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Volume 2, Issue 66:  Friday, June 9, 2000

  • "Microsoft Sets Out on Road to Appeal"
    Wall Street Journal (06/09/00) P. A3; Wilke, John; Clark, Don

    Microsoft, citing "grievous and irreparable harm," yesterday began the process of appealing U.S. District Judge Thomas Penfield Jackson's ruling to split the company, in a case that could end up before the Supreme Court. Microsoft will remain whole during the appeals process, but Jackson has imposed restrictions on the company's operations, and is unlikely to stay those restrictions as per Microsoft's request yesterday. Once Microsoft officially files a notice for appeal, the Justice Department can ask that the case be directly appealed to the Supreme Court. However, Microsoft would rather the case go the federal appeals court, which in 1998 ruled in its favor in an earlier, related case. Microsoft will base its appeal on Jackson's determination that Microsoft illegally harmed rival Netscape Communications when it bundled its Windows operating system with its Internet Explorer browser. Jackson's ruling in effect overturned the 1998 appeals court finding that Microsoft had not violated antitrust law because it could show a "plausible" benefit to consumers by integrating the two products. Microsoft also is expected to contend the finding that it used exclusionary contracts to unlawfully acquire and extend its monopoly power, violating Section 2 of the Sherman Antitrust Act. The remedy phase of the trial is also expected to offer appeals options.

  • "Disclosure of Windows Source Code Is a Central Requirement"
    Financial Times (06/09/00) P. 6; Foremski, Tom

    The "conduct remedies" ordered by U.S. District Judge Thomas Penfield Jackson in his ruling against Microsoft could prove more damaging than his decision to split the company. Although some analysts say breaking up the company could eventually make it more valuable, Microsoft competitors such as Sun Microsystems say the conduct remedies would go a long way toward ensuring that open standard technologies exist on the Internet. Jackson has given Microsoft 90 days to implement his remedies, and Microsoft yesterday asked for a stay of that order while it appeals the court's ruling. Jackson has ordered Microsoft to reveal the source code of its Windows operating system, which Microsoft chief counsel William Neukom refers to as the "confiscation of our intellectual property." Jackson is also requiring that Microsoft redesign some of its programs, which Microsoft says will require it to divert much of its programming capabilities away from other key projects, particularly its Next Generation Windows Services (NGWS) effort. Microsoft Chairman Bill Gates says the three-year NGWS project will bring about a new Internet era but require resources on the scale of NASA's moon shot. Gates says the NGWS project will go forward in the expectation that Jackson's remedies order will be nullified on appeal.

  • "Software Makers Ask for Protection From Internet Piracy"
    New York Times (06/08/00) P. C2; Clausing, Jeri

    Software makers on Wednesday urged lawmakers to enforce copyright laws on the Internet, warning that inconvenient technological protections will be built into software if the laws are not enforced. To prevent piracy, developers will be forced to implement awkward protections such as software that only works on one machine, said Adobe Systems Chairman John E. Warnock. The executives, visiting Washington on a lobbying trip arranged by the Business Software Alliance, said new copyright laws are not necessary, but enforcement should be improved. More digital piracy cases need to be brought to court, said Autodesk Chairman Carol Bartz. Piracy will become an even larger problem in coming years as more software is distributed online, the executives said. Although 12 percent of software is currently distributed over the Internet, the figure will rise to 66 percent by 2005, according to a Business Software Alliance survey. Furthermore, piracy accounted for 36 percent of the software in use last year, the survey said. In addition to their request for copyright law enforcement, the executives also asked legislators to continue supporting free trade policies and to allow more visas for foreign high-tech workers.

  • "Spain's Cell Phone 'Love Bug' Unlikely to Infect U.S."
    Washington Times (06/08/00) P. B9; Stefanova, Kristina

    Internet security experts said yesterday that the virus currently affecting Telefonica's network is not likely to spread to U.S.-based networks. The new virus has been spreading to Telefonica's Web-enabled handsets. Telefonica, which is Spain's biggest mobile phone company, has been the only company infected by the virus thus far. The virus spreads by entering the email systems of Web phones, and then sends emails containing the virus to every address in the user's Internet address book. Some experts caution that the U.S.'s network systems could be severely impacted if a stronger version of the virus were to spread into the nation's wireless networks. The virus destroys saved computer files, but cannot damage hardware.

