefox users

By Scarlet Pruitt

Yahoo Inc. released a beta version of its Web browser toolbar for users of the Mozilla Firefox browser on Thursday, offering bookmarks, newsfeeds and search and translation tools. The beta version of the toolbar requires Firefox 1.0 for Windows and is available for free download from Yahoo's site. It also includes features such as the ability to search a site, Yahoo Mail notifications and alerts, and buttons for access to the Internet company's games, finance, news and sports sites, among others.

The release comes on the heels of reports that Firefox is quickly gaining in popularity, although it still holds a small portion of the market compared to Microsoft Corp.'s dominant Internet Explorer (IE) browser. The Yahoo Toolbar has been available to IE users for some time.

Firefox 1.0 was released in November and its share of the market grew 34 percent from November to December, according to analyst firm WebSideStory Inc. Firefox's usage share hovered at around 4 percent at the beginning of December, while IE stood at around 92 percent, down from 95.5 percent six months earlier, WebSideStory said.

Yahoo's release of a toolbar for Firefox demonstrates the browser's growing popularity, the Mozilla Foundation said in a statement. The open source browser has been downloaded over 23 million times since its launch in November, it added.

While the Firefox toolbar is still in a beta version, Yahoo said it plans to add its antispyware tool to the product soon. The Sunnyvale, California, Internet company added its antispyware tool to the IE version of the toolbar last year.

Posted by Chad Dickerson at 04:28 PM

New program attacks Microsoft's AntiSpyware

By Scarlet Pruitt

One month after Microsoft Corp. released a beta version of its new antispyware software, security researchers at Sophos PLC say they have detected the first malware program that seeks to attack it. The program, named BankAsh-A, tries to disable Microsoft AntiSpyware and delete all files within its folder, Sophos said. It also tries to steal users' banking passwords by installing a keystroke logger that records information typed into online banking sites, according to the antivirus firm.

The program appears to targets users of U.K. online banks Barclays Bank PLC, Cahoot, Halifax PLC, HSBC Bank PLC, Lloyds TSB Bank PLC, Nationwide, NatWest, and Smile, Sophos said

While there are a number of malware programs that attempt to steal banking passwords this one is interesting because it seems to single out Microsoft's antispyware software for attack, said Sophos senior technology consultant Graham Cluley. AntiSpyware is designed to protect Windows users from spyware, or programs that surreptitiously monitor computer users' actions, and other malicious programs.

Sophos was first made aware of the program Wednesday morning, Cluley said. Although the researchers have only seen a handful of incidents of the program "in the wild" -- out on the Internet -- the speed in which hackers targeted Microsoft's AntiSpyware software is concerning, Cluley said.

The Redmond, Washington, software maker began offering the beta of AntiSpyware in early January, via free download from its Web site.

Sophos advised Internet users not to download unknown files and to make sure their antivirus software is updated to protect against attack. Microsoft representatives weren't immediately available to comment on the threat Thursday.

Posted by Chad Dickerson at 04:27 PM

Broadband and managed services drive BT growth in Q3

By Laura Rohde

BT Group PLC (BT) reported moderate gains in its third quarter due to continued growth in its "new wave" technology segments, including broadband, mobility and managed services, it said Thursday. The London company reported net income for its third fiscal quarter, before taxation, goodwill amortization and exceptional items, of £545 million (US$1.05 billion as of Dec. 31, the last day of the period reported), up 4 percent from £525 million a year earlier. Earnings per share rose 9 percent year-on-year to £0.048 from £0.044, BT said.

Third quarter revenue was £4.584 billion, up slightly from £4.578 billion in the same quarter in 2003. Underlying revenue was up by 3 percent, excluding the impact of regulatory reductions to mobile termination rates, BT said.

Ben Verwaayen, BT's chief executive, credited the quarterly gains to a record 800,000 broadband connections in the period, as well as strong growth at the group's global services division, where revenue for the quarter rose 10 percent to £1.5 billion, from £1.4 billion a year earlier.

Contracts with the U.S. pharmaceutical company Bristol Myers-Squibb Co. and French electronic systems and industrial electronics maker Thales Group SA showed that BT's services division is gaining a foothold in the competitive overseas markets, the company said. Turnover in its global products division grew by 3 percent, boosted by demand for MPLS (Multi Protocol Label Switching) products, BT said.

Additionally, the consulting and systems integration portion of its services segment saw robust growth of 27 percent, driven in large part by BT's IT infrastructure contracts with the U.K. National Health Service (NHS), it said.

Overall growth in broadband, mobility and managed services was 35 percent in the quarter, offsetting the company's continued declines in its traditional retail business areas, including its fixed-voice offerings, which fell 8 percent.

BT also continued to chip away at its net debt which stood at £8 billion at the end of December 2004, 10 percent below the level it was on Dec. 31, 2003.

BT, the U.K.'s largest telephone company, said its transformation strategy, designed to drive customers from traditional services to the new wave services like broadband and IP VPNs (Internet Protocol Virtual Private Networks), has delivered underlying revenue growth for four consecutive quarters.

Posted by Chad Dickerson at 04:27 PM

Broadband, wireless boost France Télécom's 2004 results

By James Niccolai

New customers signing up for broadband and wireless services helped France Télécom SA report an uptick in revenue for 2004, although net income at the French operator declined slightly from the year before. Revenue for the year to Dec. 31 was €47.2 billion (US$64.4 billion on the last day of the period reported), up 4.1 percent from 2003 on a comparable basis, or 2.2 percent on an actual basis, France Télécom said Thursday. The comparable figures assume constant exchange rates and exclude the effects of acquisitions or disposal of operations.

Net income for 2004 came in at €2.78 billion, down from €3.21 billion in 2003, France Télécom said.

Growth was led by the French operator's wireless subsidiary, Orange SA, where 2004 revenue increased 10.4 percent on a comparable basis to €19.67 billion. Orange added 5.4 million customers in 2004 for a total of nearly 54 million by the end of the year.

France Télécom's other wireless businesses also did well. Revenue from its stake in Polish wireless operator PTK Centertel, for example, increased 25.2 percent on a comparable basis to €1.2 billion.

Wanadoo, the French operator's Internet services unit, reported revenue of €2.85 billion for the year, up 9.9 percent on a comparable basis from 2003. Almost half of France Télécom's Internet access customers in Europe were using broadband by the end of 2004, up from a quarter at the end of 2003, the company said.

Sales from France Télécom's fixed-line business continued to slow, dipping 0.3 percent from 2003 on a comparable basis, to €21.68 billion. That compared to a drop of 2.4 percent between 2002 and 2003.

While overall net income for the year declined, operating income increased 12.4 percent from 2003 on a comparable basis, to €10.8 billion, France Télécom said. Operating income provides a measure of profit from a company's ongoing operations, excluding adjustments for income taxes, interest payments and the like.

Thierry Breton, France Télécom's chairman and chief executive officer, called the results solid and said they will allow the company to continue investing in new technologies that merge voice and data services. The company's research and development budget increased 20 percent in 2004, it said.

France Télécom also said Thursday that it has agreed to buy the 45.8 percent of global network operator Equant NV that it did not already own. France Télécom will pay €578 million for the remaining assets and liabilities of the Amsterdam-based company. The deal is expected to close in May, the French operator said. It had announced last month that it planned to make an offer for the remainder of Equant.

Posted by Chad Dickerson at 04:27 PM

Report: Verizon makes informal offer for MCI

By Martyn Williams

Verizon Communications Inc. has made an informal bid for MCI Inc., according to a report in the Thursday edition of The Wall Street Journal newspaper. The bid was made as part of talks between the two carriers and doesn't represent a firm offer, the newspaper said, citing "people familiar with the situation." Discussions are still under way between the two carriers and have become "meaningful" in recent days but they could fall apart, it said. While the report didn't quote a price, it said the deal is close to a US$6.3 billion offer recently made by Qwest Communications International Inc.

News of the deal comes just over a week after SBC Communications Inc. said it plans to acquire AT&T Corp. in a deal worth US$16 billion.

That deal, which will create the largest telecommunications carrier in the U.S., was viewed by analysts as the possible start for a series of mega-mergers in the telecommunications industry. In addition to speculation regarding MCI, Verizon and Qwest, some analysts also speculated about plans that BellSouth Corp. and Sprint Corp. might have for a deal with a competitor or each other.

Posted by Chad Dickerson at 04:26 PM

After Fiorina: Who's next?

By Robert McMillan

Almost as quickly as Carly Fiorina's tenure as chief executive officer (CEO) and chairman of the board at Hewlett-Packard Co. (HP) came to an end, the speculation began about who may be plucked to replace her. The company announced Wednesday that the board has begun an "immediate" search for a replacement, and although Fiorina was the first CEO in HP's history to be selected from outside of the company, her replacement will probably be the second. "Who should HP approach for the job? Our first choice would be former president Michael Capellas," wrote Merrill Lynch & Co. Inc. analyst Steven Milunovich in a report published Wednesday. Capellas, the former head of Compaq Computer Corp. was made president of HP after the two companies merged, but he resigned in 2002, apparently in dissatisfaction with his new role. He is now the CEO of MCI Inc.

The recruiter who brought Fiorina to HP in 1999, executive search firm Christian & Timbers Vice Chair Stephen Mader, believes HP's next CEO will most likely not be a technology titan such as Capellas. Instead, Mader expects that Fiorina's replacement will come from outside the technology industry.

It will be extremely difficult to find a technology executive with the experience and organizational ability to match the task at hand, he said. "The pickings in technology for the scale of this work are going to be very slim," he said.

Mader expects the company to recruit a CEO in the mold of Lou Gerstner, who came to IBM in 1992 with no technical background and engineered a turnaround. Gerstner took a sluggish company famous for its hardware and reshaped it as a flexible services provider.

The executive recruiter believes that HP will name a CEO quickly, within the next several months.

"HP needs resolution on key strategic issues. They can't continue to find themselves being speculated on," Mader said. "They need someone like Gerstner, who will come in and marshal the troops by saying to every third person, 'You don't agree with the strategy? You're fired.' "

First and foremost, HP will need a "hands-on detailed logician" who can "make the company run," said Roger Kay, an analyst with research company IDC.

According to him, such a candidate could very well come from within the industry, with rival PC vendor Dell Inc. being the most likely source of management talent. "The person that they're looking for is Kevin Rollins," he said. Rollins, recently promoted to the CEO position at Dell, is unlikely to be interested in the job, but the Austin, Texas, company has long roster of talented executives who may not be willing to wait for Rollins to step down, Kay said.

"They might be able to find somebody somewhere in the second-tier management at Dell," he said. "Dell has one of the deepest benches in the industry."

Although HP Director Patricia Dunn said Tuesday that she expected the company's next CEO to be selected from outside of the company, there are also at least two current employees who will merit consideration: Ann Livermore, executive vice president of HP's Technology Solutions Group, and Vyomesh Joshi, executive vice president of the company's Imaging and Personal Systems Group.

Livermore, a 23-year HP veteran who heads up the company's combined services and enterprise systems operations, was a top contender for the CEO job back in 1999. And while the enterprise division she has run has struggled to achieve profitability, Livermore is well-regarded within the company and could be a successor to Fiorina, analysts say.

Joshi has the better track record. He has run HP's highly profitable printer division since 1999, but like Livermore, he may face an uphill battle for the job. "I have the feeling that all of Carly's top management team is a little tainted," said IDC's Kay. "She articulated the grand strategy and then they were supposed to go and make it so, and they didn't quite do that."

Stacy Cowley in New York contributed to this report.)

Posted by Chad Dickerson at 01:42 AM

February 09, 2005

TOKYO EDGE : February's coolest gadgets

By Martyn Williams

A new feature is making its way into a number of recently launched cell phones in Japan and South Korea: motion sensing. The capabilities of the handsets vary a little but the basic idea is that moving the phone through the air translates into actions and inputs on the screen. The latest handset to offer such a function is the V603SH, produced by Sharp Corp. for Japan's Vodafone KK. Three similar handsets have already been announced in South Korea: Pantech Co. Ltd.'s PH-S6500, LG Electronics Inc.'s SV360 and Samsung Electronics Co. Ltd.'s SCH-S310.

Looking at the four phones, gaming appears to be the main beneficiary of the motion technology. There are a couple of games for the Vodafone handset that rely on the system.

The first, 'House of The Dead Mobile,' is a zombie shoot-em-up game from Sega Corp. The screen shows the game scenario from the character's point of view, and as the player turns around with the phone, so does the character in the game. In 'Full Swing Golf,' from Taito Corp., the player holds the phone as if it were the golf club and swings it to hit the ball on the screen. A warning before each shot reminds the user to avoid hitting people when swinging the phone.

Similarly, the Pantech handset comes with a fishing game that requires the user to swing the handset like a fishing rod, and a racing game in which the handset becomes the steering wheel. LG's phone, which actually looks as much like a portable gaming device, includes a skiing game that uses the motion technology.

