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Volume 1, Issue 5: Friday, December 10, 1999

  • "VA Linux Makes a Record Debut"
    Los Angeles Times (12/10/99) P. C1; Dunn, Ashley

    Shares of VA Linux Systems yesterday skyrocketed nearly 700 percent on the first day they were available, from an IPO price of $30 a share to a closing price of $239.25. Some analysts say the record-setting increase indicates a big future for Linux-related products and a threat to Microsoft, but others simply saw it as irrational behavior. International Data analyst Dan Kusnetzky says, "This is buying into a dream, and when people wake up, the dream might not be there." Still, other Linux-related offerings have also done very well this year and analysts see the open-source operating system as a serious competitor to Microsoft. They say the investor frenzy is helping to legitimize the OS. VA Linux, Red Hat, and Corel, among others, are offering versions of Linux that come with support and other services in an effort to attract corporate buyers that otherwise might be wary of an open-source based product. Linux is increasingly being used for Web servers and also is expected to be used with a new wave of digital appliances. However, leading computer firms are also embracing Linux and the potential market is still not that big, according to Kusnetzky. VA Linux, at yesterday's closing price, now has a market capitalization of $9.5 billion, bigger than many large, well-established companies. For its last fiscal year, which ended July 31, the nearly five-year-old company reported total revenues of $17.7 million and a $14.5 million loss.

  • "Microsoft Launches E-Services for Office Users"
    InfoWorld.com (12/09/99); Johnston, Margret

    Microsoft on Wednesday began providing expanded free services on its Microsoft Office Update Web site (www.officeupdate.microsoft.com) to users of its Office suite. Microsoft's expanded Office services include the ability to store files for others to modify, display PowerPoint files, find information, and maintain an inbox for voice, fax, and email messages. The site already had offered clip art, templates, reference tools, pictures, and sounds. The site also features Web publishing services in partnership with several vendors for use with Word files and PowerPoint slides. Another partnership allows Office users to print postage stamps on their own printer. Next year Microsoft says it will provide free language translation services. Microsoft says 2 million users now visit the site each month.

  • "Harvard Seeks Rights to Own Name in Cyber Suit"
    Boston Globe (12/08/99) P. B1; Murphy, Shelley

    Harvard University is suing under the just-signed cyber-piracy law to gain Internet rights to Web site addresses, now held by Michael Rhys and his company Web-Pro, that relate to the university. Rhys had bought 65 domain names involving Harvard and Radcliffe and offered to sell them back to Harvard for about $325,000 before trying to sell them in an online auction. Harvard says it is suing to defend its trademark and is using the new cybersquatting bill to back up its claim. The bill allows trademark holders to seek damages from anyone that registers a name that infringes on a trademark and then trying to sell it back to the trademark holder. Harvard says it does not want money from Rhys, but simply wants him to stop. The new cybersquatting bill, signed November 29, was heavily backed by businesses and celebrities, which often have had to pay large sums to gain the rights to Web site addresses that bear their names.

  • "New Law Touches Off Suits Over Names in Cyberspace"
    New York Times (12/09/99) P. C2; Clausing, Jeri

    The fallout from the new anti-cybersquatting law that recently went into effect has been considerable, as trademark holders throughout the states are filing lawsuits to claim domain names. Critics say the law places small companies and individuals at a significant disadvantage against large corporations in the scramble to claim legitimate ownership of Internet addresses. The Internet Corporation for Assigned Names and Numbers (ICANN) will be responsible for assigning trademark-related domain name disputes to international arbitration centers; however, ICANN's authority extends only to those domains assigned by the newer registrar firms and those distributed by Network Solutions after Jan. 1. The White House originally opposed the new anti-cybersquatting law due to concern that it would interfere with ICANN's dispute-resolution responsibilities. Among the trademark holders who recently filed lawsuits to protect their property are New Zealand's America's Cup team, Harvard University, and the National Football League.

