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Volume 2, Issue 143: Monday, December 18, 2000
- "In Silicon Valley, No Time to Be Jolly"
Washington Post (12/17/00) P. A1; Streitfeld, David
Dot-coms in Silicon Valley that spent lavishly before the market downturn are being miserly this holiday season as stock values shrink and the list of collapsed companies grows. Online firms that are still standing are cutting back expenses to avoid falling victim to the ongoing shakeout, which continues to bring layoffs and shutdowns. For example, at a charity auction in San Francisco last year GotMarketing.com bid $210,000 for a walk-on part on "Ally McBeal" just to promote the startup's brand. At this year's auction, the largest bid came from Microsoft, which paid $22,000 to rent a highway billboard for one month. Many Silicon Valley firms canceled holiday parties or scaled down the events. Workers who attended holiday parties discussed how much they lost on stocks and sized up the devastation in the dot-com sector by looking at sites such as the Internet Wasteland Web page, which lists the 274 Internet stocks that have dropped at least 80 percent this year. However, some companies and workers are responding to the situation by working harder. Dot-coms are starting to focus on profitability, with some companies appointing executives in charge of revenue--a move that would have been unnecessary last spring when venture capitalists threw money at online companies. Dot-coms can no longer afford to ignore revenue and solid business models, says Round Zero co-founder Nirav Tolia. "This is a performance-based economy," Tolia says.
- "Silicon Valley Insiders Say Bush Will Be Good to the Industry"
San Francisco Chronicle (12/15/00); Saracevic, Alan T.; Zito, Kelly
President-elect George W. Bush will likely help the technology industry, analysts say. Although Bush has never presented himself as a great proponent of computers and the Internet, he has several allies in the tech industry and his pro-business outlook should mean good news for the leading firms. Some analysts even expect that a few high-profile Republicans from the tech industry could receive appointments to the Bush administration. Former Netscape CEO Jim Barksdale is a name frequently mentioned for such a position. Analysts say Bush's policies will likely benefit both Republicans and Democrats in the industry, as technology tends to be non-partisan. However, industry giants could be the big winners, as the Bush administration will take a more hands-off policy in terms of government regulation. A big winner could be Microsoft, as the Bush administration may be less likely to pursue a break-up of the company, especially if the company wins its current appeal. However, some analysts say the policies of the Bush administration could hurt startups and smaller technology firms. Also, the Bush administration will likely be more sympathetic to corporations that want to restrict access to content on the Internet.
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- "EToys' Disappointing Forecast Prompts Hard Look at Rest of E-Commerce Sector"
Wall Street Journal (12/18/00) P. A3; Bannon, Lisa
EToys CEO Toby Lenk has announced that the online toy retailer is facing "a major disappointment" in holiday sales this season and that the company may agree to be purchased by another company. EToys had originally forecast sales as high as $240 million for the quarter ending Dec. 1; the company now says sales could be as low as $120 million. The drop in forecasted sales is expected to significantly decrease the company's ability to survive on its own, says Lenk. Thus, the company has retained the services of Goldman Sachs to examine "strategic alternatives." EToys expects to burn through its remaining cash by March unless it receives additional funding. Wall Street analysts say the bad news could portend even worse things for the rest of the e-commerce sector. Banc of America Securities analyst Tom Courtney says eToys' announcement could mean the entire e-commerce sector will slow down. The mistakes made by many online retailers last Christmas did not help eToys' prospects--or consumer trust in the Internet. "Many consumers are terrified about e-tailer delivery problems and solvency this year, so they're going to brick-and-mortar retailers," says Internet analyst Tom Wyman.
