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Volume 2, Issue 15: Monday, February 7, 2000
- "Critics Press Legal Assault on Tracking of Web Users"
New York Times (02/07/00) P. C1; Tedeschi, Bob
The uneasy relationship between privacy advocates and DoubleClick recently exploded into open hostilities after the company was accused of collecting Web users' personal information without their permission and combining the data with information from its database unit, Abacus Direct. At the heart of the dispute is consumers' ability to opt out of DoubleClick's tracking program--privacy advocates say it is not easy. The Electronic Privacy Information Center has decided to take its complaint with DoubleClick to the FTC. Meanwhile, the Center for Democracy and Technology is attempting to convince consumers to not participate with DoubleClick's tracking program. Industry insiders are also criticizing the company. DoubleClick is defending its data-collecting efforts by claiming that consumers benefit from the targeted advertising the data helps produce. Roughly 50,000 people have opted out of DoubleClick's tracking program over the past four years, but the majority of consumers want to receive targeted ads, says DoubleClick's Jonathan Shapiro. Also, DoubleClick claims it will not collect financial, medical, or sexual data, nor will it collect data on children's Web usage. Privacy advocates point out that DoubleClick has no legal obligation to abide by those rules. At least one company, Real Media, is utilizing technology that takes consumer privacy concerns seriously. Real Media's approach will go over well in Europe and other foreign markets where privacy is a big concern, says Real Media Chairman Dave Morgan.
- "Free Services on Web Can Assess and Fortify Computer's Defenses"
International Herald Tribune (02/07/00) P. 6; Dembart, Lee
Computer security experts warn that computers with cable or telephone digital subscriber lines to the Internet are much more vulnerable to hackers than those with dial-up connections, as these lines are basically always operating. However, two new free services offered on the Internet at www.grc.com and www.secure-me.net will try to hack into a computer and then download a report of the findings, as well as some suggestions. To decrease the possibility of hacking, experts also suggest that computers be turned off when not in use; the system's file- and print-sharing functions should also be disabled. Firewalls can also be implemented on home computers, and cost much less than those purchased for commercial use. Programs such as BlackIce Defender cost $40 and can be downloaded from www.networkice.com.
- "Online Software Catches On"
USA Today (02/04/00) P. 1B; Davidson, Paul
New software companies want the Internet to transforms the industry into one in which consumers and companies go online to access software applications. By offering software products over the Internet, the new companies expect consumers to visit their Web sites instead of stopping at a nearby computer store for software. Similarly, application service providers (ASPs) are hoping that companies to do the same to fill their business needs. The emerging industry is a threat to industry mainstays such as Microsoft and IBM. Although Web-based software sales excluding service fees accounted for less than 1 percent, or $700 million, of the U.S. software market in 1999, by 2003 Web-based software sales are expected to represent 22 percent of the market, or $5.8 billion, according to Forrester Research. And most sales are expected to come from businesses. Among the companies moving software online are Desktop.com, Mi8, and myWebOS, and the startup frenzy is said to be driving the trend toward Web-based applications. For example, LoanCity.com was able to launch its venture in six months instead of a year by using the services of Corio. In addition, LoanCity did not have to build its own data center or hire 20 engineers because of the ASP. And Americasbaby.com sought out Mi8 because the baby-products retailer wanted its tech people working on its Web site rather having to deal with email. Still, there are some concerns and drawbacks concerning Web-based applications. Privacy advocates are concerned about the data that software company Web sites gather on visitors. Meanwhile, companies that rely on ASPs may have to put up with crashing networks, hackers, and corporate espionage. High prices are also a problem, although there are Web-based software companies that offer free products.
- "First Sprouts from IBM's Garlic Project Take Root in DB2"
VNUNet.com (02/05/00); Everett, Cath
IBM's Garlic project will allow users to access structured and unstructured data from different sources and extract relevant information through one federated query. Garlic products will be object-oriented middleware that enables access, for example, to third-party relational and non-relational data through a single query. Garlic middleware is also playing a part in the Discoverynet project IBM has initiated with various life science groups to find data relevant to the creation of new pharmaceuticals.
- "Greater Width"
tele.com (01/24/00) Vol. 5, No. 2, P. 20; Gerwig, Kate
Demand for bandwidth is expected to explode. Several service providers believe bandwidth sales will double in 2000. Because Y2K was so uneventful, several companies are embarking on new ventures ahead of schedule. Business-to-business applications may rise substantially in 2000, especially following the first quarter. Service providers seem to agree that the time necessary for provisioning local network access and the demand for larger circuits will be critical issues. Companies that tout optimal provisioning also acknowledge service delays. Williams Communications experiences delays because local telcos decline to guarantee deployment times for data line installation, according to Paul Saville, Williams' vice president of network planning.
