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Date: Friday, March 24, 2000, 1:33 PM -0500
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Subject: Faulkner Cyberscape Digest - 03/24/2000

                                 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 03/20 through
Friday 03/24. Here's what you should know...

Do Billion-Dollar Deals Still Raise Eyebrows?
Large mergers still grab headlines, but at this rate it may start taking
more than a billion dollars in stock to attract attention. PSINet caught the
spotlight this week, for its purchase of Metamor for $1.9 billion in stock.
The software and service company will give PSINet a strong presence in the
e-commerce products and services market--a good complement to PSINet's ISP
business. In Australia, business software company Solution 6 spent about A$2
billion (US$1.2 billion) to nosh on sausage--er, that is, to purchase
Sausage Software, with some of Telstra's service assets on the side. The
deal creates Australia's largest technology group, according to the
companies. In a smaller, international deal, Thomson agreed to buy the core
online information services division of Dialog for $275 million. The
Canadian electronic publisher's money will allow Dialog, a British company,
to pay off its debts. Two other companies entered into a more
straightforward purchase agreement: Internet portal PlanetOut agreed to
acquire book and magazine publisher Liberation Publications; both companies
target the gay and lesbian community. Financial terms of the deal were not
disclosed. Likewise, financial terms were not disclosed for Yahoo!'s
purchase of online billing company Arthas.com, but there's no doubt Arthas'
technology for letting individuals exchange money and pay bills online will
come in handy now that Yahoo has entered the B2B arena (see below). Finally,
to answer the question posed by this article's headline: apparently,
billion-dollar mergers do still raise eyebrows at the Department of Justice.
Computer Associates extended its $4 billion bid to acquire Sterling Software
one more week to let the Justice Department look over some extra documents
it requested. A deal this big raises potential antitrust questions.
[ http://www.psi.net/ ], [ http://www.metamor.com/ ], [
http://www.sausage.com/ ], [ http://www.telstra.com/ ], [
http://www.thomson.com/ ], [ http://www.dialog.com/ ], [
http://www.planetout.com/ ], [ http://www.advocate.com/index.html ], [
http://www.yahoo.com/ ], [ http://www.arthas.com/ ], [ http://www.cai.com/
], [ http://www.sterling.com/ ], [ http://www.usdoj.gov/ ]

Everybody Wants to Be in B2B Space
The business-to-business marketplace niche is maturing at Internet speed.
Seven large financial and energy companies joined together to enter the
space. BP Amoco, Deutsche Bank, Goldman Sachs, Morgan Stanley Dean Witter,
Royal Dutch/Shell Group, Societe Generale, and the TotalFina Elf Group
partnered to create the IntercontinentalExchange, a B2B marketplace for
trading in energy, metal, and other commodities. Users of the exchange will
not be required to pay either membership or dues. FreeMarkets, meanwhile,
got a grasp of the B2B space by buying into it. The auction network company
purchased Surplus Record and SR Auction, both privately held, for $18
million. The deal boosts FreeMarkets' position in the industrial business
surplus arena. Even Yahoo! leaped into the B2B market. The company launched
Yahoo! B2B Marketplace, a directory listing equipment and inventory from a
number of B2B e-commerce sites. The search engine partnered with DoveBid, a
company with decades of experience in business auctions, to create the
directory. Of course, America Online was not to be outdone by a mere search
engine; it made a three-year deal with PurchasePro to create a
business-to-business marketplace for AOL's millions of users. Targeted at
businesses of all sizes, the marketplace will launch by the end of June and
permit buying, selling, and price negotiation between businesses.
[ http://www.bpamoco.com/ ], [ http://www.deutschebank.com/ ], [
http://www.goldmansachs.com/ ], [ http://www.deanwitter.com/ ], [
http://www.shell.com/ ], [ http://www.societegenerale.fr/ ], [
http://www.totalfina.com/ ], [ http://www.freemarkets.com/ ], [
http://www.surplusrecord.com/ ], [ http://www.srauction.com/ ], [
http://www.yahoo.com/ ], [ http://www.dovebid.com/ ], [ http://www.aol.com/
], [ http://www.purchasepro.com/ ]

