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Volume 2, Issue 58: Friday, May 19, 2000
- "IT Pioneers Create Frenzy of Activity"
Financial Times (05/19/00) P. 15; Maheshwari, Vijai
The Internet is taking hold of Estonia, with 25 percent of the nation's population using the Internet. The area took advantage of the slow development during the recent communist period, installing new wireless technologies instead of new phone lines. Banks saw the Internet as an opportunity to expand without having to deal with the expense of building branch offices. Now farmers use the Internet to keep up to date on agricultural trends and to market their produce, according to an advisor to the prime minister. Tax forms, budget finances, and other public sector needs were made available online by the government. The government also plans to open an IT college this fall with two Scandinavian companies, Ericsson and Nokia, sponsoring student tuition if the students agree to work for those companies upon graduation. In order to fill Scandinavia's shortage of IT specialists, Estonian companies are developing specific high-tech products so the Scandinavian companies can outsource to them. Although less cash is available than in other parts of the world, there is a significant number of Internet startup companies in the Baltic region drawing the interests of venture capitalists to the area. The largest bank in the Baltics, Hansabank, is buying into local IT companies through an Internet fund it created, and foreign investors are even more prominent in the area. Two other countries in the Baltic region, Latvia and Lithuania, are catching up with Estonia, the area's current IT industry leader. Entrepreneurs are considering creating business links with Russia as well.
- "Intel Tops Cisco in Market Value"
CNet (05/18/00); Ames, Sam
Intel yesterday reached market capitalization of $413 billion while Cisco had market capitalization of $385 billion. Intel plans to split its shares two-for-one in a little over a month. One analyst says that Intel is the only reliable major technology company in terms of investment, despite a recent decrease in stock value. General Electric has the highest market capitalization, however, at $527 billion.
- "New Virus More Destructive Than "Love""
CNet (05/18/00); Festa, Paul
A new virus, more destructive than the love bug that recently swept the world, is on the loose. The virus is not widespread, but because it is a worm, a few cases can quickly become a worldwide issue. The new virus, which targets Microsoft Outlook and sends itself to all the contacts in the infected computer's address book, is written as a VisualBasic attachment recognizable by the ".vbs" suffix. Computer data, programs, and crucial operating software can be destroyed and files on both network and local drives are targeted. Antivirus crews working to eliminate the new threat are having difficulty due to the virus' ability to mutate subtly. A random subject header from documents on the victim's own computer is adopted by the virus, preceded by "FW:," and then the virus uses the new name as its own, followed by ".vbs". To throw off antivirus scanners, the virus puts random text in the VBS script. All of the various mutations have "FW" as a subject header and come with a blank email body, meaning a filter could be used to block such messages. The new virus does not share source code with the love bug virus, and therefore is not a mutation of the earlier bug, says Vincent Weafer of Symantec. Microsoft has created an upgrade that would be effective against the virus, but the company has not yet released the program.
- "New Cooperation in Taming the Wild Web"
Christian Science Monitor Online (05/18/00); Ford, Peter
Participants at this week's Group of Eight cybercrime conference pondered weighty issues such as how and where the line should be drawn between privacy and freedom on the Internet. This type of debate often pits governments versus the tech industry. "Governments used to say they'd tell us what to do, and the industry said it was too new to be burdened" by regulation, said Internet Alliance Executive Director Jeff Richards. "Today they are figuring out solutions together, and at the very least there is a new urgency," Richards explained. "Pragmatism for the first time overcame ideology." Many participants echoed Richards' comments, noting that teamwork and a sense of urgency are needed to catch criminals on the Internet.
- "Congress Hears From Industry, Privacy Groups"
Newsbytes (05/19/00); Krebs, Brian
- "Warning to T-Online on Content Despite Growth"
Financial Times (05/19/00) P. 27; Harnischfeger, Uta
German ISP T-Online yesterday reported an impressive first-quarter showing in sales growth and number of new customers recruited, but tempered these results with the warning that its growth will slow over the coming two quarters due to "seasonal reasons." T-Online is bracing for the slowdown in part because Internet users tend to go online less during summer months. T-Online's stock dropped nearly 6 percent on news of the warning. T-Online's subscriber base hit 4.9 million in March, up 64 percent from the end of the first quarter last year. T-Online's earnings and subscriber growth met with approval from analysts, who were nonetheless unimpressed with the pace at which the ISP has been acquiring content. Indeed, analysts predicted that T-Online must increase the amount of content it offers if it hopes to be recognized as one of the top European ISPs in the long run.
