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Week of July 22, 2001 News Archive

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Monday July 23, 2001 Top


"SirCam" Virus Continues to Grow

The SirCam worm continued to gain momentum Monday, carrying with it the potential not only to slow corporate e-mail servers but also to send along company secrets. The worm, which cropped up last week, continued to infect systems across the world over the weekend. "It's not quite a 'Love Bug,' but it's spreading very virulently," said Vincent Weafer, director of software maker Symantec's Antivirus Research Center in Santa Monica, Calif. Symantec rates the worm a four on its scale of one to five, with five being the most dangerous. Like many other worms, SirCam spreads by e-mailing copies of itself to everyone in the infected computer's Microsoft Outlook address book. An added twist with SirCam is that the worm sends a random file from the infected computer's hard drive, potentially sending confidential business data or embarrassing personal information along with the virus. The subject line matches the name of the file being sent.

"That's a far more serious consequence for a person or business," Weafer said. "Once a document is gone from your organization, it's gone." Network Associates' NAI Labs on Monday upgraded the worm to a level of 'high risk' from its previous 'medium risk' designation, noting the virus can be spread not only to addresses listed in the Windows address book files but also those stored in a Web browser's cache files. While SirCam's self-propagation is typical of a worm, it also has several characteristics of a virus, including the ability to attach itself to files. Besides sending torrents of e-mail, SirCam can perform several destructive acts based on a combination of arcane PC settings and chance. If the infected PC uses the European date format (day/month/year), for example, there is a 1-in-20 chance that the worm will delete all files and folders on the hard drive on Oct. 16. The worm is also "network aware," Symantec reported, meaning it will search for network resources and attempt to propagate itself to attached systems.

Large Amounts of Processors Being Stashed

The PC industry is mired in one of its worst slumps ever, but you might not know that from looking at recent numbers for chip leaders Intel and Advanced Micro Devices. Both chipmakers posted quarterly increases in shipments of PC processors when they reported second-quarter earnings recently. And both gained in market share for the second quarter, according to a survey by Mercury Research. Analysts credit the seemingly contradictory trends in PC and chip sales to the fierce price war that has emerged between the two chipmakers. Cost-conscious PC makers are stocking up on parts now in anticipation of an upsurge in PC sales starting in the third quarter, spurred by back-to-school buying and the coming release of Microsoft's new Windows XP operating system. Many of the extra chips likely went to PC makers, who took advantage of the low prices offered towards the end of the second quarter to stock up for an anticipated upswing in demand in the third quarter.

The two chipmakers have been involved in a heated price war this year, slashing to help push sales and gain market share. The rest went to resellers, where the companies likely engaged in some degree of "channel stuffing," the practice of shipping products to distributors ahead of orders placed for them. Here, stuffing shows up when one company's products cost significantly less than the other's or when that company's products show up for far less than its list price on the gray market, suggesting a supply glut. Certain versions of AMD's Duron processor, such as the 800MHz, show up for sale on sites such as at about half the price of Intel's 800MHz Celeron. The Duron 800MHz chip was listed on PriceWatch on Monday afternoon starting at $35, while Intel's 800MHz Celeron was listed at $63 and up. The lower price of the 800MHz Duron suggests there are probably many more of the AMD chips available now than 800MHz Celerons.

Bug Found in Security Software featured in Linux OS's

A flaw in widely used Unix software could allow attackers to gain control over computers running Solaris, HP-UX and several versions of Linux, security analysts and the company selling the software warned Monday. SSH Communications Security, a Finnish company, reported Monday that the latest edition of its SSH Secure Shell software, version 3.0.0, released June 21, can let an attacker gain control over some Unix or Linux computers. SSH is software designed to secure the text-based user interface--or "shell"--people use to remotely log in to computers and send them commands. SSH checks people's passwords and lets authorized individuals open and use the shell by way of an encrypted communications channel. The encryption prevents outsiders from intercepting the commands sent from computer to computer.

As a result of the vulnerability, though, SSH lets anyone remotely log in to an account that uses a two-character password by simply leaving the password field blank and hitting Enter. A two-character password is not likely for most active users' accounts, but it's common for several administrative accounts for functions such as controlling printers or for accounts that the system administrator has locked to temporarily disable access, said Dan Ingevaldson, leader of Internet Security Systems' X-Force research and development team. SSH released a patch, version 3.0.1, which can be downloaded from the company's FTP site. Versions of Linux that are vulnerable include those from Red Hat, Caldera International, SuSE and Debian, the company and experts said. | FTP Site

Windows XP May be Investigated by Congress

Sen. Charles Schumer, of New York, issued a statement saying he will hold a press conference on Tuesday to call for committee hearings to investigate Microsoft and "demand that Windows XP allow users to choose their media player, messenger service and other applications instead of being forced to use Microsoft applications." The statement said Schumer will "discuss the possibility of enjoining the release of Windows XP," the upcoming version of the PC operating system. It says he has written a letter to Microsoft Chief Executive Steve Ballmer demanding changes to Windows XP, which is scheduled for release in October. A spokesman for Judiciary Committee chairman Patrick Leahy, a Vermont Democrat, said Microsoft's business practices will be one part of a broader hearing in September on the subject of how to promote competition on the Internet.

Apple Discusses in Depth Details Of New Products

In a private meeting with eWEEK, Apple Computer Inc. executives expanded on topics raised at this week's Macworld Expo conference here. They revealed additional technical details about the company's new Power Mac G4 systems and possible directions for Mac OS X 10.1, the upcoming operating system revision. The new logic board, which runs at 133MHz, supports SDRAM but not the newer, faster (and more expensive) DDR standard. However, the top-of-the-line model, which sports dual, 800MHz processors, will see a boost in actual throughput thanks to more efficient data flow between the twin chips' L3 caches (each of which are 2MB), Tom Boger, director of Apple Desktop Product Marketing, said. Those who use any of the system's four PCI slots will see a marked improvement in data transmission over earlier Power Mac G4 models, Boger said; the replacement of certain bridge chips should boost top throughput along the PCI bus to a maximum of 215M bps, almost twice the previous rate, representatives said.