Three Companies Looking for the Exit
Deciding to change its focus in the wake of fierce competition from Cisco
and other such companies, 3Com revealed plans to sell its high-end
networking modem businesses. As part of the sell-off, 3Com formed joint
ventures with Accton Technology and NatSteel Electronics. The company said
it will now concentrate its efforts on IP telephony, broadband access, and
wireless access. To assist with its new focus, 3Com agreed to purchase Call
Technologies for $90 million and invested $20 million in CAIS Internet.
After missing earnings estimates for the year, Bank One hired Morgan Stanley
Dean Witter to examine the possibility of selling off WingspanBank.com, its
fledgling online banking unit. The Internet-only bank was launched in June,
and its less-than-stellar performance contributed to its parent company's
woes. Finally, Iridium officially stopped providing commercial mobile
telephone service as of 11:59 PM EST on March 18. Motorola, which holds an
18 percent stake in the company, will maintain the system for a short period
of time to allow users in remote areas to make alternative communication
arrangements. This might gain the company enough time to stay in business
after all; Iridium has so far received two bids to stay in business. If
negotiations fail, the company has said that it will place its satellites on
a trajectory to burn up in the atmosphere. (Wonder if any pieces will make
it to earth, and if so, how long will it be before they start showing up on
eBay?). 
[ http://www.3com.com/ ], [ http://www.calltechnologies.com/ ], [
http://www.caisinternet.com/ ], [ http://www.bankone.com/ ], [
http://www.deanwitter.com/ ], [ http://www.wingspanbank.com/ ], [
http://www.iridium.com/ ], [ http://www.motorola.com/ ]

Not All Agreements Involve B2B
It only seems like every agreement includes a B2B tie-in. Here are a few
that don't. America Online and Universal entered into a marketing agreement
that involves AOL's promoting Universal's movies on its Web sites, as well
as selling tickets to Universal features online. E-Stamp and Canada Post
recently completed a six-week trial of E-Stamp's service in Calgary;
Canadians may soon join their US counterparts in being able to download and
print stamps on their postage. ABC and Go.com teamed up on an arrangement
that will let "the audience at home" play along via the Internet with the
contestants on the popular game show "Who Wants to be a Millionaire?"
Viewers link to ABC's "Enhanced TV" site with their PCs during the show, and
receive the same questions to answer at the same time as the TV contestants.
High scorers on the Internet will win prizes--but those who want to win a
million dollars still must appear on the show as contestants. Indiatimes.com
and Citigroup teamed up to form a financial services Internet portal in a
60-40 joint venture. Finally--okay, one more agreement with a B2B tie-in: i2
Technologies and Siemens agreed to collaborate on an online marketplace that
will also provide procurement management services. The offering will be
available through i2's TradeMatrix platform.
[ http://www.aol.com/ ], [ http://www.universalstudios.com/ ], [
http://www.estamp.com/ ], [ http://abc.go.com/ ], [ http://www.go.com/ ], [
http://www.indiatimes.com/ ], [ http://www.citigroup.com/ ], [
http://www.i2.com/ ], [ http://www.siemens.com/ ]

Dogpileup on Microsoft!
It's "let's feel sorry for Microsoft" week once again, for those who can
still do it with a straight face. Reports leaked of a possible deal with the
Justice Department over the ongoing antitrust case against the software
giant. Rather than breaking up the company, any negotiated settlement is
expected to deal more directly with placing restrictions on Microsoft's
monopoly power. Meanwhile, the European Commission opened a probe into
Microsoft's plan to purchase MediaOne's nearly 30 percent stake in Telwest
Communications. The EC is concerned about the impact of the purchase on
competition for software for set-top boxes in the UK. Microsoft is set to do
some probing of its own, into how the 2001 version of Windows, codenamed
Whistler, ended up posted on the Internet. Scheduled to replace Windows
Millennium (which still isn't out yet), Whistler will be the first Windows
platform using NT code and targeted at consumers. Not surprisingly, reports
from those who took a look at the OS say it strongly resembles Windows 2000
Professional Edition, which is also based on the NT code. Microsoft did see
a bright spot this week: the company made a deal with FirstMark and Compaq
to create several broadband Internet hosting centers in Europe. Aimed at
small- and medium-sized businesses, the "Solution Hotels" will host
applications.
[ http://www.microsoft.com/ ], [ http://www.usdoj.gov/ ], [
http://www.europa.eu.int/ ], [ http://www.firstmark.com/ ], [
http://www.compaq.com/ ]