Not only games use the movement technology. Users can dial with the Samsung phone by drawing the numbers in the air with the handset, for example, or end a call by shaking the phone twice. Other functions include a sharp move to the right or left to tell the built-in MP3 player to skip forward or back a track. Vodafone's handset can be programmed to perform similar functions when it is moved in different ways.

The Pantech phone is already on sale in South Korea for 451,000 won (US$440). Vodafone will begin selling the V603SH from mid-February, while the LG and Samsung phones are due on the local market in March or April. Prices for those have not yet been announced.

None of the handsets are based on the widely used GSM (Global System for Mobile Communications) standard and they won't be available outside their home countries immediately. However, Samsung will consider adding the function to international models if it is well received in South Korea. Aichi Steel Corp., which is making the motion sensor for the Sharp phone, has already begun offering it to other companies for use in their products, increasing the chance that it will make its way overseas.

Sanyo HDR-B5GM hard-disk drive voice recorder

Add voice recorders to the list of portable gadgets that include hard-disk drives. Sanyo Electric Co. Ltd.'s HDR-B5GM includes a 5G-byte, 1-inch drive that provides a maximum recording time of 693 hours in the lowest quality MP3 recording mode. There are four quality modes and recording time drops to 57 hours with the highest of them. The device doubles as a music player and plays Windows Media Audio (WMA) and MP3 files. In addition to the hard-disk drive, there is an SD (Secure Digital) card slot and the recorder can copy files from the card to the hard disk, freeing up the card for re-use. It will go on sale in Japan in early March for around ¥53,000 (US$507). Sanyo will sell the HDR-B5GM overseas although no firm plans have been set.
http://www.e-life-sanyo.com/products/hdr/HDR-B5GM_S/index.html (Japanese)

Casio Exilim Pro EX-P505

Casio Computer Co. Ltd.'s EX-P505 digital still camera packs a 5X optical zoom and a 5 megapixel image sensor into a compact body. It has a shutter lag time -- the delay between when the shutter is pressed and the image captured -- of 0.01 seconds, and is ready to take a picture 0.8 seconds after it is first switched on. Notable functions include VGA quality MPEG4 video recording at 30 frames per second and a 2-inch LCD monitor that flips out from behind the camera so that it can be seen from in front of or behind the lens. It measures 98.5 millimeters by 55.5 millimeters by 73.5 millimeters, weighs 215 grams and has a battery life sufficient for 220 images, according to Casio. It will go on sale in February in Japan and the U.S., and in March in Europe. It will cost US$500 in the U.S.
http://www.casio-europe.com/euro/dc/exilim/exp505/

Hitachi Living HMP-1 Audio Player

Hitachi Ltd. will release a new digital audio player in Japan in early March. The HMP-1 plays MP3, WMA (Windows Media Audio) and WAV files and comes with 256M bytes of built-in memory, plus an expansion slot for an SD (Secure Digital) memory card. Other features include an FM radio, voice recorder, a USB 2.0 interface for connecting with a PC, and support for English, Chinese or Japanese on-screen display. In music playback mode it will run for up to 13 hours on a single AAA battery. The device, which has a rather basic rectangular design, measures 56.3 millimeters by 45.3 millimeters by 13.3 millimeters and weighs 30 grams. It will be available in Japan from early March for around ¥15,000. The company has no current plans to put it on sale overseas.
http://www.hitachi.com (Japanese)

Aiwa XDM-S990 Digital music player

Sony Corp. has launched a couple of new flash memory music players as part of its Aiwa family of products. The XDM-S900 and XDM-S990 are both similar to the XDM players announced by the company a couple of months earlier but come with at least double the memory: either 512M bytes or 1G byte. Like the other members of the family they play MP3- or ATRAC3-encoded music and offer a battery life of about 100 hours. They'll be on sale in Japan and Europe during February. There are no current plans for sales in other regions. In Japan the XDM-S900 will cost ¥25,000 and the XDM-S990 will cost ¥30,000.
http://www.eu.aiwa.com

Sony DCR-PC55

Sony Corp.'s latest digital video camcorder, the DCR-PC55, is one of the smallest such devices yet, being just a little larger than a pack of cards. Sony says that, as of the end of last year, it was the smallest MiniDV-based camcorder on the market. Sony had great success in Japan with a passport-sized camcorder released a few years ago, and this new model is even smaller than that, at 45 millimeters by 99 millimeters by 72 millimeters. Despite its size the camera features a 3-inch display on the side that can be turned to face either outward or inward. The lens offers a 10x optical zoom and the camera adds a 120x digital zoom function. It will be on sale in the U.S. in February for about US$800.
http://www.sony.com

Posted by Chad Dickerson at 05:00 PM

HP board dismisses Fiorina

By Stacy Cowley and Laura Rohde

Hewlett-Packard Co. (HP) announced Wednesday that its board of directors has dismissed Carly Fiorina as the company's chairman and chief executive officer (CEO). Fiorina, who has been HP's CEO for the past six years, is to be replaced on an interim basis by HP's current chief financial officer, Robert P. Wayman, the company said in a statement. Wayman, who has been with HP for 36 years, will also continue to fill his role as CFO. HP has already begun its search for a new CEO, the Palo Alto, California, company said.

HP also named Patricia Dunn as its non-executive chairman of the board. Dunn has been an HP director since 1998.

HP said it does not plan to make any additional structural changes or executive leadership changes for the time being.

"Carly Fiorina came to HP to revitalize and reinvigorate the company," Dunn said in a telephone press conference. "She had a strategic vision and put in place a plan that has given HP the capabilities to compete and win. We thank Carly for her significant leadership over the past six years as we look forward to accelerating execution of the company's strategy."

The company statement indicated that Fiorina's departure stems from disagreements on company strategy.

"While I regret the board and I have differences about how to execute HP's strategy, I respect their decision," Fiorina is quoted as saying in the statement.

According to Dunn, the board's decision to replace its CEO did not signal a change of strategy, but rather a desire to accelerate that strategy. Wayman, who was also made a member of the HP board on Wednesday, added that no changes in the company's product portfolio were expected.

Dunn declined to give specific reasons for Fiorina's dismissal. "We thought a new set of abilities was called for," Dunn said. "We are looking to accelerate the growth of the company and we think that requires hands-on execution."

Last month HP denies published reports that said the board of directors was considering a plan that would redistribute some of Fiorina's day-to-day responsibilities to other HP executives, due in part to the board's displeasure with the company's uneven performance.

Dunn said on Wednesday that the board had been deliberating on company performance and CEO performance for "quite some time." Dunn added, "the timing of the announcement was due to the fact that a decision was reached."

Both Dunn and Wayman insisted the HP board does not have a strict set of conditions for the CEO candidates it will interview. "Looking for someone who will fit in the culture is part of it, but that doesn't mean that you don't want a leader that doesn't challenge that culture," Wayman said.

Fiorina survived a bruising shareholder battle to push through HP's purchase of Compaq Computer Corp. in May 2002. The expectation at the time was that if shareholders rejected the merger, which Fiorina argued was needed to keep HP competitive, Fiorina would leave the company.

She won the necessary shareholder support, but has been under pressure ever since to make the US$21 billion deal pay off, with results analysts call mixed. Recently, Fiorina came in for a round of brutal press coverage, with both Business Week and The Wall Street Journal savaging the HP-Compaq deal as a failure. Last month, HP combined its printer business, a lucrative division often referred to as the company's "crown jewels," with its ailing PC group, in an effort to improve profitability in its PC and server lines.

Increasing HP's exposure to the PC market was one of the most controversial aspects of the HP-Compaq deal: Detractors warned that buying Compaq would dilute HP's profit margins by increasing its business in a commoditizing market, while Fiorina argued that only the biggest IT players would thrive in the future. Making HP a head-to-head competitor with IBM Corp. -- which just sold its own PC business -- was the goal.

Fiorina's ouster also removes one of the tech industry's most prominent female executives. Fiorina topped Fortune magazine's "50 Most Powerful Women in Business" list every year from the list's introduction in 1998 through to 2004, when eBay Inc.'s Meg Whitman displaced her. After majoring in college in medieval history and philosophy, Fiorina went on to a business career that began with a position as a sales representative at AT&T Corp. and led to Lucent Technologies Inc., where she guided its 1996 initial public offering and subsequent spin-off from AT&T. That put the ambitious Fiorina on the business world's radar, and soon after, HP wooed her to be its CEO.

In early Wednesday morning trading, shares of HP (ticker symbol: HPQ) were up $1.74 percent to $21.88.

HP said it plans to report its first quarter financial results on Feb. 16 and will hold its annual share owner meeting in Chicago on March.

According to Wayman, HP expects its quarterly results to be in line with consensus analyst expectations, after adjusting for the effects of the previously announced Intergraph Corp. settlement. Last month, HP said it would pay $141 million to Intergraph to settle a dispute over HP's alleged infringement of Intergraph's microprocessor patents.

"The decision (to fire Fiorina) was made independently of the quarterly report," Wayman said.

Posted by Chad Dickerson at 04:54 PM

Cisco meets expectation in Q2

By Stephen Lawson

Cisco Systems Inc. made US$1.4 billion in net income in its fiscal second quarter ended Jan. 29, achieving earnings per share of $0.21 on revenue of $6.1 billion, the networking equipment giant reported Tuesday. On a pro forma basis, excluding certain items, the company reported net income of $1.5 billion and earnings per share of $0.22, matching analysts' consensus expectations reported by Thomson First Call. Cisco's revenue for the quarter also was in line with analysts' expectations.

Revenue was up 12.3 percent from the year-earlier quarter and up 1.5 percent from the first quarter of the fiscal year, according to a company statement.

The $1.4 billion net income under GAAP (Generally Accepted Accounting Principles) was up from $724 million in the year-earlier quarter. Pro forma net income rose from $1.3 billion a year earlier. GAAP results exclude amortization of intangible assets at $57 million, amortization of deferred stock-based compensation at $39 million, an income tax effect, in-process research and development and payroll tax on stock option exercises.

For the first time in several quarters, the company saw strong momentum in its enterprise and commercial business in all regions of the world, President and Chief Executive Officer John Chambers said in a conference call with press and analysts. One challenging area was sales to the federal government in the U.S., where orders were flat compared with a year earlier, he said.

Overall, product orders grew about 20 percent in Europe, the Middle East and Africa and in the Americas excluding the U.S. Product orders increased in the mid-teens in the U.S. and in Japan, and were up in the mid-single digits in the Asia-Pacific region, Chambers said. The company saw especially strong growth in Europe, despite what Chambers called economic weakness in Germany and France. Growth was strong in the U.K., Eastern and Southern Europe, North Africa, the Middle East and Russia, he said. Product bookings in India rose about 60 percent year-over-year, while China was a more challenging market for Cisco, he said.

Chambers touted the success of Cisco's advanced technologies, which are relatively recent additions to its lineup that include security, storage, home networking, VOIP (voice over IP) (Internet Protocol), optical networking and wireless networking. They saw revenue growth of between 35 percent and 70 percent, he said. Revenue from security technologies, which are being integrated into a variety of Cisco products, grew more than 30 percent from the year-earlier quarter.

The integration of advanced technologies across Cisco's product line is at the center of the company's strategy for staying ahead of competitors, especially low-cost Asian manufacturers, Chambers told analysts. The concept of buying an integrated network instead of point products from different vendors has reached a "tipping point," and Cisco is poised to beat new competitors who generally are focused on one type of product, he said.

Chambers pointed to the example of Cisco's Integrated Services Router, which is made for small and medium-size businesses and can be equipped with VOIP, security and other features. That product line, introduced in September, has had the fastest new-product sales growth in Cisco's history, he said.

VOIP phones are another strong point, almost doubling in sales from last year's second quarter to pass 570,000 phones shipped in the quarter.

For the third quarter, Cisco predicted revenue will be flat or up as much as 2 percent from the second quarter. The company expects year-over-year revenue growth of between 8 percent and 10 percent, Chambers said.

Posted by Chad Dickerson at 04:54 PM

RealNetworks makes mobile licensing flexible

By Laura Rohde

RealNetworks Inc. has changed its mobile licensing model to provide more flexibility to handset manufacturers and allow software components like RealAudio and RealVideo to be licensed separately, it announced Wednesday. Additionally, the Seattle software company has expanded its long-standing deal with Nokia Corp., whereby the Finnish handset manufacturer will build support for RealNetworks' media formats into a variety of its new devices.

Previously, RealNetworks had sold its audio and video software to manufacturers as one package, but RealNetworks is now offering licenses for individual components. Customers can pick and choose a variety of options from RealNetworks' media player engine, its proprietary audio and video format support, or its total user interface.

"We want to be more flexible. It's not so much a change in mobile strategy for Real as it is an adjustment to be attuned to changes within the industry," said Sharon Goldstein, director of mobile products and services at RealNetworks.

