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Volume 3, Issue 196: Monday, April 30, 2001
- "Collapse of Dot-Coms Stifles Tech Innovators"
Washington Post (04/30/01) P. A1; Cha, Ariana Eunjung
The tech firms that developed the innovations that drove the dot-com boom now find themselves curtailing their grandiose projects for humbler, more practical applications of their research. However, some experts fear that as more and more tech firms fold due to lack of funding, important breakthroughs may be delayed. Yale science historian Daniel Kevles contends that the pace of innovation is closely linked with the availability of capital, making the year's Nasdaq woes and choppy venture capital waters a dangerous period for many promising ideas. E.piphany CEO Roger Siboni argues that the shakeout will be good in the long run because it will separate the best from the good and eventually will make the strongest innovations even surer. Large tech firms such as AOL and Microsoft have shown that the most promising new technologies will attract capital. In recent years, for example, AOL has acquired many firms--Netscape, Tegic Communications, Nullsoft, and others--that have added to its tech repertoire. Microsoft senior vice president Craig Mundie says the firms's research spending will increase from $1 billion in 1999 to $4 billion this year, with some of that amount earmarked for the purchase of struggling firms with good ideas. As many groundbreaking technologies fade into the corporate background, innovative companies are left solving the more mundane solutions of making networks work and building commercial Web sites.
- "Tech Spending Takes a Tumble"
USA Today (04/30/01) P. 1B; Kessler, Michelle
Corporations are rethinking their tech budgets in light of recent economic uncertainty, with new Commerce Department data showing that tech spending fell 6.4 percent annually last quarter for the first time in 10 years. Additionally, a survey of chief technology officers by Cahners In-Stat Group shows that 70 percent foresee zero or declining growth in tech expenditures over the next year. However, the decline in spending does not necessarily translate into failed company tech initiatives, as many CTOs look for resourceful ways to work around tight budgets. Carnival cruise line, for example, recently saved 60 percent to 80 percent on desktop systems by buying refurbished equipment. Other hardware resellers are raking in profits as first-tier vendors such as Cisco, Oracle, and Compaq take serious hits to their bottom line. Quadrasource sales manager Dick Giglio says his hardware reseller company has seen a dramatic increase in sales since January of this year, while online auction firm eBay says sales in computers and networking equipment have grown by double-digit rates since October. Other companies are establishing new cost-saving technology, such as drug manufacturer Astra-Zeneca's $200,000 online training system and Bank of America's check imaging system that promises to streamline costly paper processes.
- "After Lull, Dot-Com Layoffs Set Record in April"
E-Commerce Times (04/27/01); Mahoney, Michael
Dot-coms have laid off 17,554 workers in April, the job placement firm Challenger, Gray & Christmas has revealed. That is the largest total during the 17 months Challenger has tracked the dot-com sector. In comparison, there were only 327 dot-com layoffs in April of last year. In the year to date, Challenger has recorded 52,564 dot-com layoffs. The number of layoffs had declined in the previous two months after reaching a record high in January, and Challenger CEO John Challenger says this slowdown took place as firms enjoyed a brief period of "breathing room." Now, however, increased pressure to show a profit in order to receive funding is causing more dot-coms to cut staff or fold altogether. He says dot-coms need to reduce their staff overhead and implement more automated solutions in order to survive the current downturn. Challenger also notes that more dot-com layoffs are occurring at Old Economy firms that entered the dot-com sector.
- "Microsoft Stock Declines Amid Concerns Windows XP May Miss Delivery Targets"
Wall Street Journal (04/30/01) P. B6; Buckman, Rebecca; McWilliams, Gary
Analysts continue to question whether Microsoft will release its new XP operating system in the second half of this year, as was originally promised. Giga Information Group analyst Rob Enderle said last week he expects the new operating system, which will bring together the code from consumer-oriented Windows 98 and more business-based Windows 2000, will be shipped to PC makers in August, not June. Enderle also said packaged versions of XP will likely not hit stores until October. Microsoft is under some pressure to release XP by the end of summer so that PC makers have time to install the new software in the PCs due to be released for the upcoming holiday season. Although sources at an unnamed PC maker shared Enderle and other analysts' concerns that Microsoft could miss that deadline, officials at Compaq say they still see XP as a third-quarter release.