Regulatory, Enforcement Issues and the Internet
With the Internet so pervasive that it significantly affects more areas than
can be easily listed, anything that might affect the Internet becomes a
cause for protest--or at least investigation. Take, for instance, the
AOL-Time Warner merger. This combination of old and new media motivated Walt
Disney, several music companies, and several ISPs to meet with officials on
Capitol Hill to express their concerns that the company, once merged, will
use its size and market power to block other ISPs or content providers from
using AOL-Time Warner's cable network. For its part, both AOL and Time
Warner maintain that there is no cause for alarm; they will continue to
share their network after the merger. In a matter that touches a button
among many who use e-mail, the Colorado Senate passed a strong anti-spam
bill on to the state's governor. If signed, the bill would require the
addition of an "ADV" label to the subject line of unsolicited commercial
bulk e-mail, and obligate spammers to take recipients' names off their
mailing lists when requested to do so. The bill includes other provisions,
some of which are similar to those in a Washington state anti-spam law that
was recently declared unconstitutional. Spammers often advertise
get-rich-quick schemes--which brings us to our next story. The Federal Trade
Commission is working with other agencies worldwide to target fraudulent
"make money fast" schemes online. The operation's huge scope--28 countries,
more than 1600 Web sites targeted--dwarfs previous crackdown attempts in
other areas of Internet fraud. Meanwhile, the Food and Drug Administration
is seeking an expansion of its own regulatory powers, so it can crack down
on online drug sellers and punish those who pose a health hazard through
unethical or illegal practices. Officials from the organization met with
members of Congress to promote President Clinton's proposal to grant $10
million to the FDA for increased regulation enforcement and consumer
education--and to support the president's call for laws requiring online
pharmacies to get state licenses. Finally, the Advisory Commission on
Electronic Commerce adjourned without reaching a consensus on issues of
Internet taxation. While the Congressionally-appointed commission is still
expected to send a report to Congress in late April, it will be unable to
designate parts of the report as "recommendations" because the 19-member
commission could not get two-thirds of its members to agree on important
matters.
[ http://www.aol.com/ ], [ http://www.timewarner.com/ ], [
http://www.disney.com/ ], [ http://www.ftc.gov/ ], [ http://www.fda.gov/ ],
[ http://www.ecommercecommission.org/ ]

Taking Stakes
Those who just can't wait for books they ordered online to arrive received
good news this week. Online bookseller Amazon agreed to invest $60 million
in Kozmo.com in exchange for a stake in the company. The deal, along with
warrants to purchase more shares, serves to cement a three-year alliance
between the two companies in which Amazon will offer its customers the
option of receiving their orders delivered by Kozmo in one hour. For those
who complain about the Internet being slow, Exodus Communications invested
$637.5 million in Mirror Image Internet, an online content distribution
company. Exodus will use the company's technology to speed up the
distribution of Internet content. Finally, for those with stars in their
eyes, NBC took a stake in space news Web site space.com, run by Lou Dobbs,
formerly a business reporter for NBC rival CNN. The deal calls for NBC to
provide space.com with cash and advertising time on its TV network and cable
properties in exchange for a minority stake in the company.
[ http://www.amazon.com/ ], [ http://www.kozmo.com/ ], [
http://www.exodus.com/ ], [ http://www.mirror-image.com/ ], [
http://www.nbc.com/ ], [ http://www.space.com/ ], [ http://www.cnn.com/ ]

First Zippergate, Now...Emailgate?
A report by Clinton administration officials that thousands of subpoenaed
e-mail messages had been mislaid caused the US Justice Department to open a
criminal probe into the matter. According to White House counsel Beth Nolan,
the incoming messages, covering a period from 1996 to 1999, were lost due to
unintentional computer failures and would take up to two years and $3
million to reconstruct. The messages had been subpoenaed by the House
Government Reform Committee, which is looking for information on campaign
fund-raising, the Waco incident, and other matters. Aside from the subject
matter and the seeming convenience of the computer failure, the Justice
Department is concerned with allegations that White House employees
threatened employees of Northrop Grumman, the company which ran the system,
to keep the existence of the e-mails a secret. Two Northrop employees
testified before members of Congress that they were told they would go to
jail if they did not keep mum about the messages. Two other employees do not
recall the threat, however, and the White House employees accused of making
the threats maintain that they did not try to intimidate anyone about the
problem. The White House says it is cooperating fully with the
investigation. [ http://www.usdoj.gov/ ], [ http://www.whitehouse.gov/ ]  

