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Volume 2, Issue 145: Friday, December 22, 2000
- "More Power! Tech Firms Act to Avoid Blackouts"
USA Today (12/22/00) P. 1B; Iwata, Edward
High-tech companies in Silicon Valley are taking steps to minimize the risk of costly power blackouts, as tremendous energy consumption in California continues to strain the state's electrical infrastructure. California this year declared an all-time high of 52 energy alerts, which are issued when power reserves dip below 7 percent of the state's capacity. Silicon Valley's high-tech companies, which use massive amounts of energy to run data-processing rooms, research labs, and chipmaking facilities, lost $100 million in production when officials cut power for a few hours on several days in June. To avoid disruptive blackouts, about 200 Silicon Valley firms volunteered to reduce energy consumption by 10 percent or more during rolling blackouts, in exchange for year-round rate discounts of up to 20 percent. Companies who agree to this deal with the utilities can also choose to be bumped down on the list of customers who could lose power when officials call for a mandatory blackout. In addition, nearly all tech companies have generators to keep vital equipment running during blackouts, and Oracle has its own $6 million substation to supply power in the event of an emergency.
- "High-Tech Downturn Is Gobbling Up Jobs in Europe"
Wall Street Journal (12/21/00) P. A15; Rhoads, Christopher
The slowdown in the high-tech sector is causing several European companies to lay off employees and freeze hiring. High-tech growth is reducing unemployment in the European Union, but this trend is slowing due to the recent downturn. For example, while the number of unemployed people in Germany dropped by 15,000 in November, this was only about half the decrease in unemployment seen in October. Meanwhile, France is expected to create only half as many jobs in 2001 as it did in 2000, says Morgan Stanley Dean Witter. French computer firm Bull cited sluggish sales in announcing that it will lay off 10 percent of its workforce over the next 18 months. German data communications firm BinTec Communications is laying off 17 percent of its workforce, while Swedish Web consultancy Framfab is getting rid of 340 employees to reduce expenses. However, despite the recent wave of profit warnings and lay-offs, high-tech workers are still in strong demand at many European tech firms.
- "Linux Companies Beat Microsoft in Itanium Support"
CNet (12/21/00); Shankland, Stephen
Microsoft will not have a new version of Windows ready to operate on Intel's new 64-bit Itanium processor when it debuts next year. Microsoft plans to release the 64-bit Windows in the latter half of 2001, the same time it will launch its new Whistler operating system. Microsoft CEO Steve Ballmer had said Windows would be ready when Itanium appeared, but analysts say not meeting that promise will not be a big blow for the company, as the first release of Itanium will not be considered ready for production use. The Itanium chip has also been plagued by delays. The chip, Intel's first processor for the high-end server market, was intended to appear several years ago. However, Intel pushed its release back to last year then delayed it again until next year. The chips will require users to upgrade their software, as Itanium chips are not only faster but operate under a new language. Although Microsoft Windows will not be ready for Itanium's coming arrival, vendors of rival Linux systems say they will have new software prepared for the processor. Red Hat, Caldera, and Turbolinux all say they have Itanium-based versions of Linux scheduled to appear when the chips are released.
- "Sun Eyes Cost Cuts, H-P Said Delaying Raises"
Reuters (12/21/00); Henderson, Peter
Sun Microsystems is planning to cut costs, according to an internal company memo leaked to Reuters. In the memo, Sun CEO Scott NcNealy writes, "We will have to respond to changing economic situations in our spending and hiring decisions." Also, Hewlett-Packard has reportedly told employees that there will be no raises for at least three months. Sources at the computer maker told the San Jose Mercury News that the company intends to save as much as $140 million. The apparent move toward cost-cutting by two Silicon Valley giants underscores growing concern in the tech sector that the economy is slowing, analysts say.
- "Dot-Com Shakeout Merely History Repeating"
Investor's Business Daily (12/22/00) P. A6; Prado, Antonio A.
The consolidation taking place in the dot-com sector has occurred in many industries in the past, eliminating weak players and ultimately strengthening the industry as a whole, economists say. The U.S. automobile industry, for example, had 275 players in 1910 when the industry was 15 years old, and today only three major U.S. automakers remain, says Pembroke Consulting President Adam J. Fein. Similarly, 152 drug companies existed 20 years ago, and fewer than 40 are still around, says Fein. Hundreds of companies rushed into the automobile and drug industries following some initial innovation, causing stock prices to skyrocket, as in the dot-com industry. Over time, larger companies that entered the markets early began to dominate both industries, leading to a shakeout and a leveling-off of stock prices. Today's Big Three U.S. automakers were all among the first four to achieve a market share of more than 10 percent, according to economists Steven Keppler and Kenneth Simons. However, shakeouts are beneficial to industries because weaker companies with poor business models are wiped out, leaving only the most viable players behind, experts say.