- "Does an Anti-Piracy Plan Quash the First Amendment?"
New York Times Online (04/27/01); Kaplan, Carl S.
A coalition of movie studios are suing Eric Corley, editor and publisher of 2600, an online hacker magazine, for distributing the DeCSS code that cracks the digital encryption on DVD movies. The studios claim that the software will be used to pilfer intellectual property and illegally distribute copies of movies throughout the digital world. Corey and his backers maintain that DeCSS is necessary because people must have access to works so that they can quote or borrow parts under "fair use" terms. "Fair use" will lose its meaning, they contend, if content owners can lock up everything they put on the Internet. Legal experts believe that the case will have ramifications on the constitutionality of the Digital Millennium Copyright Act of 1998 and is likely the go to the Supreme Court. Already, a district court judge ruled in favor of the studios, and the case is under review in federal appeals court. A second related issue at stake in the case is the liability that Web sites have over the hyperlinks listed within their site.
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For additional articles related to DVD court cases, CSS, and DeCSS, visit http://www.acm.org/usacm.
- "Workers, and Bosses, in a Visa Maze"
New York Times (04/29/01) P. BU3; Wayne, Leslie
Although the H-1B visa program, which allows highly skilled foreign workers to work in the United States for up to six years, remains popular with many tech firms, it is coming under increased scrutiny from labor organizations and the H-1B holders themselves. The tech industry, which depends on the H-1B holders to fill crucial positions, last year successfully lobbied Congress to raise the number of H-1B visas issued each year to 195,000, and some estimates peg the total number of H-1B holders in the United States reaching 710,000 in the next three years. However, many supporters of domestic workers say the tech industry has greatly overstated the lack of qualified U.S. workers and depend on H-1B holders only because they can be paid less and because they are beholden to the firm that hired them. H-1B holders cannot change jobs or found their own companies, and they have difficulty even gaining a promotion or working on a project outside the specific task for which they were hired. Moreover, many H-1B holders attempt to obtain green cards permitting them permanent residence, but the wait to gain a green card can often be as long as the H-1B visa's term, forcing many holders to leave when their visa expires. This is especially true for H-1B holders from India, who outnumber holders from all other countries, because there is a cap on how many green cards can be issued to residents of any one country in a given year, regardless of how many applicants there are from that country. The most outspoken opponents of the H-1B program liken it to slave labor, with holders forced to work and pay taxes with no guarantee that they or their families will be able to remain in the country.
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- "Big Blue's Big Brother Lab"
Wired News (04/24/01); Batista, Elisa
In the minds of scientists at IBM's Almaden Research Center, the projects they are working on are destined to change the way we live. But privacy advocates are not so sure that what we want is to live out the vision of IBM scientists. Much of the technology that is being developed at IBM's second-largest lab involves the field of pervasive computing. Although IBM's business development office does not dictate what the company's scientists develop in the lab, some of the products, such as Magic Point, look a lot like Big Brother. Magic Point, which is a camera and tracking system embedded in a computer, could make it possible for everyone in the world to know each other's name. The product would need to have everyone's face scanned into a database so that the gaze-tracking technology--Vision Pad Identifier--can identify faces. The technology, which could be available to the public in a few years, also would work with camera-enabled sunglasses, which would display the names of people, or, for example, translate the name of a restaurant in Chinese characters into English. A company spokeswoman says scientists are developing the technology for sign translation and not for face recognition. IBM says the lab's technology is not being developed to track people, and notes that much of the equipment already exists and some examples of pervasive computing are currently in use--such as using voice recognition to surf the Web.
