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Date: Friday, August 11, 2000, 3:18 PM -0400
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Subject: Faulkner's Cyberscape Digest 08/11/00

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CyberScape Digest

  

CyberScape Digest is a weekly roundup of top internet stories. This issue
covers events from Monday 08/07/00 through Friday 08/11/00. 


  

Two Major Software Companies Reorganize
Both Computer Associates and Microsoft bowed to the power of the Web and
the market this week as they reported major reorganizations. After a
disappointing fiscal quarter, Computer Associates stated that company
founder Charles Wang will step down as CEO, but remain chairman. President
and COO Sanjay Kumar will take over as CEO. He plans to focus the company
on three businesses: security and storage management; network, event, and
performance management; and application development. CA will also spin off
its iCan-ASP business, its ACCPAC business, and several other businesses,
presumably to better align the company with its newly-stated priorities.
Microsoft, meanwhile, created the .NET Services Group to oversee online
hosting of its applications, part of the company's recently-announced .NET
strategy. This meant some executive shuffling: group vice president Bob
Muglia moved from head of Microsoft's Office division to head of the new
group, which will contain at least 2000 people. Muglia will report to Rick
Belluzzo, who is in charge of Microsoft's Internet initiatives. The group
will focus on creating user interfaces with graphics and speech
recognition, and other technologies related to the latest initiative. 

  

This Week's Internet Agreements
Trying to keep up with all the deals between Internet companies this week
could make one feel like one's track ball needs track shoes. Starting from
the top of the alphabet, AltaVista and Redband Broadcasting entered into a
relationship permitting the search engine service to offer Redband's news,
talk, and entertainment content. Moving to the top of the e-tailing ladder,
Amazon.com reported a deal with Toysrus.com to create two co-branded Web
sites: one for selling toys and video games, and one for selling baby
products. Expect to see the first one in the fall (in time for the holiday
shopping rush, no doubt), and the second one before the end of June next
year. The companies committed to a 10-year partnership. Moving to the Bs
brings us to B2B--and the agreement between BroadVision and Commerce One to
combine their procurement and electronic trading exchange applications. The
combination will be marketed by both companies. In other B2B news, an
aerospace products and services joint venture between Honeywell, i2
Technologies, and United Technologies received a thumbs up from the
European Union. MyAircraft.com still awaits a signal for take-off from the
Federal Trade Commission, however. And while we're on the subject of B2B,
Citigroup, Enron Broadband, Wells Fargo, i2 (again), and S1 teamed up to
launch FinancialSettlementMatrix.com, charged with linking up buyers and
sellers in electronic marketplaces and providing payment processing,
credit, and other bank services. Switching from B2B to vital business
services, antispam company Brightmail and antivirus company Symantec teamed
up to create a program that gets rid of both spam and viruses. Dubbed the
Anti-Virus Solution, the software incorporates Symantec's Norton AntiVirus
into Brightmail's spam filtering server. Other products to control and
filter e-mail are in the works. Next in the alphabet is e-commerce--just
the place to put the deal between Sun and Vignette. Following on the heels
of an agreement Vignette made with IBM, the two companies said they will
jointly develop, market, and sell e-commerce products throughout the globe.
Their products will aim for customers in the new media and
telecommunications markets. Finally, from e-commerce it's just a short
click to online auctions, which brings us to the deal between eBay and
TradeOut.com. The two companies agreed to link their Web sites, giving eBay
another toehold in the B2B marketplace--TradeOut auctions off surplus
business merchandise online. 

  

FBI Scrutinizes NTT-Verio Merger; Others Scrutinize FBI
The FBI sat on both sides of the investigative table this week. First, the
bureau planned to attend a meeting on the prospective merger between NTT
and Verio. The FBI was reportedly concerned about the deal, which would
place a US ISP under the control of a Japanese carrier, thereby presenting
what the bureau saw as a security risk. As it turned out, NTT and the FBI
reached an agreement outside the meeting which reportedly protects US law
enforcement interests, including a ban on any Japanese government
involvement in Verio's daily activities and an agreement that NTT's
management of Verio will not adversely affect US national security. The FBI
itself caused many people to feel insecure after revealing its
controversial Carnivore e-mail monitoring system. In part because of this,
the system will be reviewed by independent experts at a major university
expected to be chosen in the next 10 days. According to attorney general
Janet Reno, the experts will have "total access" to any information needed
to carry on the review.