RealNetworks will charge US$0.25 per device for any combination of components, up to $1 million annually per device manufacturer, Goldstein said.

RealNetworks offers RealOne Mobile Player for playing content on handheld devices, and also offers mobile operators and other service providers its Helix content delivery system. But the company has come under increasing competition in the nascent mobile phone multimedia market from long standing rival Microsoft Corp. as well as companies using open standards like MP3 and aacPlus.

"People are still testing the waters. We want to help monetize the platform," Goldstein said. "I would say the biggest challenges are figuring out what's the most appealing services to users and then getting those services out there in the market."

There are currently about 70 mobile phone operators worldwide that have installed the infrastructure in their networks needed to stream content in RealNetworks' format, Goldstein said. The company is looking not only to address the needs of those operators that are rapidly adding more multimedia content and services to handsets, but to additional operators as well. "RealNetworks would like to be on as many devices as possible," Goldstein said, "in terms of content, services and infrastructure."

As part of RealNetworks' expanded agreement with Nokia, in Espoo, Finland, the companies will work in partnership to develop media technology including the Helix DNA client media engine.

RealNetworks also announced a new Technology Compatibility Kit, aimed at allowing handset manufacturers to easily test the multimedia functionality of services using RealNetworks' Helix Universal Mobile platform.

Posted by Chad Dickerson at 04:54 PM

FCC publishes wireless-phone spam list

By Grant Gross

The U.S. Federal Communications Commission (FCC) took a major step this week toward fighting unwanted e-mail messages sent to wireless phones and pagers by publishing a list of wireless mail domain names. The FCC, which published the list late Monday, has ruled that starting in early March, it will be illegal to send most commercial messages to users of wireless phones with addresses that include any of the published domain names. Wireless spam, still limited in the U.S., has generated significant customer complaints in other countries including Japan and India.

The FCC list was provided by wireless carriers.

Commercial mail that is authorized by wireless users will not be illegal. In addition, the prohibition does not apply to so-called "transactional or relationship" messages, such as those sent to customers about product safety or account status.

Senders who violate the FCC rules and send commercial e-mail to the wireless mail domains on the list face fines of up to US$11,000 per violation.

In August, the FCC adopted rules to protect consumers from receiving unsolicited commercial messages on their wireless phones and pagers. The FCC took the action as part of the Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act, passed by the U.S. Congress in 2003.

The FCC adopted a general prohibition on sending commercial messages to any address referencing an Internet domain associated with wireless subscriber messaging services. To assist the senders of e-mail messages in identifying those subscribers, the commission required that commercial wireless providers submit those domain names to the FCC for a list that's publicly available.

The FCC list puts spammers on notice that wireless spam is illegal, said Scott Chasin, chief technology officer at MX Logic Inc., an antispam software vendor. Until recipients opt out of future mailings, CAN-SPAM allows marketers to send commercial e-mail to conventional addresses meant to be accessed from computers. But authors of CAN-SPAM argued that wireless spam can be more costly to recipients because wireless users often pay for service on a per-minute basis.

The FCC list has one potential downside -- it provides spammers with a working list of wireless mail domains, Chasin said. In June, the U.S. Federal Trade Commission (FTC) rejected a national do-not-spam registry after CAN-SPAM called for a study, in part because of concerns that spammers would use such a list to harvest working e-mail addresses. The national do-not-spam list would have included individual e-mail addresses, but the FCC wireless list does not.

The FCC list could make it easier for spammers to conduct so-called brute force attacks on wireless mail domains, Chasin said. In a brute force attack, a spammer tries to send e-mail to every possible combination of letters and numbers that could make up individual e-mail address names.

"It's a good first step in the right direction to try to solve the problem before it gets out of hand," Chasin said of the FCC list. "On the other hand, it provides the mobile spammers with some ability to spam users."

The wireless domain name list is available at http://www.fcc.gov/cgb/policy/DomainNameDownload.html.

Posted by Chad Dickerson at 12:34 AM

February 08, 2005

PhpBB site compromised, developers locked out

By Grant Gross

A handful of Web sites, including the site for the popular open source bulletin board project phpBB, have been compromised this week by a group apparently trying to make a political point. The site was reported as being down early Sunday by a member of the phpBB team posting on the project's development bulletin board. Developers were apparently locked out of the site by the hackers.

The hackers replaced the phpbb.com front page with a picture of U.S. President George Bush's head pasted onto the body of a monkey and a message in Portuguese advocating that people use their lives to make others happy and to appreciate flowers. The hackers, calling themselves the Simiens Crew, are apparently from Brazil and were protesting against Bush.

The phpBB team posted a short message, updated Tuesday, on the compromised Web page. "At present www.phpbb.com is offline due to a group of politically motivated hackers wishing to use an opensource project to push their agenda ... shame on them," the message said.

The hackers also hit several other sites apparently using AWStats, an open source Web site statistics generator. The phpBB team's message said the compromise appeared to be in AWStats, and the AWStats Web site on Tuesday included a warning about a vulnerability in old versions that allows remote users to execute arbitrary commands on servers using AWStats. The AWStats Web site recommended users update their AWStats version to 6.3.

In the phpBB team's Web site message, the group said it wouldn't comment further while it investigates the compromise. One member of the team, contacted by e-mail, referred to the Web site message, but also noted the vulnerability had nothing to do with phpBB itself.

"Since it would be totally inappropriate in this situation to simply 'restore' (without investigating what happened we could simply be restoring an already vulnerable system) the box is being shipped from its datacenter to our server manager," the Web site message said. "There it will be analysed so we can confirm just what happened. Of course a full reinstall will then be performed after recovering the database. This will take some time. We are hoping to have an intermediate solution but there are no guarantees this is doable, or even worthwhile given the time frames."

Posted by Chad Dickerson at 09:02 PM

Ask Jeeves buys Bloglines

By Juan Carlos Perez

Seeking to complement its flagship search engine, Ask Jeeves Inc. has acquired Trustic Inc., which owns and operates the Bloglines online content-aggregation service, Ask Jeeves is announcing Tuesday. Bloglines monitors the content "feeds" that millions of Web sites distribute using technologies such as Really Simple Syndication (RSS) and Atom. After a user decides which feeds he wants monitored, Bloglines aggregates the desired content in the user's Bloglines personal Web page.

"Search is one way to retrieve information on the Internet and this is another. This a very close cousin to search," said Jim Lanzone, Ask Jeeves' senior vice president of search properties.

In addition to Bloglines' core content-aggregation services, Ask Jeeves also found attractive the company's services for creating, publishing and searching blogs, Lanzone said.

As part of Ask Jeeves, Bloglines will have more resources to develop its services, said Mark Fletcher, Bloglines' founder and chief executive officer. At Ask Jeeves, Fletcher will remain at Bloglines' helm with the title of Bloglines vice president and general manager. " Ask Jeeves will be committing resources to Bloglines to help us build out our service even more and accelerate our product roadmap," Fletcher said.

Bloglines will operate independently within Ask Jeeves and will retain its Web site, but there will be integration of services and technologies from the two organizations, the executives said. For example, there are immediate and concrete plans to integrate Bloglines' blog search capabilities into Ask Jeeves' flagship Ask.com search engine, they said. Users can expect to see in the future further integration of Bloglines' services across Ask Jeeves' network of Web sites, which also includes portals Excite.com and iWon.com, the executives said.

With its Bloglines acquisition, Ask Jeeves is addressing an area that is becoming increasingly important for Web portals and search engines: providing tools and services to its visitors for aggregating and managing the massive amount of information available via Web site feeds, said Allen Weiner, a Gartner Inc. analyst.

No financial details of the acquistion were disclosed.

Posted by Chad Dickerson at 04:22 PM

Level 3 to phase out VoIP service

By Stephen Lawson

Level 3 Communications Inc. plans to phase out (3)Tone, a VoIP (voice over Internet Protocol) service it provided to small and medium-sized businesses through channel partners, a company spokesman said Monday. The service, designed as an IP network-based alternative to PBXes (private branch exchange) and Centrex services, will be phased out over time, said company spokesman Arthur Hodges. The Broomfield, Colorado, company will support (3)Tone through June and is developing a transition assistance plan for its approximately 100 channel partners and their customers, he said.

The move comes amid a fast-growing, rapidly evolving market for VoIP services, which use IP packet networks to carry voice calls, generally at much lower cost and potentially with more advanced features than in traditional phone services,

Level 3, which operates an international IP backbone, introduced the service in September 2003 after acquiring startup Telverse Communications, which had started it.

The service doesn't offer channel partners the flexibility they need, Hodges explained.

"It's a highly integrated service where our partners have not had an ability to plug into it at any level and do their own development," Hodges said. Level 3 has had much more success with its consumer VoIP service, (3)VoIP Enhanced Local, a wholesale offering that carriers and cable operators can enhance with their own features and bundle with other services in a modular fashion, he added.

"Our strategic view of the market has evolved over the past year or so. ... We believe that open development platform is better for Level 3," Hodges said.

Posted by Chad Dickerson at 04:21 PM

Microsoft to buy antivirus company

By Paul Roberts

Microsoft Corp. said Tuesday that it is buying Sybari Software Inc., an antivirus and antispam software company. The terms of the deal were not disclosed. Microsoft intends to use the acquisition to provide its corporate customers with technology to protect themselves against malicious software, according to a company statement. The acquisition is Microsoft's first in the antivirus market since the company purchased technology from GeCAD Software Srl of Bucharest, Romania, in June 2003. It also comes amid expectations among industry insiders that company Chairman and Chief Software Architect Bill Gates will use a keynote speech at next week's RSA Security Conference in San Francisco to announce plans for a consumer antivirus product.

Sybari, of East Northport, New York, makes antivirus, antispam and e-mail content filtering products for big companies. Sybari's Antigen antivirus product is a server-based product that uses multiple antivirus engines to scan e-mail messages for viruses.

Sybari gives customers a choice of antivirus engines from companies such as Sophos PLC, Computer Associates International Inc. and Kaspersky Labs Ltd., but the company does not have its own antivirus engine. Sybari works with Microsoft Exchange e-mail server, as well as Microsoft Office SharePoint Portal Server 2003 and Microsoft Windows SharePoint Services, which are used to manage and share documents and information across an organization.

The purchase is not surprising, considering Sybari's strength on Microsoft Exchange and the two companies' close business ties, said Brian Burke, an analyst at market-research company IDC. In fact, Microsoft commonly recommended Sybari to customers looking for an antivirus product that works with Exchange, Burke said.

Sybari's use of other companies' engines also stays true to Microsoft promises to avoid domination of the antivirus software market and play fair with other antivirus companies, Burke said.

In a statement, Microsoft tried to ease concerns that Sybari would become an Exchange-only product, saying that it will continue to support multiple versions of Sybari's software for Exchange and Lotus Notes.

However, Microsoft said that it does plan to add its own antivirus engine, which it acquired from GeCAD, to the list of those that run on Antigen. That could spell trouble for Sybari's antivirus engine partners, Burke said.

Sybari's Chief Executive Officer Robert Wallace said, in a statement, that he welcomed the addition of Microsoft's expertise and the opportunity to offer Sybari technology to more businesses.

Microsoft has been adding to its stable of security software in recent months. In December, the company announced it was buying Giant Company Software Inc. The company later released a free test version of Giant's product, Giant Antispyware, under the name Microsoft Antispyware.

Posted by Chad Dickerson at 04:18 PM

Spamming trick adds to pressure on ISPs

By Scarlet Pruitt

A cunning technique used by spammers to hide the origin of their messages underscores the need for a multi-tiered approach to tackling the plague of unsolicited email, security experts said this week. Spammers have traditionally used software to route their messages through a mass of "zombie machines" to reach recipients. Zombies are computers connected to the Internet that have been infected with malicious programs that give hackers control over the machines.

However, an increasing amount of spam is being sent to zombie machines and then passed through servers at the zombie machines' ISPs (Internet service providers) before reaching recipients, security experts at The Spamhaus Project and MessageLabs Ltd. warned.

This technique makes blocking spam more tricky, they said.

By routing their messages through ISPs, the spammers make it more difficult to block spam using "blacklists," or addresses of known spammers. Blacklists are often used for filtering spam, but if the messages appear to be coming from an ISP, then the lists become useless in targeting the real culprits, according to some security experts.

"No blacklist can block a whole ISP or e-mail itself would start to crumble," said MessageLabs' Chief Technology Officer (CTO) Mark Sunner.

Security experts have recently brought the issue to light although the technique is not new, they say.

While the delivery method is problematic when using blacklists, many systems for filtering spam do not rely on blacklists alone. Filters often employ other means such as scanning subject headers or entire messages to detect unsolicited mail.

ISP routing does not spell "gloom and doom" for blocking spam, but emphasizes the need to take a multi-layered approach to filtering, Sunner said.