This Week's Lawsuits
Break out the scorecards. While not many new Internet-related suits made
headlines, some old ones saw new developments. For instance, Mattel
subsidiary Microsystems, the company which owns Internet filtering software
program Cyber Patrol, received a court order forcing two crackers to stop
distributing "cphack," a program that permits users to bypass Cyber Patrol.
There's one problem: the court order was issued in the US, and the crackers
neither live in the US nor possess US citizenship. Nevertheless, both of
them backed down and removed the program from their personal Web sites. It
is expected that Microsystems will now go after mirror sites with the
"cphack" program. DoubleClick, meanwhile, saw South Carolina add itself to
the list of groups probing the company's privacy practices. The state's
attorney general is looking into whether those practices, which include the
use of cookies to compile consumer profiles, violate state privacy statutes.
South Carolina gets to stand in line behind New York, Michigan, and the
Federal Trade Commission. Connecticut and Vermont also belong on that list;
the states are reportedly negotiating with DoubleClick to try to reach a
settlement. DoubleClick can commiserate with MP3.com. The online music
company earlier riled the Recording Industry Association of America into
filing a lawsuit; this week, music publisher Harry Fox joined the fun. His
suit accuses MP3 of illegally distributing songs copyrighted by two
companies that Fox represents. Like the RIAA suit, Fox's suit claims that
MP3's Mymp3 instant-listening device violates copyright laws. Finally,
Network Solutions became the target of a complaint filed under ICANN's
domain dispute policy. The complainant, Rich Smith, owns a domain look-up
service called wwwhois, and says that NSI registered wwwhois.com to itself
as soon as it became aware of Smith's company. Smith owns wwwhois.net and
wwwhois.org, but he wants wwwhois.com. Furthermore, he states that NSI has
merely been sitting on the domain, not doing anything with it (or a whole
slew of other names NSI registered to itself). This fight could get
interesting. [ http://www.cyberpatrol.com/ ], [ http://www.doubleclick.com/
], [ http://www.ftc.gov/ ], [ http://www.mp3.com/ ], [ http://www.riaa.org/
], [ http://www.harryfox.com/ ], [ http://wwwhois.net/ ], [
http://www.networksolutions.com/ ] 

Companies Expand Their Products, Services
America Online continued its AOL Anywhere strategy by expanding its Digital
City service. The local information service will now be available in more
than 200 US regions, and will go wireless this spring. Yahoo! expanded its
own wireless initiative, launching several services allowing wireless users
to access Yahoo's directory of wireless sites, movies, and auctions. Word
lovers with tight purses will be pleased to hear that Microsoft is putting
its Encarta World English Dictionary on the Web for free. The move came just
a few days after the Oxford University Press said it would put its venerable
Oxford English Dictionary (OED) online--at a cost to users of $550 a year.
At that price for words, one wonders what the company would charge for
pictures. Hewlett-Packard, meanwhile, began offering a new service for Web
start-ups. Called the HP Garage Program, it provides start-ups with
technical, marketing, and financing support. As HP itself is well aware,
sometimes large companies come out of very small garages. For those who want
not only a garage, but the whole house, Priceline expanded its
"name-your-price" home mortgage service; after being test marketed for
months in Florida and New York, it is now available throughout the US.
Finally, for those who don't like the two main browser choices, Opera
Software released a beta version of Opera 4.0 Electra for Windows, which is
downloadable from the company's Web site. The browser includes an e-mail
client and supports both 128-bit encryption and SSL versions two and three. 
[ http://www.aol.com/ ], [ http://www.digitalcity.com/ ], [
http://www.yahoo.com/ ], [ http://www.microsoft.com/ ], [ http://www.hp.com/
], [ http://www.priceline.com/ ], [ http://www.opera.com/ ]

Accompany Patents Technology, Stirs Controversy
Accompany reported that it expects to receive a patent in the next three
months for its group-buying technology. While not as common as one-click
shopping once was, group buying has been increasing in popularity with
online consumers. The technology allows shoppers to form a time-limited
group to buy particular items; the item's price decreases as the group's
size increases, and everyone in the group gets to purchase the item at the
lower price. Accompany CEO Jim Rose said the company has not yet decided if
it will enforce its patent; perhaps he remembers the controversies stirred
up when Priceline and Amazon slapped competitors with lawsuits when they
received patents for "name-your-price" shopping and "one-click" purchasing,
respectively. As companies continue to patent business models, the debate
can only get louder.
[ http://www.accompany.com/ ], [ http://www.priceline.com/ ], [
http://www.amazon.com/ ]