Sheila Annis, Apple product marketing manager for Mac OS X, said that Apple did not yet want to release full performance metrics for Mac OS X 10.1 because it was "still early" in the development process for the final release, currently due in September. She did say that preliminary numbers indicated Mac OS X-native applications would launch "two to three times faster" in the updated system. Resizing windows, which in earlier versions of the operating system was sometimes described as "glacial," was greatly accelerated in Mac OS X 10.1, Annis said. While the build she was running was still not ready for prime time--resizing a Finder window to a narrow width repeatedly crashed the Finder--the Unix-based system recovered quickly and will no apparent ill effects. Annis also confirmed that Mac OS X 10.1 will support drag-and-drop burning of data to CD-R and CD-RW media in the Finder, obviating the need for specialized CD burning software. And in a bit of good news for traditional Mac users and Unix enthusiasts who may be attracted to Mac OS X, the 10.1 version will allow users to hide or reveal three-letter extensions to files and applications both on a system-wide and on an individual basis.

Tuesday July 24, 2001 Top

More Request Made to Delay Windows XP Release

Lawmakers, trustbusters and competitors are turning up the heat on Microsoft, indicating they could seek to delay the company's Windows XP operating system, due to ship in October. During a Tuesday press conference, Sen. Charles Schumer, a New York Democrat and member of the Senate Judiciary Committee, asked federal and state trustbusters to consider taking action that would delay Windows XP's release. He also called on Judiciary Committee Chairman Sen. Patrick Leahy, D-Vt., to hold hearings on the matter. Also on Tuesday, software maker InterTrust amended an existing lawsuit against Microsoft, asking for an injunction against Windows XP. The Santa Clara, Calif.-based company charges that controversial product-activation technology found in Windows XP violates four InterTrust patents.

Previously, state attorneys general said they, too, would consider an injunction to delay Windows XP's launch, so the U.S. District Court for the District of Columbia could probe potential consumer harm and anti-competitive issues posed by the new operating system. Microsoft is not taking potential Windows XP delays lightly. The company is pushing hard for settlement talks, seeking to drag out court proceedings and scrambling to get Windows XP to PC makers ahead of schedule. Microsoft, apparently not waiting for the government to act, is stalling for time and pushing hard to get Windows XP out the door quickly. Jacobson described Microsoft's request for rehearing one portion of the case as a "stalling tactic for thwarting any possible injunction against XP.

"The company may also be accelerating plans to complete Windows XP, which is in the final testing stages. Though Microsoft had given partners and customers a tentative Aug. 29 release of final--or gold--Windows XP code, PC makers have been given targets between Aug. 15 and Aug. 20. That means direct-PC makers could conceivably start selling Windows XP systems no later than mid-September--five weeks or more before the official launch. If Microsoft makes its target, it could make getting an injunction much harder, Andy Gavil, an antitrust professor with Howard University School of Law, said.

Microsoft May Pull Back Windows XP Successor

Microsoft has deviated from its initial plans to have the operating system code-named Blackcomb succeed Windows XP, instead adding a new release to its product rollout strategy currently code-named Longhorn. The move has surprised some developers, Microsoft partners and beta testers because Microsoft executives have been publicly touting Blackcomb to follow Windows XP. Jim Allchin, group vice president of Microsoft's platform group, confirmed to eWEEK on Monday that planning for a next-version operating system started in May. But that release will not be Blackcomb. "We haven't settled on anything yet," Allchin said via e-mail. "We have used several code names for thinking about this. Longhorn was one of the names -- there are others. Nothing is final. This is just normal planning that started back in May as we prepare for completing Windows XP." Tom Laemmel, a product manager in the Windows division, also told eWEEK in a recent interview that the timeframe for the release of Longhorn would be "more traditional" and longer than the year between the release of Windows ME and the upcoming release of Windows XP on October 25.

But in his keynote address at last year's Microsoft Professional Developers Conference in Orlando, Fla., Chairman and Chief Software Architect Bill Gates told the audience that the successor to Windows 2000, then code-named Whistler and later officially named Windows XP, was due during the second half of 2001. Blackcomb, the successor to Whistler, was due out in the second half of 2002, Gates said, adding that in both releases, the Internet Explorer browser would become more fully integrated and more central. People close to Microsoft also believed that Blackcomb would be the first true ".Net version" of Windows. But the Microsoft spokesman said it had not yet been decided which version of the operating system would be truly .Net-centric. A Microsoft partner in the midwest, who declined to be named, was surprised by the news that Blackcomb had been pushed so far back. It's possible that Microsoft was "simply just not yet ready to deliver a true .Net version of the operating system in that timeframe," the partner said.

AOL Details Plan to Open up AIM Service

America Online says it will test a new system later this summer that would allow users of its popular instant messaging service to communicate with users of other products, like Microsoft's MSN Messenger. AOL, the nation's largest Internet provider, said it's almost finished developing the technology that would allow its messaging services to operate with those offered by other industry players. In a filing with the Federal Communications Commission, the company laid out the steps it has taken to reach this goal. The company has selected a standard, developed new customer software, and created systems that enable different services to talk to one another.