  • "Dell Extends Linux System's Use"
    Associated Press (12/07/99); Mabin, Connie

    Dell Computer yesterday announced that it will install Linux on its high-end PowerEdge servers, with Linux distributor Red Hat providing customer service and technical support. Although systems based on Linux now account for only a small percentage of Dell's revenue, the open source OS is rapidly gaining popularity, says Dell's Bruce Anderson, noting that Dell is now selling twice as many Linux systems as it did in August. PowerEdge customers range from small companies to large ISPs, and the server is priced from $5,000 to over $12,000. Beyond the recent PowerEdge announcement, Dell supports Red Hat Linux on some desktop PCs and workstations. In addition to the support agreement with Dell, Red Hat has made similar deals with Gateway, IBM, Hewlett-Packard, and Compaq.

  • "Data Bus: Technology Spending"
    Investor's Business Daily (12/10/99) P. A6

    Technology spending by the majority of the U.S.'s fastest-growing companies is expected to remain the same, according to a survey from PricewaterhouseCoopers. Total hardware spending will remain steady in the next 12 months for 71 percent of the fastest-growing service companies, Pricewaterhouse reports, with 17 percent planning increases and 12 percent planning to spend less. Total software spending by service companies is also expected to remain the same by 72 percent of respondents, with 16 percent planning increases and 12 percent expecting decreases in spending.

  • "Does E-Commerce Have Anything to Offer Small Business?"
    E-Commerce Times (12/07/99); Spiegel, Rob

    E-commerce for small to midsize businesses has not developed as much as it has for large companies, but more efforts are now being made to draw smaller firms online. Small business Web sites for the most part are just static pages that contain information about products and services. The capital, time, and effort required to move into actual e-commerce are too great for most small businesses. One Web firm called Affinia now offers to build small company sites that are stocked with products from a group of affiliates. Still, Affinia does not relieve small business owners from tasks such as promotion and advertising, and does not solve problems of capital, time, and effort. Small companies are not motivated to participate in online procurement because they do not see immediate savings as do larger firms. However, small companies do use information obtained from the Internet. While small business owners are used to getting online information for free, some companies believe they would be willing to pay for special reports or writing services. For example, Inc.com sells proprietary reports to small firms while Digital Work offers small companies writing assistance and press releases.

  • "Portals May Come Unstuck in 2000, Says IBM Guru"
    Network World Today Online (12/08/99); Soon, Alan

    A newfound maturity in the e-business market could cause poorly planned sites to fall behind, said IBM vice president of Internet technology John Patrick at a recent press briefing in Hong Kong. Patrick predicted that Internet startups with unstable business models and companies which are reluctant to fully adopt the Internet will have the most trouble staying afloat in 2000. Patrick also foresees a shakeup in the portal sector; he said that vertically integrated portals will see increased success, while all-purpose portals will be less popular. Ultimately, says Patrick, community portals will have the most market support. "Hanging out has emerged in my mind as an important business," says Patrick. This community focus will also become important because consumer expectations will determine which businesses survive, according to Patrick. "Expectations of people will drive the next wave of the Internet," said Patrick. "People, not companies." Last, Patrick predicted that many consumers will abandon their PCs in favor of handheld devices such as cell phones, pagers, and personal digital assistants. While more than 95 percent of all Web pages are currently viewed using a PC, Patrick expects that rate to drop to less than 50 percent in two years.

  • "Lessons Learned From ERP: E-Commerce Will Feel Frictionless"
    PlanetIT (12/01/99); Lipsin, Bill

    The issues many companies faced in implementing ERP strategies 10 years ago can help businesses better understand today's task of moving into e-commerce, writes Bill Lipsin. ERP implementations often neglected in-between steps as companies raced into complex projects without proper structure or discipline. Before jumping into e-commerce, companies today should set priorities and examine technical issues, says Lipsin. Initially, companies should evaluate whether the benefits of e-commerce justify the costs, and rank the importance of business issues associated with e-commerce. In business-to-business applications, companies should stress necessary functionality, such as product availability and real-time visibility into order status, rather than flashy features. In executing an e-commerce strategy, companies should form a cross-functional team that taps the expertise of each relevant area. Companies should rely on technology from best-of-class vendors wherever possible, developing functionality only when necessary, Lipsin says. Furthermore, companies should choose products based on open standards to ensure compatibility with current and future technologies. Finally, companies should set small, attainable goals and adhere strictly to deadlines. Although the pressure for companies to move to e-commerce is unrivaled, e-commerce implementations cannot match the complexity of ERP projects and should feel "frictionless" by comparison, Lipsin says.

