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---------- Forwarded Message ----------
Date: Friday, October 08, 1999, 3:22 PM -0400
From: Faulkner Information Services <flash@faulkner.com>
To: ???
Subject: Cyberscape Digest 10/08/99 (Part 1 of 1)

                                 CYBERSCAPE DIGEST

Welcome to CyberScape Digest, a roundup of top internet stories delivered
weekly to Faulkner Information Services subscribers.

This issue of CyberScape Digest covers events from Monday 10/04 through
Friday 10/08. Here's what you should know...

Major Mergers and Acquisitions Make Excitement
The biggest merger news this week, by far, is MCI WorldCom's proposal to
Sprint, accepted by Sprint despite a last minute effort by BellSouth to stop
the deal. MCI will pay $76 per share for Sprint's long distance, $5 billion
for its PCS group, and assume Sprint's $14 billion in debt. This brings the
value of the deal to $129 billion, easily the largest takeover in corporate
history. The combined company will provide customers with one-stop shopping
for local, long distance, international, wireless, paging, Internet, and
high-speed access. Another big deal was Gemstar International's purchase of
TV Guide in a deal valued at $9.2 billion. This merger ends six years of
contention between the two companies pertaining to technology patents for
program guides. The new company will be called TV Guide International; the
merger is expected to be completed in the second half of next year. Some
companies merge with other companies in an attempt to branch out from their
current market; bookseller Barnes & Nobles' $215 million purchase of
Babbage's fits this mold. The video game and entertainment software company
brings nearly 500 brick-and-mortar retail establishments to the deal, plus
the well-known names of Babbage's, Software Etc., and GameStop, and its
gamestop.com Web site. Then again, some companies merge to increase their
share of the market they're presently in; Concentric Network's $54 million
acquisition of 9 Net Avenue, for instance, improves its position in the US
Web hosting market. Concentric's chairman Henry Nothhaft figures that his
company will be ahead of the EarthLink-MindSpring combo in the Web hosting
arena, with more than 104,000 customers. Sabre's purchase of online travel
company Preview Travel also fits into this model. Sabre plans to merge it
with Travelocity, its own online travel company, to beat out Microsoft's
Expedia to the number 1 spot among Web-based travel agents. Sabre will
contribute $50 million to the creation of the new company. The deal is
expected to close by the end of March 2000. Finally, there are the mergers
that allow companies to improve their services. Intuit spent $370 million in
stock to acquire Rock Financial. Rock brings an online mortgage site to the
deal that Intuit will roll into its QuickenMortgage service. This purchase
lets Intuit offer online home mortgage applications in all 50 states.  
[ http://www.wcom.com/ ], [ http://www.sprint.com/ ], [
http://www.gemstar.com/ ], [ http://www.tvguide.com/ ], [
http://www.barnesandnoble.com/ ], [ http://www.gamestop.com/ ], [
http://www.concentric.net/ ], [ http://www.9netavenue.com/ ], [
http://www.travelocity.com/ ], [ http://www.previewtravel.com/ ], [
http://www.intuit.com/ ], [ http://www.rockloans.com/ ]

AOL Annoys Microsoft--and Some Subscribers
America Online added Lycos to its growing list of companies that have agreed
to use AOL's Instant Messenger rather than Microsoft's. Under the agreement,
the two companies will develop a custom version of AOL's IM software for use
in most areas of the Lycos Network. The software is expected to be available
before the end of the year. Users of the co-branded software will also be
able to send Instant Messages to the 45 million folks who already use AIM
software. Pleasing Lycos users with the new deal, AOL went on to please its
own users with the release of version 5.0 of its user interface. The new
software was meant to accommodate non-PC devices such as wireless phones and
PDAs in addition to the usual PCs, but it discommoded a number of users
instead. Many AOL subscribers who downloaded and installed the software ran
into problems getting to Web sites and other content. AOL members with
dial-up accounts with other ISPs seemed especially susceptible to the
problem. It appears that the AOL TCP/IP adapter which AOL 5.0 installs is at
fault; under certain circumstances, it can disable DNS settings necessary
for connecting to an ISP. If all this hassle leaves one wanting to take a
vacation--well, assuming the ability to connect to AOL, that won't be hard
at all. America Online agreed to a five-year alliance with Travelocity,
making the online travel agent the exclusive reservations provider of AOL
once Travelocity's merger with Preview Travel is completed. The deal is
valued at $200 million. 
[ http://www.aol.com/ ], [ http://www.microsoft.com/ ], [
http://www.lycos.com/ ], [ http://www.travelocity.com/ ], [
http://www.previewtravel.com/ ]

