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Volume 2, Issue 70:  Monday, June 19, 2000

  • "Reno Seeks Increased Cybercrime Reporting"
    USA Today (06/19/00) P. 3A; Fields, Gary

    Attorney General Janet Reno will convene a group of law enforcement officials and high-tech executives to discuss the problem of underreporting of cybercrimes by many companies. Every year thousands of companies are hit with destructive computer hacks or other types of cybercrime unbeknownst to the public. Companies avoid reporting such incidents out of fear that they will erode public trust in their ability to conduct e-commerce. They are also concerned that competitors will use an incident to their own advantage. Reno says that she will demand that high-ranking members of banking, computer, telecommunications, and Internet firms draw up plans to increase the reporting of cybercrimes by private firms, with an emphasis on making sure that an investigation into those security breaches will be handled with discretion and will not adversely effect the public-relations of a business that has been victimized.

  • "Software Law Foes See Route to Harm"
    Baltimore Sun (06/19/00) P. C1; Washington, Kevin

    Maryland may have been the first state to enact the Uniform Computer Information Transaction Act (UCITA), but if opponents have their way, no other state will adopt UCITA before its overhaul. In fact, other state legislatures have killed or postponed similar bills, while Iowa went so far as to pass an opposing law. Maryland's law, effective Oct. 1, requires buyers to enter legally binding agreements with software publishers. The National Conference of Commissioners on Uniform State Law expects Maryland's bill to undergo revamping, but ultimately wants some degree of uniformity across states. The Federal Reserve, Microsoft, and AOL, among others, claim that the legislation is needed to minimize piracy. But opponents, from consumer advocates to educational institutions, say UCITA is too corporate-friendly. Anti-UCITA lobbyists maintain that although the Maryland law has included a provision that state consumer protection laws remain applicable, the law is still anti-consumer. Libraries and other educational institutions say such software agreements would not allow them to archive, copy, or make those materials available to disabled patrons via assisting technologies. Under some software licensing agreements, users could be sanctioned for speaking against the software publicly or moving the software to other computers.
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    For information on ACM's activities regarding UCITA, visit http://www.acm.org/usacm/copyright.

  • "High-Tech Worker Crisis Is Unfair Game"
    E-Commerce Times (06/16/00); Regan, Keith

    The continued growth of the U.S. high-tech industry depends on legislative action on the issue of immigration, and time is running out to raise H-1B visa caps as lawmakers debate a range of competing measures, writes Keith Regan. This year the industry used up its quota of 115,000 H-1B visas by March, leaving 300,000 high-tech positions still unfilled. In an effort to persuade Congress to act on the issue, high-tech companies joined forces in a group called American Business for Legal Immigration. The group, which includes Microsoft and Hewlett-Packard, warned legislators that if visa caps are not raised, the U.S. high-tech industry will lose sales and be forced to postpone projects, possibly causing the nation to lose its dominant role in IT. An increase in the visa caps seemed likely until last week, when President Clinton suggested raising the visa fee from $500 to $2,000, with the extra money going toward training for U.S. workers. Clinton dampened support for his proposal by linking the increased quota to amnesty for immigrants already living in the country illegally. Although Clinton's proposal addresses the inequities of an immigration policy that embraces educated foreign IT workers while casting out refugees, Regan suggests that Clinton should not allow his political motives to impede the nation's technological progress and economic growth. If legislators fail to act on the visa caps in coming weeks, the number of H-1B visas available to high-tech firms will actually fall, Regan warns.

  • "E-Mail Attitudes: Talk to the Mouse"
    Christian Science Monitor (06/19/00) P. 12; Hartill, Lane

    A recent survey from business-information Web site Vault.com aims to provide information about the impact of email on workers' productivity, communication, and quality of life. The survey, which polled over 1,000 employees, found that 80 percent of respondents believe email has essentially supplanted traditional mail, while 49 percent said email has replaced phone calls. In addition, 79 percent of respondents keep a separate email account for personal messages, citing concerns about monitoring by employers. Meanwhile, a separate study from Stanford University indicates that email is taking a toll on users' social lives, finding that Internet users tend to devote less time to social events and personal phone calls.