- "Internet Pioneer Helps the Net Stretch to Mars"
Network World Fusion (04/26/01); Meserve, Jason
Internet pioneer Vint Cerf expounded on his vision of the Internet at a National Association of Broadcasters meeting, noting how the design of the Internet is intended to be open to new innovations. One example he gave of new uses was the development of Web-enabled home appliances. Cerf predicted how people's lives would change because their refrigerator could tell them what to cook for dinner and other home appliances would form a type of home network centered around personal needs. Cerf also intends to see his creation become truly ubiquitous and has even begun working with the Jet Propulsion Lab to set up a Interplanetary Internet protocol standard that could relay data between Mars and the earth and adjust to up to 40-minute response delays. The new Internet protocol is already set to take off in 2003 along with two new Mars rovers. Cerf says, "The idea is that new missions will be able to take advantage of assets left behind by previous missions. Over time, there could be a two-planet Internet."
- "By the Water Cooler in Cyberspace, the Talk Turns Ugly"
New York Times (04/29/01) P. 1; Abelson, Reed
Online chat rooms and message boards devoted to specific companies present a new challenge to corporations when the discussions become offensive and potential sources of legal trouble. Parry Aftab, a lawyer who specializes in such online issues, says the problem has grown significantly in the past six months. Unsubstantiated allegations and hurtful accusations flow freely through some third-party sites, such as those run by Yahoo!. The consulting firm PricewaterhouseCoopers contracts Vault, an online community service, to run its message boards. Vault says it tries to monitor messages for inappropriate content that targets specific people or that attacks the company. Often, online forums serve as soundboards for employees disgruntled over corporate programs or policies--for example, what some workers saw as United Parcel Service's unfair promotion of minorities or Lucent Technologies' recent gay sensitivity effort. Lawyers and Internet investigators say companies can often track the identities of offending writers and take direct action against them, in addition to filtering their harmful messages.
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- "Hackers Vandalize Two U.S. Web Sites"
Washington Post (04/30/01) P. A13
Chinese hackers are believed to have vandalized Web sites belonging to the departments of Labor and Health and Human Services (HHS). A picture of Wang Wei, the Chinese pilot who was killed as his plane hit a U.S. surveillance aircraft on April 1, was posted on Labor's site on Saturday, but technicians fixed the portal within a couple of hours. On the same day, a similar picture was posted on HHS' site, and the surgeon general's portal was disabled. The FBI and the Federal Computer Incident Response Center are looking into the attacks. Government agencies and private businesses have been warned that this week could see an influx of hacker attacks from China.
- "H-1B Visas a Boon to Local Talent"
Wired News (04/26/01); Dean, Katie
The H-1B program is funding training programs aimed at increasing the technical skills of American workers and eventually lessening the need for imported talent. Last year's increase in the number of H-1B visas issued--up to 195,000 from 115,00--plus the doubling of the processing fee to $1,000 has contributed millions more dollars to the Department of Labor's grant program. So far, the Department's Employment and Training Administration has given $95 million to 43 schools, companies, and organizations. The money is going toward teaching entry-level people, upgrading the skills of current tech workers, and schooling workers for high-demand sectors in specific regions, such as qualified health care workers for South Dakota. Whatever the application, the grants are intended to reduce the number of foreign workers needed in the United States--the program is expected to allow the cap on H-1B workers to be lowered to 65,000 in 2003. However, president of executive search firm techVenture, Fadi Bishara, says that companies are not necessarily choosing foreign workers because of a dearth in skilled American ones, but rather because they bring a die-hard work ethic with them. Many foreign workers are willing to sacrifice salary, benefits, and work harder in order to be employed in the country, he notes.
- "Arizona May Create State Internet Security Group"
InfoWorld.com (04/25/01); Costello, Sam
Wes Marsh, a Republican member of the Arizona legislature, has introduced a bill that would help protect the state's computer systems against attacks. The legislation would establish a Statewide Infrastructure Protection Center (SIPC) to serve as the central point of contact for the public sector and disseminate computer security information and alerts, as well as execute security measures. Another effect of the bill would be to create an emergency response team composed of National Guard members to protect their network. On the national level, groups such as the FBI, the Department of Defense (DoD), and the National Infrastructure Protection Center are devoted to IT security, as is InfraGuard, a coalition of government and 500 private companies. However, it often takes up to two weeks for their information to trickle down to the state level. In February, Arizona's legislature lost its email for a day because of the Anna Kournikova virus, even though the DoD had knowledge of it two days prior. Other areas, including Texas, Virginia, Florida, and Washington D.C., are looking at their own plans for SIPCs.