AOL said it has been conducting internal trials using the system. It expects to complete an agreement with a leading technology company to conduct a live test between two different servers later this summer. The FCC did not impose a requirement on AOL's existing instant messaging service but did order the company to make future generations of the service--offered over Time Warner's cable lines--work with competing services. The agency also asked AOL to provide a progress report on its effort to open its system to rivals. In the FCC filing, AOL said the issue is not as easy as it seems. To make all the services communicate, the companies would need to rely on the public Internet--something that could slow the speed of message transmission, AOL said. Making the different services interact could also make it possible for hackers to crack into the system and send spam or other unwanted messages to users, the company said.

Adobe Drops Charges Against Russian Hacker

In the wake of worldwide criticism, Adobe Systems agreed Monday to withdraw from a case charging a 27-year-old Russian programmer with violations of the controversial Digital Millennium Copyright Act. A day after he gave a speech at the Def Con hacking conference, ElcomSoft employee Dmitry Sklyarov was arrested and charged by the FBI under the criminal provisions of the DMCA, which prohibits trafficking in software and devices that break the informational locks on digital content. Sklyarov is one of the authors of a program known as the Advanced eBook Processor that strips the copy protection from Adobe's eBook format and converts the files to unprotected PDF format. A conviction could yield five years in prison and fines of up to $500,000.

"The prosecution of this individual in this particular case is not conducive to the best interests of any of the parties involved or the industry," Colleen Pouliot, general counsel for Adobe, said in a statement. "Adobe will continue to protect its copyright interests and those of its customers." Adobe backed down from the case after protesters in several U.S. cities demanded the release of Sklyarov and after a Monday meeting with the Electronic Frontier Foundation, a digital civil liberties group that agreed to represent Sklyarov. "In a large part, this is in response to the public outcry," said Robin Gross, an EFF staff attorney working on the case. However, Gross quickly warned that the fight is not over; Sklyarov will remain in jail until the charges are dropped by the U.S. government.

Microsoft Executive Discusses Plan for Broadband Future

Microsoft President Rick Belluzzo outlined a vision of a high-speed Internet world with his company as its foundation Tuesday, in remarks aimed at cable industry executives. The Redmond, Wash.-based software company is betting much of its future on its ambitious .Net strategy, which involves moving many of its software products into a service mode, where customers might rent access to Office or subscribe to music from MSN. Because that strategy requires people to have more bandwidth than is reachable via simple dial-up modem connections to the Internet, the company has also turned into one of the biggest boosters of the high-speed Net, with a history of broadband investments. Belluzzo cited several things Microsoft is doing to help drive broadband demand: home networking is a key part of the Windows XP operating system, allowing a high-speed connection to the Net to be shared with different entertainment devices around a home, the Xbox gaming console system will be set up with the ability to play games online over a fast connection, the Microsoft TV platform lets cable companies create interactive TV applications that take advantage of a high-speed connection, MSN TV, created by the merger of WebTV and MSN content, is pushing people toward broadband, and the Windows Media audio and video technology is being positioned as the basic infrastructure for music and video download and subscription services.

Wednesday July 25, 2001 Top

Intel and AMD Beginning War Over Bus Technology

A group of Intel rivals is gaining steam in backing a new standard for connecting various chips inside computers, but Intel is plotting a major counterattack to solidify support for its competing standard. In February, Intel archrival AMD introduced a technology called HyperTransport to connect CPUs to other chips handling tasks such as networking or connections to the PCI data pathway. In a surprise move Tuesday, Apple announced it's one of the eight companies in charge of the newly-formed HyperTransport Technology Consortium that will govern the technology and license it to companies building it into their products. Meanwhile, Intel is preparing to lock in its competing standard that was announced in March and now known as 3GIO. The Santa Clara, Calif.-based chipmaker is working to have an industry standards body govern 3GIO, spokeswoman Kea Grilley said. "We don't want it to be an Intel specification; we want it to be an industry specification," she said.

Sources familiar with the plan said the standardization likely would happen at PCI SIG, the special interest group that governs the prevailing method to plug devices into computers, called Peripheral Component Interconnect (PCI). The move would be politically astute, sources said, because some of PCI's status as the prevailing technology could rub off on 3GIO and because computing companies already are comfortable with the well-established group. The competing standards, overlapping though not identical, raise the prospect of a "bus war"--a potentially industry-crippling indecision about what type of data pathway, or bus, will form the nervous system of computers. Such uncertainty hobbles component makers, who must decide whether to support one or another standard or both. "The germ of a bus war has been planted," Mercury Research analyst Dean McCarron said. "Both companies are trying to solve a problem pretty clearly on the horizon, which is dealing with these...high-performance interconnects."

Intel's Grilley praised the move toward making HyperTransport a more open standard rather than a company's proprietary technology, Grilley said, but Intel believes HyperTransport will run out of steam too soon. "HyperTransport is...a good five-year solution. We just think there needs to be a 10-year solution," Grilley said. "What we want to do with the 3GIO is to go one step farther." Both HyperTransport and 3GIO use a relatively small number of high-speed wires to carry data. 3GIO is explicitly designed as a way to connect external devices to a computer, whereas AMD currently is billing HyperTransport as a way to connect internal components. But communications chipmakers such as PMC-Sierra are working on using HyperTransport for connections that lead outside computing equipment, and Brookwood expects HyperTransport will evolve to accept add-in cards within a year, meaning it will start encroaching on the turf of PCI.

Intel Will Announce the Upgraded Pentium III Monday

One of the worst-kept secrets in the tech world will be unveiled Monday, when Intel launches its new Pentium III-M mobile processors.Intel will host an event on Monday introducing five new Pentium III-M chips, CNET has learned. Many of the major PC manufacturers also are expected to be on hand to announce support for the new chips in updated notebook PCs. Top-level Intel executives, including Intel Executive Vice President Paul Otellini, will discuss the strategy for the Pentium III-M and touch on Intel's other Pentium III processors built on the 0.13-micron manufacturing process, including server and desktop PC chips. The 0.13-micron process allows for smaller circuits to be printed on chips, increasing processing power and energy efficiency.