- "E-Greetings Spread Viruses, Tax Networks"
USA Today (12/21/00) P. 1A; Armour, Stephanie
Many companies are discouraging employees from sending or opening online holiday cards, which can carry viruses or overwhelm networks. Hackers often strike over the holidays, security experts warn. The Navidad virus, which has hit 1,000 computers since it was discovered in November, is supposed to contain a Christmas greeting but instead erases computer contents. In addition, online cards contain audio and video clips that can overwhelm networks. AT&T is warning its workers about the potential dangers of e-greetings, while Xerox is blocking mass-distribution e-greetings from its network. In addition, some companies are installing security software that detects email viruses. The number of companies taking such precautions is growing as e-greetings become more popular. ExciteAtHome's BlueMountain.com says its online card site will distribute 100 million e-greetings this month, compared with 80 million last December. Meanwhile, Forrester Research predicts that e-greetings will bring in roughly $9 million in revenue in 2004.
- "Neo-Nazis Sheltering Web Sites in the U.S."
Washington Post (12/21/00) P. A1; Finn, Peter
The free-speech guarantees of the U.S. Constitution are allowing German neo-Nazi groups to establish Web sites on American soil featuring content that would otherwise be outlawed under Germany's hate laws. These sites are directed at and accessible to German citizens, a turn of events that has so frustrated German authorities that the German supreme court recently ruled that Web sites hosted overseas are covered by its hate laws. Germany's Interior Ministry estimates that the number of neo-Nazi sites hosted in other countries and directed at German citizens now stands at 800, a huge increase over the 330 such sites that existed just last year. The German supreme court ruling could theoretically lead to the extradition of Americans, but the U.S. government appears to be balking at this interpretation of the ruling. Alan Davidson of the Center for Democracy and Technology poses some chilling scenarios for the German government. "How will the German government respond if the governments of Saudi Arabia or Singapore or China seek to impose their very restrictive laws on a German publisher?" Davidson asks. One German government official claims that 90 percent of neo-Nazi sites in America are being "nourished" by U.S. companies.
- "Protests Arise Over Business Aspect of Censoring Web"
New York Times (12/21/00) P. C4; Schwartz, John
Internet filtering companies are set to reap the benefits from the Children's Internet Protection Act, the bill passed a week ago by Congress that requires the nation's schools and libraries to implement filtering technology as a prerequisite for continued federal funding. The bill's critics say that filtering companies will monitor students' Internet movements and sell the tracking-data to marketers. Nancy Willard, head of the University of Oregon's Responsible Netizen Center for Advanced Technology in Education, raises questions about the filtering companies' motives and wonders whether they have a hidden agenda beyond improving educational environments. Filtering company N2H2 recently discontinued its policy of aiming on-screen advertising at students, but left open the door to reinstating the policy at some point. Worse yet, says ACLU lawyer Ann Beeson, is that the bill represents a form of unconstitutional censorship, with profit-oriented enterprises in charge of this censorship. President Clinton has misgivings about the act, but plans to sign it into law because it is part of the broader appropriations bill. The Clinton administration would have preferred that communities develop their own "acceptable use" plans for the Internet, says White House spokesman Elliot Diringer. Some 100 filtering companies are currently in existence, and the new law would prove quite lucrative for the $90 million filtering market, says International Data analyst Brian Burke.
- "Hard Choices for Hardware Vendors in 2001"
TechWeb (12/20/00); Hachman, Mark
As the market for PCs slows, many hardware vendors are considering whether to develop and sell software, online services, and other products not usually within their scope. Analysts say such changes might be necessary to avoid financial catastrophe in 2001, as consumer demand for PCs remains stagnant and inventories along the supply chain continue to rise. International Data says the first quarter of 2001 will see PC sales decrease 5 percent in the U.S., while global PC sales will fall 10 percent or more. Many in the business community believe that the U.S. economy is slowing, curbing PC sales to that sector, while consumer demand has been falling off since Thanksgiving, the time when holiday shopping usually pushes PC sales upwards. PC makers are now reporting inventory backups of up to five weeks. Analysts note that although many PC makers have become exceptionally sensitive to supply-chain management in order to avoid inventory build-ups such as this, many contract manufacturers, or CEMs, this year overestimated the amount of inventory they would need to supply PC makers.