  • "Digest: House and Senate Conferees"
    Washington Post (06/09/00) P. E2

    The Electronic Signatures in Global and National Commerce Act, also known as the E-Sign Act, has been approved by House and Senate conferees. The House and Senate may address the legislation by next week. "This is good news for the American economy and good news for American consumers," said House Commerce Committee Chairman Thomas J. Bliley Jr. (R-Va.).

  • "EU Plans Rule for Web Tax; U.S. Companies Protest Proposal"
    Wall Street Journal (06/08/00) P. A19; Winestock, Geoff

    The European Commission introduced a draft law yesterday that would require certain U.S. companies that sell online products in Europe to comply with European Union value-added tax (VAT) rules. The VAT would apply to online sales of music, software, and computer games by U.S. companies that do more than 100,000 euros of online sales in the EU. The proposal drew a quick and harsh response from U.S. companies. U.S. Software and Information Industry Association President Ken Wasch said it is unlikely that the EU has the legal authority to impose the tax on U.S. companies. "U.S. vendors should not be tax collectors for European governments," he said. The proposal is fatally flawed because of problems with the technological feasibility of such an undertaking, according to U.S. companies.

  • "High-Tech CEOs Converge on D.C. for Internet Summit With Lawmakers"
    Investor's Business Daily (06/09/00) P. A7; Guinto, Joseph

    A dozen leaders of prominent high-tech companies descended upon Washington this week to lobby lawmakers on several issues of importance to the industry. Many of the leaders urged lawmakers to vote against saddling the Internet with new online privacy laws. They also lobbied for Congress to grant China permanent normal trade status, to more strictly enforce laws against software theft, to allow more foreign high-tech workers into the country, and to increase tech-education-related funding efforts. The industry is likely to get what it wants because of its massive influence on the nation's economy and its muscle in Congress. The Business Software Alliance said its agenda includes "strong copyright protection, open markets free of regulation, and availability of a world-class work force." Microsoft Chairman Bill Gates said the most important high-tech issues Congress needs to address are those regarding education, including the renewal of the Elementary and Secondary Education Act. Many of the CEOs would like to see Congress permanently install a research and development tax credit. Privacy, of course, is a big issue to the industry, but not one everyone is in agreement on. Intel's Andy Grove favors one broad federal online privacy policy. Others favor industry self regulation, and still others fall somewhere in between the two extremes. Grove also opposes special tax breaks for the Internet.

  • "Web Lobby Fights Foes on All Sides"
    Law.com (06/06/00); Eckstein, Ron

    Internet service providers (ISPs) are lobbying against increased restrictions on alcohol, gambling, and drug enforcement--not because they support the misuse of substances, but because they do not want the medium of the Internet to be restricted because some people abuse it. Bell Atlantic vice president Sarah Deutsch says the ISPs do not have a stake in activities such as online instructions for bomb-making, but neither do they want to be punished for people distributing such instructions. Some of the many bills introduced recently would make ISPs liable for the activities of the sites they host, while others would make them police their sites. NetCoalition executive director Daniel Ebert says Congress members are not trying to cause liability problems, noting that the Internet constituency needs to work with lawmakers. Some lobbyists are considering legislation that would establish liability limits for Web hosts, while others are not sure that a general standard is realistic. Laws vary from state to state and issue to issue, which would make things difficult for ISPs. Congress is also trying to protect databases without restricting the flow of information.

  • "Knowledge Management Tool Can Make Life Easier"
    Financial Times--Information Technology (06/07/00) P. 4; Shillingford, Joia

    Interest in customer relationship management (CRM) systems is rising. The better CRM implementations will include sales force automation, customer service, marketing, data warehousing, back-office integration, collaboration databases, and, most importantly, support for the cultural changes necessary to allow the technologies to work. Experienced sales personnel may resist the sharing of best practices with less experienced colleagues but it is the inexperienced sales personnel who will mine the most value from CRM systems, which equip them with specific customer information such as trading history, products purchased, interests, and other helpful hints. "In a good CRM, tried-and-tested selling techniques for the company's products will be available for the less experienced staff," says Pagoda Consulting CRM specialist Peter Brown. From a broader strategic perspective, CRM could be viewed as customer value management, says Druid consultant Nick Archer. "The single customer view that CRM provides ... enables organizations to measure the true value of a customer," he says.

  • "Study: Shareholders Meetings Ceding Ground to Web"
    Reuters (06/07/00)

    Roughly 40 percent of companies listed on the Nasdaq exchange say they will publicize themselves by broadcasting their shareholder meetings online, and about 50 percent say they favor allowing shareholders to exercise their voting rights on the Internet, according to a recent study from Ernst & Young. About one third of the 206 companies surveyed responded. The survey also determined that 47 percent of the companies surveyed say the Internet has replaced shareholder meetings as a way to communicate with investors.