Federal Lawsuit Challenges State Internet Law
Fifteen Internet businesses joined forces with civil rights advocates to
challenge the constitutionality of a Virginia law, enacted April 7, that
attempts to prevent businesses from posting material on the Internet that
might be harmful to minors. The lawsuit lists Virginia governor James
Gilmore and attorney general Mark Earley as defendants, and states that
businesses complying with the law "will be obligated to self-censor their
speech, thus reducing the adult population in cyberspace to reading and
communicating only material that is suitable for juveniles." To Gilmore's
credit, the law was enacted by the Virginia General Assembly over his
objections; he tried to delay its consideration for a year. No one has yet
been charged under the law, which can inflict a penalty of up to 12 months
in prison and a $2,500 fine. Defenders of the law say that it was narrowly
aimed to snare businesses who sell pornography to children, and that it is
constitutional. Plaintiffs include People for the American Way, PSINet,
well-known science fiction author Harlan Ellison, and the Sexual Health
Network. [ http://dit1.state.va.us/governor/ ], [ http://www.pfaw.org/ ], [
http://www.psi.net/ ], [ http://www.harlanellison.com/ ], [
http://www.sexualhealth.com/ ]

Stakes, Joint Ventures Move Forward on Internet
Paul Allen's Vulcan Ventures invested in Allen's vision for a "wired world"
to the tune of a $1.65 billion stake, in convertible preferred stock, in
telecommunications company RCN. Vulcan already owns four and a half percent
of the company; if it immediately converted the stock, it would increase its
stake to more than 27 percent. RCN said it would work with Charter
Communications, Go2Net, and High Speed Access on the development of Internet
portal services. NetZero is busy with two deals: first, PSINet agreed to
provide it with wholesale Internet connectivity, which NetZero will use to
provide its own customers with dial-up Internet access. Second, Launch Media
spent $1 million for 62,000 shares of NetZero, and in return NetZero made
Launch Media the default music Web site on the ZeroPort tool that NetZero
customers use for Internet navigation. Lycos has also been busy; the search
engine invested a combined $8 million in three Internet start-ups:
advertising software maker Conducent, online personal reminder company
LifeMinders.com, and online sports retailer Fogdog Sports. Perhaps figuring
that users of its Web site are as interested in businesses as it is, Lycos
struck a deal with Edgar Online to distribute its data through a co-branded
site accessible from Lycos' Business Web Guide. CBS also put two deals under
its belt: a joint venture with Medscape to launch a consumer health Web site
called CBS Medscape, and a majority stake in iWon.com for $70 million in
advertising. iWon offers Web surfers a chance to win up to $10 million in
exchange for their registration information. Finally, in a deal that might
annoy AOL, Alta Vista agreed to use Tribal Voice's software for instant
messaging. Tribal Voice claims that users of its software will be able to
send and receive messages from users of both Microsoft and AOL instant
messaging software, but AOL said that it would block Tribal Voice's service
in addition to Microsoft's. 
[ http://www.rcn.com/ ], [ http://www.chartercomm.com/ ], [
http://www.go2net.com/ ], [ http://www.netzero.com/ ], [ http://www.psi.net/
], [ http://www.launch.com/ ], [ http://www.lycos.com/ ], [
http://www.conducent.com/ ], [ http://www.lifeminders.com/ ], [
http://www.fogdog.com/ ], [ http://www.edgar-online.com/ ], [
http://www.cbs.com/ ], [ http://www.medscape.com/ ], [
http://www.cbsmedscape.com/ ], [ http://www.iwon.com/ ], [
http://www.altavista.com/ ], [ http://www.tribalvoice.com/ ], [
http://www.aol.com/ ], [ http://www.microsoft.com/ ]

GAO Concerned About Network Security
The Government Accounting Office revealed that the relatively lax security
of computer networks used by governments and businesses put them at risk of
severe disruption, and believes that the government should be doing more to
protect these networks. In a report made public this week, the GAO
identified a number of operations at risk, including national defense, tax
collection, law enforcement, and air traffic control. Private sectors
systems identified as at risk included those that control energy,
telecommunications, financial services, and transportation. The report also
pointed to a tremendous rise in the number of security incidents handled by
the CERT emergency response team, from 1334 in 1993 to almost 4400 in just
the first half of this year. "At the federal level, these risks are not
being adequately addressed," according to the GAO.
[ http://www.gao.gov/ ], [ http://www.cert.org/ ] 