- "Site Management Ins and Outs"
Interactive Week (01/31/00) Vol. 7, No. 4, P. 68; Babcock, Charles
To remain competitive in the explosive e-business market, systems management vendors are working to ensure that their traditional network products can be used to monitor Web sites. The top three systems management brands--Tivoli, Computer Associates' CA Unicenter TNG, and Hewlett-Packard's OpenView--are being revamped to provide strengthened Web site management. Over the past year the vendors have upgraded their offerings to manage a company's entire infrastructure, from the network router to the Web server. Often, the vendors measure site response times, provide site testing, and encourage feedback from site visitors. The vendors have also formed hundreds of partnerships to provide add-on features from third-party vendors. Carefully planned site management is crucial to avoiding e-business pitfalls such as site crashes, warns Tivoli's Jackie Gilbert. She finds that often, even as companies find that Web sites are necessary to business, "there's ... an unwillingness to make the investment [in management systems]." One solution is to gradually add management features to the Web site, says Gilbert.
- "The Dot Com Within Ford"
U.S. News & World Report (02/07/00) Vol. 128, No. 5, P. 34; Holstein, William J.
Ford CEO Jacques Nasser is trying to bring his company into the Internet age and has been forming partnerships with high-tech firms such as Yahoo! and Oracle. Nasser's goal is to make the products customers want rather than pushing the products Ford already has by taking personalized customer orders over the Internet though services such as Microsoft's CarPoint. The orders would be fed into a supply chain system Oracle is creating that coordinates Ford's procurement from suppliers. In addition, Ford wants to provide customers with personalized Yahoo! Web pages that offer up-to-date vehicle information and schedule maintenance. Ford's supply chain plan faces a number of technological hurdles, such as linking Ford's many different computer systems with one another, and enabling these systems to accept customer orders. In addition, the incoming data needs to move seamlessly into procurement systems for many suppliers that all have different computer systems. In the past, Ford has ordered supplies six months in advance, based on estimates of how many cars it will produce. These estimates are often revised several times, and the system is wasteful and inefficient. Ford and Oracle are now working together in their Auto-Xchange partnership to build an interactive supply chain that connects Ford's internal systems to those of its suppliers. Eventually, Ford plans to use Auto-Xchange to jointly design vehicles with suppliers. Nasser believes the new system will help Ford better understand customer needs and cut manufacturing expenses.
- "Putting the 'E' Back in E-Business"
InformationWeek (01/31/00) No. 771, P. 45; Wilder, Clinton; McGee, Marianne Kolbasuk
The Internet is revolutionizing the business world, so much so that soon, e-business will simply be defined as basic business. "Timeless, 24-by-7 access to information is becoming the standard way of doing business," says IBM's Ed Kilroy. "Companies' business partners are demanding it, and just as important, their competitors are driving them to provide it." Often, companies ease into e-business by beginning with initiatives that involve money, then gradually automate other processes. Procurement is one popular first initiative: Chase Manhattan reports that it has streamlined its purchasing process using e-business software, while hotel management firm Stonebridge Companies says that its online system has cut its procurement process from 20 days to 10 days. By the third quarter, Stonebridge plans to Web-enable most of its major business processes, including policy and procedure information and employee training. "It's an important evolution in people's thinking to realize that e-business isn't just one thing--because business isn't just one thing," says Fulton Wilcox, director of technology business development at BOC Gases, which is implementing e-business among most of its processes. While there can be difficulties in setting up e-business, including conflicts among supply chain members and problems in integrating disparate systems, most businesses now clearly understand that e-business is worth the effort. "Two years ago, the burden of proof was really on the e-commerce team to persuade everyone that e-business made sense," says Wilcox. "Now anyone who says we shouldn't be on the Net has a very tough argument to make."