  • "Inside IBM: Internet Business Machines"
    Business Week (12/13/99) No. 3659, P. EB20; Sager, Ira

    The dot-com companies may get all the glory in the Internet marketplace, but IBM has quietly become the leader in helping businesses set up shop online, executives refocus their companies' corporate strategies, and much more. About one-fourth of IBM's $80 billion in annual revenue now comes from e-business--almost 50 percent more than rival Sun. And of IBM's e-business revenue, three-fourths comes from the sale of Internet technology, software, and services, rather than the mainframes to which IBM's reputation remains tied. IBM CEO Lou Gerstner's says, "Now, I am not suggesting that you view us as an Internet company, but I think it is worth noting that IBM is already generating more [e-business] revenue and certainly more profit than all of the top Internet companies combined. Critics pointed to IBM CEO Lou Gerstner's lack of computer industry experience when he came to the company in 1993, yet Gerstner has tenaciously sought to push IBM e-business influence in all areas, from products to practices to marketing. Among the results: online sales should reach past $12 billion this year, up almost 400 percent compared with last year. And by handling more of its customer service online, IBM expects to save $750 million. More internal training using the Internet should give IBM and additional $120 million in savings. In a critical early move by Gerstner, IBM in 1994 devoted 25 percent of its research and development budget to Internet-related technology, with the intention of making all IBM products "Internet-friendly." As part of the new strategy, Lotus Notes was integrated with Web technology, and IBM based software development on the Java programming language. The respected IBM executive Irving Wladawsky-Berger was put in charge of the company's new Internet Division that year, and Gerstner sat down with top executives and decided where in IBM's product line were gaps that IBM needed to focus new development on.

  • "ASPs Rethink Approach to Billing Users"
    InfoWorld (12/06/99) Vol. 21, No. 49, P. 1; Briody, Dan

    ASPs are examining different billing models, with some favoring a usage-based approach and others advocating flat rates. In response to the usage-based push, software makers are beginning to offer products that help ASPs determine a customer's monthly usage. In the past, ASPs had difficulty charging on a usage basis because they could not monitor and meter network traffic. This week Narus plans to launch version 1.5 of its Narus Billing Mediation software, which will provide ASPs with usage data, fraud detection, and quality-of-service diagnostics. Another software firm called Erogo offers ASPFlex, which lets ASPs bill for specific applications. Rather than monitoring usage, ASPFlex takes usage information from a specific application and channels it into a billing program. Narus and other companies believe ASPs, like major phone companies, will use their pricing plans to distinguish themselves from rivals in the future. However, other companies such as USinternetworking feel that customers want to know how much they will be paying each month. USinternetworking's Dave Collier points to the ISP industry, which began charging on a usage basis and switched over to flat fees because of customer demand.

  • "Not a Global Village After All?"
    InternetWeek (12/06/99) No. 792, P. 13; Wilson, Tim

    People in different countries use the Web and make online purchases in sometimes vastly different ways, according to a nonscientific International Data (IDC) survey on e-commerce. IDC's John Gantz says, "Some of the results we had will challenge the conventional wisdom about e-commerce in certain countries." For example, although many people do not view developing countries as potential markets for online commerce, up to 33 percent of respondents in India, China, and Chile bought things on the Net in the last three months. Western Europeans have the speediest access, with over 40 percent having links of at least 64 Kbps, while high-speed connections are available to roughly 22 percent of Asia-Pacific region people. In the U.S., the percentage of people with links over 56 Kbps is 17 percent, but the U.S. led the world in buying online; three-quarters of U.S. respondents said they bought something on the Net in the past three months. In Japan, over 25 percent of people responding said they had at least three devices with which they could access the Net. People responding to the survey also came from all levels of education and computer savvy, so online merchants will have to focus on ease of use, says IDC's Alan Farias. The survey was based on voluntary responses from 29,000 Web surfers in over 100 countries.

