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Volume 2, Issue 48:  Wednesday, April 26, 2000

  • "Microsoft Management Tells Workers There Will Be No Breakup"
    New York Times (04/26/00) P. C1; Lohr, Steve; Brinkley, Joel

    Management at Microsoft assured employees yesterday that the company would not be broken up and that new stock options would be given to employees to protect them financially from the recent reduction of Microsoft's stock price. "No matter what the newspaper headlines say, absolutely nothing in the current case justifies breaking us up," said Microsoft CEO Steven Ballmer. Chairman Bill Gates stresses that Microsoft has done nothing wrong. The Justice Department and the 19 states suing Microsoft disagree and call for strong remedies. The remedy proposal, which will be submitted by Friday, will probably suggest breaking Microsoft into two companies and imposing restraints on the company's business practices. Although many believe that dividing Microsoft will restore competition to the industry, others have noted that a breakup would still leave the smaller companies with a monopoly in their respective markets. Further, growth in the future will probably be in PC computing on the Internet, an area in which Microsoft is not particularly competent. Still, venture capitalists are guardedly optimistic that competition may be restored by the government's plan to divide the company. Gordon E. Eubanks Jr., a software industry executive, believes that the industry will not suffer from the government's remedy proposal. Meanwhile, the briefing of White House advisers on the issue of breaking up Microsoft was simply informational. White House advisers did not attempt to change the Justice Department's strategy, and the President, who did not attend the meeting, believes the Justice Department should handle the issue.

  • "Glendening Signs Bills on E-Commerce"
    Baltimore Sun (04/26/00) P. 1B; Dresser, Michael

    Maryland Gov. Parris N. Glendening yesterday signed into law a bevy of related e-commerce bills, including the Uniform Computer Information Transactions Act (UCITA), the Uniform Electronic Transactions Act (UETA), and a measure that forces public libraries to adopt guidelines protecting children from Internet smut on library computers. Maryland will become the first state to put a UCITA law into effect, and the UETA law gives electronic contracts legal validity. The overall package of laws also calls for extending government services to the Internet, guidelines for the collection of personal data by government agencies, and harsher punishment for hackers. After signing the laws, Glendening embarked on a trip to Silicon Valley to promote Maryland as one of the top e-commerce states in the nation. Baltimore venture capitalist Charles J. Nabit, CEO of Southport Financial, said Glendening has much to boast about. "Maryland has the most complete package of legislation and the most e-commerce-friendly environment of any state in the country," Nabit said.
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  • "Intel Eyes More Funding In Indian Firms"
    Reuters (04/26/00); Daga, Anshuman

    Intel intends to increase its investments in Indian firms this year, especially companies that provide services, infrastructure, and enabling technologies. Intel has invested in more than a dozen Indian firms over the past 15 months. The Indian Internet industry is expected to undergo a shakeout as dot-coms flood the sector, but Intel officials expect that startups with effective business plans will remain and prosper.

  • "Your Manager's Policy on Employees' E-Mail May Have a Weak Spot"
    Wall Street Journal (04/25/00) P. A1; McCarthy, Michael J.

    High-tech workers are trying to curb their employers' power to control email use in the workplace by seeking protection under the National Labor Relations Act passed in the Depression Era. The National Labor Relations Board (NLRB) sets guidelines to preserve workers' rights to organize themselves as well as to communicate with one another about work terms. The board is trying to clarify legal issues that have emerged with new technology, such as whether a unionized company can universally monitor workers' computer usage. Past NLRB rulings have held that employers must negotiate with unions before using polygraphs, conducting drug tests, or aiming surveillance cameras at employees. In a case involving email, the NLRB ordered that Timekeeping Systems, a manufacturer of bar-code readers, rehire a programmer who was fired for criticizing the company's new vacation plan over email. The Timekeeping case marked the NLRB's first ruling that the government should protect email use, despite the fact that the company had no union. In another case, the NLRB issued a memo that forced Pratt & Whitney to retreat from its policy of prohibiting all personal use of email. By forbidding all non-business email use, Pratt & Whitney banned workers from exchanging messages about work conditions, and federal labor law protects such communications. The NLRB found that Pratt & Whitney's policy was illegal, and the company subsequently announced that occasional personal use of email would be permitted.

  • "ICANN Moves Closer to Adding Web Domains"
    Newsbytes (04/20/00); McGuire, David

    The Internet Corporation for Assigned Names and Numbers (ICANN) will decide whether to approve a proposal by its Names Council that would allow for new generic top-level domains (gTLDs) to be created for the legacy root server. ICANN manages the addressing system for the Internet, and therefore it holds the power to decide whether to add to the three present gTLDs--dot-com, dot-net, and dot-org. Before the end of the year, new domains, such as dot-banc for financial institution sites and dot-shop for e-commerce sites, could be established with very little technical difficulty, says Network Solutions' (NSI) Brain O'Shaughnessy. NSI is eager to see new gTLDs created. ICANN President Mike Roberts says the proposal to add to new gTLDs is very controversial and anticipates much feedback from the Internet community. Roberts says the ICANN likely will devise a procedure for adding new gTLDs when it meets in July. One of the only issues left to be worked out is who will be in charge of the new Internet domains. Roberts says ICANN remains open to the types and naming conventions used to create new top-level domains.