- "Web Retailers Get Energized for E-Holiday Millennium"
Executive Technology (01/00) Vol. 2, No. 1, P. 1; Hickins, Michael
After experiencing record-breaking sales in 1999, successful Internet retailers are already busy planning for the Christmas season of 2000. Holiday shoppers spent $3.3 billion in 1999 between Thanksgiving and Christmas, according to BizRate.com. Online orders were up an estimated 270 percent this holiday season. Traditional catalog merchants such as the Sharper Image tended to perform best under the enormous online demand. "They have the infrastructure, customer service, and logistics in place," says Ben Narasin, CEO of Fashionmall.com, an apparel-mall site. Among those that fell behind were sites that were unprepared to satisfy online orders. "The clear losers were sites that weren't able to control their own fulfillment," says Jupiter Communications analyst Mike May. Throughout the year Internet retailers will be concentrating on building a stronger technological infrastructure, hiring customer service representatives and technical help, and staying abreast of technological developments such as wireless Web applications for cell phones, pagers, and handheld computers. "Wireless applications will have an impact beginning this year," predicts Tom Cunniff, chief creative officer at Web design and consulting firm Fry Multimedia.
- "Connecting the Dotcoms"
Brill's Content (01/00) Vol. 2, No. 10, P. 70; Savan, Leslie
"Old media" has become the advertising vehicle of choice for Internet companies that are not as confident about online banner ads being the best way to establish a brand that consumers can identify. The dot-coms are putting more of their money into print ads, radio, and television, in particular. Competitive Media Reporting says Internet advertisers spent 228 percent more on traditional media during the first half of 1999 than they did during the same period the previous year. The spending amounted to $755 million. In comparison, all other categories of advertisers saw their spending increase by just 5.5 percent. And market observers expect the spending of Internet advertisers on traditional media to soar even higher for the second half of 1999. "The media marketplace is in sellout mode on TV and radio," says Sarah King, account director at Swirl, the ad agency for Petopia.com. "Advertising rates have gone up dramatically. It's mostly because of the dot-com companies." When marketers talk about "share of mind" that online startups are clamoring for, they are not just talking about consumers. Making the right impression on Wall Street in commercials may be even more important to dot-coms that are hoping to receive the blessing of market experts. And old media remains the best way, hands down, to obtain share of mind, which comes from telling a story and reaching an emotional connection with viewers.
- "Europe's Internet Bash"
Business Week (02/07/00) No. 3667, P. EB40; Baker, Stephen; Echikson, William
Europe is looking more like it is on the verge of having an Internet boom, while more American companies with online plans head across the Atlantic in search of new markets. Although electronic business totaled just $15 billion in Europe last year, according to International Data, that number is expected to rise to $178 billion by 2002. Entrepreneurs are now packing First Tuesday gatherings, startups are finding more than one round of venture capital, Web-based business and technology companies are launching IPOs, and consumers are starting to go online to shop for items. In the midst of this Internet frenzy, American companies that have made their way to Europe are opening offices on the continent, commissioning studies, and buying billboards in hopes of being prepared when the market is ripe--just 13 percent of Europeans now go online from their homes. Viewed as the next logical step for U.S. companies, Europe is a market that has an economy that is as large as America's, but has the potential to have 100 million more consumers. However, U.S. companies can expect some very stiff competition from their European counterparts. In fact, some already have. American Online has had to contend with Europe's telephone giants, who view themselves as being the Yahoo! and the AOL of the Internet, being able to subsidize their own ISPs. And in just months AOL saw Dixons soar past it in Britain as the number one Internet service thanks to Freeserve. Like AOL, U.S. e-commerce efforts will find European portals, ISPs, auction sites, investment sites, and the like ready to do serious battle with them. Some European industries, such as automobile makers, are already ahead of their U.S. counterparts in that they have been using sophisticated electronic links before the emergence of the Internet. A greater challenge to American companies could be the direction that the European phone companies want to take e-commerce. The phone companies want to bring mobile Internet to cell phones, and if they are able take the lead in this technology, European companies could also catch and surpass American companies in e-commerce.
- "Life, Auto, Home and Hackers"
Computer Reseller News (01/31/00) No. 879, P. 1; Rogers, Amy
Insurers are adding to their usual repertoire and are now offering policies that protect businesses from data breaches that harm online business. Arnall Golden & Gregory attorney Becky Stone says that mission-critical applications are being transmitted over the Web, which means that people are trying to ensure that the service continues to function. Ace Insurance business development manager Mark Greisiger says that Ace has been selling its Secure Systems product since 1998, and intends to introduce a new one next month--Voyant--that will add liability coverage to policies covering network extortion, hacks, and software damage. Greisiger says Ace sells such insurance mostly to dot-coms, but roughly 30 percent of the policies go to traditional businesses. Hamilton Dorsey Alston Co. risk financing specialist Brad Halliday says that most people are unaware that such policies exist. Insuretrust.com offers security assessments and insurance, and founder Steve Haase says that Internet connections bring up questions both of risk and of accountability. Resellers themselves would rather their customers had security solutions first, before buying insurance.