  • "Partisan Edge Is Elusive in Silicon Valley"
    Washington Post (06/19/00) P. A1; Balz, Dan

    Unlike the nation's capital with its bipartisan divisions, Silicon Valley refuses to be pigeonholed into a pat political constituency. "It's not a Republican valley or a Democratic valley," says one Silicon Valley executive. "A politician can't take anything for granted here." Both parties have been increasingly focused on the valley, breaking with a tradition that had Democrats focusing on Hollywood and Republicans heading to Orange County. Democrats and Republicans alike realize that courting Silicon Valley provides a high-tech, cutting-edge appeal. Yet Silicon Valley is a political free-for-all, illustrated in politically active Cisco Systems CEO John T. Chambers' support of both Democratic and Republican incumbents in a culture in which candidates, and not parties, rule the vote. Silicon Valley executives may side with the Republican views on business and Democratic views on social issues, in an effort to gain cross-partisan power and to encourage centrist politics. Despite the high-tech industry's modest campaign contributions--$13 million compared with the legal constituency's $49.5 million as of April 1--politicians continue to appeal to what they consider to be an untapped, ambivalent constituency.

  • "Study Finds CIO Role Is Evolving"
    InternetWeek Online (06/15/00); Khirallah, Diane Rezendes

    Chief information officers (CIOs) are enjoying more influence over their business' performance and success than ever before, according to a GartnerGroup study of 1,400 CIOs. "CIOs have a big impact on what an organization thinks is possible and how quickly it can react," reports GartnerGroup's Marianne Broadbent. "A good CIO, working with executives and senior management, can manage and shape informed expectations on what is and isn't possible." GartnerGroup used a biological analogy to differentiate between four different types of CIO roles, or species. Departmental CIOs direct the IT workings of a specific department, such as human resources, while the technological opportunist CIO is adept at leveraging technology to create new business opportunities. The CIO's chief technology officer aspect tends to make sure IT solutions are cost-effective, even if that means outsourcing solutions. Finally, the CIO strategist works with senior management to map out business and IT needs while leaving the actual implementation of solutions to others. It is likely, according to the GartnerGroup, that most CIOs will have to play many or all of the above roles at one time or another, depending on business and technology pressures.

  • "Software Allows Stealth Monitoring"
    Associated Press (06/14/00); Pope, Justin

    Raytheon recently unveiled its Silent Runner software program, a product that companies can use to monitor whether an employee is using a computer to spread proprietary information or other sensitive data. The software employs algorithms to study communications patterns, morphing the analysis into 3D pictures that can be analyzed to monitor traffic patterns and discover anomalies that could signify that confidential company information is being compromised. Those being monitored are completely unaware of the activity. Although some privacy advocates frown upon the technology, Raytheon insists that it is the least intrusive of all filtering technologies because it does not have to ransack individual files or emails searching for specific keywords. Raytheon also points to a recent report that estimates Fortune 1000 companies suffered $45 billion in losses last year due to the leaking of sensitive data and trade secrets, with the culprits most often being employees rather than outside hackers. Raytheon counts numerous government agencies and private firms among its new customers, but declines to give any names.
    For information on ACM's activities in the area of privacy, visit http://www.acm.org/usacm/privacy.

  • "Digital Divide May Narrow by 2005"
    TheStandard.com (06/15/00); Abramson, Ronna

    The digital divide is an economic problem, not a racial one, according to a new Jupiter Communications study, "Assessing the Digital Divide." The study finds that only 15 percent of American households with annual incomes under $15,000 currently have access to the Internet. By 2005, less than 50 percent of the households in this income bracket will have Internet access, although 64 percent of African American households and 68 percent of Hispanic households will have Internet access. As of last year, only 30 percent of African American households and 33 percent of Hispanic households had Internet access. Internet penetration rates are expected to be 76 percent for white households and 84 percent for Asian households by 2005. Only 9 million of poorer households will be online by 2005, compared with 20 million of the wealthiest households, according to the study. People between the ages of 19 and 49 will lead all other age groups, with a penetration rate of 79 percent, while the over-50 group will have a penetration rate of 58 percent. The cost of PCs and Internet access must drop in order for the digital divide to be bridged, the study concludes.
    Readers interested in the Digital Divide and related issues may wish to learn more about ACM's upcoming conference on Universal Usability http://www.acm.org/sigs/sigchi/cuu.