- "To Old-Time Techies, Dot-Com Troubles Ignore the Lessons of History"
Washington Post (12/17/00) P. L1; Johnson, Carrie
Tech-industry veterans say young tech workers should not overreact to the current economic slowdown. The tech economy is cyclical by nature, say tech veterans, pointing out that investors in the 1960s, as in recent years, showered capital on fledgling electronics firms without sound business strategies but saw the market hit hard by the recession of 1971. Similarly, sound business plans will overcome the current slowdown, argues veteran high-tech venture capitalist Art Marks, who says of the Internet boom, "It ignored basic principles--that the value of a company should be based on a stream of future profits and not on a dream of future promises." However, many long-time tech workers complain that the new generation is so focused on being original that they are ignoring the lessons of the past.
- "Thinly Veiled"
MSNBC.com (12/13/00); Meeks, Brock N.
People who post anonymous, often critical messages on the Internet are being unmasked by the courts when public officials and corporations sue for defamation. But several recent court cases could reverse this trend. In November, Pennsylvania Judge Stanton Wettick Jr. protected an anonymous Web critic of Allegheny County State Superior Court Judge Joan Melvin by ruling that online identities do not have to be revealed until the accused has had an opportunity to disprove the defamation charges. Until this ruling, "a public official or employer claiming defamation could get a court to disclose the name of an anonymous Web author simply by filing a lawsuit," points out ACLU attorney Ann Beeson. Another case took place in New Jersey shortly after, when Judge Kenneth MacKenzie prohibited the unmasking of two anonymous writers who posted critical comments about Dendrite International on a Yahoo! message board. However, MacKenzie allowed two other Web authors to be subpoenaed for not coming forward to challenge Dendrite's lawsuit. Identities can only be disclosed if the suing companies can prove their allegations, according to MacKenzie's decision. Rulings such as Wettick's underline the importance of anonymity, especially in light of the thousands of pseudonymous people who have been criticizing Florida judges online during the election fiasco, notes Witold Walczak, executive director of the Greater Pittsburgh Chapter of the ACLU .
- "Future Christmas Gift: A 'Spintronic' PC?"
Christian Science Monitor (12/13/00) P. 3; Savoye, Craig
Stuart Wolf of the Defense Advanced Research Projects Agency (DARPA) believes that the spin of electrons can lead to a whole new category of electronics. Electron spins can be controlled through spin polarization--a key property in the development of "spintronic" devices. Storage technology based on spin polarization has been adopted throughout the industry since IBM introduced a pioneering product in 1998. Experts postulate that spintronic research could yield enormously powerful devices such as quantum computers, heat-free chips that can permanently store data without a hard drive, and instant-on, instant-off computers. A team led by Wolf is attempting to develop spintronic PC memory chips, and their research is being transferred to private industry. The U.S. military hopes to apply spintronics to weapons and communications systems, while DARPA's Spin in Semiconductors project is investigating the possibility of incorporating spin into logic chips and optical devices. A quantum computer or quantum data system is the goal of the Quantum Information Science and Technology program. "You could build a computer exponentially faster than today's machines [with spintronics], so what might take a year to solve on today's computers you could solve within half an hour," speculates physicist David Awschalom of the University of California, Santa Barbara.
- "Cybervoting: Beyond the 'X'"
Ottawa Citizen (12/18/00) P. A11; Duffy, Andrew
Due to a steady decline in Canadian voter participation, particularly amongst voters 25 years of age and younger, Elections Canada is looking into online balloting. As soon as technology that cannot be breached by fraudulent users and hackers is developed, Canadians will be permitted to vote online, says Chief Electoral Officer Jean-Pierre Kingsley. Biometric technology will most likely be utilized to secure online voting, says Kingsley. However, the size of an online vote in Canada is still too large for the new technology. The government would have an immense task creating a database that contains the biometric identifiers of each eligible voter prior to voting day and then authenticating each voter before they cast a vote. Canadian Internet security firm Chrysalis-ITS created a consortium of Internet security and encryption software companies, including VeriSign and Entrust Technologies, to put forward the Internet's potential as a voting venue. This group already has made its case to the U.S. chief electoral officer and intends to meet with Kingsley. Digital certificates would be used, and this technology can prove that a single vote is cast for each certificate. However, there is no way to prove that the person who voted was the one who was issued the certificate. Telephone and electronic kiosks, which are like ATMs, have more potential and are safer than the Web when it comes to voting, according to a 1998 report commissioned by Elections Canada. Online voting could be a good way to help individuals overseas or in nursing homes to vote, says Elections Canada spokesman Hal Doran.