- "Integrators Pursue Promising Online Tax Projects"
Washington Technology (01/24/00) Vol. 14, No. 20, P. 1; LeSueur, Steve
Internet tax filing solutions are starting to emerge all across the country. Anderson Consulting in Chicago has implemented its EasyTax solution, which company officials say could generate tens of millions of dollars in revenue. Meanwhile, American Management Systems kicks off its pilot program in February, which will be geared towards businesses. Unisys is working to create an online filing system for paying income taxes in Pittsburgh. And before making the jump to the Internet, Kansas and Hawaii are conducting e-filing over the telephone. Dataquest expect state and local governments to spend $972 million on tax and revenues systems in 2004, up from $552 million in 1999. Electronic tax filing is considered to be a major tool because it offers the immediate payment of taxes, quick refunds, a reduction in paperwork, and improved accuracy. However, the issue of people paying taxes online without having to pay credit card companies must be addressed before online tax really takes off. Experts say many people will not want to file their taxes online if they have to use their credit cards--they carry a transaction fee of about 2 percent--to do so. Unisys' Faye Farrington says credit card fees are a major stumbling block to electronic tax filing. The government's role in e-filing is another problem, the tax preparation industry would add. Tax preparation companies do not want the government to have a part in performing tax preparation services for taxpayers. Their opposition led to last year's legal squabble of H&R Block and Intuit with the California Franchise Tax Board. The companies convinced a judge to block the installation of California's e-filing service because it represented a conflict of interest for the state. Such concerns have governments moving more slowly with their e-filing plans as a result. "The changes [that e-filing could bring about] are so large and pervasive that you've got to talk to all the stakeholders," says AMS' Ross Kory.
- "E-Commerce: Rebuilding Business From the Bottom Up"
Silicon Prairie (01/00) Vol. 3, No. 1, P. 12; Coates, James
E-commerce offers companies a wealth of opportunities. E-commerce has gained a reputation for making consumer sales and business-to-business transactions better, faster, and cheaper. Yet while it is the business-to-consumer side of e-commerce that has gained the attention of the media, the business-to-business side has far greater potential, writes James Coates. Businesses can speed processes by automating them, perhaps by using email to immediately contact a group, or using online databases to track supplier's inventories, says Coates. Using electronic transactions, companies such as Coca Cola can benefit by programming a vending machine to raise the price of a soda when the demand is greatest, such as on a hot day. The list of possibilities provided by business-to-business e-commerce is endless, says Coates. Ultimately, companies that will gain the most success in the Internet age will be those that can design new ways to use e-commerce to their advantage, says John Sviokla, who directs digital strategy at Chicago-based Diamond Technology Partners. These discoveries, dubbed "killer apps," can improve companies of any size and of any industry, says Sviokla.
- "Service: The Next Inflection Point"
Computer (01/00) Vol. 33, No. 1, P. 128; Lewis, Ted
By 2003, the U.S. Web-hosting business will grow from the current $3 billion to $15 billion, predicts columnist Ted Lewis. As the rate of advance in technology slows, the service industry will come to dominate e-commerce, which in turn will consume every other form of commerce by 2020. In addition to Web hosting, many IT companies will begin to rent applications and hardware rather than sell them outright. Sun Microsystems' Gene Banman says, "Hosted application services will replace boxed software sales altogether in the next decade. In the future, there won't be applications, there will be network services." The Internet is basically the biggest vending machine ever conceived; companies that make the most of the Internet will focus on providing services for it.
- "Cutting Through the Lip Service of Voice Over DSL"
Upstart (01/00) Vol. 1, No. 1, P. 40; Schmelling, Sarah
VoDSL, a hot topic in the telecom industry, provides carriers with a more effective tool for serving small companies. The convergence of voice and data also allows for a reduction in costs that could lead to lower customer churn, says Copper Mountain's John Reister. Cahners In-Stat Group estimates that the market for VoDSL service will reach $1 billion by year's end. Tollbridge, CopperCom, and Jetstream are the most prominent suppliers of voice gateways, which link circuit-switched voice with the DSL network. Although each of the companies is similar, Jetstream says it was the first, CopperCom argues that it boasts the best toll-quality voice, and Tollbridge says it offers the best quality over existing systems. However, they all believe VoDSL has its advantages for telcos. The suppliers say they have been tapped by numerous carriers to provide their equipment. But few carriers have revealed deployment plans. The market will not really become active until the latter half of this year, says TeleChoice's Beth Gage.