For information regarding ACM's activities on behalf of security matters, visit http://www.acm.org/usacm/crypto.
- "Chips Clearing up Internet Phone Calls"
Investor's Business Daily (04/27/01) P. A8; DeTar, James
Voice over IP will be the next big wave in Internet technology, Mitel strategic marketing vice president Peter Burke predicts. He believes that new technology such as better digital signal processors and broadband connections make Internet telephony the fastest growing Internet application and will enable video over IP in the near future. Soon, new standards for unified messaging will allow voice messages to be converted into text and vice-versa--people with cell phones will hear their email and laptop users will read their voice mail. Current trends show an inevitable shift toward pervasive voice and video over IP, as broadband networks overcome final barriers and companies such as Texas Instruments and Intel innovate the faster digital signal processors needed for unified messaging. Voice over IP phone calls will likely begin to increase dramatically early next year, says Forward Concept President Will Strauss.
- "Motion Sensors May Let Everyday Appliances Do More"
New York Times (04/26/01) P. E9; Austen, Ian
Accelerometers, or sensors that monitor changes in motion, may become cheap enough to implant in common machines. The piezoelectric crystal-based sensors available today are costly. Analog Devices produces a low-priced alternative that uses a miniscule, charged suspension weighing .07 micrograms embedded in a microchip. These chips are used by car airbag manufacturers and cost approximately $4. Yet the price is still to high for such uses as washing machine sensors, which would let machines know when to adjust their off-balanced loads. Nintendo uses the chips to allow users to play video games just by tilting its GameBoys rather than pressing buttons. A team of researchers headed by Dr. Michael Gaitan of the National Institute of Standards and Technology is working on a microchip that uses a tiny heater equipped with temperature gauges to detect changes in motion. Such a chip could be used in packages, for example, to see how much they were moved in transit. Wireless Web-enabled phones and PDAs would be easier to manipulate if infused with the chips.
- "Final Rules Governing IT Accessibility Issued"
GovExec.com (04/26/01); Ballard, Tanya N.
Federal agencies this week were offered their first glance at the final version of IT accessibility regulations issued under the Rehabilitation Act Amendments of 1998. The rules require government agencies to make IT--Web sites, networks, and computers--accessible to employees and citizens with disabilities such as hearing and vision impairment. Published in the Wednesday issue of the Federal Register, the finalized version has changed so that new acquisitions awarded after the June 25 deadline must comply with the regulations. Previously, the Federal Acquisition Board (FAB) had said that the rules would only apply to purchases negotiated after the deadline. Information Technology Association of America's Olga Grkavac says that, although her group is concerned about contracts that might be endangered by the new stipulation, they are greatly relieved over the FAB's decision to exempt purchases under $2,500 bought with the government purchase card.
- "Free PC Programs: Where's the Payback?"
InternetWeek (04/23/01) No. 858, P. 1; Wagner, Mitch
Large companies that promised a year ago to offer free or subsidized PCs to employees are forging ahead, but the programs are being recast due to expenses and other factors. Delta Air Lines, Ford Motor, and Intel are about halfway though their free PC programs, which were created as an employee perk, a way to educate employees on technology, and as a way to develop commerce portals among captive users. Companies thought that e-commerce sales would cover the cost of the programs, but that plan has not worked out, as excitement about the portals has quieted. Plus, the programs were more difficult to implement than anticipated. Ford's Model E program has handed out 155,000 PCs since last June, many of which have to gone to blue-collar workers among Ford's 400,000 employees. Those workers are generally inexperienced on the Web or using PCs for the first time and as a result are not that active in e-commerce. However, analysts say such programs provide valuable training experience, and at about $200 to $300 per employee, are not that expensive. Ford classifies the benefits into the three "Cs"--competence, communication, and consumer focus. Analyst John Metz says, "When you look at what you get out of the investment, it's a great one. These days, you can't even give employees a gift certificate for dinner for the whole family for $200." Still, the programs can be difficult to implement if companies are based in multiple locations or multiple countries, and cost considerations have cause companies such as Intel to restrict their programs to specific employee groups such as manufacturing or clerical staff.