- "Yahoo Takes French Ruling to a U.S. Court"
Upside Today (12/21/00); Berger, Matt
A French court's ruling against Yahoo! regarding the filtering of anti-Semitic online content could be thrown out by a U.S. court on constitutional grounds. Yahoo! has asked a U.S. Federal District Court in San Jose, Calif., to determine if the French ruling is valid in the United States. Yahoo! is hoping that the court strikes down the French ruling as unconstitutional and finds that it violates public policy. Should the court hand down such a decision, France would have no way of enforcing its ruling. However, if the U.S. court rules against Yahoo!, the company may have no other recourse but appealing the French decision in France, a lengthy and complicated process that would produce court action in both France and the United States. The matter stems from a French judge's ruling in November that Yahoo! must keep French citizens from accessing anti-Semitic artifacts on Yahoo!'s auction site. In related news, the German government recently requested that Bertelsmann help stop the trading of neo-Nazi music on Napster. Yahoo!'s associate general counsel international, Greg Wrenn, says that the matter appears to indicate that Germany has broken with its policy of pursuing Web sites outside of Germany.
- "Debate Over German PC Fees Could Go to Court"
TheStandard.com (12/20/00); Perera, Rick
Several organizations supporting German artists say they will take the country's computer industry to court in order to ensure their members receive compensation for works that are copied and distributed via computers and the Internet without their permission. The organizations want a fee of $26.85 added to the cost of a PC. In a separate action earlier this year, an organization of German musicians called for a fee of $18.76 for each PC. A similar precedent exists in several German electronics industries, including photocopiers, fax machines, and CD burners. However, the German computer industry is resisting the move, saying the fees are too high and would hurt computer makers because consumers could buy computers from neighboring countries and avoid paying the fee. According to the German computer-industry organization BITKOM, the system of compensating artists for potential copyright violations is outdated and needs reform. BITKOM advises using digital technology to monitor and assess fees on individual users.
- "Who Wants Your Old Computer?"
Washington Post (12/22/00) P. E1; Cohen, Sacha
As computers become more powerful and less expensive, buyers of new computers often do not know how to dispose of their older models. Schools and charities rarely will take anything less powerful than a Pentium-driven PC or a Power Mac, nor will most stores that specialize in used computers. One option is to recycle old computers. Recycling allows parts that still have some use to be refurbished and installed in other computers or to be melted down for scrap. Also, recycling lets trained professionals dispose of computer monitors, which contain hazardous materials and must be treated as toxic waste according to Environmental Protection Agency guidelines. Many communities hold computer-recycling drives once or twice a year, and some computer recyclers accept old machines year-round. One such recycler is Subtractions in Highland, Md. Subtractions claims to recycle 90 percent of an old computer, distributing the parts among numerous vendors. Subtractions charges between $8 and $30 to dispose of computer monitors because of the cost of handling toxic materials. Many computer recyclers do not process the entire machine, instead salvaging only the most valuable parts such as the processor and memory, Subtractions says.
- "Spintronics Boosts Chip Efficacy, May Lead to Quantum Computer"
Wall Street Journal (12/21/00) P. B8; Hamilton, David P.
Japanese researchers led by Hideo Ohno of Tohoku University have made significant progress in the emerging science of spintronics. Ohno's team has built a transistor-like device with magnetic properties that can be manipulated by an electric field. The team discovered that applying electricity to indium manganese arsenide, a semiconductor alloy, switches its magnetism on and off. Spintronics involves adding magnetic properties derived from electron spins to semiconductors, a methodology that scientists hope will yield ultra-large memory chips more efficient than hard drives as well as quantum computers. Ohno's experimental device can only operate at extremely low temperatures using very high voltages, so its practical applications are limited. But Ohno's work is still valuable as a "proof of concept" for spintronics, states David Awschalom of the University of California, Santa Barbara.
- "Tough Tech Topics to Test Congress--Rep. Dreier"
Newsbytes (12/20/00); MacMillan, Robert
House Rules Committee Chairman David Dreier (R-Calif.) says that the Bush administration will work with the 107th Congress to keep the government from interfering with the growth of the technology industry. Dreier says that he will dedicate himself during the upcoming session to defend the Internet from most forms of regulation, including the collection of e-commerce taxes. However, Dreier indicates that the long-term prospects for keeping the Internet free of taxes are not good. Dreier says he will fight anti-Internet gambling legislation from Sen. Jon Kyl (R-Ariz.) and Rep. Robert Goodlatte (R-Va.), but says he is unsure what President-elect Bush's stance is on such legislation. Dreier expects Bush to help loosen export controls, but does not expect Congress to pass a permanent ban on Internet taxes, even with Bush's support. Bush will not "politicize" the hot issue of online privacy, but Congress must find a middle ground on the matter, says Dreier.
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- "Report: E-Book Industry Set to Explode"
E-Commerce Times (12/20/00); Enos, Lori
The e-book market in the U.S. will be worth $414 million in 2004, up from $9 million this year, according to a new report from International Data (IDC). The report notes that several big-name authors, most notably Stephen King, have shown their support for e-books, as have many major publishing houses, including Time Warner and Random House. The firm says the big publishers will likely dominate the e-book market, spurred by the lower cost of publishing digitally. However, it predicts that small e-book publishers may act as a proving ground for unknown authors. The market should really take off by 2002, according to IDC, as readers become more comfortable with e-book readers and begin to favor them because of their portability. Also, consumers have already proven that they will purchase books on the Internet, giving publishers hope that e-books will also attract them. According to a report from NFO Research and The Conference Books, the purchase of books online this year outweighed the purchase of any other consumer product. Barnesandnoble.com and Amazon.com have both begun offering e-books for sale through their sites.