Microsoft Cozy with BT and NSI, Gets Hotmail Ok'ed, Learns Hebrew
British Telecom and Microsoft agreed to work together to roll out a
three-month trial of wireless Internet services to 1000 BT mobile phone
users. The trial service will include e-mail access, interactive calendars,
and other custom information designed for use on the small screen of a
mobile phone. After the trial, a more substantial launch of the service is
expected for next year. Speaking of the Internet, Network Solutions signed a
deal with Microsoft that will allow the software giant to offer
country-specific domain name registration services in several countries.
Financial details were not disclosed. Meanwhile, Microsoft's Hotmail, which
garnered much criticism for how much it was prone to accidently disclose,
received a passing grade from an outside accounting firm. According to the
firm, Microsoft has resolved the security problems with Hotmail. Not
everyone is satisfied with this; consumer advocacy firm Junkbusters, for
one, would like to see the results of the audit released to the public.
Microsoft, meanwhile, is finding other ways of reaching out to the public.
It made a deal with Israeli ISP Internet Gold to launch a Hebrew-language
Internet portal. The portal will look similar to Microsoft's MSN portal.
According to Israel's Ha'aretz newspaper, the joint venture will be an equal
partnership between the two companies. 
[ http://www.bt.com/ ], [ http://www.nsi.com/ ], [ http://www.microsoft.com/
], [ http://www.junkbusters.com/ ], [ http://www.internet-zahav.net/ ]

IBM, AT&T Work Together for One-Stop Shopping
Reaching out to the mid-sized business market, IBM and AT&T joined forces to
sell a products and services package to help businesses get started and
established in e-commerce. IBM will offer servers and software, while AT&T
will provide Internet connectivity. The packages will be offered through IBM
channel partners that have also been certified to sell AT&T's offering, thus
providing businesses with one-stop shopping. Leases start as low as $2000
per month.
[ http://www.ibm.com/ ], [ http://www.att.com/ ],

This Week's Auction News
Disney and Infoseek's GO Network launched an online auction site. Addressing
the concerns of online auction aficionados, the site will be supported with
an automatic backup system to prevent it from going offline in the case of a
server crash. In keeping with the Disney image, no offensive text or
graphics will be allowed; all ads will be screened, and sellers must be at
least 18 years old to list an item for auction. eBay, meanwhile, is going
local with its business. Pleased with the success of eBay LA, the local Los
Angeles auction site it launched in April, eBay announced plans to add 52
more regional auction sites by the end of December. The regional sites
should encourage sales of large items that can't easily go through the mail,
like cars or pianos. But eBay's policies don't make everyone happy. In an
attempt to get around the online auction giant's requests to auction
aggregators not to post auction listings from eBay's Web site, Bidder's Edge
took out a full-page ad in the New York Times inviting eBay auction runners
to list their auctions on the aggregator's site. As Bidder's Edge CEO and
president James Carney put it, "We're not eBay bashing, but we disagree with
their decision." Bidder's Edge is nevertheless sticking to the "letter of
the law;" it no longer includes eBay's data base in its auction searches.
[ http://www.disney.go.com/ ], [ http://www.ebay.com/ ], [
http://www.biddersedge.com/ ]

Larry Ellison Makes Predictions at Internet World
At his Wednesday afternoon keynote address at the Fall Internet World in New
York, Oracle CEO Larry Ellison spoke about his vision of the future--a world
where the Internet will mostly be accessed on non-PC devices, where
corporate network models will mirror the Internet, and where a greater
centralization of complexity (i.e. a few large servers rather than many
small ones, or a few large data bases rather than many small ones) will
allow businesses to realize reduced costs and access to information that
would have been difficult or impossible to obtain under the client-server
model. He made three predictions: first, that Europe will pass the US in
Internet usage, because Europe is ahead of the US in cell phone usage,
providing a wireless, non-PC platform for Internet access. Second, he
predicted that there will be more non-PCs than PCs accessing the Internet in
the year 2000. Third, he predicted that the PC industry will continue moving
towards lower-priced, simplified machines. He also alluded to Oracle's new
product, the "Portal-to-Go" browser for mobile phones that will allow
consumers to buy products online using any mobile phone.
[ http://www.oracle.com/ ] 

Russian Cyberspies? Nyet!
Responding to FBI reports that computer hackers in Russia, possibly traced
to Moscow, stole sensitive but unclassified data from US military networks,
a spokesman for Russia's SVR Foreign Intelligence Service denied the
charges. "Do you think Russian special services are so stupid as to engage
in such activities directly from Moscow?" asked Boris Labusov, pointing out
the widely-acknowledged cleverness attributed to the KGB and Soviet
Intelligence over the decades. "Why should one think we suddenly became less
clever in the last few years?" He went on to express his belief that the
attacks may have come from amateur hackers or even intelligence agents from
another country trying to not be detected. Russia's Academy of Sciences,
where at least some of the attacks were thought to come from, flatly denied
the charges. Academy spokesman Igor Milovidov said that, while there may be
"people who sneak into computer systems" professionally, "we don't take part
in that. That is complete gibberish."
[ http://www.fbi.gov/ ]  