- "XML Factions Develop Along Familiar Lines"
InfoWorld.com (12/14/00); Johnston, Margret
Microsoft and Sun Microsystems both announced new XML (extensible markup language) initiatives on Wednesday, then both immediately accused the other of trying to steal the spotlight. Microsoft touted BizTalk Server 2000, the gold version of which is now being manufactured or should ship early next year, while Sun displayed ebXML (electronic business XML) technology. BizTalk Server 2000, part of Microsoft's BizTalk Framework, is an XML-based product that is designed to allow integration between different platforms over the Internet. Microsoft officials said BizTalk Framework applications have been in use for over a year now, whereas Sun's ebXML is unproven and still not past the spec stage. Sun officials countered that ebXML will be ready next February. The officials noted that ebXML is part of the Organization for the Advancement of Structured Information Standards (OASIS), a United Nations-supported effort to develop a common data language for business transactions. Microsoft has been reluctant to join OASIS, Sun officials say. They claim that BizTalk, while an XML product, is not really dedicated to open standards. Analysts are uncertain which company has the upper hand. Illuminata analyst Jonathan Eunice notes that Microsoft is well ahead of its competitors in the XML market, but does not have "a tremendously open relationship with the people who are defining the mechanisms of the conversations."
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- "Actors Urge Anti-Piracy Protection on Net"
The International Federation of Actors (FIA), a group that represents actors, dancers, and singers in 70 countries, is urging the United Nations' World Intellectual Property Organization (WIPO) to give artists greater copyright protections on the Internet. The FIA would like the WIPO to include the protections in a treaty that is up for vote by Dec. 20. Artists' images and works are being exploited by digital pirates, representatives for the group said. "We need to put a stop to this or at least have some kind of legal rights protection...because it will be bigger and bigger and never stop unless there is some law," said critically acclaimed Hong Kong actress Maggie Cheung. The FIA's general secretary, Katherine Sand, notes that liberties have been taken with the images of U.S. performers on the Internet.
- "Study: Firms Still Bullish on B2B"
E-Commerce Times (12/13/00); Macaluso, Nora
Half of 105 executives surveyed by consulting firm Arthur Andersen believe online business-to-business marketplaces will be a "critical means of competitive positioning" for the next year. Andersen's survey of high-level executives from mid- to large-size startup and high-tech companies in the United States compares favorably with a similar study the firm conducted in June. Research firm eMarketer also is bullish on the future of B2B, reporting that 79.2 percent of $4 trillion in e-commerce spending in 2004 will be in the B2B space. Although the initial investment required to participate in a digital marketplace was listed by 42 percent of the executives to be their biggest challenge, 30 percent of those participating in exchanges say they have realized a return on their investment, with the average amount being 29 percent. Other potential barriers include the prospect of long-term viability of the exchanges, the task of training employees, the lack of in-house resources, and whether suppliers would join. "Despite these considerations, companies are continuing to realize that these marketplaces will play a key role in the future of B2B," says Andersen partner Kevin Costello.
- "Is Carnivore Dangerous? Controversy Continues"
Computerworld (12/11/00) Vol. 34, No. 50, P. 24; Meehan, Michael
Five researchers studying the FBI's controversial Carnivore email monitoring system say they have major reservations about the technology, contradicting a more glowing report by the IIT Research Institute (IITRI) released several weeks earlier. The researchers contend that the "limited nature of the analysis described in IITRI's draft report simply cannot support a conclusion that Carnivore is correct, safe, or always consistent with legal limitations." The researchers also suggest that the government publish Carnivore's source code so that the public would have greater confidence in the system, a move long advocated by civil liberties and privacy groups. The researchers say they are especially concerned with Carnivore's "vague and changeable" audit trails; without a fixed audit trail, it is basically impossible to tell who or what has been monitored by the system. The researchers' study will be reviewed by the U.S. attorney general's office by the end of December, along with the IITRI report and any other studies dealing with Carnivore.