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- "Two European Web Auction Sites to Merge to Fight eBay's Inroads"
Wall Street Journal (05/17/00) P. A23; Boudette, Neal E.
The two biggest homegrown Internet auction sites in Europe are merging to fight inroads made by U.S. auction behemoth eBay. Britain's QXL has finalized an agreement with the German company Ricardo.de to purchase the latter in a pure-stock deal worth $1 billion, thereby creating a pan-European group with Web auction sites in 12 countries and 1.3 million registered users. Although the merged concern, QXL Ricardo, will have more users in Europe than eBay, it still lags far behind its rival in revenue. EBay's European operations, which attract about 750,000 European users, have brought in gross revenues of $87 million in the first quarter, compared with Ricardo's results of $22.4 million in the comparable period, and QXL's results of $7.8 million in the final quarter of 1999. The merger comes at a time when eBay has started to expand beyond its base in Germany, particularly into France and Italy. QXL Ricardo currently has sites in Poland, Norway, Italy, Spain, Denmark, Switzerland, the Netherlands, France, Germany, and Britain, and with QXL's pending purchase of Sweden's Bidlet, will also get sites in Finland and Scandinavia.
- "Bertelsmann Changes Focus"
Financial Times (05/17/00) P. 20; Harding, James
The recent deal between Lycos and Terra Networks includes some side-agreements with Telefonica that will create new opportunities in the Spanish-speaking world for Bertelsmann. Bertelsmann has created an alliance with Telefonica worth $1 billion to develop e-commerce operations and services available to users in Latin American and Spain on the platform created by the Terra-Lycos deal. The service will include online sales of music, books, and magazines provided to Bertelsmann by the Terra-Lycos partnership. Bertelsmann announced in March that it would sell its 50 percent stake in AOL Europe in an effort to move away from Internet service provisions and focus on the development of e-commerce. Bertelsmann CEO Thomas Middelhoff said his company had been wanting to leave the Internet service provider business since last year so it could concentrate on e-commerce.
- "AT&T Wireless Offers Free Net Access"
New York Times (05/18/00) P. C23
AT&T Wireless intends to supply its subscribers with unlimited access to a select group of Web sites. The offer is an attempt to profit from future growth in mobile Internet access. With the purchase of one of two new AT&T Wireless phones and a subscription to the company's wireless services, customers will receive free access to 40 Web sites, according to the company. Ericsson and Mitsubishi are manufacturing the phones for the service. The service, called PocketNet, is expected to increase wireless customer retention rates, according to president and CEO of AT&T Wireless Services, Mohan Gyani.
- "A Weak Response to Virus"
Washington Post (05/19/00) P. A29; Gordon, Marcy
The Government Accounting Office (GAO) says the federal government was very slow in its response to the "I Love You" virus. The GAO contends that the FBI's National Infrastructure Protection Center did not warn other federal agencies of the virus until 11 a.m. on May 4, many hours after most of the agencies had been attacked. The FBI did not post any tips or plans on how to combat the virus until 10 p.m. the same day. The GAO says the virus crippled the Social Security Administration for five days, seriously damaged over 1,000 NASA computer files, and caused the Pentagon to switch employees from normal functions and enlist them to help fight the virus. The Department of Health and Human Services was hit especially hard, and a department official said if a biological disaster had occurred simultaneously, "the health and stability of the nation would have been compromised."
- "Web Also Revolutionizing ID Fakery"
Washington Post (05/19/00) P. E1; Mayer, Caroline E.