Graham Cluley, security technology consultant at Sophos PLC, agreed, saying that antispam filters that use a "cocktail" approach and don't rely on one or two filtering methods will suffer less from spammers' shifting strategies.

The technique puts the onus on ISPs to monitor their outgoing mail carefully, however, and make sure they aren't being used as a proxy for spammers, according to Sunner.

"At the end of the day there is increased pressure on ISPs," Sunner said.

Routing spam through ISPs could potentially give them more visibility and control over spam, Cluley said, but they need to revisit their policies for filtering outbound, and run the risk of being put on blacklists if they send out spam directly.

Spamhaus estimates that as much as 75 percent of the traffic arriving at most ISPs is unsolicited commercial email. Some ISPs already monitor their outbound mail. Wanadoo U.K. PLC, for instance, introduced new spam filers last year to prevent its users from sending and receiving spam, a representative for the company said Tuesday.

ISP organization the London Internet Exchange Ltd. has also moved to prevent ISPs being used as proxies for sending spam. The group issued a list of best practices in August stating that ISPs should identify and be able to trace the source of all the e-mail passing through their systems.

"It's a cat and mouse game," Sunner noted.

Posted by Chad Dickerson at 04:17 PM

February 07, 2005

Skype signs deal with fixed-line telco in Hong Kong

By Sumner Lemon

Skype Technologies SA has signed an agreement with Hong Kong's Hutchison Global Communications Ltd. (HGC) to offer a co-branded VoIP (Voice over Internet Protocol) service in Hong Kong, Skype said in a statement released Sunday. The agreement marks Skype's first deal with a fixed-line telecommunications operator, the company said.

Skype is a peer-to-peer VoIP application that lets users to make voice calls to other Internet users for free or, through the SkypeOut service, to fixed-line and mobile phones in countries around the world at a fraction of the cost of international phone calls. The application is available in versions for Windows, Pocket PC, Linux and Mac OS.

The growing popularity of Skype has led some observers to point to the application and VoIP technology in general as a growing threat to traditional fixed-line telecommunications service.

Skype and HGC will introduce a co-branded HGC-Skype portal for Hong Kong in March 2005. Terms of the deal were not disclosed.

The co-branding deal with HGC is the third such deal that Skype has signed in the Greater China region over the last year and follows similar agreements with Tom Online Inc. in China and PCHome Online Inc. in Taiwan -- two subsidiaries of Tom Group Ltd.

Both Tom Group and HGC are largely controlled by Hong Kong billionaire businessman Li Ka-shing.

Posted by Chad Dickerson at 04:42 PM

EBay to increase customer support and cut fees

By Laura Rohde

In response to complaints from users, eBay Inc. will expand customer service in the U.S. and Canada while reducing some of the fees it charges sellers, the online auction company announced Sunday. Within the next 90 days, eBay will limit automated e-mail responses to customer queries and increase its telephone support, said Bill Cobb, eBay president of North America, in a message posted on the company's Web site Sunday.

"Our users will get a 'real' e-mail response to their questions -- you'll hear from a human being who will try to help you with your problem or question right off the bat. We will only use auto responses to acknowledge receipt of spam or policy violation reports," Cobb said.

Additionally, beginning April 1, all eBay Stores owners -- sellers who pay a monthly subscription fee to run "stores" on the site -- will also have access to phone support, Cobb said. Such support is currently offered only to its biggest sellers (Silver, Gold, Platinum and Titanium PowerSellers).

EBay, in San Jose, California, charges a variety of fees to people selling items through its site, be it through its auction process or at fixed prices. When an item is initially listed, sellers are charged an insertion fee of between US$0.25 and $4.80, depending on the starting or reserve price of the item for sale. Once the item is sold, sellers pay a percentage of its final price. There are also optional fees for such services as adding pictures of the item for sale.

Users who regularly sell items over eBay are encouraged to pay for the store service to gain tools for branding and for easily listing items. Features for the stores also include the Store Inventory format, which has the lowest-priced insertion fee on eBay ($0.02), available only to Store sellers. On Jan. 12, eBay announced it was going to increase fees, including a number of store fees, drawing immediate criticism from sellers.

Though Cobb acknowledged that "this increase has been difficult for some of our sellers," he said the company was standing behind its decision to increase final value fees on Store Inventory format listings. Despite threats from some sellers to boycott or stop using eBay altogether, those fee increases will still take effect as scheduled on Feb. 18. Instead, as a "reward," eBay will credit $15.95 to all its sellers who operate an eBay Store in April, Cobb said.

At the same time, Cobb promised to reduce some other fees charged by eBay. Beginning Monday, the minimum insertion was dropped from US$0.30 to $0.25, while eBay Canada insertion fees went from C$0.35 to C$0.30.

"EBay Germany has always used this pricing, and users there have benefited from higher conversion rates on items with lower starting bids," Cobb said.

The changes will only affect the eBay users in the U.S. and Canada. In the U.K., eBay currently has no plans to follow suit, according to Victoria Sayers, spokeswoman for eBay U.K. Ltd. "Each eBay site is run locally and in the U.K., we equally listen to the community, but we haven't had the same issues raised," she said.

Posted by Chad Dickerson at 04:42 PM

Thirteen European countries unite to tackle spam

By Simon Taylor

Thirteen European Union (E.U.) countries have agreed to boost cooperation to tackle spam, or unsolicited commercial e-mail. Under an agreement announced by the European Commission on Monday, the countries' antispam authorities -- in most cases their data protection offices -- have pledged to exchange information on e-mail system abuses and to follow up on complaints about spammers operating on their territory from other countries.

Commenting on the agreement, E.U. Information Society Commissioner Viviane Reding said: "Enforcement authorities in member states must be able to deal effectively with spam from other E.U. countries, even through at present most spam originates from outside the E.U."

The move is designed to tackle the problem where spammers operate outside the territory of the member state that has received a complaint about abusive e-mail and the national enforcement agency cannot act because it lacks legal powers to take action in another member state.

The 13 countries are: Austria, Belgium, Cyprus, the Czech Republic, Denmark, France, Greece, Ireland, Italy, Lithuania, Malta, the Netherlands and Spain.

A recent report by Stanford University in Palo Alto, California, claimed that the average Internet user loses 10 working days a year dealing with unwanted e-mail.

Posted by Chad Dickerson at 04:42 PM

February 05, 2005

Interactive cabs to start hitting the streets

By Johan Bostrom

Taxi trips in some of the major metropolitan areas of the U.S. are about to get much more interactive, thanks to a New York advertising company that plans to roll out hundreds of wireless multimedia systems in cabs across the nation over the next few months. Interactive Taxi, a subsidiary of Targeted Media Partners LLC, based in New York, plans to install interactive devices in the back seats of more than 600 cabs in Boston, Chicago and San Francisco, according to company Chief Executive Officer Corey Gottlieb.

The units consist of a wirelessly networked multimedia computer controlled by a touch screen.

Interactive cabs have been available in the U.S. for years now, but technical limitations have curbed their popularity, Gottlieb said. "We used to have 40G-byte hard drives in the trunk, but they were too big and also vulnerable to bumps," he said. "Upgrading and updating was also complicated without a working wireless system.�

Today the whole unit is mounted in the partition between the driver and the back seat and offers passengers news, movie trailers and restaurant listings. The touch screen is connected to a 2G-byte flash drive running on Windows Embedded XP that receives wireless updates from a central database every five minutes.

Interactive Taxi is rolling out more than 600 interactive media units in Boston, Chicago and San Francisco cabs this year, Gottlieb said. His company rents the space for the unit in the vehicles and sells ads displayed in multimedia, including video.

But advertising is not the only force driving multimedia devices into cabs. By this fall, another 12,000 cabs in New York will have similar interactive devices, thanks to new regulations from the New York Taxi and Limousine Commission. "In November this year, each medallion cab must be equipped with vehicle location technology and an interactive passenger information monitor," said Allan Fromberg, public relations chief of the City of New York Taxi and Limousine Commission.

The devices will help the Commission keep tabs on the location of New York's cabs, which will enhance the security of cab drivers and also make it easier for passengers to recover items left behind. The Commission receives more than 1,000 lost-property calls each month, and trying to find out which of the thousands of cabs the customer actually rode in is like looking for a needle in a haystack, Fromberg said.

So, what do the drivers themselves think about all of this high-tech gadgetry?

"It’s cool," said Ted Ross, a driver at the Boston Cab Co. for the past two years. "It strikes up conversation between the passengers and with me," he said. "If they read about a restaurant that looks interesting, they ask me if I've been there."

"And late nights, the drunks, instead of hassling me, they are tuned to the screen."

Posted by Chad Dickerson at 01:32 AM

February 04, 2005

Christie's to auction computer history

By Laura Rohde

This isn't your average eBay auction. For those who want to own a bit of computer and Internet history, the venerable auction house Christie's International PLC is putting on the block a collection of documents that follow the evolution of computing from the 1600s to the 1970s. The sale of the "The Origins of Cyberspace: A Library on the History of Computing, Networking & Telecommunications," slated for the end of the month, consists of 255 lots, contains 1,141 items and is expected to sell for over US$2 million, the auction house said.

Items such as the original Arpanet documents written by Vint Cerf and Bob Kahn (Lot 82, estimated value $2,000 to $3,000), or the deposition of Alexander Graham Bell in the suit brought by the U.S. to annul the Bell patents (Lot 61, estimated value $1,000 to $1,500) will be auctioned by Christie's in New York on Feb. 23.

Owner Jeremy Norman is selling his collection of computing books, documents and even children's games, which he began collecting in 1971. Also on sale are documents on the first general purpose programmable computer, on the first stored-program electronic computers, on the founding of the world's first electronic computer company and on the earliest programs written for electronic computers. Additionally, Norman is parting with his life's work, "The Origins of Cyberspace Library."

On the low end of the scale, an estimated $400 to $600 is expected for the original copies of two papers delivered by J. C. R. Licklider, whose work initiated the sequence of events leading to Arpanet, at the 1963 NATO symposium's session on "Man-computer communication" (Lot 144).

At the high end, an estimated $50,000 to $70,000 will buy the business plan for the world's first computer company, written by J. Presper Eckert and John W. Mauchly (Lot number 238).

For fans of Charles Babbage, considered by some to be the "father of computing" for his contributions to the basic design of the computer through his Analytical Machine, there is plenty on offer. A great deal of the collection consists of work from Baggage, including an open letter to Sir Humphry Davy dated July 3, 1822, on the application of machinery to the purpose of calculating and printing mathematical tables, which is valued at between $10,000 to $15,000.

The collection will have viewings at Massachusetts Institute of Technology's Burndy Library in Cambridge, Massachusetts (Feb. 9-10); Stanford University in Palo Alto, California (Feb. 14-15); and at Christie's in New York (Feb. 19-22).

The collection call also be views online at http://www.christies.com/promos/feb05/1484/overview.asp.

Posted by Chad Dickerson at 04:39 PM

Consumers responsible for security, industry reps say

By Joris Evers

In the battle against online scams, consumers have a responsibility to use the tools provided by technology vendors to protect their personal data, privacy executives from eBay Inc., Hewlett-Packard Co. (HP), Microsoft Corp. and Truste said Thursday. Phishing schemes are prevalent and eBay users are regularly targeted. Phishing scams typically use spam e-mail messages to drive people towards Web pages that look like legitimate e-commerce sites, but in fact steal sensitive information such as user names, passwords and credit card numbers.

The online auctioneer introduced a toolbar about six months ago that tells customers if they are actually on the eBay Web site or on a spoof site. The toolbar has been downloaded 1 million times, while eBay has about 135 million users.

While technology companies can provide tools to help, Internet users are responsible for protecting their data, executives from eBay, Microsoft, HP and Truste said in a panel discussion Thursday at Microsoft's Mountain View, California, campus.

"The customer has a responsibility to help protect information as well as the technology companies," said Scott Shipman, privacy counsel for eBay, of San Jose, California. Tools available for customers include the toolbar as well as authentication methods such as fingerprint scanners, he said.

Fran Maier, executive director at Truste, agreed. "We have to get people to understand that they have a duty to protect their information," she said. Truste certifies Web sites as trustworthy when the companies adhere to certain rules.

User education is a big part of the solution to online scams, the panelists said. Education will help Internet users find the appropriate security tools and learn how to identify fraudulent e-mail messages and fake Web sites. "Educational tools are starting to get the message out there," said eBay's Shipman.

TV commercials help, such as those by Citibank Inc. on identity theft in the U.S., but more needs to be done, said Truste's Maier. "We have to leverage the word of mouth and, unfortunately, the bad experiences we all know about. It has to be in 'The Sopranos,' 'Law and Order' and other (popular TV shows). That is how you reach a lot of people."

Scams, particularly phishing scams, are so complex that educating users is a major challenge, said Barbara Lawler, chief privacy officer at HP. "How do you really educate someone to recognize a phishing scam? It is really hard to tell," she said.