  • "Big Business Embraces the Internet--Carefully"
    Investor's Business Daily (06/16/00) P. A4; Howell, Donna

    Traditional brand name brick-and-mortar companies have been slow to move online for a variety of reasons, but recently have begun to utilize the Web both to sell products and to improve operations. The offline companies had been concerned that the Internet did not provide enough benefits to make a move online necessary and doubted that customers or suppliers would use the Internet often. Furthermore, many offline businesses were allocating a lot of money and time preparing for the year 2000. But now that the New Year has come and gone, traditional businesses are viewing online sales as feasible. There has been a recent increase in demand for services to integrate online operations with back-end processes, and top companies in several different industries, including automotive and retail, are taking more serious steps onto the Internet. Full-time teams are being utilized by 50 percent of larger businesses to assist in moving operations online, and the executives at these companies are now using the Web to make a profit and simplify the customer's buying experience, rather than simply promote the brand. Traditional brick-and-mortar companies, which are late arrivals to the Internet, may at first have difficulty competing with the dot-coms that are already established online, but customers can be fickle and analysts believe that the slower, yet consistent, larger companies may win in the end.

  • "Nader: Tossing Tech Bombs"
    Interactive Week (06/12/00) Vol. 7, No. 23, P. 82; Taylor, Steven T.

    Consumer advocate Ralph Nader said the Internet must remain open, competitive, safe for the public, and affordable, during a campaign stop in Portland, Ore. The Green Party candidate continues to be concerned about the Internet Corporation for Assigned Names and Numbers (ICANN) being influenced by corporations. He said ICANN continues to hold meetings in such far-off places as Santiago, Chile, where citizens cannot afford to fly but corporations can. He added that the group's board needs to be diversified and that he will press ICANN on opening up more domain categories so that large interests such as Network Solutions are not controlling everything. On the topic of selling personal information for marketing purposes, Nader said children must be protected first, and then online companies must declare a privacy policy that meets government standards. And he added that consumers should have proprietary rights to their own personal files, because if the data is a property right, then consumers have a right to sue. Nader does not consider a potential order to break up Microsoft a victory, even though he led the crusade against the software giant's hegemony. He said he would wait to see if there is a three-way breakup involving desktop PC, Internet, and content sectors. Nader said he differs from Vice President Al Gore on technology because he does not think computers should be in elementary school classrooms. He also said congressional voting records and government contracts and grants should be placed online.
    For information on ACM's Internet governance work related to ICANN, see http://www.acm.org/serving/IG.html.

  • "The Net War In Europe"
    Business Week (06/19/00) No. 3686, P. 64; Ewing, Jack; Capell, Kerry; Yang, Catherine

    Although America Online has been able to use the courts to get T-Online International to fight fairly, the giant Internet access provider may not be able to beat out its German rival in the Europe space if it does not become an active player in emerging technologies. T-Online, in dominating the large German market, is now the biggest ISP in Europe. But with Deutsche Telekom as its parent, T-Online has links that will enable the company to master mobile access and broadband. In fact, T-Online will be first to the market with broadband Internet access thanks to Deutsche Telekom, which is set to roll out TDSL. Although T-Online already owns a mobile-phone provider, AOL still has deals pending with providers of mobile technology in Europe. Other European rivals, which also are established phone companies, are ahead of AOL in preparing for the new technology. As in Germany, AOL does not have the lead in France or Spain. AOL finds itself in direct competition with big telecom companies because it sells the infrastructure to go online. Britain is considered to be the next battleground for the two companies. Although AOL is second to Britain's Freeserve in a market that has a higher Internet penetration than Germany, Deutsche Telekom owns the fourth largest mobile phone company in the market, One2One. Also, Britain, with an Internet penetration of 40 percent, leads Europe in readiness for next generation Internet access, offering everything from mobile phones to digital TV. What is more, Deutsche Telekom is likely to make a bid for Freeserve in the next few weeks. AOL's rich Web content has some observers believing that it still has a chance. Experts also say AOL may look to exploit its relationship with U.S. advertisers in Europe, and add that it does have the edge in international experience.

  • "On the Internet, There's No Place to Hide"
    Industry Standard (06/19/00) Vol. 3, No. 23, P. 124; Koppell, Jonathan G.S.