Collectively, these 0.13-micron Pentium III semiconductors are referred to by the company as the "Tualatin" chips. Intel will focus on selling the chips in the mobile market, with the Pentium 4 aimed at the desktop segment. "I think that as you shrink lines (from the current 0.18-micron process to the 0.13-micron process), it allows you to get closer and closer to the performance of a desktop," IDC analyst Roger Kay said. The new Pentium III chips will also come with 512KB of Level 2 cache, high-speed memory that shuttles data to and from the processor. The added cache will provide notebooks with an additional performance boost over previous generations. Intel is expected to announce five new Pentium III-M clock speeds, including 866MHz, 933MHz, 1GHz, 1.06GHz and 1.13GHz, along with a new mobile chipset. The new components will increase the performance of notebook PCs while lowering power consumption, giving notebook buyers more bang for the buck. Although the Monday announcement marks the official Pentium III-M launch, Intel has been shipping Pentium III chips manufactured on the 0.13-micron process for several weeks.

Privacy Groups Latest to go After Windows XP

Several privacy groups are set to file a complaint with the Federal Trade Commission on Thursday regarding Microsoft's imminent release of Windows XP, alleging unfair and deceptive trade practices. The Electronic Privacy Information Center, a Washington, D.C.-based public-interest organization, and privacy group Junkbusters, as well as at least five other groups will ask the FTC to prevent the launch of Windows XP based on potential privacy threats arising from the operating system and Passport software, according to Marc Rotenberg, executive director for EPIC. The groups will ask that the FTC open an investigation into Microsoft's data-collection practices with regard to Passport and Windows XP, which is scheduled for release in October. The complaint will ask for relief under Section 5 of the Federal Trade Commission Act, which is a legal standard evaluating whether a practice is unfair and deceptive.

During a press conference Wednesday, Rotenberg said the complaint "concerns the privacy implications of the Windows XP system that is expected to become the primary means of access for consumers to the Internet." It will ask that the FTC investigate Microsoft's intention to "collect, track and profile millions of Internet users." "Central to the scheme is .Net, which encompasses HailStorm, Passport and Wallet, and its design to gain personal information unfairly and deceptively," Rotenberg said. The planned complaint comes as pressure against Microsoft is mounting on different fronts, with lawmakers and competitors scrutinizing the critical features in Windows XP. The software giant has been promoting a service, dubbed HailStorm, that is part of its strategy to closely tie its software and Net services together.

Through HailStorm, which relies on Microsoft's Passport authentication system, the company envisions connecting content delivery, shopping, banking and entertainment through a variety of devices, including cell phones, personal computers and handhelds. But with its Passport service, Microsoft is entering one of the most hotly contested arenas on the Web. E-wallet services gather and store personal information from consumers, including passwords and credit card information, so they don't have to continually re-enter the crucial data. But the promise of convenience may come at a heavy price if the stored information is maliciously breached or accidentally leaked. At the very least, it opens up chances for abuse. And privacy advocates say Microsoft's track record on security is cause for alarm.

Intel Pulls Plug on Rambus Subsidies

Intel has decided it's time for Rambus memory to stand on its own. The chipmaker, as expected, has begun efforts to phase out subsidies for PC makers using RDRAM, high-speed memory based on designs by struggling chip company Rambus. Intel says the subsidies, which include a rebate for PC makers and a Pentium 4/RDRAM bundle, are no longer necessary to lower prices and increase availability of RDRAM, which initially was the only memory supported by the Pentium 4. But analysts see the move as a not-so-subtle sign that Intel's support of Rambus is weakening. Within a few weeks, the chip giant is scheduled to release a new chipset that will connect the Pentium 4 with standard, less-expensive SDRAM memory, ending the company's exclusive reliance on Rambus to support its fastest processors. Most analysts believe the new chipset, dubbed 845, will become the basis for the majority of Pentium 4 PCs sold, with later versions supporting faster double data rate (DDR) DRAM. "I think that Intel is slowly but surely backing away" from RDRAM, said Kevin Krewell, senior analyst with Instat/MDR (formerly MicroDesign Resources).

"When they do finally introduce the DDR version of the 845, they'll get good performance--not as good as RDRAM...but everybody, overall, will be happier." Starting last November, Intel offered PC makers a rebate of $70 for each PC manufactured with a Pentium 4 processor and RDRAM memory. It lowered the rebate to $60 in the first quarter of 2001 and later extended the program through the end of the second quarter, when it was to be phased out. Intel also packaged "boxed" Pentium 4 processors for sale at retail and to system integrators with RDRAM. The idea of this program, which included a Pentium 4 processor with two RDRAM chips, was to bundle the chip and memory for a price that was lower than purchasing them separately, thus subsidizing the cost of the memory and helping PC makers ensure adequate supplies of the memory chips.

ISP's Begin Terminating Service for File Traders

Record companies have joined the movie industry in trying to root out post-Napster file trading, putting new pressure on ISPs to clamp down on subscribers' actions.ISPs say the last few weeks have seen a sharp uptick in the number of requests they're getting to pull the plug on subscribers who are using file-trading software such as Gnutella or iMesh. Driven by a combination of high-profile summer movie releases and a growth in the business of independent piracy hunters, these requests are putting service providers in an awkward position. Even as they avoid facing media-industry lawyers, these ISPs risk losing their customers to competing Internet access companies that may be less aggressive about curtailing the use of file-trading software. High-speed Internet provider Adelphia, a cable company based in Pennsylvania, is one of the latest to join the list of ISPs cracking down on file swapping in the post-Napster world. Like many other ISPs, it has started suspending accounts of people who have been identified by record companies or movie studios as file swappers. Adelphia, like other ISPs offering high-speed Net service, is increasingly caught in a bind between protecting their customers and responding to the growing demands of copyright holders.