"A couple of years ago we were not even talking about spyware, we were not talking about phishing. These are pretty new issues. ... The challenge is putting that in the language of the average person and that is, I think, where the industry still has work to do," Lawler said.

Microsoft, which has been criticized for delivering software that enables scams such as phishing, also offers tools and information to protect users, said Peter Cullen, chief privacy strategist at the Redmond, Washington-based software maker. One of the ways is via a Web site that teaches how to identify scams such as phishing.

But it comes back to users taking advantage of the tools and information made available to them. Cullen likened the adoption of security tools to when seatbelts were first introduced in cars. At first, not many drivers used the seatbelts, but usage rose after a concerted public information campaign.

Daunted by the talk about online scams and the lack of a silver bullet from technology vendors, one attendee suggested that maybe the vendors should take a step back and develop products that are not prone to phishing.

"If eBay, HP and Microsoft can't fix the problem, I am pulling the DSL line out of my home," said the attendee, who did not give his name.

Posted by Chad Dickerson at 04:30 PM

Network and cable units boost Time Warner's Q4

By Scarlet Pruitt

Strong performances from Time Warner Inc.'s network and cable divisions boosted the company's fourth-quarter revenue and income, allowing it to exceed expectations for the period, the company said Friday. The New York-based media conglomerate reported total revenue of $11.1 billion for the quarter ended Dec. 31, compared to $10.9 billion for the year-earlier period.

Net Income grew 76 percent to $1.1 billion, up from $639 million a year earlier, Time Warner said. That translated into income of $0.24 per share, up from $0.14 per share in the fourth quarter of 2003. Analysts had been expecting income of $0.16 per share, according to Thomson First Call.

"It was a very good year, we settled down as a company," chairman and chief executive officer Dick Parsons said during a conference call Friday.

The company's AOL Internet division reported a small revenue gain of 1 percent, to $2.2 billion, despite continuing to lose subscribers. AOL's operating income before depreciation and amortization climbed 8 percent to $326 million. That included a restructuring charge of $52 million for the reported quarter and $22 million for the year-ago quarter, Time Warner said.

AOL's U.S. subscriber base stood at 22.2 million at the end of the fourth quarter, 2 million less than a year earlier and down 464,000 from the immediate prior quarter. Its AOL Europe service ended the quarter with 6.3 million members, down 49,000 from a year earlier, but up 9,000 from the third quarter.

Despite recent subscriber losses, Time Warner expects AOL to significantly grow its broadband subscriber base through a new deal offered by the company's cable division, it said. Under the deal, a custom version of the AOL service will be offered to Road Runner broadband customers, with AOL.com as an optional home page for subscribers.

Company executives waxed positive about the partnership during the conference call, saying that it would also allow AOL to grow its advertising and search revenues, which are the division's current focus.

AOL.com, which currently has 100 million domestic visitors and 200 million worldwide visitors, will be another area the company will focus on in 2005. It plans to launch a new version of the site in mid-2005 with a variety of additional content and services, including video on demand, expanded search, AOL's instant messaging product and other features, company executives said.

While Time Warner has big plans for AOL, the quarter was led by Time Warner's network and cable divisions, which allowed the company to beat expectations, Parsons said.

The cable division reported quarterly revenue growth of 10 percent, to $2.2 billion, while its network division brought in revenue of $2.3 billion for a 6 percent increase.

The division was boosted by the addition of 685,000 residential high-speed data subscribers during the year, allowing it to end 2004 with 3.9 million subscribers. The company also deployed Digital Phone service to all 31 of its divisions, and ended 2004 with 220,000 subscribers.

Time Warner is looking to expand its cable division through the acquisition of Adelphia Communications Corp., which it is pursuing in conjunction with Comcast Corp., Parsons said during the call.

"Adelphia is a real opportunity to grow our footprint," Parsons said. He declined to give further details of the bid, citing confidentiality agreements.

For the full year, Time Warner brought in $42.1 billion, a 6 percent increase from 2003. Operating income before depreciation and amortization for the year was $9.9 billion, up 13 percent from $8.7 billion in 2003. Net income for the year was $3.4 billion compared to $2.6 billion for 2003. The company also ended the year with $3.3 billion in free cash flow, in part bolstered by the sale of Google Inc. shares. Time Warner still holds 5 million Google shares worth $1 billion, Parsons said.

In 2004 the company not only produced strong results, but was able to "put some history behind it," Parsons said, apparently referring to Time Warner's prolonged legal problems with U.S. financial authorities.

Time Warner settled a dispute with the U.S. Department of Justice during the quarter over accounting irregularities in its AOL division. It agreed to pay a $60 million penalty and establish a $150 million fund to settle related securities investigations.

Looking ahead, the company expects continued strong growth, according to Parsons.

"We have a lot of exciting things going on," he said.

Posted by Chad Dickerson at 04:29 PM

Chinese online games provider sees income triple

By Sumner Lemon

Shanda Interactive Entertainment Ltd., China's largest provider of online games, Friday said its 2004 fourth quarter net income more than tripled compared with the previous year and said more growth is expected in the coming year. Shanda's fourth quarter net income was 231.4 million renminbi (US$27.9 million as of Dec. 31, 2004, the last day of the period being reported), up 239 percent from the same period one year earlier, when the company's net income was 68.3 million renminbi. The company's fourth quarter revenue was also sharply higher, up 133 percent to 453.1 million renminbi from 194.2 million renminbi.

For 2004, Shanda reported annual net income of 609.5 million renminbi, up 123 percent from the previous year. Revenue for 2004 was 1.4 billion renminbi, up 116 percent from 2003, the company said.

"2004 laid a very good foundation for future growth in 2005 and beyond," Chen Tianqiao, Shanda's chairman and CEO, told financial analysts during a conference call.

China's online gaming industry now attracts a broader segment of users, including women and white-collar professionals, Chen said. In addition, for the first time a greater percentage of users are playing games from home than from Internet cafes, he said, noting that some users are playing online games at home and at Internet cafes.

Shanda had an average of 1.2 million concurrent users during 2004, Chen said.

In 2005, Shanda hopes to tap into growing demand for online games among home users and has high expectations for a set-top box that the company plans to introduce, Chen said.

This set-top box, which Shanda is developing with Intel Corp. and other partners, will have the basic functions of a PC as well as software that connects users to Shanda's online game platform, Chen said. The set-top box will connect to the Internet over a broadband connection and use a user's TV set as the display, he said, without saying when the company expects the set-top box to be introduced.

"That will let more users access interactive entertainment offerings," Chen said.

Posted by Chad Dickerson at 04:29 PM

Wall Street Beat: Telecom news, Google jolt trading

By Marc Ferranti

Telecom merger mania and Internet company earnings excited investors this week, but not in a way that appeared to lift the veil over a market that slumped in the first month of the year. Trading in technology company shares spiked on Monday's news that SBC Communications Inc. plans to acquire AT&T Corp., subsequent reports that Verizon Communications Inc. and Qwest Communications Inc. are wooing MCI Inc., and good news for Google Inc. earnings.

Investors pushed up the value of technology company shares in the beginning of the week after the Nasdaq Composite Index declined 5.2 percent in January, the worst decline for that period since 1990. But the index started to show signs of weakness again toward the end of the week in what was seen to be a follow-on effect of weak earnings at Amazon.com Inc. and moves by investors to sell shares after the spikes at the beginning of the week.

SBC's move to buy AT&T for US$16 billion was heralded as a deal that would usher in a new era of telecommunications, as other carriers look to merge in order to bulk up and compete. SBC gains, among other things, stronger business services and a bigger international footprint from the move, which is not expected to clear all regulatory hurdles for at least a year. SBC (ticker symbol: SBC) did well on the news for several days, as its share price rose about a dollar in value. AT&T (T) shares also appear to have been buoyed by the news, as traders pushed up its share price by almost a dollar over several days.

At the same time, traders also boosted the value of Verizon (VZ) shares, from the low $35 level to the upper $35 level, while MCI shares rose in value as well, by a similar amount. Qwest (Q) shares jumped in Thursday trading, by $0.20 to $4.40, as investors reacted to a report in the Wall Street Journal that said the company is in merger talks with MCI.

Meanwhile, reporting an uptake of wireless and DSL (digital subscriber line) services, Sprint Corp. Thursday morning said that for the quarter ended Dec. 31 it generated $437 million in net income on net operating revenue of $6.9 billion, up from net income of $110 million and net operating revenue of $6.7 billion a year earlier. Sprint reported an adjusted earnings per share of $0.31, missing analyst expectations of $0.32. However, its shares did not suffer, rising in value by $0.12 to $24.60 for the day.

For Google Inc., meanwhile, the question of the week seemed: How high can it go? The company on Tuesday afternoon reported that revenue for the December quarter was $1.032 billion, leaping by 101 percent over the year-earlier quarter, while it garnered $204.1 million, or $0.71 per share, in net income, up from $27.3 million, or $0.10 per share. Google is reaping rewards from increased traffic to its Web site as well as an improved ability to make money from advertisers. Google (GOOG) shares soared $14.06 to $205.96 Wednesday after the news and continued to climb Thursday, heading north of $210.

Google shares, trading for less than six months since the company's initial public offering, have risen 142 percent. Despite this, and the fact that the leading Web query tool faces looming threats in the Internet search arena from Yahoo Inc. and Microsoft Corp., analysts remain bullish. Jefferies & Co., for example, raised Google to a "buy" from a "hold" rating.

The market was not as kind to Web retailer Amazon.com Inc., which, though it posted a fairly solid financial report Wednesday, was punished for failing short of analyst expectations. Amazon reported net revenue of $2.54 billion in the December quarter, up 31 percent and exceeding analysts' forecasts. But net income excluding some one-time gains and charges was $0.35 per share, below analyst expectations of $0.40 per share. Traders smacked down the value of the company's shares by $6.13 Thursday, when it closed at $35.75.

Posted by Chad Dickerson at 02:28 AM

February 03, 2005

Yahoo test drives contextual search on web pages

By Juan Carlos Perez

Yahoo Inc. has begun testing publicly a new search technology that can generate queries on the fly based on the content of the Web page a user is reading. The goal of the new technology is to make it easier and faster for users to find information than if they go through the conventional process of executing a keyword-based search engine query. "Most people aren't skilled in the art of choosing exactly which keywords to use when searching," wrote Jeremy Zawodny, a Yahoo Search executive, in Yahoo Search's official blog to formally announce Y!Q. "The fundamental idea (behind Y!Q) was to supplement search queries with context."

Users can try out the new service, called Y!Q, in several ways. It has been implemented in a test Yahoo News environment available at http://test.news.yahoo.com/. Another option is to download a new Yahoo toolbar that lets users trigger contextual searches on any Web page they're visiting. The toolbar, called DemoBar, can be downloaded from ttp://yq.search.yahoo.com/. Finally, Web publishers can embed Y!Q tags into their Web pages. More information on how to do this is at http://yq.search.yahoo.com/.

In all cases, the Y!Q queries and subsequent results are based on an analysis of the Web content a user actively highlights or is passively viewing. "Y!Q uses the context to help bridge the gap between query and intent," Zawodny wrote.

In the Yahoo News implementation, headlines are accompanied with "search related info" links, which trigger a Y!Q search. A small search results box pops up on top of the Web page being viewed. Users have the option to click on one of those results, close the results box or click on a link that takes the user to a separate page with a longer list of results. With the DemoBar, users highlight portions of the text of the Web page they're visiting and click on a button to trigger a Y!Q contextual query. Finally, Web publishers can tag content on their Web pages to give users the option of running a Y!Q contextual query.

Y!Q supports Microsoft Corp.'s Internet Explorer browser and the Mozilla Foundation's Firefox browser.

More information about Y!Q can be found at http://yq.search.yahoo.com/splash/start.html.

Posted by Chad Dickerson at 09:41 PM

Napster To Go ready for portable players

By Laura Rohde

Napster LLC launched a portable version of its digital music service in the U.S. and the U.K. on Thursday, hoping to tempt users with a more tasty "all-you-can-eat" monthly subscription model. Called Napster To Go, the company will charge users US$14.95 in the U.S. and £14.95 (US$29) in the U.K. per month, letting them download an unlimited number of songs onto compatible MP3 players as well as their PCs.

Napster users can fill and refill compatible MP3 players with their choice of tracks, but must plug, or dock, the device into their PC at least once every 30 days into order for Napster to verify they are still paying customers. If users stops paying their monthly subscription fee, the music will no longer play on the device.

By adding a portability element, Napster is looking to make its digital music service a more attractive alternative to the dominant player in the market: Apple Computer Inc. with its iPod device and iTunes online music service.

"It is a new business model for the consumption of music," said Adam Howorth, Napster's spokesman in the U.K. "It is similar to how people rent air time to use their mobile phones or pay monthly fees to watch cable or satellite television. But it's a matter of getting people used to the concept."