    Privacy advocates have focused most of their attention on "name anonymity," which appears to be secure even without any protections from Congress or the Federal Trade Commission, writes Jonathan G.S. Koppell. However, privacy advocates may be losing the battle to keep the profiles of Web surfers anonymous, now that Internet companies are collecting data on the online activities of computer users and selling the information to advertisers. In fact, Koppell notes that a profile of a Web surfer is more important to marketers and advertisers than a name, address, and number. Marketers and advertisers would much rather know the city that a Web surfer lives in, their age, their religion, their race, and their ethnicity so that they can refine their sales pitches to individuals or groups of people. Even if companies are not matching profiles with names, Koppell says he is concerned about profiling because it separates people into identifiers such as gender and ethnicity and does not take individuality into account. Koppell foresees newspapers identifying the traits of computer users, and customizing content to a certain group. Thus the group would receive "relevant" news, serving only to encourage biases and misconceptions. Politicians are likely to take it a step further by creating Web sites that send visitors to areas of their sites that tell them exactly what they want to hear. The Jewish voter, the soccer mom, and the blue-collar white male are likely to see different sides of the candidate. Koppell considers the potential to break down superficial barriers as one of the remarkable traits of the Internet. Although the names of Web surfers remain anonymous, "we may never again be able to lose ourselves in cyberspace," writes Koppell.

  • "Bertelsmann: Under E-Construction"
    Economist (06/10/00) Vol. 355, No. 8174, P. 69

    Bertelsmann will overhaul its e-commerce strategy this week by forming a single entity for its various Internet activities called Bertelsmann E-Commerce Group. Ultimately, the largest media and entertainment group in Europe wants to be the dominant e-commerce media company, and Bertelsmann expects to achieve its goal by using the Internet to sell everything from books and magazines to television programs and compact discs. Last week Bertelsmann sold its MediaWays ISP to Telefonica of Spain. Although Bertelsmann is already the preferred content provider of AOL and Telefonica, the television and magazine markets expose the company as not being a true global multimedia empire. More importantly, experts see a problem with Bertelsmann being a private company. The company may have problems raising money because it would have to rely on the shares of Lycos Europe, Pixelpark, and other subsidiaries for merger currency. Aside from being a private company, the other major issue is the decentralized structure of Bertelsmann. The company will have to force its independent companies to collaborate for cross-promotions, using offline content online, and the like.

  • "Old-Line Goes Online"
    Business 2.0 (06/13/00) Vol. 5, No. 6, P. 176; Parker, Kay

    Although based on traditional offline brick-and-mortar consumer products, Unilever is experimenting with different online ventures in an effort to remain competitive. In 1998, the company demonstrated an interest in the Internet by creating the Interactive Brand Center (IBC), a research and development center which shares information with interactive marketers from specific business units. Unilever also formed partnerships with companies such as Microsoft Network, America Online, and NetGrocer.com in an effort to jointly experiment towards international growth. One important lesson learned by Unilever is that customers use the Internet when they require information. "From our point of view, people are looking for something that can add utility to their lives," says Tony Romeo, co-founder and chairman of Unilever's New York Interactive Brand Center. Using this lesson, Unilever found that demonstrations of how to use specific products could be displayed online via broadband. Other methods by which Unilever has attempted to "add utility" and enable consumers is through equity investments in startup companies that focus on women, who make up a large portion of Unilever's customer base.

  • "Online Retail Success Lies Behind the Scenes"
    InfoWorld (06/12/00) Vol. 22, No. 24, P. 35; Leon, Mark

    Online retailers are finding that success depends not only on the design and efficiency of the Web site, but also the back-end processes. If the logistics and fulfillment, payment systems, return policies, customer service, and integration do not function well, a customer will quickly look elsewhere for better services. Companies can either work to improve the behind-the-scenes business functions in-house or through outsourcing. Internet market Webvan chose to do its back-end work in-house, building a system of company-owned automated distribution centers. "Construction of these distribution centers is the drumbeat that sets the rhythm for everything I do," says Gary Dahl, vice president of distribution at Webvan. The online market's true competition is actually delivery companies such as FedEx and UPS instead of other grocers. Outsourcing reduces a company's control, but is much less expensive and allows the company to focus on retailing strengths instead of wallowing in back-end systems. Soundwaves, which sells CDs all over the world, chose to outsource fulfillment services to Globalfulfillment.com. "The partnership with Globalfulfillment extends our reach and lets us stay focused on building our brand," says Soundwaves IT manager Alex D'Eath. Of course, e-business also provides opportunities for catalog and direct merchants, who already have substantial fulfillment systems in place. If the direct and catalog companies come online, "they will eat a lot of the dot-coms for lunch," says Giga Information Group analyst Martha Bennett.