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- "Still Waiting for the Internet Impact"
National Journal (12/09/00) Vol. 32, No. 50, P. 3836; Fogg, Piper
Although presidential and congressional candidates were able to break new ground in Web site design and grass-roots organizing, high-tech campaigning experts were not overly impressed with the manner in which the Internet was used for the 2000 elections. Although Robert Arena, an Internet consultant to Republicans, was disappointed in the fact that candidates were unable to enlarge their list of subscribers for campaign email, E-Voter Institute President Karen A.B. Jagoda said campaigns could have used the Internet to raise more money. Michael Cornfield, an associate research professor at George Washington University who has studied the way in which politicians integrate technology into their campaigns, says politicians could have done a much better job of advertising their Web sites on other sites, or finding ways to make their Web addresses more well known. He says the Democrats bought just one banner ad this fall. Still, 18 percent of Americans went online for campaign news this year compared with 4 percent in 1996, according to a new study by Pew Research Center for the People and Press. Larry Purpuro, Deputy Chief of Staff of the Republican National Committee and head of the Internet team for George W. Bush, says the Web initiatives of politicians should not be compared to what large companies do online because campaigns are short-term projects and do not have access to deep pockets. Getting politicians to sit down with a Webmaster is still a grind, says Purpuro.
- "A Tale of 60 High-Tech Cities"
Electronic News (12/11/00) Vol. 46, No. 50, P. 2; Elliott, Heidi
High-tech is everywhere and those employed in the industry are generally better off than other workers, according to a new study from NASDAQ and the American Electronics Association (AEA) that surveyed high-tech employment in 60 cities across the U.S. The study, "Cybercities: A City by City Overview of the High-Technology Industry," counted employees in three industries: industrial electronics, semiconductors, and computers. San Jose, with 252,900, had the most workers in the high-tech industry, with one in four workers in the city employed in the high-tech field. The top five also included Boston, Chicago, Washington, D.C., and Dallas. According to the study, a total of 1.1 million high-tech jobs have been created since 1993. In the past five years Colorado Springs, Colo., has seen the greatest growth in high-tech employment, an increase of 77 percent, the study says. San Francisco, Houston, Denver, and Sacramento also showed strong growth. The study also found that Boston is home to the most high-tech businesses, while San Francisco's high-tech businesses took in the most venture capital. The study revealed that high-tech workers in Seattle have the highest average salaries at $129,300 a year. In San Jose the average wage is $81,500. AEA's John Hatch says, "High-tech is everywhere--it's pervasive."
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- "Too Much Information"
Computer Reseller News (12/11/00) No. 924, P. 58
The storage requirements for the world's total annual production of print, optical, and magnetic content is about 1.5 billion GB--250 MB for every person on Earth, according to a report from the University of California at Berkeley's School of Information Management and Systems. The report identifies an emerging dominance of digital content and a growing number of average individuals gaining access to and producing vast amounts of information, a trend known as "democratization of data." The production of digital information is growing faster and generating more content than print and film, the report indicates. Optical and digital magnetic storage system shipments double each year, compared to virtually no growth for unique film and print content. The report finds that documents produced by office workers account for over 80 percent of all original paper documents, while X-rays and photographs comprise 99 percent of all original film documents. Camcorder tapes account for a significant portion of all magnetic tape unique content storage and digital tapes are mainly used to back up materials stored on magnetic drives. Approximately 55 percent of all hard drives are installed on single-user desktop PCs, according to the report. A large difference exists between upper and lower magnetic storage bounds because a considerable fraction of an individual user's hard drive content is not unique. However, more individual digital content will be stored on hard drives as more image data is transferred to those drives, the report predicts. Data democratization is likely to continue because digital data is fluid and easily searchable, and can also be copied and disseminated at affordable prices.