Napster plans to spend US$30 million on a marketing campaign promoting the benefits of digital music subscription services, which kicks off in the U.S. Sunday with a television commercial during the Super Bowl. The Napster marketing will also include promotions for compatible MP3 players from Creative Technology Ltd., Dell Inc. and iRiver Co. Ltd.

Apple has often stressed that its a la carte download service allows users to own their music like they do when they buy a CD. Napster will attempt to convince users that for the price of one CD per month, they'll have access to as much music as they want, and with a catalog of over 1 million songs, which gives them a lot more music to listen to, Howorth said.

As with Apple's iTunes, Napster also offers users the option of buying individual tracks for $0.99 in the U.S. and £0.79 in the U.K. Apple charges $0.99 in the U.S. and £0.99 in the U.K.

"In some ways, it's probably unfair to compare Napster and other subscription services with Apple iTunes as one is a programming experience and the other is a retail experience," said Mark Mulligan, a senior analyst with Jupiter Research in London. "One key difference is that Apple doesn't have to educate people, whereas that's something Napster and any subscription service will have to deal with."

Napster has made an important step by making its music portable with some MP3 players, Mulligan said. "This makes the Napster service more appealing for current users and may also be the tipping point for some of those who are seriously considering getting a digital music player."

Napster is the first subscription music service to take advantage of new copy-protection software from Microsoft Corp. that allow users to listen to digital music over devices as well as on their PCs.

Last year, Microsoft updated its Digital Rights Management (DRM) technology by adding a hacker-resistant clock to portable music players for files encoded in Microsoft's proprietary Windows Media Audio format (WMA). Other companies such as RealNetworks Inc. are also planning to utilize the Microsoft software in an effort to take on the rival iPod.

Apple's FairPlay DRM system makes the iPod incompatible with music in the WMA format. "IPod users can't switch over to Napster or to anything using WMA, " Mulligan said. "But it's a device driven market and iPod has been able to dominate the market despite being incompatible with anything else."

According to Mulligan, the market will have space for several players, all catering to slightly different users, much in the same way that radio stations target listeners with varying tastes.

"This is still a very small market and major companies like Amazon are waiting for the time being to see how it beds down," Mulligan said. "They don't see legal downloadable digital music as a missed opportunity because it's not a sizable enough market yet."

As Mulligan pointed it, the biggest competitor for Apple, Napster or any other company remains free file sharing, despite the music industry's attempt to criminalize the practice. "File sharing, at the very least, is as big as it has been in the past, if not slightly more popular," he said. "It's just difficult to put a number on it because people are now less open about their use of file sharing programs with those trying to measure that market."

Posted by Chad Dickerson at 06:23 PM

HP's smart phone efforts heat up

By Tom Krazit

Building on the success of a PDA (personal digital assistant) launched last year that offered mobile phone and Wi-Fi functions, Hewlett-Packard Co. (HP) plans to offer a number of new devices to its business customers throughout 2005 and 2006, company executives said Wednesday. The Palo Alto, California, company will demonstrate a second PDA that can be used as a mobile phone -- which the company bills as a smart phone -- later this month at the 3GSM World Conference in Cannes, said Ted Clark, senior vice president and general manager of HP's Mobile Computing Business Unit, during a press conference at the Fairmont Hotel in San Jose, California.

The HP iPaq Mobile Messenger will work with EDGE (Enhanced Data Rates for GSM Evolution) networks and come with built-in GPS (global positioning system) location technology and an integrated keyboard. It will be available in the second quarter of this year, but pricing and carriers have yet to be determined, said Rick Roesler, vice president for handhelds in the Mobile Computing Business Unit, in an interview following the press conference.

HP unveiled several new notebooks, as well as its smart phone plans, during an event for press and analysts dedicated to mobile technologies.

Smart phones are viewed as the next frontier for handheld devices. Shipments of stand-alone personal digital assistants (PDAs) have fallen steadily over the last few years, as users have realized their mobile phones work just as well as those PDAs for storing contact information or calendar appointments. In 2004, shipments decreased by 13 percent to 9.2 million units, down from 10.6 million units shipped during 2003, IDC reported Wednesday.

While relatively new on the mobile device market, smart phones are growing in sales at rates that make PDA vendors such as HP and PalmOne Inc. take notice. PalmOne's Treo 600 and 650 smart phones have done very well among consumers, but HP has a different customer in mind for its first smart phones, Roesler said.

The HP iPaq h6315 was introduced in July of last year with the ability to make voice calls and access the Internet over GSM/GPRS (Global System for Mobile Communications/General Packet Radio Service) networks as well as through wireless LANs based on the IEEE 802.11b standard.

Enterprise customers were the primary target for the h6315, and future HP smart phones will also be designed with the mobile professional in mind, Roesler said. The company has no plans at this time to target the consumer smart phone market, dominated by companies such as Nokia Corp., but some consumers might choose to purchase the devices on their own, he said.

HP's expertise in selling to corporate accounts gives it a better chance than a company such as Nokia or wireless carriers such as T-Mobile or Cingular of introducing smart phones into enterprises, said Rob Enderle, principal analyst with the Enderle Group in San Jose, during a panel discussion at HP's mobility event. The company can also take some of the security features from its other iPaqs and incorporate them into its smart phones, he said. Most other smart phone companies don't offer those security features, he said.

HP doesn't plan to give up on the traditional PDA market just yet, Roesler said. The company sells five different categories of iPaqs right now, with one of those categories dedicated to smart phones. Its plans are still evolving, but HP will probably increase the number of smart phone categories while keeping one or two types of traditional PDAs, he said.

Posted by Chad Dickerson at 04:39 PM

HP, Nokia mobilize the digital pen

By Stephen Lawson

Hewlett-Packard Co.'s (HP's) "digital pen" technology is going on the road with a little help from Nokia Corp. The digital pen is a real ink pen that takes 100 pictures per second to digitally record what the user is writing. A new model from Nokia can send that information via Bluetooth to a Nokia phone and from there to a server over a standard mobile data network, the companies announced Wednesday. HP and Nokia teamed up to add more mobility to a system that was designed to quickly and efficiently transfer information from paper forms to databases, according to Eric Chaniot, vice president and general manager of HP's Digital Pen and Paper business. HP's current digital pen uses a cradle wired to a PC via USB (Universal Serial Bus). Users have to put the pen in the cradle in order to upload data.

The key markets for digital forms are health care, manufacturing, financial services and government, where transferring information from paper forms to computers typically costs about US$1 per page and causes delays in work processes, Chaniot said. Digital pen technology takes that cost down to about $0.25 per page, according to HP. By going mobile, the companies hope to make digital forms useful in many new settings, Chaniot said. For example, nurses and doctors making rounds, claims adjusters in the field and building inspectors will be able to send information back to a database as soon as it is entered on a paper form.

The system is built around a server application called the HP Service Controller and includes HP LaserJet printers that can print digital forms, as well as software for transforming an enterprise's existing paper forms in to digital ones. A user can fill out the paper form and then send all the information on it to the Service Controller from any remote location served by a GPRS (General Packet Radio Service) mobile data service.

Every part of the system is built around a grid. The HP printers can print a background grid on each individual form, in regular black ink, to map the location of every element of the form. The Service Controller understands that grid and uses it to make sense of the data it gets from the pen.

In addition, each copy of each paper form has a unique identity, defined by its position on a virtual grid of all the forms printed out by that enterprise. That grid, in turn, is part of a massive virtual grid of all forms printed out using the Mobile Forms Initiative technology. That "super" virtual grid has trillions of possible forms and would be as big as Eurasia if it were reproduced in the real world, Chaniot said.

That "super" grid is designed to keep each form unique, to prevent mixups with critical forms such as medical records, Chaniot said. Enterprises can "recycle" the unique identity of a form if it doesn't have to be saved, he said. For example, records from clinical trials need to be saved for decades but an insurance claim form may not be needed after it is settled.

There are 18 LaserJet models available now that can print the special digital forms and most future models will have the feature, Chaniot said.

The pen has a rechargeable battery and can store 1M byte of data, good for about 40 typical pages, before it has to be sent, said Jukka Hieta, worldwide manager of sales development for Nokia. On most forms, users will start recording their writing by touching the pen to a "start" box and send the data by touching a "send" box. Each pen has a unique four-digit identification number and requires a password for use, which is entered on the phone. If a pen is lost or stolen, it can be deactivated, he said.

Though today the pen works only with Nokia phones, in the future will be tested with the HP iPaq Pocket PC h6300 series phone and other HP products, Hieta said.

The system is available now. Currently it supports a variety of European languages, and support for some Asian languages is planned, according to Chaniot.

The pen can be purchased from Nokia's Web site for about $199 but will usually be sold as part of a package put together by a reseller or system integrator, Chaniot said. Packages for large enterprises, including the server, pens and software, probably will start at about $150,000, he said. In addition, some enterprises will buy the pens and infrastructure as a third-party service, which would cost an estimated $39 per pen per month, Nokia's Hieta said.

Posted by Chad Dickerson at 04:38 PM

Sprint posts fourth quarter increase in net income

By Grant Gross

Sprint Corp. reported fourth-quarter 2004 net income of US$437 million on net operating revenue of $6.9 billion, with both numbers up from a year ago. Buoyed by what it called a record year for wireless and DSL (digital subscriber line) customer gains, Sprint improved upon a net income of $110 million and net operating revenues of $6.7 billion in the fourth quarter of 2003, it said Thursday.

For the fourth quarter of 2004, Sprint reported an adjusted earnings per share of $0.31, just under analyst expectations of $0.32, according to Thomson First Call.

Sprint added 1.9 million new wireless customers -- a net gain of nearly 1.6 million wireless customers -- in the fourth quarter, an increase of 16 percent over the fourth quarter of 2003, the company said in a press release. The company's wireless operating income was $406 million for the quarter, up from a loss of $96 million the year before. Operating revenue from data services, including DSL, grew to $219 million, from $194 million in the fourth quarter of 2003.

The data numbers didn't offset other drops in Sprint's local telecom offerings. The company's local division, including local voice services, recorded an operating income of $464 million in the fourth quarter of 2004, down from $484 million in the same quarter a year earlier. Long-distance net operating revenue dropped 11.5 percent from the fourth quarter of 2003 to the fourth quarter of 2004.

For the full year, Sprint reported net operating revenue of $27.4 billion, up from $26.2 billion in 2003. The company reported a net loss for the year of $1 billion, compared to a net income of $1.3 billion in 2003.

The company reported a full-year free cash flow of $2 billion, allowing Sprint to finish the year with a net debt of $12.6 billion and beat its goal of getting net debt under $13 billion.

Posted by Chad Dickerson at 04:38 PM

MP3.com founder to start new music venture

By Joris Evers

Michael Robertson, the founder of MP3.com and head of desktop Linux company Linspire Inc., on Thursday next week plans to launch a new music download company and service called MP3tunes. Breaking with other online music services, such as Apple Computer Inc.'s iTunes and Microsoft Corp.'s MSN Music Store, MP3tunes will not use a format with digital rights management (DRM) technology to copy-protect the tracks it sells for download, but instead will use the popular MP3 format without DRM, Robertson said in an interview.

At launch, MP3tunes will offer a few hundred thousand tracks from independent labels and artists at a cost of US$0.88 per track or $8.88 per album, Robertson said. MP3tunes has yet to approach the major record labels, he said.

Because the tracks will be offered in MP3 format, buyers can use the music they purchase on virtually any digital music player or computer, as well as make unlimited copies of their songs and burn their music onto CD, Robertson said. Most other online music sellers restrict what users can do with their songs.

"I don't want a world where every piece of music or every device I buy has a fruit logo on it," Robertson said, referring to Apple. The computer vendor has been criticized for using DRM technology so tracks bought in its iTunes music store can be played only on its iPod portable media player and not on any other portable music player.

"I am more interested in a world where consumers have a choice: They can choose any portable player, any piece of software, any operating system, and listen to their music," Robertson said. "That is what MP3 brings."

Robertson is hopeful that major record labels will want to offer their music through MP3tunes even though the service lacks copyright protection. "Obviously that would be a change from where they are at. They have licensed their music to DRM-based systems, but not to non-DRM-based systems. We are trying to push the envelope."

In addition to the music download service, Robertson next week plans to unveil a new device called the MP3beamer. The beamer will be a hub for digital music that can be connected to a home stereo and other devices as well as let consumers access their music from multiple locations, Robertson said.

The MP3beamer is scheduled to be available next week from online retailers. Further details are set to be announced next week.

Robertson founded MP3.com in 1997. The site came under attack from the record industry for a service that allowed users to get online access to music they owned on CDs. MP3.com was ultimately sold to Vivendi Universal in 2001 in a deal valued at $372 million, a windfall for Robertson.