  • "Cleaning Up Your E-Mail"
    Government Executive (06/00) Vol. 32, No. 6, P. 95; Ferris, Nancy

    Federal agencies are following the private sector in monitoring employee emails and Internet use, and analysts say such surveillance is actually more prevalent in government offices than in corporate ones. Various programs are used throughout the federal government, such as Mail Sweeper and the Messaging Management System. These products provide filtering based on words or concepts, and have a built-in intelligence system that judges the potential offensiveness of a word or concept within the context in which it is used. This software can also safeguard against employees emailing proprietary or classified information. Most federal agencies, including those primarily dealing in intelligence, allow an employee several offenses before initiating disciplinary action, provided that the offense does not involve threats or the release of proprietary information. Most federal agencies alert employees at the time of hire that their communications may be monitored, and often display such warnings on login screens and Web pages. However, federal agencies are not legally required to give notice of surveillance. Regardless, most follow the guidelines issued last year by the Chief Information Officers Council. The policy basically allows federal employees to use government computers for personal use on a limited basis as long as the use does not negatively affect an employee's work or cause the government lextra expense.

  • "Dear Supplier: This Is Going to Hurt You More Than it Hurts Me..."
    eCompany Now (06/00) Vol. 1, No. 1, P. 136; Richards, Bill

    Online business-to-business (B2B) auction sites such as FreeMarkets.com and eMerge.com promise to bring new efficiencies and lower costs to the transactions between buyers and their suppliers, especially in situations where intermediaries charge a healthy percentage of the total transaction. What no one knows however, is how exactly the online marketplaces will accomplish this and which parties will benefit--or lose--the most. Owens Corning claims to have reduced its procurement costs for various goods and services by just under 10 percent by having suppliers bid through FreeMarkets for the supply contracts. Owens Corning plans to put $400 million of its $3.4 billion in purchasing contracts online this year and plans to move $1.7 billion worth in 2001. Perhaps tellingly though, Owens Corning has almost completely avoided entering an online auction as a supplier, saying it wants the concept to develop before committing as a supplier. There is little doubt, says GartnerGroup analyst David Hope-Ross, that the first generation of online auctions are ruled by large companies with huge purchasing contracts. Suppliers are strong-armed into dropping their prices. One supplier's misfortune, however, is another's opportunity; some suppliers say the auctions give them access to business they could not have afforded to chase with traditional methods. Also of concern to buyers and sellers is the auction site's inability to address some of the subtler aspects of their relationships. Many long-term procurement relationships include personal touches that, while not specified in the official contract, nonetheless contribute to a strong, effective partnership. Online auction sites are probably a permanent feature on the business landscape now, but many businesses have no trouble reigning in their enthusiasm while they wait to see how the process and technology develops.

  • "Customer Relationship Management Software"
    World Trade (06/00) Vol. 13, No. 6, P. 70; Sowinski, Lara L.

    Customer relationship management (CRM) software, which combines the sales, marketing, and customer support aspects of a company to provide better customer service and simultaneously distributes information throughout the entire organization, is currently making strides towards improving e-businesses' customer services. To keep customers informed--and satisfied--CRM software offers self-service opportunities, which means customers are able to get advice, create profiles for themselves, request e-mail updates, browse catalogues, and shop among other things. Smaller to mid-size companies tend to use CRM to obtain information on the customer and share this information within the companies' various departments, while larger companies tend to use CRM to combine front-end operations with back-end enterprise resource planning (ERP), enterprise resource management (ERM), and supply chain systems. Commence's CRM software is a good example of what is available for smaller companies. The software is immediately ready for use when opened, can be customized without previous programming knowledge, and can be enhanced and enlarged via Commence's Web application server. Siebel Systems' CRM software, which is designed for larger companies, is provided over the Web, which means there is no money spent on application deployment or maintenance, and permits business partners to share information in real time. Quotes are automatically converted into a common currency to simplify international business transactions. Companies must utilize CRM develop a good strategy, integrate direct and indirect marketing efforts, and keep an eye on and improve the service constantly in order to retain relationships with customers.

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