- "Demand for Executives Is Strong in the Technology Sector"
Asian Wall Street Journal Weekly (12/17/00) Vol. 22, No. 50, P. 6; Witcher, S. Karene
Global demand for executives in the technology industry grew 23 percent in the third quarter compared with last year's quarter, according to executive recruiter Korn/Ferry International. North America showed the largest increase in demand for executives, with 34 percent growth over last year. Meanwhile, demand for executives in the Asia-Pacific region grew 23 percent, Europe jumped 19 percent, and Latin America grew 1 percent. Technology-focused companies accounted for 32 percent of total executive hirings in Asia, up from 21 percent last year. In the U.S., tech companies represented 33 percent of total executive hirings. Executives with knowledge of technology, as well as CEOs and general managers, were in strong demand. Korn/Ferry expects demand for executives to remain strong.
- "Ecological Computing"
Industry Standard (12/25/00) Vol. 3, No. 52, P. 33; Brown, John Seely; Rejeski, David
Environmentalists and the high-tech community, rather than viewing one another as enemies, should work together to create new systems that benefit everyone, write former Xerox PARC director John Seely Brown and Woodrow Wilson Center resident scholar David Rejeski. A ubiquitous network of embedded microprocessors could help detect low-level pollution, track global biodiversity, and address other environmental issues. Computers will claim just 2 percent of the 8 billion microprocessors created this year, with the remainder being embedded in a wide range of objects. Embedded chips will help bring about an environmental revolution as they become increasingly linked to one another, the environment, and the Internet. A pervasive network would make industrial systems increasingly resemble ecological systems by making them aware of their surroundings and giving them the ability to manage and regulate themselves. Micro- and nano-scale sensors could allow products to track themselves, providing alerts when they need to be repaired and ensuring that they are sent to the right place for recycling. Vehicles could track their own emissions and communicate with other vehicles to reduce traffic and air pollution. Networked sensors could help farmers optimize their use of fertilizer, water, and dangerous pesticides. In addition, sensors could monitor ocean currents or assess the impact of an oil spill. However, the environmental and IT communities first need to join forces to go beyond personal computing and focus on the broader idea of ecological computing, say Brown and Rejeski, noting the great strides that have been made in the 15 years that the IT and medical communities have been working together.
- "Power Struggle"
Interactive Week (12/18/00) Vol. 7, No. 51, P. 26; Bryce, Robert
Tech guru George Gilder has lent some credibility to new research first published last year in Forbes magazine that says the Internet uses 8 percent of the electricity produced in the United States. Gilder heads Gilder Technology Group, the company that publishes the Huber-Mills Digital Power Report newsletter, which is co-edited by free market conservatives Peter Huber and Mark Mills, who wrote the Forbes article. Their research has touched off widespread debate about how much power the Internet uses, and has led many to believe that the increase in domestic energy use is the result of the Internet. Just last month the Energy Information Administration (EIA) increased its projections for power demand through 2020 from an annual growth rate of 1.3 percent to 1.8 percent, and cited computers as a possible reason. Still, many economists and energy analysts are not convinced that the Internet is the reason energy use is up. Cambridge Energy Research Associates' Steven Taub says Americans are using all sorts of powered gadgets these days, a result of the "wealth effect." For Karl Stahlkopf, a vice president at Electric Power Research Institute, reliable energy is the more pressing problem. Mills says he is merely interested in keeping Silicon Valley lit.
- "Data Collection and Consumer Privacy"
netWorker (12/00) Vol. 4, No. 4, P. 9; Treese, Win
Although real-world stores collect information on consumers in a manner similar to the way in which Web sites gather data over the Internet, people should still be very concerned about the fact that businesses have databases filled with their personal information. Questions of whether the practice is an invasion of privacy continue to arise, even though businesses maintain that they are using the data to give consumers more personalized information and offers. The technology often appears to be more invasive than the checkout barcode scanners that supermarkets use to collect data. With the technology, companies can correlate consumer information across other businesses and track Web pages rather than just send catalogues to consumers. The fact that users are not likely to know what information companies are gathering about them and that the technology allows companies to collect more information than traditional systems also makes the Internet seem more invasive. More than anything else, unfamiliarity with the new technology and the secretive way in which information is gathered are the two main reasons people are alarmed over the privacy issue. And consumers appear to be losing the battle, judging from the current trends of the Internet.