Web sites that purvey bogus identification documents are proliferating across the Internet, allowing customers to purchase software or download programs that can create driver's licenses, birth certificates, immigration cards, and other personal identifiers. Law enforcement officials say that they are alarmed at the ease with which these documents can be forged, and are surprised at how sophisticated and realistic the bogus identification looks. David C. Myers, identification fraud coordinator for Florida's Division of Alcoholic Beverages and Tobacco, says that roughly 30 percent of the fake IDs that he currently sees were purchased or created via the Internet, as compared to only 1 percent just two years earlier. Myers says that a successful purveyor of bogus IDs on the Web can make more than $1 million a year. Law enforcement officials also contend that the Internet has facilitated obtaining false documents and personal financial information by criminals. Particularly popular right now is the scam where criminals use bogus IDs to open bank accounts, and then deposit counterfeit checks from large corporations into the account. The account is then closed, and the money is withdrawn from the account in cash, all before the banks catch on to the fact that both the check and the customer are phony. Congress will begin holding hearings on the matter today, and will study the possibility of increasing penalties for creating and using fake documents. Currently, the crime can land someone in prison for three years to 25 years, depending on the case.
- "Lucent to Add Over 2,000 Jobs"
New York Times (05/19/00) P. C3
Lucent Technologies announced Thursday it would invest $40 million to expand its manufacturing of optical networking components in Southern California, increasing its workforce by 450 in the next year and a half. The company also said its European workforce would be expanded by 2,000 in the next six months, citing nearly 50 percent growth in its business there. Lucent is expanding its workforce and manufacturing to compete against companies Nortel Networks and Cisco Systems, which provide advanced optical and wireless gear to telecom operators. As a result of the California expansion, the output of Lucent's factories in the regional will increase sixteen fold. Lucent also announced having received a $51 million order to expand Egyptian Company for Networks' data network. Lucent has formed a four-year, up to $600 million supply agreement with the company.
- "Yahoo! Signs Mobile Phone Content Deal"
Financial Times (05/19/00) P. 26; Harvey, Fiona
Telecom Italia Mobile formed an agreement with Internet portal Yahoo! yesterday to receive content for its WAP service. Yahoo! will provide TIM subscribers with access to its e-mail, news, sports, and other information. TIM, Europe's larger wireless phone operator, is also Italy's exclusive WAP service. Financial terms of the deal were not revealed. Teather & Greenwood analyst Simon Baker believes the deal is an indicator of the integration of media, telecom, and technology industries.
- "Boo.com's End Darkens Picture for E-Tailing"
Wall Street Journal (05/19/00) P. B8; Gruner, Stephanie
In an announcement likely to further shake investors' confidence in high-spending Internet retailers, online fashion retailer Boo.com yesterday said it has no more money and is going out of business. Boo.com made its high-profile online debut only six months ago, claiming to be the first truly global online retailer. Experts say the news comes as no surprise, noting that Boo.com spent lavishly on senior managers and failed to make wise investments in technology. For example, the company's Web site offered advanced graphics, but few online shoppers have the high-speed access needed to appreciate the technology, says Forrester Research's Rebecca Ulph. Boo.com's failure is a reminder that Internet startups, like any other business, must have effective budgeting, planning, and execution, says Jim Rose of online auction house QXL.com.
- "Secrecy for All, as Encryption Goes to Market"
New York Times (05/18/00) P. E1; Guernsey, Lisa
As Internet and computer privacy issues rapidly move to the forefront of public concern, companies in the cryptography field are doing what would have been unthinkable just five years ago--making big money. Companies that offer anonymity to Web users or protect emails from prying eyes say privacy products are now moving into the mainstream as people become more aware of how vulnerable their computer files are. Privacy experts say users want protection from identity theft, spam, and investigators who search hard drives for incriminating emails. Consumers also want the ability to avoid online firms gathering personal information that can be sold to third parties. The recent upswing in privacy concerns has coincided with the federal government's decision to liberalize regulations regarding encryption technologies, including their export to foreign countries. Privacy firms can choose to make profits by either selling their software and services directly to customers, or by offering the products and services free of charge and selling advertising. However, critics of the second approach say companies that take ad money end up beholden to their advertisers, often to the detriment of the customer's privacy. Some of the larger privacy proving services are Anonymizer, PrivacyX, Freedom, Hushmail, and ZipLip.com.
- "Burlington Northern Is Locked in Privacy Fight"
Wall Street Journal (05/17/00) P. B8; Orey, Michael
Earlier this week former Burlington Northern Santa Fe employee William Purdy posted on the Internet the first digit of company CEO Robert Krebs' Social Security number as a protest against certain company policies. Purdy says he intends to post additional digits of the Social Security number on his personal Web site in a continuation of the protest. Purdy threatened in the past to reveal the Social Security numbers of hundreds of the company's upper-level employees on his Web site. Burlington Northern countered this threat by suing Purdy. Purdy came upon the company's Social Security information by chance, when he received a company email that went astray. A Minnesota court granted Burlington Northern's request for a preliminary injunction, preventing Purdy from posting employees' Social Security numbers. However, the injunction was overturned on appeal on May 5, opening the way for Purdy to post Krebs' Social Security number on his Web site.