- "Bill Aims to Curb Abuse of Business Method Patents"
Washington Business Journal (04/26/01) Vol. 19, No. 51, P. 28; Hoover, Kent
Travelocity.com general counsel Andrew B. Steinberg testified during a recent congressional committee hearing that his company should have been able to compete with Priceline.com by bringing a reverse auction to the World Wide Web. However, Travelocity did not offer its own "Dutch auction" online because it feared Priceline, which had a business method patent for its "name your own price" online service, would sue the company. Steinberg also noted that eBay, which did not seek a business method patent for its online auctions, faces competition. Ever since a federal court decided in 1998 that business method patents should be held in the same regard as other inventions, the number of applications for business method patents has soared. In fiscal year 1999, the U.S. Patent and Trademark Office received 2,650 applications, but the following year the number grew by 5,150 applications. Rep. Howard L. Berman (D-Calif.) believes the situation has gotten out of hand and has introduced legislation, along with Rep. Rick Boucher (R-Va.), that cracks down on attempts to patent business practices that already exist, although not on the Internet. However, Berman's bill, which was unsuccessful last year, is opposed by the patent office, the American Intellectual Property Law Association, the Intellectual Property Owners Association, and Rep. Howard Coble (R-N.C.), the chairman of the House subcommittee on courts, the Internet, and intellectual property. The patent office says it has added 17 patent examiners since 1997 to aid its effort in cracking down on any abuse of business method patents.
- "Global IT"
InformationWeek (04/23/01) No. 834, P. 43; Rendleman, John
InformationWeek surveyed 894 business and IT executives around the world for its Research Global IT Strategies 2001 study, and found that 60 percent of the companies plan to spend more money on IT this year than a year ago. In general, companies already are committed to improving customer service, and they plan to extend their strategy to improving IT customer service and support infrastructure, improving Web site capacity and performance, and improving network security. However, the cooling economic climate in different parts of the globe has many companies reconsidering their expansion plans, even though 75 percent expect revenue growth in 2001. For example, Gartner Group Asia projects the number of Internet users in the Pacific Rim to grow by 72 percent to 72 million this year and to 188 million by 2004. However, many businesses are not too optimistic about the prospects of business-to-consumer e-commerce in the Pacific Rim because the digital divide will confine Internet penetration to less than 6 percent in poorer countries, and executives are concerned about other social and cultural issues. The study, which was released this week, reveals that less than one-third of respondents consider overall business expansion to be a priority at this time. Still, executives nearly cited organizational barriers as often as poor leadership, government regulations, and a slow global economy as barriers to reaching business and IT goals.
- "Plastic, Fantastic Superconductors"
Computerworld (04/23/01) Vol. 35, No. 17, P. 60; Vijayan, Jaikumar
After 20 years of research to get organic polymers to act as superconductors, scientist at Bell Labs in Murray Hill, N.J. finally figured out that they had to rearrange molecules to reach their goal. By removing electrons from plastic polythiophene to change its electrical properties, instead of adding chemical impurities, scientists at the research and development arm of Lucent Technologies were able to get polythiophene to lose all resistance to electricity. However, scientists had to cool polythiophene to 3 degrees Kelvin to do so. Unfortunately, there is no commercial potential for plastic superconductors unless scientists can get organic polymers to offer no resistance to electricity at much higher temperatures. Richard Greene, director of the Center for Superconducting Research at the University of Maryland in College Park, does not see that happening in the next 10 years. Researchers say plastic superconductors would be easier and cheaper to produce, and easier to use than current pure metal and ceramics based superconductors. Quantum computing would benefit greatly from plastic superconductors, which would offer another alternative for building electronic circuits. In addition to helping make faster computers, the new technology could be used in communications, utilities, transportation, and superconducting electronics.
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