  • "Online Credit Card Security Gets a Charge"
    Investor's Business Daily (04/25/00) P. A8; Howell, Donna

    One in 10 e-commerce merchants have had transaction information stolen, and fear of such crime has kept many consumers from purchasing online, according to recent FBI statistics. However, two new companies, one Irish and one English, are developing e-commerce security products that may radically secure the online shopping experience. NCipher, headquartered in Cambridge, England, recently created a data security product called NForce that maintains encrypted private keys under hardware controls on an e-merchant's computer. In order to access these hardware controls, it is necessary to use smart cards and obtain several approvals. Microsoft recently said that it will use NForce to "manage" the digital certificates used by its employees. The Irish firm Orbiscom recently created a special credit card for e-commerce transactions. A customer's regular credit card is electronically connected to the customer's bank's online operations via a computer icon. A password must then be entered, and the customer is asked to type in the credit limit desired on the card for the transaction, as well as the length of time that the customer wishes the card to be valid for. After processing this information, the bank then issues a special credit card number to be utilized for an online transaction. Allied Irish Banks PLC is currently testing out the Orbiscom system with the cooperation of Visa and Mastercard, and will soon integrate the system into its online banking program.

  • "Interagency Alliances Aim to Fight Cybercrime"
    New York Times Online (04/25/00); Clausing, Jeri

    The FTC has played the part of supreme enforcer of the Internet for nearly half a decade, getting help from other government agencies, consumer groups, state attorneys general, and international partners. That role continues with the Children's Online Privacy Protection Act, a recent addition to the FTC's arsenal of consumer protection laws. Meantime, other agencies have been partnering to overcome the sticky issue of jurisdiction, a major stumbling block to enforcing laws on the Web. For example, the U.S. Customs Service and Thailand last month took combined action against 18 online pharmacies in the Southeast Asian country that had been breaking U.S. drug laws. With the exception of online prescription drug sales, the Clinton administration believes existing laws provide enough regulation of the Internet. The FBI has been developing closer working relationships with the G-8 group of developed countries to combat hacker attacks. John T. Bentivoglio, chief privacy officer in the Department of Justice, says many foreign governments now realize the value of cooperation in pursuing criminal activity on the Internet. The G-8's high-tech crime task force, headed by the U.S., has been encouraging other countries to update their laws to reflect the realities of the digital age.

  • "US Agency Offers Export Advice Online"
    Journal of Commerce (04/26/00) P. 11

    An e-commerce trade service designed to assist small and medium-sized companies in growing global relationships and engaging in e-commerce was launched by Commerce Secretary William M. Daley last month. The site, www.usatrade.gov, provides market research on 90 countries, trade leads screened by the Department's Commercial Service international staff, and a video Webcast library with programs on market opportunities and "how-to-do-business" tips for China, Brazil, and beyond. Companies can also join E-Expo USA, the Commercial Service's virtual trade show. There they receive a virtual booth that supplies company and product information, a calendar of trade shows and events, and direct email and links to all Commercial Service domestic and international offices. The site also offers federal government export assistance resources, publications such as the Basic Guide to Exporting, Commercial Service products including customized market research and introductions to potential buyers, and information on sources of trade financing.

  • "New Bluetooth Networking Technology Is Ready for Launch, Except in France"
    Wall Street Journal (04/24/00) P. B17C; Delaney, Kevin J.

    Bluetooth technology has not gained approval for use in France. Bluetooth, designed as a worldwide standard for short-distance wireless communication between computers, cell phones, and other related devices, is presently illegal to use in France, where possible penalties include fines and six months in jail. The French law concerning the technology was passed to protect sensitive military operation's transmissions against possibly being picked up by Bluetooth products since both use identical radio frequency. France has so far resisted arguments from the wireless industry to change their military's frequency, and is the last remaining country to not accept the Bluetooth standard. This is not totally unexpected as France refused to legalize more secure computer encryption codes two years ago. The decision of many mass producers of wireless devices, such as Toshiba, Nokia, and Ericsson, to incorporate Bluetooth in nearly all its devices is sure to complicate matters for France; the nation's Bluetooth restrictions are sure to be broken by users of imported Bluetooth technology.