Privately, ISP executives say that Napster and its rivals have been one of the biggest drivers of high-speed Internet use, a part of their business that most big ISPs are desperately trying to improve. But as decentralized swapping services like Gnutella, Music City's Morpheus and Kazaa emerge, copyright holders are leaning on ISPs to cut off file swapping at the source. Some ISPs, like Verizon, are resisting the demands, saying that copyright law does not force them to monitor or respond directly to content that is on their subscribers' hard drives. Others, like Adelphia, quickly cut off their subscribers' connections. Many, including DirecTV Broadband and Excite@Home, issue warning letters to their subscribers. If there is a second violation, the subscribers' accounts may be terminated for violating the ISPs' terms-of-service agreements, which generally bar using the networks for copyright violations.

Thursday July 26, 2001 Top

Another Company Will Stop Producing CRT Monitors

Japanese electronics maker Hitachi on Thursday said it would exit the conventional desktop computer monitor business, citing sluggish PC demand and a shift to new displays. In a statement issued in Tokyo, Hitachi said it would halt production of computer monitors, known as cathode ray tube (CRT) displays, at plants employing 770 workers in Sakura City, Japan; 950 in Singapore; and 1,670 in Johore, Malaysia. Hitachi said it is reviewing its options on the sale of the CRT business, which generated about $470 million (59 billion yen) in revenue during its fiscal year ending in March 2001, the company said. "The sluggishness of the desktop PC market has reduced demand for CRTs for PC monitors, leading to a sharp fall in prices," the company said in a statement. The electronics maker said in the future it would concentrate its efforts in this area on flat-panel displays, particularly thin-film transistor (TFT) LCDs that include a cutting-edge technology it calls Super TFT. LCDs rely on rod-shaped molecules, which when twisted, offer better contrast and wider viewing angles than older, bulkier cathode-ray tube technology. Super TFT offers still higher picture quality and a wide viewing angle, and is well-suited for moving-picture images.

Bill Gates Speaks About .Net Strategy

Microsoft Chairman Bill Gates on Thursday told financial analysts that the software giant is on course to deliver key pieces of its strategy to make its software available as a Web-based service. Gates, speaking before more than 350 financial analysts, reporters and investors at Microsoft's annual analysts meeting at its headquarters, said Microsoft is on track to release a test version of its Web services technology, called HailStorm, late this year. In his speech, Gates said Microsoft is on track with its .Net strategy to make its Windows operating system and other software available over the Internet to traditional PCs and handheld devices, such as cell phones and handheld computers. The goal is to tie all computing devices to the Net, allowing people to access their e-mail, calendars and important files, regardless of what device they use. "We think software will be more important and magical the next decade than in the last 25 years," Gates said. "Driven by some of the vision we had during the last 25 years, we now have the opportunity to implement scenarios that weren't possible before." At the heart of the strategy is XML (Extensible Markup Language), a Web standard for data exchange that Microsoft is building into every one of its products, Gates said. For example, he said, the company's next version of its SQL Server database software and Office productivity software is built "top to bottom" with XML, he said.

Gates compared XML to the importance of graphical user interfaces for computing in the late 1980s and early 1990s and of HTML to Web sites in the late 1990s. "It really is changing the architecture of all of our products," he said. Gates said another driver for the move to Web services is the adoption of high-speed Net access in businesses, giving people the bandwidth they need to use new services. One potential hitch, he said, is the consumer market, where broadband Internet access isn't being adopted as quickly. "In terms of the hardware (over) the next five years, it's more than adequate (for) what we need for (our) scenarios," he said. "The piece that is a little bit of concern is the cost of broadband. The forecasts average about 25 percent household penetration. Broadband will hold things (back) somewhat in the consumer arena." As a result, Gates said, storing information on local hard drives, rather than on the Internet, will still play a key role. Microsoft needs to "support offline connectivity. We can't assume high-speed connectivity will always be present," he said.

Microsoft Tries to Soften its Tone on Open Source

Microsoft executives took a conciliatory tone as they went behind enemy lines to explain their views on open-source software. But Red Hat and others at the O'Reilly Open Source Convention gave them a hostile reception.Craig Mundie, senior vice president of advanced strategies at Microsoft, said in a speech at the convention in San Diego that his company is embracing several of the beneficial aspects of the open-source movement. But while stating that Microsoft didn't have anything against open source itself, he took issue with the General Public License that underlies much of the code-sharing movement. "Our concern about the GPL is strictly the fact that it creates its own closed community," Mundie said, referring to the license's requirement that new software being added to a GPL-governed program must also be governed by the GPL. Earlier in the year, that feature led Microsoft Chief Executive Steve Ballmer to call open-source software a "cancer" and Windows leader Jim Allchin to call it "an intellectual-property destroyer."

As an alternative, Microsoft in May came out with its own "shared source" plan, a collection of licenses that makes it easier for business partners and curious people to see Microsoft's source code without requiring the company to relinquish control the way the GPL would. But Mundie on Thursday tried to back away from the harsher position Ballmer and Allchin have taken. "Let me be clear," he said. "Microsoft has no beef with open source. We think it's an integral part of an ecosystem that has fueled such growth around the world in the software and information technology business." Mundie's criticism was vaguer but farther reaching. "The big concern Microsoft has is the long-term preservation of what we consider the software ecosystem," he said.