Posted by Chad Dickerson at 01:58 AM

Amazon's Q4 revenue and net income grow

By Juan Carlos Perez

Amazon.com Inc. posted solid growth in revenue and net income during its 2004 fourth quarter, but missed financial analysts' earnings expectations. Amazon's net revenue came in at US$2.54 billion in the fourth quarter, ended Dec. 31, an increase of 31 percent compared with 2003's fourth quarter, the Seattle company said in a statement Wednesday. The online retailer exceeded the consensus forecast of $2.44 billion from analysts polled by Thomson First Call. Excluding an $85 million benefit from foreign exchange rates, net revenue grew 26 percent during the quarter.

Meanwhile, Amazon had net income of $347 million, or $0.82 per share, up from $73 million, or $0.17 per share. Pro forma net income, which excludes, among other things, stock-based compensation and the benefit from a $244 million deferred tax asset, was $149 million, or $0.35 per share, below analysts' consensus expectation of $0.40 per share.

Amazon also introduced on Wednesday a membership program called Amazon Prime, which, for a flat fee of $79 per year, gives members free, unlimited, two-day shipping without a minimum purchase requirement. Amazon Prime also offers members one-day overnight shipping for $3.99 per item. Members can extend their benefits to up to four family members living in their house.

"Two-day shipping becomes an everyday experience rather than an occasional indulgence," said Jeff Bezos, Amazon's chief executive officer, in a statement.

Bezos acknowledged Amazon Prime will be expensive for the company in the short term, but he said in the statement that it will provide a "significant benefit" and convenience for customers.

For the full year, Amazon had $6.92 billion in net revenue, compared with $5.26 billion in 2003, for growth of 31 percent. Excluding the benefit of foreign exchange rates, net revenue grew 26 percent. Net income for the year came in at $588 million, or $1.39 per share, up from $35 million, or $0.08 per share in 2003.

Looking ahead, Amazon expects net revenue to be in the range of $1.80 billion to $1.95 billion in 2005's first quarter, which would mean growth of between 18 percent and 27 percent compared with 2004's first quarter. For the full year, Amazon expects net revenue in the range of $8.05 billion and $8.65 billion, which would represent growth of between 16 percent and 25 percent.

Posted by Chad Dickerson at 01:21 AM

February 02, 2005

Wireless hotspot price war kicks off

By Peter Judge, Techworld

Wireless access has just got cheaper thanks to a new service by veteran price-cutter Freedom2Surf which promises to halve what BT charges and beat the rest of the market as the same time. The company has bought wholesale access to BT's OpenZone hotspots, which it is reselling at a smaller margin than everyone else. The final price is still high compared with the US - but it's a start.

"This is real, there are no catches," said Chris Panayis, managing director of Freedom2Surf . "In ADSL, we did 2Mbit/s at £14.99, so people are used to us being cheaper and better." Panayis claims the eight year old ISP has tens of thousands of customers for existing broadband and dial-up services. His company can undercut BT's Wi-Fi and still make a profit because it is smaller and more efficient than BT, he said.

Freedom2surf offers roughly similar vouchers to BT, and is pretty clearly better value at low usage levels. Freedom2Surf starts at 10p per minute (compared with BT's 20p). A voucher for one hour's online time within a day costs £4.50, compared with BT's £6.

"At the moment, the most popular package is pay as you go and hourly stuff," says Panayis, which is not surprising, as Freedom2Surf does not offer a contract, and its monthly voucher (20 hours for £30) actually looks poor value compared with BT's monthly ticket (£40 for 66 hours), unless you know you will need less than 20 hours.

"Our next specific move would probably be a contract," said Panayis. Freedom2Surf is also considering adding Wi-Fi as an extension to broadband customers' bills, and is talking to other hotspot operators about the possibility of adding more hotspots.

The Freedom2Surf prices seem to compare well with other operators, though it is hard to compare with T-Mobile, which appears to offer more usage hours in a given time, and Surf and Sip, which does not say how much connect time is allowed.

The prices are still well above those in the US of course, but then we aren't expecting a Wi-Fi bubble to burst over here.

Posted by Chad Dickerson at 04:36 PM

NTT DoCoMo begins mass-market transition to 3G

By Martyn Williams

NTT DoCoMo Inc. will begin selling a new range of 3G handsets in Japan this month that will mark its first attempt to push 3G telephony into the mainstream of the cellular market. The four handsets, unveiled Wednesday in Tokyo, are smaller and lighter than DoCoMo's current, high-end 3G (third generation) handsets and have fewer bells and whistles, but they still retain several key 3G functions, said Kiyohito Nagata, managing director of DoCoMo's product department. These include a megapixel-class camera, video telephony, a built-in music player and support for the latest ring-tones.

The handsets will appeal to users who aren't looking for the most cutting-edge technologies but still value certain 3G features that fit with their lifestyles, he said.

Among the things they lack is support for the Felica contactless smart-card system. The technology, which is in many high-end 3G models, enables phones to double as electronic cash or loyalty cards and to be used for functions such as airport check-in. DoCoMo said Felica support would come to its new range of phones when the technology gets cheaper.

Nevertheless, the new handsets aren't without their frivolous features.

The F700i from Fujitsu Ltd. has a "relaxation mode" that plays soothing music and animation, while the N700i from NEC Corp. allows users to dress up video telephone calls with the type of on-screen graphics seen in cartoons, such as an exclamation mark. The P700i from Panasonic Mobile Communications Inc. sets the phone's LED to blink in reaction to the content of incoming picture messages. A fourth handset, the SH700i, is offered by Sharp Corp.

A large part of making the handsets appeal to a mass market has been to concentrate on design, by making them smaller, lighter and more stylish. In addition, each phone costs DoCoMo ¥10,000 (US$96) less to buy from the manufacturers, allowing it to charge customers less, Nagata said. DoCoMo wouldn't be drawn on retail prices but said the new phones will cost about the same as current 2G handsets.

The average weight of the 700-series handsets is 114 grams, compared to 127 grams for the higher-end 900-series, and the average volume is 97 cubic centimeters, versus 106cc. At the two extremes, the heaviest 900-series handset weighs 148 grams while the lightest new phone weighs 102 grams.

DoCoMo's effort to push 3G services into the midmarket comes just over 3 years after it launched its commercial 3G service in October 2001. At that time, the small selection of bulky and power-hungry handsets that were available, combined with spotty coverage, meant that users were slow to make the switch from the carrier's 2G network, which is based on a domestically developed system called PDC (Personal Digital Cellular System).

It took until September of 2003 for DoCoMo to get its first million 3G users, although the pace of new subscriptions picked up after that. In December 2003 the company launched its first full series of 3G handsets, the Foma 900i range, which consisted of five models and marked the beginning of a serious push for high-end customers. By the end of December 2004 the carrier's 3G subscriber base had swelled to 8.5 million, or 18 percent of its 47.9 million users.

The 9 million mark was passed in January and DoCoMo says it's on track to hit 10 million subscribers by the end of March.

DoCoMo sees the new 3G handsets replacing existing 2G handsets, and has announced no plans for a new range of cheaper 2G handsets.

"The role that was fulfilled by the 500-series (DoCoMo's current 2G handsets) will be fulfilled by the 700-series going forward," he said.

Posted by Chad Dickerson at 04:36 PM

Open source backer warns of 'patent WMDs'

By Robert McMillan

Despite recent efforts by IBM Corp. and Sun Microsystems Inc. to make thousands of software patents available to open source developers, patents remain a major source of concern, according to a panel of open source luminaries who discussed the issue at the OSDL Enterprise Linux Summit in Burlingame, California. "Software patents are clearly a problem, and I think it's a problem that the open source community has been pretty aware of for the last five years," said Linus Torvalds, the lead developer behind the Linux kernel project. "The good news is that a lot of proprietary vendors are starting to see it as a problem as well."

Last month, IBM made 500 of its patents available to the open source community, saying that this would promote innovation in the field of information technology. Sun Microsystems Inc. followed suit two weeks later, releasing more than 1,600 patents of its own.

More companies are expected to follow, according to panel host Stuart Cohen, who is chief executive officer of Open Source Development Labs Inc., (OSDL) the consortium that employs Torvalds.

Other members on the panel echoed Torvalds' criticism. There are an estimated 150,000 to 300,000 registered software patents in the U.S. alone, and many open source developers would like to seem them invalidated. They believe that many such patents are frivolous and that copyright law is a better mechanism for protecting software innovations.

Part of the problem is that the U.S. Patent Office has been lax in granting patents, said Mitchell Kapor, a founder of Lotus Development Corp. and a prominent backer of the Mozilla browser. "There have been tens of thousands of bad software patents issued which never would have been issued if the Patent Office had actually been following its own rules," he said.

Ultimately, these bad patents may come back to haunt the open source community, Kapor predicted, saying that Microsoft Corp. eventually will be driven to launching wide-ranging patent lawsuits, which he called "patent WMDs," (weapons of mass destruction) against open-source projects. "Their business model no longer holds up in an era where it's clear that open source is simply an economically superior way to produce software," he said. "Of course they're going go unleash the WMDs. Why would they not?"

Torvalds, for his part, was reluctant to make predictions. "I'm the anti-visionary. I distrust people with visions," he said. "You don't see what's right in front of your face and you don't see the technical issues that face everyday users."

Posted by Chad Dickerson at 02:38 AM

February 01, 2005

Google posts strong Q4 growth in revenue, net income (Update)

By Juan Carlos Perez

Google Inc. saw its revenue and net income grow significantly in its fourth quarter, as the search engine giant's ad sales continued to climb both on its Web sites and on its ad network partners' Web sites. Google closed the quarter, ended Dec. 31, with US$1.032 billion in revenue, up 101 percent compared with 2003's fourth quarter, the Mountain View, California, company said in a statement. Meanwhile, the company generated $204.1 million, or $0.71 per share, in net income, up from $27.3 million, or $0.10 per share.

Google's own Web sites generated 51 percent of the quarter's total revenue, or $530 million. Google's ad network partners brought in 48 percent, or $490 million, of which partners kept $378 million, a figure known as traffic acquisition costs (TACs). Subtracting TACs, Google's revenue for the quarter was $654 million.

For the full year, revenue came in at $3.2 billion, up 118 percent compared with 2003. Meanwhile, net income increased 278 percent to $399 million, or $1.46 per share.

In a conference call, Google executives expressed deep satisfaction over the quarter's results, but cautioned that the company remains committed to its philosophy of making decisions that may harm short-term financial results if the company thinks those decisions will help it attain long-term goals. Following this philosophy, Google doesn't provide financial forecasts and guidance to analysts ahead of its quarterly results.

"Google will continue to take risks and make investments we believe will deliver over the long term. As is clear from our results this quarter, this approach may also translate into exceptional short-term results, which is great. But we remain disciplined in our focus on and most committed in the long-term," said Eric Schmidt, Google's chief executive officer.

Larry Page, co-founder and president of products, highlighted new search products and services introduced in recent months and weeks, such as a program for digitizing millions of library books; Google Desktop Search, software for indexing the contents of PC hard drives; Google SMS, a service for querying certain portions of Google's index from wireless devices; and Picasa, software Google recently updated designed for organizing and managing images in PCs.

As for products on the horizon, Google plans to soon update the desktop search tool, Page said. Google is also working on further developing the multi-terabyte database of images and mapping information it acquired recently when it bought Keyhole Corp., with an eye to integrate it into its search services, particularly in the area of localized searching, Page said.

"In the coming weeks and months, Google will be delivering more product improvements, and new products that personalize, localize and internationalize," Page said.

Google has also been hard at work improving its ad sales activities in three main areas: first, Google has been enhancing the way it interacts with its largest advertisers; second, the company revamped its sales team structure by organizing it by industry; and third, Google is creating an "ecosystem" to support third-party professionals in charge of Google clients' advertising campaigns, Page said.

Meanwhile, Sergey Brin, co-founder and president of technology, gave details about a recently-launched program designed to retain employees and attract good candidates. The program, called the Founders Award, rewards groups of employees who have come up with innovative ideas and projects, Brin said.

In the fourth quarter, Google rewarded two teams with Founders Awards, giving the employees involved collectively over $12 million in restricted stock units, Brin said. "This is both a great internal incentive and recognition, as well as a way to attract new employees who might otherwise opt for a startup," he said.

Google is the world's most popular search engine, but it faces increasing competition from rivals Yahoo Inc. and Microsoft Corp., which have recently developed their own search engine technologies, and from other players such as Ask Jeeves Inc. and America Online Inc.

In December 2004, Google drew 34.7 percent of U.S. search engine users, while Yahoo came in second with 31.9 percent. Microsoft's MSN placed third with 16.3 percent, followed by Time Warner Inc., which includes America Online Inc., with 9.4 percent, according to market research company comScore Networks Inc.