  • "Piracy Killing Thai Software--Watchdog"
    Reuters (04/25/00); Jittapong, Kettiya

    Thailand's software industry is plagued with a piracy problem so severe that illegal software accounted for 82 percent of the Thai market in 1998, according to the Business Software Alliance (BSA). Piracy in Thailand needs to be quickly eliminated to allow legal markets to open and local developers to obtain investments to build new products, says BSA vice president Huey Tan. Although the BSA attacked illegal software last year, piracy is still rampant and the situation is unlikely to improve in the near future, Tan says. The BSA last year urged businesses to migrate to legal software during a 90-day grace period, with unimpressive results. The two main factors driving piracy are the ease with which users can copy software and a failure to understand the effort developers put into creating software, says Tan. The BSA is working to educate companies and users about software, and has warned over 15,000 Thai corporate users of the possible consequences of using illegal software.

  • "Lawmakers at Comdex Talk Trade, Taxes"
    TheStandard.com (04/20/00); Johnston, Margret

    The Comdex conference in Chicago last week gave high-tech leaders an opportunity to meet with lawmakers and voice some of their concerns regarding taxes. The eight Republican congressmen reiterated their commitment to ending the 100-year-old tax on telecommunications usage. In fact, Rep. Billy Tauzin (La.) said the House committee that he chairs will vote in May on eliminating the 3 percent excise tax. The advisory committee studying the issue of taxing Internet-based sales for Congress recommended doing away with the telecommunications tax. There may even be broad support for such a move in Congress. Business representatives also stressed that lawmakers need to update tax depreciation rules to make it easier for companies to write off computers against their income taxes. Because companies tend to replace their computers every two or three years, high-tech representatives said it should not take five years to fully write off computer purchases. Although Rep. Jerry Weller (Ill.) said he is sponsoring a bill that would shorten the write-off schedule to one year, he did not make any promises. However, he added that the Treasury Department will be releasing its study on tax write-off schedules shortly. The lawmakers also expressed some of their ideas about addressing the digital divide. Weller's bill would encourage companies to donate their computers to schools, libraries, and community centers in low-income neighborhoods. Linux executive Jon Hall said he would like to see Congress get behind a program that would be similar to Sun Microsystems' "Net Day," which would have high-tech companies commit employees and personnel for wiring low-income communities.

  • "China Looks to Linux as a Way Not to Get Locked Into Windows"
    Wall Street Journal (04/25/00) P. A23; Bolande, H. Asher

    China, one of the world's fastest growing computer markets, may use the Linux operating system as an alternative to Microsoft's Windows before the company's programs become ingrained in the country's economy. In early January an official reported that Communist leaders plan to use a state-developed operating system based on Linux technology called Red Flag instead of Windows. The government is also providing contractual support to domestic companies that offer Chinese-language versions of Linux. However, China does not appear interested in sacrificing its entire technology industry for Linux. Instead, China is grooming the new operating system in case it wants to exploit Microsoft's technology in the future without giving up control of its software industry. Technologically young, China is not yet dependent on the Information Age, and in that respect is one of the few countries still able to choose systems other than Windows. Chinese officials view the privacy of Window's source code as a possible way for others to disable China's national security systems, while the alternate system, Linux, runs on open-source code that could be viewed in its entirety by anyone.

  • "The New Linux World Order"
    E-Commerce Times (04/21/00); Beale, Matthew W.

    As Linux increasingly moves into Microsoft's Windows NT territory, observers are watching for the software giant's attempt to quash its open source rival. Although some experts speculate Microsoft will eventually open its Windows CE source code, others believe the company will release its own version of Linux. In a move that seems to target Linux, Microsoft bought the Unix company Softway Systems last September and now plans to integrate the Interix line with its pending Windows Services for Unix (SFU). Interix provides a link from Windows to Unix environments, while SFU aims to connect Windows 2000 and Unix. By combining Interix and SFU, Microsoft wants to encourage users to migrate to Windows. In addition to the integration, Microsoft showed it is not yet deserting Unix and its many variants in January when the company announced plans to release a Linux version of the Windows Media Player. Meanwhile, Linux server shipments grew 166 percent from the fourth quarter of 1998 to the same quarter in 1999, making the open source OS the fastest growing server platform, according to a recent International Data report.