Trying Again: Yahoo, eBay Back at Bargaining Table
After the recent collapse of rumored talks, Yahoo! and eBay are again
discussing a possible merger. Observers give the idea of a merger between
the two companies mixed reviews. Yahoo! draws more traffic than eBay, and
eBay is far more successful in the online auction space than Yahoo--but
these factors do not automatically mean a match made in heaven. A merger
would be an expensive proposition for Yahoo and, despite the traffic, may
not be compelling for eBay. It seems more likely, if the talks do result in
a deal, for the two companies to create a looser alliance.
[ http://www.yahoo.com/ ], [ http://www.ebay.com/ ]  

IPOs Springing Up All Over
Linux developer Caldera Systems led the pack of IPOs this week, more than
doubling the price of its stock from $14 per share to close at $29.44 per
share, giving it a market capitalization of more than $1 billion. Not
everyone fared so well, however; in Europe, World Online's initial offering
of stock finished nearly even with where it started, going from 43 euros
(US$41.70) to 43.20 euros (US$41.90). Also in Europe, on the Neuer Market,
Lycos Europe held its IPO, raising $649 million--quite successful, despite
dipping below its opening price. Several companies filed for IPOs. Watch for
Kozmo.com's IPO; the online delivery company filed to raise $150 million
shortly after closing a $60 million deal with Amazon. Evolve may also do
well with its IPO. The company makes business processing software and runs a
Web site linking buyers and sellers of professional services; it hopes to
raise $65 million.   
[ http://www.calderasystems.com/ ], [ http://www.worldonline.com/ ], [
http://www.lycos.com/ ],
[ http://www.kozmo.com/ ], [ http://www.evolve.com/ ]

Outage Ticker: New Mexico, Northwest Airlines, Sprint
A mixed bag of outages sprang up last weekend and early this week, leaving
many frustrated. On March 18 at 5 PM, most of the state of New Mexico
reportedly lost power. Those affected lost power for anywhere from less than
an hour to five hours or more. The outage was apparently caused by a grass
fire which damaged a transmission line and forced two power plants to shut
down. E.spire's switched services went offline for more than 12 hours as a
result--which is to say, none of its systems could communicate with US WEST.
On Tuesday, a subcontractor for Northwest Airlines reportedly cut 244 US
WEST fiber-optic and copper telecommunications lines, including ones linking
the airline's Minneapolis-St. Paul hub to the rest of the US. The cut
affected both the main and redundant systems; the systems remained down for
three and a half hours, and forced the airline to cancel 130 flights.
Finally, on Wednesday, Sprint reported an outage which started the previous
morning affecting its sl-gw4-rly router. No ETR was given.
[ http://www.espire.com/ ], [ http://www.uswest.com/ ], [
http://www.sprint.com/ ]

Cyberscape Dee-Lite: An Existential Acknowledgement Online
Palestinians may not yet have their own country in the real world, but they
now have their own designation in cyberspace. Wednesday, the US Commerce
Department approved the suffix ".ps" as a country code for Palestinian Web
sites. The department followed ICANN's recommendation in its action; ICANN,
in turn, relied on decisions by the United Nations. While not intended to
recognize Palestine statehood, political implications may be unavoidable.
The approval of the suffix on the same day that Pope John Paul II, visiting
Palestinian leader Yasser Arafat, stated that Palestinians should have "a
natural right to a homeland." Hmmm. Perhaps the Palestinians can take a page
from Cyber Yugoslavia's book. Reported on some months ago in this space,
Cyber Yugoslavia is an attempt by war-torn Yugoslavians to establish a
peaceful (if somewhat whimsical) country online. All citizens must be
ministers of something. Right now the waiting list to become a citizen is
one to two weeks long, and the country claims nearly 11,000 citizens.
[ http://www.icann.org/ ], [ http://www.doc.gov/ ], [ http://www.juga.com/
]    


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Missy Harvey
Computer Science Librarian
Engineering & Science Library
Carnegie Mellon University
Pittsburgh, PA  15213

http://www.library.cmu.edu/usr/missy/

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      (_/'~~      ''''(;

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