- "Europe's First Multi-Access Web Portal"
BBC News (05/17/00)
Vodafone Airtouch, Vivendi, and Canal+ formally announced more details surrounding the introduction of Vizzavi, Europe's new portal site that is slated for a multi-country launch this year, starting with France in a few weeks' time. After the French rollout, the portal is scheduled to enter the U.K. market in July, followed by introductions in Germany and Italy before the year is out. Vizzavi is being touted as Europe's first multi-access Web portal, and more than 70 million Europeans will use the site as their default portal. Vizzavi will likely feature more than 200 services, including content, email, an address book, calendar, voice recognition capabilities, and video conferencing and video messaging services for third-generation mobile phones. The companies backing Vizzavi say they would like to place Vizzavi on the market within two years, which would allow the portal to go on an acquisition spree. Vizzavi headquarters will be located in London.
- "Pa.'s Improved Web Site: What's in It for Microsoft?"
Philadelphia Inquirer (05/19/00) P. C1; Halper, Evan
Through free consulting provided by Microsoft, Pennsylvania hopes its new state government Web site, PA PowerPort, will open as the quickest and most extensive state government site nationwide. The site would link to free services provided by Microsoft, and Pennsylvania is not receiving any monetary compensation from the company, despite the fact that similar high traffic links normally would be very expensive. As the Internet economy strengthens, government Web sites will probably be an area where a great deal of money is made on advertising contracts, experts say. Microsoft points out that although the venture will be valuable to the company, links to other companies will be on the site. Pennsylvania officials agree with Microsoft, saying links were only a small portion of the overall deal and were not the factor that stimulated competition from other high-tech companies, such as Oracle and SAP America, which also submitted proposals. Microsoft's $100,000 worth of services will be used to help the state develop the site into a portal that could be used as a home page or staging point to enter the Web. By providing free services such as email and weather services on the site, Microsoft would gain customer loyalty, according to W. Russell Neuman of the University of Pennsylvania. The site would enable users to renew their driver's licenses, obtain hunting and boating permits, and obtain homework assignments from their schools via links.
- "E-Power to the People"
Washington Post (05/18/00) P. A1; Cha, Ariana Eunjung
While music companies are currently locked in bitter copyright-infringement battles over college students using Napster to swap music files over the Internet, a more sophisticated version of the program is now on the loose in the form of Gnutella. Created two months ago by AOL's Nullsoft unit, Gnutella is a software tool that directs a user's query for a file to 10 other computers, and if none of the computers has the file, the 10 ten computers will each contact 10 other computers. This searching sequence continues until all of the computers on the Gnutella network have been searched. Gnutella decentralizes the Web in that users do not have to use a storage center to trade files, which means the network of users cannot be shut down until all of the computers on the network have been unplugged. The fact that Gnutella enables Web surfers to freely exchange everything from digital music files to political propaganda was enough for AOL to take the "unauthorized freelance project" off the Nullsoft Web site within 24 hours. However, software developers had already copied the program and about 10,000 people were able to download it. Gnutella is the type of product that would move the Internet toward becoming a completely decentralized system, as the original architects of the Internet intended. However, the software could also crumple the plans of multibillion-dollar corporations like AOL, Amazon.com, Yahoo!, and Microsoft that want to turn the Internet into a global marketplace. Concerns about lawsuits may prevent widespread use of Gnutella. Furthermore, security experts say the Gnutella network could become a gathering place for hackers, terrorists, pornographers, and other malevolent users. However, Gnutella users say software that protects copyrights can be created.
- "Boom in Tech Jobs Expanding in U.S."