- "The Little Country That Could"
Industry Standard (12/11/00) Vol. 3, No. 50, P. 116; Perera, Rick
E-government is a reality in Estonia, only 10 years ago a part of the Soviet Union, now a fledgling, independent nation. Nearly all of the country's government business occurs online, with lawmakers reviewing and voting for bills over the Internet. The lawmakers' meetings are Webcast, and transcripts and all but classified government documents are available online. Although Estonia is a small nation, with a population of 1.4 million, it now has a higher per-capita rate of citizens connected to the Web than Germany. Those who do not have Web access at home can visit one of the government's new public kiosks. Government officials say Estonia has been successful at implementing e-government because it had to build its computer systems from scratch after the collapse of the Soviet Union and so was not burdened by legacy systems. Also, high-tech firms in the nearby Scandinavian countries have tested many of their latest developments in Estonia. News about Estonia's success has spread quickly, with officials from many other nations stopping by to examine the system. Ros Docktor, a consultant with the U.S. firm McConnell International, says, "It really is paperless government. No other country is doing this."
- "Mission Impossible"
Wired (12/00) Vol. 8, No. 12, P. 130; Bayers, Chip
As Esther Dyson's term as interim board chair at ICANN comes to a close, ICANN is left reflecting on its past decisions under Dyson and its future role under a new chairperson, likely WorldCom senior vice president Vint Cerf. ICANN was created as a new type of governing body that could make important decisions quickly as it implemented rules for numbered IP address distribution, assigned numbers to domain names, and decided whether new top level domains ought to be introduced. Jon Postel originally distributed a plan to develop an international Internet management group located in Geneva that would shoulder the Commerce Department's control over IANA and Network Solutions, as well as introduce some 150 new TLDs. However, the idea was temporarily stopped as NSI spread rumors that foreigners were taking control of the Internet. Later, ICANN was created under a watered down version of Postel's original ideas, and the organization immediately stepped into controversy. Esther Dyson entered the fray as the appointed interim chair. Previously, Dyson had been a supporter of free market solutions, and that background clashed a little with ICANN's role as a regulatory entity. Because ICANN was in a position to leverage a great amount of power and the media was so disruptive to ICANN's ability to function, Dyson tried to portray ICANN as holding a smaller role. Although Dyson did downplay ICANN's role, she also opened its meetings to the public, and she successfully overcame NSI's attempts to hamper ICANN. "My job at ICANN was not to make it do what I wanted it to do--it was about trying to foster consensus," says Dyson. As Dyson steps down, the board will be addressing the issue of domain dispute resolution. ICANN needs to stay away from outside "expectations and aspirations," says Cerf. Reflecting on her position, Dyson believes that her job was impossible, but worth the effort.
For information regarding ACM's Internet governance work related to ICANN, visit http://www.acm.org/serving/IG.html.
- "High-Tech Labor Squeeze Defies Single Solution"
IT Professional (12/00) Vol. 2, No. 6, P. 7
The IT industry will require more than just an increase in the H-1B visa cap to ease the existing labor shortage, according to a recent report from the U.S. National Academies' National Research Council. "Employers, employees, educational institutions, and the government all have important roles to play in assuring that the high-tech industry has the labor force needed to compete in a global economy," says committee chair Alan Merten. Raising the number of H-1B visas will keep the IT industry's growth from slowing and will prevent IT salaries from soaring as quickly as they otherwise might, the report says. Still, the IT industry needs to tap all sources of labor, including older workers, the report says. The committee examined the issue of age discrimination in the IT sector but was unable to draw a conclusion. In addition, companies need to use a wider range of recruiting strategies and emphasize worker training, the report says.