Posted by Chad Dickerson at 11:16 PM

AOL aims to secure surfing with new Netscape browser

By Joris Evers

America Online Inc. (AOL) on Feb. 17 plans to release the first public test version of a new Netscape browser that is designed to protect users from scams and malicious code while surfing the Web. With the release, AOL is taking aim at Microsoft Corp.'s dominant Internet Explorer (IE) Web browser, which has been the subject of many security vulnerabilities. Also, AOL is looking to piggyback on the popularity of Firefox, the open source Web browser that was released in November and has since been downloaded nearly 22 million times.

Using a list of known malicious Web sites, the new Netscape 8 browser will automatically adjust security settings to protect the user. A blacklist of Web sites will be stored on the user's PC and updated frequently. AOL is currently in negotiations with various security companies to supply the information, sources close to AOL said.

While browsing the Web, users will be alerted with a red check mark in the browser tab to sites known to be part of a phishing scam or that distribute spyware or other malicious code. Browser technologies such as JavaScript, cookies and ActiveX will be disabled.

Phishing scams are a prevalent type of online attack that typically combine spam e-mail messages and Web pages that look like legitimate e-commerce sites to steal sensitive information such as user names, passwords and credit card numbers.

Netscape 8 will identify sites known to be trusted, such as banks, online services and online stores, with a green check mark. These sites by default will be displayed using the IE rendering engine, with most browser technologies enabled to maximize compatibility. The trusted sites list will come from organizations such as Truste, sources said.

Unknown sites will be coded yellow. Users can change settings on a per-site basis through a menu that is easily accessible from the browser tab.

Netscape 8 is based on Firefox, but also supports the IE browser engine. AOL released a preview version of the browser to a select group of testers in late November. The Netscape browser doesn't include the IE engine, but uses the engine that is part of Windows. As such, the Netscape 8 browser only works on Windows computers.

IE is part of Windows and is used by most Web users. Many Web sites have been designed specifically to work with the Microsoft browser and may not work correctly in browsers using other engines, including the Gecko engine in Firefox. For example, movie site Movielink.com and tax Web site HRBlock.com don't work well in Firefox.

"One of the big complaints about Internet Explorer has been security," said one person involved with Netscape 8 development who asked not to be named. "We think that is real, but we also think that a lot of the browser technologies can be used for good things as well."

In addition to the security features, the Netscape 8 beta includes enhanced support for RSS (Really Simple Syndication) feeds, also found in Firefox, and allows users to set multiple homepages that will display in different browser-tabs.

Netscape and Firefox are not the only browsers seeking to capitalize on IE's bad security reputation. Deepnet Technologies Ltd. of the U.K., for example, offers a free browser based on IE, but with additional features, including one designed to protect against phishing scams. Apart from gathering known phishing sites from affiliates and antiphishing Web sites, the Deepnet browser also has a built-in phishing report facility that Netscape 8 will lack.

Netscape was the most popular browser in the early years of the Web. AOL is now breathing new life into the Netscape browser, which was marginalized after Microsoft introduced IE in the mid-1990s. The final version of Netscape 8 is due out in the second quarter and will be backed by some marketing efforts from AOL, according to sources familiar with the company's plan.

Johan Boström in Boston contributed to this report.

Posted by Chad Dickerson at 11:16 PM

SBC + AT&T = confused international picture

By John Blau

On Monday, SBC agreed to acquire AT&T Corp., a leading provider of voice and data services to enterprises around the globe. That deal comes just months after the San Antonio, Texas, telephone company began pulling the plug on its less-than-successful investments in network operators in Europe and South Africa. Over the next year, while SBC seeks regulatory approval for its planned acquisition, enterprise customers will have time to chew over whether a regional telephone company -- albeit a big one -- has the vision and determination to carry on AT&T's role as a global player.

Some are doubtful.

"SBC went abroad but returned home," said Ewan Sutherland, chairman of the International Telecommunications Users Group (INTUG). "Enterprise customers have to ask themselves how serious SBC is about international operations, given its track record in Europe and South Africa. The company will certainly need to do some convincing."

In the late 1990s, when numerous U.S. companies were investing heavily in newly liberalized European telecom markets, SBC joined the fray. It made investments in several European network operators, including Denmark's TDC A/S and Belgium's Belgacom SA, as well as Telkom SA Ltd. in South Africa.

Last year, SBC sold its stake in Belgacom and sharply reduced its holdings in TDC and Telkom.

"It's really easy to talk global but it's a whole other story to deliver on a global strategy," said Sutherland. "SBC's retrenchment in Europe is proof of that."

Few will disagree that SBC has failed to gain international recognition -- including SBC itself. With the nationally and internationally well-known AT&T brand name tucked under its arm, the former "Baby Bell" hopes to cast off its parochial image.

That, however, could be easier said than done.

For one, AT&T isn't what it used to be. Its core long-distance business has been ravaged by price wars and new technologies, such as wireless and Internet phones. Its failed wireless and broadband cable expansion plans in the U.S. diverted money and attention away from the international operations.

For another, AT&T's roster of more than 3 million enterprise customers may be the envy of the industry -- the operator counts nearly all companies in the Fortune 1000 as customers -- but its service outside the U.S. has slipped.

One indicator: Cisco Gold accreditation. Cisco Systems Inc. certifies operators that meet specific criteria, such as maintaining a certain number of engineers and sales people on the ground in each market.

"This accreditation speaks to an operator's ability to credibly deliver and support convergent services," said Camille Mendler, an analyst at the European office of The Yankee Group. "It's only a guide but it's a very important one for enterprise customers."

AT&T has Cisco Gold accreditation only in the U.S., compared to BT Group PLC, which is certified in numerous European countries in addition to the U.S., according to Mendler.

Mendler warned that while AT&T may enjoy a "high perception" among enterprise customers today, tomorrow could be another story.

The U.S. icon faces fierce competition on all fronts. BT, for instance, recently acquired Infonet Services Corp. to gain more market share.

Competing from outside the carrier ranks, IBM Corp. continues to achieve much higher levels of customer perception and satisfaction for network and communication services than all operators, according to Mendler. "IBM understands the needs of enterprises and knows how to reduce their business risks," she said. "So it's not just about network reliability and pricing as the operators would like everyone to believe."

Other analysts warn that the integration of SBC and AT&T -- two big former Bell companies that have evolved in their own unique ways -- could force executives of the new company to focus on the U.S. first and international markets second. "The group will have a lot to do in the U.S. in the way of network integration, product service rationalization and headcount reduction," said Tim Dillon, principal analyst, telecom services Europe, at Current Analysis Inc. "So I think we can expect SBC and AT&T to get their house in order before they go walking around the block."

Posted by Chad Dickerson at 04:17 PM

Microsoft turns spotlight on its search engine

By Juan Carlos Perez

Microsoft Corp.'s Internet search engine, in the works for about two years, is ready for its big-time debut. Microsoft is announcing on Tuesday that the search engine it built from scratch is taking center stage at the company's Web portal, MSN.com, which previously had relied on search technology from rival Yahoo Inc.

"The whole goal with our new search service is to deliver answers faster to users," said Mark Kroese, MSN's general manager of information services product management. "In a world where the search engine user experience is getting lots of links but no answers, we're really focused on giving users quick answers to their questions."

Since November, Microsoft's search engine had been in a public test -- or beta -- mode in a special section of the MSN.com portal, while the main search section continued to be powered by the Yahoo technology.

The new MSN Search powered by the Microsoft search engine will let users search not only Web sites but also content from Microsoft's Encarta encyclopedia and MSN Music, Kroese said.

MSN Search also features a variety of tools to let users adjust searches, such as narrowing results by language or domain. The search engine also has the ability to deliver search results from a specific geographical area, a feature called "search near me."

Also on Tuesday, Microsoft will introduce a redesigned home page for MSN.com with a cleaner and simpler layout in which the search engine box is featured more prominently. "We've reduced the number of links significantly on the page, which loads much faster and has a clean, light design," Kroese said.

The new MSN Search is available on 25 localized versions of MSN.com, including the ones for the U.S., the U.K., Spain, Sweden, India and Germany, and in 10 languages. MSN Search features, such as access to Encarta, vary among MSN.com versions.

With this rollout, Microsoft takes another step in its fight against Google Inc. and Yahoo. In December 2004, Google drew 34.7 percent of U.S. search engine users, while Yahoo came in second with 31.9 percent. Microsoft's MSN placed third with 16.3 percent, followed by Time Warner Inc., which includes America Online Inc., with 9.4 percent, according to market research company comScore Networks Inc.

In the second quarter, total U.S. Internet ad spending was about $2.37 billion, a 42.7 percent increase over the same period in 2003, according to a report issued in September by the Internet Advertising Bureau and Pricewaterhousecoopers LLP. Search-related ads were the largest category with $947 million, according to the report.

Microsoft has a deal with Yahoo's Overture ad network to provide the text ads that run with MSN Search results. Microsoft has no plans currently to build its own ad network, Kroese said.

What users can expect to see from Microsoft are frequent enhancements to MSN Search, now that the company has the search engine foundation in place, he said. "We're now really poised to deliver new features on a very aggressive schedule," he said.

Likely areas of improvement would be increasing the size of the search engine's index, which in November stood at about 5 billion documents, broadening the types of searchable documents to include, for example, video content and maps, enhancing result relevance, enabling wireless access to the search engine and expanding the ability to personalize searches, he said.

In related news, Microsoft on Monday also updated the beta of its MSN Toolbar Suite, which includes the MSN Desktop Search application. The new version fixes bugs reported through the Dr. Watson crash analysis tool in Windows as well as other bugs, according to a posting by program managers to the MSN Search Web log.

Additionally, the updated product can scan items in Outlook when it is not the default e-mail client and changes the way MSN Desktop Search handles e-mail attachments. The earlier version can cause conflicts with antivirus applications because it temporarily saves e-mail attachments for indexing, according to the posting.

Microsoft won't push out the update to the Toolbar Suite to users via the automatic updates feature. Instead, users who want to update have to download and install it from Microsoft's MSN Toolbar Suite beta site at http://beta.toolbar.msn.com/.

Joris Evers in San Francisco contributed to this story.

Posted by Chad Dickerson at 04:17 PM

TOKYO EDGE : Cell phones to shake, rattle and roll

By Martyn Williams

Forget the keypad. Imagine shaking your cell phone to find and dial a number or swinging it through the air to hit an electronic golf ball. Such actions are possible with a new generation of handsets equipped with motion-sensing capabilities that have begun to appear in South Korea and Japan. One of these new handsets was unveiled on Monday by Vodafone KK in Japan, which took the wraps off a model produced by Sharp Corp.

The V603SH handset will be available from mid-February and can sense five types of movement: linear movement along the X and Y axis and twisting motions (roll, pitch and yaw) in the X, Y and Z axis, said Mikio Inoue, manager of Vodafone KK's consumer product management department. The phone is the first in Japan to offer these motion-sensing features and is also the first with a single chip that can sense five types of movement, he said.

The chip, called the G2 Motion Sensor, is the result of a two-year research project between Vodafone and Aichi Steel Corp. Until now, sensing twisting and linear motions has required separate chips but the new chip combines these functions and is smaller than either of the previous two components, Aichi Steel said.

To popularize the motion-sensing function, Vodafone plans to publish details of a Java API (application programming interface) so that developers can build support for the function into games. On Monday, the company demonstrated two games with such support.

The first, House of The Dead Mobile, is a zombie shoot-em-up game from Sega Corp. The game screen shows the character's point of view and as the player turns, so does the character in the game.

The second game demonstrated was Full Swing! Golf from Taito Corp. In this game the player holds the cell phone in their hands like a golf club and takes a swing to hit the on-screen ball. Users can also program the phone to perform shortcuts by shaking the handset in one of nine different ways. The game posts a warning on screen before each shot reminding the user to avoid hitting nearby people when taking the swing.

Gaming is a key application for the motion sensing system built into some South Korean handsets.

Pantech Co. Ltd.'s PH-S6500 has a built-in fishing game that requires the user to hold the handset as if it were a fishing rod and a racing game in which the handset becomes the steering wheel for the car. The phone went on sale in January in South Korea and costs 451,000 won (US$440), said Koh Eun Sil, a spokeswoman for Pantech in Seoul.

On LG Electronics Inc.'s SV360 handset, which unfolds to look like a handheld game device, you can play a skiing game in which you steer the course, go faster and go slower just by moving the handset around. The phone will go on sale in March or April in South Korea, said LG.

Samsung Electronics Co. Ltd. will also start selling its SCH-S310 in March. The phone uses a motion sensor for control functions, such as ending a call by shaking the handset twice or moving forward or back a track in the MP3 player by moving the phone sharply to the left or right. Possible future uses include using the sensor to help reduce blurring caused by camera shake or monitoring changes in health by detecting changes in body movement, the company said.

None of these four handsets are based on the widely used GSM (Global System for Mobile Communications) cellular standard and won't be available overseas immediately. However, Samsung will consider adding the function to international models if the user reception in Korea is good.

Posted by Chad Dickerson at 04:17 PM