SiliconValley.com (05/16/00); Bjorhus, Jennifer
The American Electronics Association and Nasdaq on Tuesday released the annual Cyberstates report, announcing that California still leads the U.S. technology industry, but other states are quickly catching up. The report is based on U.S. government data, and does not include industries such as biotechnology or research and testing services in its definition of the high-tech industry. In 1999, 5 million workers were employed by the high-tech industry in the U.S. Tech employment trends continue to demonstrate a move from manufacturing toward services, and tech jobs are still paying better than they used to. The report predicts systems analysts, computer support specialists, and computer engineers with college degrees will have major growth over the next eight years. The state-by-state comparisons offered in the report are also revealing. California is the number one state in employment, except in photonic manufacturing jobs, and also is the top exporter of high-tech products. However, other states are quickly catching up to California. Higher rates of tech job growth were reported in states such as Washington, Kansas, Colorado, and Georgia. The highest average high-tech wages were in the state of Washington, primarily because Microsoft and other prepackaged software engineers and developers are located there. Colorado has the highest concentration of technology jobs, determined by the percent of total high-tech private sector jobs, and is one of the top high-tech employers.
- "First Security"
Industry Standard (05/15/00) Vol. 3, No. 18, P. 236; Frank, John N.
Online banks have had relatively few security problems so far as compared to other e-businesses because most spend between one-eighth and one-quarter of their operational spending on security-related technology. To secure their Web sites, banks use customer authentication, which can range from simple questions such as asking a customer's mother's maiden name to more sophisticated technologies that can immediately verify whether someone is who they say they are. Banks also monitor accounts, looking for any suspicious activity that could be a sign of an online thief. In addition, banks place a high priority on the security of the Web site itself, as talented hackers could use the site as a conduit into a bank's internal database. To prevent this from happening, banks use firewalls and many also farm their online endeavors out to outside vendors that keep data on their servers instead of on bank servers, thereby adding another layer of security. Many banks use encryption when sending messages to account holders, and some use digital certificates to let customers know they are communicating with the real bank and not a bogus site set up by con-artists looking to steal money or personal account information. Banks also employ personal firewalls and anti-virus software on employee PCs to block hackers who are attempting to enter the system through generally less-secure PCs.
- "Should I Stay or Should I Go?"
Newsweek (05/15/00) Vol. 135, No. 20, P. 45; Levy, Steven
In a recent article for Newsweek, Steven Levy considers whether it is worth sticking with Apple products in an increasingly Windows-dominated world. Levy says the iMac and its follow-up, the iMac SE, are beautiful to look at, and the iMac SE improves on the original by having more memory, more storage, DVD drives, and a high-speed Ethernet port with which to hook up to a cable modem. Levy also praises the iMovie digital filmmaking software and the portable iBook for their simplicity and user-friendliness. However, Levy says the downside to Apple is that many software companies do not write programs for Macs, and many of the hottest selling computer games are for Windows exclusively. Although Apple insists that Mac users have plenty of options and that more Mac-compatible software is in the works, Levy says Windows users still have the upper hand when it comes to choice and selection. In the end, the choice of whether to stay with Apple products is an individual one, Levy says. The Mac has an emotional sway with many people that other computers simply do not have. The question Levy says customers need to ask themselves is whether this loyalty is strong enough to withstand being "semi-marginalized" in a world built for Windows.
- "Defining 'Spam' Technically Isn't Easy"
Computerworld (05/08/00) Vol. 34, No. 19, P. 12; Thibodeau, Patrick
Direct marketers, businesses with Web-based operations, consumer groups, and legislators are likely to face some difficulty in getting to the root of spam because the definition of such electronic messages is not set in stone. While spam is considered to be unsolicited commercial email, both federal and state lawmakers are working on legislation that would add "opt-in" and "opt-out" language to email that would alter the definition of spam. For example, many direct marketers like the opt-out approach, which means that Web-based businesses can send unsolicited commercial email to Web surfers and that computer users would be responsible for removing themselves from a company's mailing list. Even with the opt-out language, many experts still see the sending of such unsolicited commercial email as spam. As many as 16 states already have anti-spam laws. On Capitol Hill, Congress will consider the Unsolicited Electronic Mail Act, which seeks to offer civil litigation as recourse for those who receive spam. ISPs also would be able to seek financial damages. However, direct marketers and companies doing business online are likely to object to the provision that essentially requires them to know the policies of every ISP. Moreover, the bill would give ISPs free reign in writing their policies. While filtering software has been considered a solution to the spam debate, some experts contend such technology would not be able to differentiate between email and spam.