The DOJ Ask Court to Deny a Microsoft Request

Government prosecutors on Thursday asked a federal appeals court to deny Microsoft's request that the court re-examine part of its antitrust ruling. In June, the U.S. Court of Appeals for the District of Columbia Circuit upheld eight separate antitrust violations against Microsoft. The Redmond, Wash.-based company asked for rehearing on one: commingling. The appeals court found that Microsoft's commingling of Internet Explorer code with Windows 95 and 98 was an anti-competitive act. The government had until Aug. 3 to file its legal brief on rehearing. "Today's filing marks a continuation of the (Justice) Department's effort to move the Microsoft case back to the District Court for prompt resolution," said Justice Department spokeswoman Gina Talamona. "We believe that the issue Microsoft has identified for rehearing already has been fully litigated and properly decided by both the District Court and the Court of Appeals."

"We maintain that the trial court's ruling on this matter was erroneous and should be corrected on appeal," said Microsoft spokesman Vivek Varma. "We appreciate the court's careful review of the record on this matter. We are committed to moving forward promptly in the legal process and remain open to resolving any remaining issues in this case as quickly as possible." The government's quick response could be a sign that it intends to move the trial forward and possibly seek an injunction against Windows XP. In a filing nearly two weeks ago, the Justice Department and 18 states asked the Court of Appeals to forgo the 52-day waiting period before sending the case back to a lower court. "This would give the government more time to seek an injunction against Windows XP," said Andy Gavil, an antitrust professor with Howard University School of Law. "The longer they wait, the harder it will be to get that injunction before Windows XP ships in October."

AOL Makes Move to Receive Prominence in Windows XP

AOL Time Warner is going after Microsoft with a strategy that calls for deals with computer makers to give AOL products prominent placement on new PCs, The Washington Post reported on Thursday, citing internal AOL documents. The newspaper said AOL was trying to complete the deals in time for the Oct. 25 debut of Windows XP, the latest update of Microsoft's operating system. According to the Post, AOL wants manufacturers to give its online-access software greater prominence than Microsoft's MSN service. In return, AOL would pay the PC makers about $35 for each customer they nab for AOL's Internet-access service, sources told the Post. AOL declined comment on the financial terms, the newspaper said. The Post said AOL began advancing its new strategy about the same time a federal court ruled that Microsoft had abused its Windows monopoly. Microsoft said on July 11 that it would give computer makers more flexibility in placing icons on the desktop. According to the Post, documents show AOL's strategy for Windows XP focuses on the "OOBE process," or the out-of-box experience, "the crucial moment when consumers turn on their machines for the first time and select what products and services they intend to use." The paper quoted Microsoft as saying that AOL's actions were unprecedented and Ňanti-consumer." "AOL is paying (computer makers) to eliminate consumer choice, forcing people to select the most expensive service in the industry," spokesman Vivek Varma was quoted as saying.

Friday July 27, 2001 Top

Intel Shipping SDRAM Based Motherboards Next Week

Intel said during its second-quarter earnings call that it would begin shipping the 845 earlier than expected. The chipset will also become an important tool in making Pentium 4 the company's top-selling desktop processor before the end of the year. Previously, Intel had targeted late 2001 or early 2002 for the Pentium 4 to eclipse Pentium III. Consumers have largely stayed away from Pentium 4 because of its higher price, analysts say. Enter 845. A chipset is a collection of two or more chips inside a PC used to control functions such as data input and output. The chipset is also responsible for providing the data pathway between the processor and system memory. The 845 will pair the Pentium 4 with SDRAM, the most common type of memory used in current PCs. Originally, the Pentium 4 was available only with the 850 chipset, which required high-speed RDRAM memory based on designs from chip company Rambus. Though RDRAM offers higher performance, it costs significantly more than SDRAM. Many groups, such as corporate IT managers, have shied away from using it. The new chipset also will help Intel differentiate markets as it prepares for the release of a 2GHz Pentium 4, expected at the end of August. That chip is likely to be paired with RDRAM and focused at high-end PCs. With its introduction, however, Intel is likely to cut prices on existing Pentium 4's. Combined with cost savings from using SDRAM memory, that should put the older Pentium 4's well within reach of sub-$1,000 PCs.

Windows XP RC 2 to be Released Tomorrow

Microsoft is preparing to clear an important hurdle for delivering Windows XP, but outside forces still could trip up the new operating system. The company on Saturday will issue Windows XP Release Candidate 2--the expected final testing version--Microsoft Group Vice President Jim Allchin said Friday during a media conference call. But as Microsoft puts the finishing touches on the new version of the Windows operating system, the company faces a growing controversy over the new software. Rather than generating the excitement of the Windows 95 launch, where hordes of people lined up outside computer stores for early copies, Windows XP is the focus of competitive and government forces seeking to delay the new operating system's release. The timing of Release Candidate 2 is in some ways unusual. People who signed up for the Windows XP Preview Program are just now receiving their CDs with the first release candidate. Those people paid about $20 for the CD, but they do have the option of downloading the newer testing version.

Microsoft also is delivering its final test version very close to the launch of the "release to manufacturing" (RTM) software code, from which the company will make boxed Windows XP versions and PC makers will install the operating system on new computers. Several PC makers said Microsoft has set RTM code delivery for around Aug. 20. Allchin estimated that more than 500,000 people have a beta version of Windows XP, with 250,000 signing up for the Preview Program. Those testers will see some changes in Release Candidate 2. Microsoft removed Smart Tags, which are created using XML (Extensible Markup Language). The technology, ditched from Windows XP but kept in Office XP, has been criticized for potentially strengthening Microsoft's ability to tie its newest applications and operating systems to its own Web sites or others that it favors, including those that charge fees. Release Candidate 2 also will ship with a clean desktop. Allchin said usability studies had determined too many icons confused consumers. But in a loosening of Windows licensing agreements earlier this month, Microsoft allowed PC makers to put whatever icons they wanted on the desktop. The company also gave computer manufacturers more freedom in configuring the Windows XP Start menu, something AOL Time Warner's America Online division is trying to take advantage of.