  • "European Markets See Strong Growth in Net Users"
    InternetNews.com (04/21/00); Pastore, Michael

    An increase in the number of new Internet users in France, Germany, and the United Kingdom should help boost the three countries' combined online population to 52 million by year's end, according to the Euro.Net survey from the NOP Research Group. The Internet market in France freed itself from a recent period of mired growth to post impressive gains of 47 percent, outstripping both Britain and Germany, which posted growth rates of 33 percent and 22 percent, respectively. However, greater numbers of British Internet users professed satisfaction with their access providers than did French and German users combined. Thirty-eight percent of U.K. users polled said they were "very satisfied" with their provider, compared with 20 percent of French users and 17 percent of German users. Britain also led the three nations in numbers of online shoppers, with 3.1 million. Germany was a close second, with 2.9 million online shoppers, followed by France, with 700,000 online shoppers. NOP's Internet User Profile Survey predicts that U.K. shoppers will make more than 10 billion pounds of purchases over the Internet this year, compared with 3.2 billion last year. Groceries, books, and CDs are or will be among the more popular items purchased online by U.K. shoppers this year. The early adoption of new Internet access devices among Europeans, particularly the British, will force content providers to redefine their strategies for mobile Internet services.

  • "IT Talent Shortage Renews Interest in Mentoring"
    InformationWeek (04/24/00) No. 783, P. 166; Baron, Talila

    Technology companies seeking to attract and retain skilled IT employees are implementing mentoring programs in which veteran workers are paired with new hires. The programs are intended to help the new employees acclimate to the corporate culture, become familiar with the organization, and grow both personally and professionally. Mentors benefit as well by learning to communicate more effectively while gaining greater understanding of the various business divisions within a company. Menttium CEO Gail Holmes says "a strong correlation exists between mentoring programs and employee retention." She adds that companies which demonstrate interest in the personal and career development of their employees are better positioned to attract, retain, and develop talented workers. Mentoring programs are most successful when participants are committed to the program and when mentors do not simply teach but also listen to new hires. Also important is the development of a personal relationship; to encourage this, those with similar personalities and career goals should be paired together. Among existing corporate mentoring programs is IBM's Executive Resource Program, which encourages women to obtain positions in the IT field by providing positive role models and demonstrating the range of available IT opportunities. Having already created a program for IBM Global Services, Diane Hill of IBM Learning Services is currently working to develop one for her own division. IBM has also formed the Women of Color and Women in Technology subcommittees, the Mentoring and Employee Development Program, and the Global Women's Leadership Conference.

  • "Russian to the Web"
    Interactive Week (04/17/00) Vol. 7, No. 15, P. 110; Smetannikov, Max

    The government act Systems for Conduct of Investigations and Field Operations (SORM) and its tax system may be the foremost reasons why Russian businesses and entrepreneurs have not embraced the Internet. Although SORM allows the new secret police to enlist the services of ISPs in wiretapping individuals and companies, the existing tax system is considered to have usurious rates by businesses. In Russia, businesses exist in an environment in which they may have to pay taxes as high as 130 percent, not on their profit, but on their revenue. And in response, many companies evade paying taxes because they believe that is the only way for them to stay in business. Thus, the Russian business community does not look kindly on setting up shop on computers that tax inspectors could confiscate. In this war over taxes, the Internet has become one of the casualties. Some experts say the prospects for business-to-business investment opportunities in Russia are excellent because the country's business communications and transactions infrastructure is so outdated. Moreover, involvement in the Internet on the part of Russia's business community could result in a big boost for the country's economy. Investors started to show an interest in the Russian Internet in September 1999 and their enthusiasm picked up during the winter of 2000. Russia now has its own versions of Amazon in Ozun.ru, AOL in Golden Telecom, and Yahoo! in Rambler. The Russian equivalent of CMGI, Ru-Net Holdings, says foreign investors will flood the market with about $200 million this year. Some observers actually think entrepreneurs would be able to make so much money online that they would no longer have to hide from tax collectors. "The truth is that there are plenty of players in the market that want to play clean, especially because the existence of such a portal would lower the cost of doing business," says Alexei Peterkin, a partner at New York-based e-business solutions provider A Partners.

  • "ASPs Are Readied for Success"
    tele.com (04/18/00); Brown, Patricia

    The results of a recent study conducted by Cahners In-Stat Group suggest the U.S. ASP industry will grow significantly during the coming year, despite such obstacles as the advent of broadband services and ongoing concerns regarding infrastructure and security. The researchers predict that ASPs in 2000 will invest approximately $1 billion on infrastructure, and a large portion of corporate survey participants predict their customer bases will increase from an average of 25 customers in 1999 to an average of 170 by the end of 2000. However, the researchers also note the inexperience of the ASPs in developing and maintaining extensive, reliable IT networks and believe ASPs may be spreading themselves too thin in attempting to provide a range of services, including high-speed Internet connections and IT systems management, monitoring, support, and troubleshooting, instead of focusing upon providing quality application delivery. The study also indicates that in order to effectively compete in the marketplace, ASPs will likely need to specialize in customer support and management, applications development and optimization, and the creation of infrastructures well-suited for partnering. Indeed, several network equipment provider companies, such as IBM, Cisco, Sun Microsystems, and Oracle, are poised to partner with ASPs and some have even created products intended for use by ASPs.

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