This Week's IPO Buzz
Woman-centered Web site iVillage filed with the SEC to sell three million
shares in an initial public offering. No date for the offering was given,
nor did the filing mention a price range for the stock. Internet addressing
system developer RealNames plans to raise up to $80.5 million with its IPO,
but did not tell how many shares it plans to sell or what the per-share
price range will be. Online grocer Webvan had planned to sell 25 million
shares at $11 to $13 per share this week, netting $280 million, but delayed
its IPO when the SEC expressed concerns that Webvan has not been observing
its mandated "quiet period" and has been sharing information in its
road-show presentation that doesn't appear in its prospectus.  
[ http://www.ivillage.com/ ], [ http://www.centraal.com/ ], [
http://www.webvan.com/ ]

Look Who's Joining the After Hours Crowd
Two more online brokers promised to begin offering their customers after
hours stock trading. DLJdirect will offer a pre-open session for the early
birds from 8 AM to 9:15 AM EST and a post-closing session from 4:15 PM to 7
PM EST. The sessions will let customers put in limit orders for NASDAQ
shares and Small Cap issues outside of the normal trading times of the New
York markets. The trades will go through the REDIBook ECN. Charles Schwab,
one of the first US discount and Web brokerages, also leaped to join the
late crowd this week, promising an after-hours session from 4:30 PM to 7 PM
EST, during which customers will be able to put in limit orders for NASDAQ
and Big Board shares that were listed after 1979. Initially, Schwab will
also use REDIBook, but plans to also use stock prices posted on other ECNS
eventually.
[ http://www.dljdirect.com/ ], [ http://www.redi.com/ ], [
http://www.schwab.com/ ]

Yahoo! Goes South of the Border
Continuing its international expansion, Yahoo! launched an Internet portal
for Mexican Internet users. Yahoo Mexico links up with more than 6000
Spanish-language Web sites, and is the search engine's 21st Internet portal.
The company believes there will be more than three million Internet users in
Mexico in just over two years. Yahoo's competition in this arena includes
Prodigy Internet Plus, Todito.com, and Starmedia Network.
[ http://www.yahoo.com/ ], [ http://mx.yahoo.com/ ], [
http://www.todito.com/ ] 

Outage Ticker: MCI WorldCom, Sprint, Some ECNs
On Tuesday, Syracuse NY experienced an outage that was allegedly caused by a
fiber cut that took down two MCI WorldCom OC-48 lines. A repair crew was
sent to fix the problem. MCI WorldCom also dealt with fiber problems
Wednesday afternoon when a repair crew was sent to fix a fiber in downtown
Houston (TX). UUNet connections in Houston were reportedly affected. Sprint
saw its share of problems Wednesday morning, when hardware failure caused an
outage in Seattle, WA; the company expected to have repairs completed well
before noon Wednesday. Finally, NASDAQ's trade reporting and quotation
system slowed down so seriously, thanks to a software upgrade, that three
electronic communications networks were temporarily removed from the system
to help it run faster. The three ECNs included BRUT, Instinet, and Island
ECN.  [ http://www.wcom.com/ ], [ http://www.sprint.com/ ], [
http://www.islandecn.com/ ], [ http://www.instinet.com/ ] 

Cyberscape Dee-Lite: Two Learned Cultures
One of the greatest joys of the Internet is its capacity to make items of
interest available to a wider audience than would have been able to see them
otherwise. The Hebrew Union College is taking advantage of this to create an
online library system that will throw open the glories of its collection of
printed Judaica--the world's largest--to Web surfers everywhere. At the same
time, the college is engaged in an ongoing project to digitize its rare
illuminated manuscripts, some of which date as far back as the 13th century.
The college's Web site includes 75 full-color digital images right now, and
hopes to get 200,000 records online soon. For those who speak techese a bit
more fluently than Hebrew, and have observed high-tech lingo drifting into
mainstream usage even more than Yiddish lately, there's the Ultimate Silicon
Valley Slang Web site. Created and maintained by Steve Sabram, it lets
surfers submit slang they've heard, vote for their favorite slang terms,
peruse the word list itself (over 100 and counting), and check out links to
other slang sites (including the comprehensive New Hacker's Dictionary and
The Jargon File).
[ http://www.huc.edu/ ], [ http://www.sabram.com/site/slang.html ]    


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