Rambus Memory Likely to Fade Away Soon

Manufacturers still expect cheaper memory to relegate Rambus-based chipsets for Pentium 4 to a niche by the end of the year. Taiwanese motherboard manufacturers are anticipating a quick production ramp of new products for Intel's Pentium 4 PC chip that do not use Rambus' proprietary memory technology--which could mean more bad news for Rambus. Most motherboard manufacturers are expecting boards based on Intel's upcoming 845 chipset, code-named "Brookdale", to quickly account for most of their Pentium 4 motherboard output, relegating the Rambus-based 850 chipset to a niche. One manager with Asustek said Intel will likely phase out the Rambus-based 850 chipset in the second half of next year. The news does not bode well for Rambus, which has enjoyed a close relationship with Intel and whose memory products are, until the advent of the 845, the only ones that will work with Pentium 4. Earlier this week, Intel acknowledged that it is ending a discount program to help sell Rambus-based Pentium 4 chips, a move that industry analysts say marks a disengagement from the memory startup.

Steve Ballmer Shocked By Windows XP Attack

Microsoft CEO Steve Ballmer told analysts late yesterday that he was "shocked and dismayed" by the criticisms of Windows XP and the way competitors had attacked it. "This is a product that is good for consumers, good for our partners and associates, and good for the industry," Ballmer said here at the company's annual analyst day. Acknowledging that a recent U.S. Court of Appeals ruling was complex and the legal process ongoing, he noted that "the good thing about that ruling was that it made clear the legal test for adding new functionality to our products is whether that technology is good for consumers and others." Microsoft had already given its OEM partners more flexibility, having deciding this was "necessary to increase the industry's trust in us," Ballmer said. "We are also very open and interested in settling the antitrust matter and getting it behind us. But there is nothing low or demeaning about that court ruling and our behavior. We have always and will continue to behave with the utmost integrity." Despite all the scare stories going around about .Net and its HailStorm initiative, Microsoft is committed to earning the trust of customers. "They will get to decide what information is used and shared, they will have to opt in, not opt out," Ballmer said. "And the businesses that work with us will own the data and the customer. We will continue to be accountable to them."

The SirCam Virus Continues to Spread

Antivirus experts expect the SirCam virus to take a breather over the weekend, but it may pick up new steam as vacationing Europeans return to work Monday. "Today looks like it's going to be our biggest day yet for this virus," Mark Sunner, chief technology officer at British e-mail filtering company Message Labs, said Friday. "It should drop off over the weekend, but I would imagine we'll see a big upsurge on Monday that will probably beat this week's numbers. "This one has a lot of staying power because it's using a multilevel approach," Sunner said. "From the social-engineering point of view, the fact that it was using multiple messages--you couldn't just look for an 'I love you' header--helped keep this going," said Vincent Weafer, director of software maker Symantec's AntiVirus Research Center. "And in many cases the documents that are sent out have intriguing titles. People are going to be curious." Weafer was more hopeful that SirCam has had its heyday, especially as users of home PCs--where the virus is most active now--have time to install and update antivirus software over the weekend. "We'll see it being one of the top viruses for the next couple of weeks," he said. "But I would expect the number of infections to go down quite a bit over the next week." Meanwhile, virus writers will be busy studying and imitating some of the features that helped SirCam spread. Besides propagating itself via purloined documents and trolling the browser's cache file for addresses, SirCam is notable for having its own SMTP e-mail program, allowing it to operate independently of e-mail software on the infected PC.

Weekend July 28 & 29, 2001 Top

AOL and Microsoft Take Feud to the Desktop

AOL Time Warner is working overtime to ensure that the next version of its online software will ship this autumn with almost every new PC running Microsoft's Windows XP operating system. Such placement could help the company more easily move its customers to the newer version of its software and combat the prominent placement of Microsoft's rival MSN service, analysts say. AOL's aggressive efforts have sparked a war of words in the already contentious relationship between AOL and Microsoft executives. The media titan's America Online division claims more than 30 million subscribers. The deals with PC makers would ensure prominent placement for AOL 7, the upcoming version of its software, on both the desktop and the Start menu of Windows XP, said sources within the company. Microsoft's rival MSN online service boasts 6.5 million subscribers.

Top computer makers are negotiating about where AOL's software would be placed on or accessed from Windows XP, according to sources close to AOL and three computer makers. AOL also may be stepping up its long-standing practice of compensating PC makers for either bundling the software or offering a bounty for subscribers gained through the bundling. In addition, Compaq Computer late Thursday said it would continue to feature AOL on the desktops of consumer PCs it sells. MSN, however, would have prime placement on the Start menu in Windows XP. PC makers and AOL would not discuss current or future financial arrangements, but John Buckley, spokesman for the online service provider, acknowledged the deal brokering. "What AOL has sought is to be able to compensate OEMs (original equipment manufacturers) for promotional rights that Microsoft has taken for free," he said. "Of course Microsoft doesn't like that. No monopolist likes competition."