  • "A New Level of Online Trust"
    InformationWeek (06/05/00) No. 789, P. 22; Nelson, Matthew G.

    Most payments in online marketplaces now occur offline, but as marketplaces grow, the need for secure ways to handle payments over the Internet is rising. Digital certificates and public key infrastructure (PKI) are the prevailing means of verifying identities online and limiting access to authorized users. Once authentication is in place, an online exchange can process a range of payments, including Internet checks as well as debit-card and credit-card payments. Security systems vendor VeriSign has teamed with marketplace platform provider Ariba to create a secure payment system for a procurement-card system from American Express called Pay on Ship. The secure infrastructure will enable marketplaces powered by Ariba to use the Pay on Ship card for transactions. In a separate deal, VeriSign is working to add digital certificate authentication to the marketplace platforms of Commerce One and Intelisys Electronic Commerce. Meanwhile, some marketplaces are creating their own security systems. E-IDC.com, a design and construction industry marketplace, is building a system to be hosted by an application service provider that will allow the marketplace to handle large payments online. All users will establish accounts at the same bank to eliminate the problem of transferring funds from one bank to another, and digital certificates will authenticate user identities. In another move to secure online transactions, 21 financial institutions have formed a company called Identrus, which will use authenticate payments through digital certificates, a real-time validation service, and a financial warranty. Participating banks will verify companies and provide them with Identrus certificates.

  • "Workers, Surf at Your Own Risk"
    Business Week (06/12/00) No. 3685, P. 105; Conlin, Michelle

    As much as 30 percent to 40 percent of lost employee productivity can be attributed to workers' personal use of the Internet, according to International Data. Porn sites are the most frequented Web pages by surfers on the job, according to experts, closely followed by many other activities; Charles Schwab estimates that 70 percent of its customers perform their online trading at the office. All of this "cyberslacking" costs the economy $54 billion a year, according to Websense, a producer of employee-monitoring software products. A recent survey by the company shows that almost 75 percent of large U.S. companies monitor employee email, Internet use, and telephone calls, which is nearly twice the number of firms that snooped on their workers in 1997. However, although most companies in the recent past were chiefly concerned with lawsuits stemming from sexually-charged emails or porn site surfing, most firms are now more concerned about lost time and reduced productivity. Despite predictions of even greater increases in employee surveillance, experts contend that such activity by employers fosters an attitude of distrust in the workplace and a lowering of employee morale. With the economy humming and worker productivity on the whole at an all-time high, analysts say most employees should be cut some slack in terms of personal Internet use. And with the tight labor market, the types of people that many firms want to attract--computer savvy twenty-somethings--are precisely the group of people that would be repelled by such heavy-handed policies.

  • "A Rough Road Trip to the Net"
    Industry Standard (06/12/00) Vol. 3, No. 22, P. 150; Helft, Miguel

    Threatened by the popularity and high market valuations of online consumer mapping and travel planning companies such as MapQuest.com, Expedia.com, and Travelocity.com, traditional market leader Rand McNally realized it needed to act decisively and quickly in order to catch up with its new competitors. Rand McNally plans to launch on June 28 its revamped Web site, RandMcNally.com, and begin the process of catching its rivals. Transforming the famously staid Rand McNally into an e-commerce contender has been no easy task, and it is far from clear whether the company will be successful. While Rand McNally sold some 46 million paper maps last year, only 255,000 people visited its Web site in March, compared to the 5.5 million visitors to MapQuest's site, according to Media Matrix. By fall, RandMcNally.com will feature an automobile club similar to AAA, an effort designed to build a relationship with customers and open doors to potential revenue streams down the road. Profitability is important to the company, although it has yet to finalize plans on how to generate income. Chris Heivly, head of the Internet unit at Rand McNally, envisions offering paying auto club members other subscription and pay-as-you-go options through the site. For Rand McNally CEO Richard Davis, hired from the high tech industry, effecting the necessary environmental changes within the conservative company has been his chief challenge. Long-time employees were given the option of joining the new dot-com unit, but few did. The goal of RandMcNally.com, according to Heivly, is to provide travelers with maps, driving directions, personalized travel planning services, regional information, to become an indispensable part of customers' road trips. They will continue to come back if the site can accomplish that, he says.

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