  • "Do 'Digital Certificates' Hold the Key to Colleges' Online Activities?"
    Chronicle of Higher Education (12/10/99) Vol. 46, No. 16, P. A47; Olsen, Florence

    Several universities have begun issuing "digital certificates" to ascertain the identity of students and college personnel who are conducting online endeavors on campus. These certificates are small, coded files with embedded information about a particular person or institution. The certificates come with two encryption keys, one public and one private. University administrators say these certificates will gain more importance as colleges increasingly make online campus activities self-regulated, such as allowing students to register for classes online. Analysts say research librarians may currently be most in need of digital certificates, in order to use databases and electronic journals not in stock in their campus collections. However, many universities are not currently offering digital certificates to students because many of the electronic databases that the universities subscribe to do not have their servers programmed to accept certificates. This has led MIT and nonprofit consortium Corporation for Research and Educational Networking (CREN) to create a service that validates the digital certificates of colleges and research institutions that meet certain guidelines. This allows universities to bypass the complicated technical and business agreements that would have to be arranged for a university to ensure that its certificates would be recognized by other colleges and electronic publishers.

  • "AirTouch: Rolling Out Slowly"
    Wireless Week (11/29/99) Vol. 5, No. 48, P. 24; Smith, Brad

    Net Access, AirTouch Cellular's first wireless Internet service, allows users to connect laptops to the Internet or a corporate intranet. Boeing's Ron Mannhalter says Net Access is easy to use and deploy, and works well even from deep inside Boeing's concrete-and-steel plant near Seattle. Net Access is currently being used exclusively in QUALCOMM 860 Thin Phones, but AirTouch is planning to bring out other Net Access-equipped handsets in the future. The company predicts that the service will be nationwide by early 2000 via roaming agreements.

  • "Behind the Scenes"
    PC Magazine (12/14/99) Vol. 18, No. 22, P. 12; Gunnerson, Gary

    A wealth of new technologies aim to make e-commerce more convenient. Among these innovations is the digital wallet, which is designed to automatically fill out the online forms required upon purchase by each online site. Jupiter Communications reports that 27 percent of consumers abandon e-commerce transactions because they do not want to take the time to complete the online forms. Digital wallets ease the e-commerce process by securely storing consumer information such as billing address, mailing address, and credit card information. Most digital wallets have adopted standard methods of completing online forms, either by cataloging forms for specific sites or by supporting tags that use Electronic Commerce Markup Language (ECML).

  • "Standard Irons Wrinkles out of IP Fax"
    Network World (12/06/99) Vol. 16, No. 49, P. 51; Sieloff, Jeff

    IP fax transmissions can offer substantial cost savings for businesses by skirting long distance charges. But interoperability issues still exist that can result in higher phone bills for users, writes Brooktrout Technology's Jeff Sieloff. The International Telecommunications Union has…

  • "A Big Bet on the Holidays" Newsweek (12/13/99) Vol. 134, No. 24, P. 70; Stone, Brad

    Internet retailers have bombarded television viewers with a slew of advertisements in the hope of making huge holiday sales. The potential for big money already is evident: over Thanksgiving weekend Amazon.com sold two and a half times as much as in the same period last year, Yahoo! sold five times more, and AOL sold three times more. Dataquest projects total holiday e-commerce sales to reach $12.2 billion, three times higher than last year. Smaller e-commerce companies find themselves at a crossroads. Some are opting to join the advertising bonanza and boost their sales at a hot time of year. Others are choosing to wait until the noise dies down and some of their competitors have fallen away before launching promotional campaigns. FamilyWonder.com founder Jonathan Kaplan says he does not want to spend all of his company's money making ads that will blur into a sea of rivals' spots. Meanwhile, Send.com CEO Mike Lannon sees the market as too volatile to wait and is in the midst of a massive effort to attract customers. Lucy.com CEO Sue Levin says only e-commerce sites with solid brand names will be able to succeed over this year's holidays, so she plans to wait until early next year to begin pushing her site.

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