Microsoft executives countered that AOL is being heavy-handed with PC makers. "The stuff AOL is doing now is just limiting market choice. It's unbelievably egregious," Microsoft CEO Steve Ballmer said Thursday at the company's financial analyst meeting at its Redmond, Wash., headquarters. Chairman Bill Gates said AOL is "trying to get OEMs to delete the features of Windows." AOL 7 is expected to ship ahead of Windows XP's scheduled Oct. 25 launch. AOL is beta testing separate version 6 and 7 software packages for Windows XP. AOL 7 beta is designed to run on Windows 2000 or XP, but not earlier Windows versions such as 95, 98 or Me. AOL's Buckley said the official release version of AOL 7 will be available on Windows 95, 98, Me, 2000 and XP. Dulles, Va.-based AOL stepped up its PC maker licensing deals after Windows XP bundling negotiations collapsed with Microsoft. AOL also hopes to take advantage of changes Microsoft made to Windows licensing that would allow competitors, such as AOL or RealNetworks, to have icons on the Windows XP Start menu.

New Hotmail Filters Considered Too Restrictive

A new spam filter for Microsoft's Hotmail service is not only bouncing $198 Florida land deals and instant diplomas from in-boxes, it's also thwarting e-mail sent from subscribers to themselves. One longtime Hotmail user discovered this to her chagrin when she plucked from her overloaded spam box a birthday reminder she'd forwarded to her own account through Hotmail's Calendar service--two days after her friend Lexi turned 31. "It's not reasonable for me to look into my junk mail folder for reminders that I program Hotmail to send me," said Laura, a Boston-based attorney who has been a Hotmail subscriber since 1996. "I understand that some mail gets dumped inadvertently into my junk mail folder; but Hotmail's in a position to know that's not junk mail. It's their own service." The delivery misfire is just the latest in a volley of criticism leveled at Hotmail's renovated service, which launched last week after technical troubles. At the time, several subscribers complained about the service's design changes and technical issues, including tiny font sizes and difficulty printing e-mail.

Microsoft acknowledged that a new spam filter included in the upgrade blocks e-mail sent from its Calendar reminder service, as well as messages sent from subscribers back to themselves. "Forging headers, or an e-mail that looks like it comes from yourself, is popular with spammers; and our new service sends that kind of e-mail to your junk mail folder," said Sarah Lefko, MSN product manager. MSN's Calendar reminders fall into this category because they are sent from the receiver's address. The Redmond, Wash.-based software company is working to fix the problem, Lefko said. For now, subscribers can work around the system by adding their own e-mail address to their address book, she said. The latest spam filter for Hotmail, which has more than 100 million subscribers, lets members choose three different options for diverting junk mail. One option, the "low" setting, is similar to the previous version, while the "high" setting has more stringent methods of reducing spam, including routing any suspicious e-mail to a bulk folder,

The "exclusive" lever will let people receive e-mail only from people listed in their address books. Anti-spammers say that for the most part such filtering services work well to avert junk mail, although in Hotmail's case they may work too well. "There's obviously a glitch," said Steve Linford, who runs the London-based Spamhaus Project. Linford said that Web-based spam filters typically snare up to 40 percent to 50 percent of unwanted messages. One pitfall of the filters, however, is that they can propagate junk mail simply by accepting the messages, giving spammers a sign to continue using that address. Spammers also quickly figure out how to outsmart techniques to block junk mail. "As soon as spammers figure out how the filters work they upgrade their spamware with features to get around the filters," he said.

AOL and Kodak Launch Updated Photo Service

America Online and Eastman Kodak are launching a new version of their joint online photo service, "You've Got Pictures," aiming to bolster their position as the market consolidates in tough economic times for dot-coms. The service, scheduled to launch Tuesday, features a face-lift as well as free, unlimited storage and the ability to upload pictures from digital cameras and scanners. The service also enables people to drop off their film at a participating Kodak retailer and receive prints in addition to having the pictures delivered to an AOL account. The AOL deal is important to Kodak, which is trying to prepare its traditional film business for a consumer switch to digital image technology. Kodak faces rocky times, having reported sharply lower profits this month, sparking analysts to reduce expectations for the coming fiscal year. Kodak and AOL said their upgraded service is based on consumer feedback regarding better convenience and ease of use. The "You've Got Pictures" service also features a new pricing plan that offers film customers a single price of $8.99 to receive both prints and online photos. AOL members using the service will have more options when printing their pictures through the Print@Kodak Internet photo service. The options include ordering reprints and enlargements, such as poster sizes, and creating photo gifts such as mugs and T-shirts.

Government Official's Spreading Warning About Code Red

In an unprecedented show of force against an extremely virulent Internet attack, government and private officials on Monday will implore worldwide organizations to protect themselves from the "Code Red" worm. Representatives from the White House, FBI, Microsoft and others have decided to take the step in the face of one of the largest ever dangers to the Internet. The worm, similar to a virus, could cause widespread slowdowns and sporadic outages. "The Internet has become indispensible to our national security and economic well-being," said Ron Dick, head of the National Infrastructure Protection Center, an arm of the FBI. "Worms like Code Red pose a distinct threat to the Internet." Along with posting various warnings on their Web sites, government officials and representatives from Microsoft were holding a news conference Monday afternoon to publicize their efforts. The government routinely works with private companies to issue warnings about new hack attacks and viruses, but never before have they made such a high-profile stand. While the actual infection rate is unknown, it is believed to be in the hundreds of thousands of Internet-connected computers. In just the first nine hours of its July 19 outbreak, it infected more than 350,000 systems.

AOL Releases New Version of AIM

America Online says it has launched a new version of its Instant Messenger service, which enables people to send notes to their buddies instantly. AOL said version 4.7 for Windows offers not only a new AIM window and new buttons, but also other new features including the ability to send customized greeting cards within instant messages; the ability to create and store personalized notes; the ability to share names from the Buddy List feature with friends; and HTTP proxy support to provide people with easier connection to the AIM service from work. The new service offers people the option to send animated emotions such as a thumbs-up animation to a colleague. Version 4.7 also includes a rate-a-buddy feature that enables people to submit photos and rate IM buddies. The upgraded version is available at AOL's Web site.

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