   

Who's Buying Who?
A number of companies bought other companies this week with the idea of
adding technologies and capabilities they couldn't easily reproduce
in-house. For example, Broadcom gained access to voice and data
transmission capabilities for its products when it put up five million
shares to purchase Silicon Spice. The technology will assist Broadcom's
plans to provide high density packet telephony silicon and software
products. The European division of Lycos revealed plans to purchase
Annunci.it, an Italian publisher of online personal ads, for more than four
million euros (US$3.8 million). Annunci has an established base of 62,000
registers users. The really big news, though, involved wireless software
maker Phone.com and wireline application company Software.com agreeing to
merge in an all-stock deal worth an estimated $6.8 billion. The merged
company will provide infrastructure and application software to enable the
delivery of e-mail, voicemail, unified messaging, and wireless Internet
access for IP-based networks. E-services firm Sapient revealed plans to
purchase Human Code, a maker of entertainment and learning software. In a
major DSL purchase, Verizon said it will buy a controlling stake in
NorthPoint for $800 million and merge the DSL businesses of the two
companies. Finally, in the "second thoughts" department, Europe-based
online auctioneer QXL.com released a statement indicating it is
reconsidering its pending merger with ricardo.de because of "certain
information" it received from the other company. Shares in both companies
took a beating after the announcement. 



America Online Mostly Makes Corrections
If America Online belongs to the school of thought that believes any
publicity is good publicity, it easily consoled itself this week.
Responding to a class-action lawsuit, the ISP agreed to remove a feature of
Netscape's SmartDownload product that could be used to monitor file
transfers between Web sites and Internet users. Simply having such a
feature in a product, whether or not it's actually used, is a major privacy
faux pas these days. AOL corrected another faux pas when it took down a
search engine it recently instituted that enabled users to find musical MP3
files, including pirated songs. In this case, the ISP was responding to
pressure from proposed merger partner Time Warner, who owns a large number
of copyrighted songs. After that the company corrected the faux pas of some
of its users. Along with other Internet sites, it removed anti-Semitic
postings relating to Al Gore's running mate, Senator Joseph Lieberman. The
move is in keeping with the firm's explicit policy against hate speech. Of
course, many times communication really is the answer. After communicating
with Harris Interactive, the ISP convinced the marketing survey company to
drop its suit against it. While the agreement wasn't contingent on AOL
permitting Harris' opt-in e-mailed surveys to get through, Harris believes
it can now reach most of its survey participants with AOL addresses.
Correcting another mistake--well, perhaps in the view of Linux users,
anyway--AOL began offering free downloads of the AOL Instant Messenger beta
for Linux. Then the media company did something it might think was a
mistake in retrospect: it floated shares of AOL Latin America for $8 per
share. The stock performed poorly. Potentially adding to AOL's woes, the
Federal Trade Commission began collecting private statements concerning the
company's proposed merger with Time Warner; the ISP must be hoping the FTC
doesn't try to block the merger, which would be a dreadful mistake, in
AOL's opinion. Finally, a much brighter note: the European divisions of the
ISP and Wal-Mart agreed to jointly purchase a 22.5 percent stake in
ShopSmart, a UK-based price comparison Web site. As part of the deal, AOL
UK and Germany will use ShopSmart as their exclusive integrated price
comparison service. 

  

On the Legal Calendar: Patents, Secrets, Trademarks, Spam
Adobe filed suit against Macromedia, seeking a court order to block its
release of Flash 5.0 software. Adobe claims the program infringes on its
own tabbed palette feature, which it patented in 1996. For its part,
Macromedia claims the suit is without merit. Superior Court Judge Gregory
H. Ward issued a subpoena to GeoCities obligating the Yahoo! subsidiary to
turn over to Apple the identity of "worker bee," a computer user whom apple
alleges posted confidential information and pictures of the company's
computer mouse and dual processor PowerMacs ahead of the products'
introduction. Apple jealously guards its trade secrets; Yahoo! is somewhat
less zealous about guarding the identity of its users. Of late, the search
service toughened its privacy policy to inform users when a subpoena has
been issued to gain their personal information, and to give them 15 days to
try to quash the subpoena. In what appears to be an almost painfully
obvious case of trademark infringement, AT&T sued ATT&T for, in addition to
the alleged infringement, unfair competition and registering a deliberately
confusing domain name (ATTTINC.COM). In existence since 1994, ATT&T sells
telephone products using the ATT&T logo, which is off by only one "T" from
AT&T's 100-year-old trademark. AT&T is seeking an injunction against ATT&T
to prevent further trademark infringements, including sale of telephone
equipment and any attempt to appear to be connected to AT&T. The venerable
phone company also wants an award of actual, compensatory, and punitive
damages. Ford had little luck with its own copyright infringement suit
against Model E Corp, an Internet start-up funded by Softbank. The car
maker claimed the name sounded too close to its own old Model T series.
Ford sought to prevent the company from using the name, and also wanted all
profits gained from the use of the name, unspecified damages, and payment
of its legal fees. The start-up is automobile-related, so yes, confusion
could happen; nevertheless, US District Judge Denise Page Hood dismissed
the case, stating that Michigan was not a proper venue for the case. Model
E maintains headquarters in California. While Model E is discussing its
differences with Ford, it does not plan to give up the name. Harris
Interactive also lost a point. It was denied a temporary restraining order
that would have forced Mail Abuse Prevention System to remove the online
survey company from its Real-Time Black hole List, used by many ISPs to
protect their systems from unsolicited bulk e-mail. Harris claims it does
not belong on the spammer list, and is suing MAPS and several ISPs for
engaging in monopolist practices. Speaking of spam, Register.com scored a
first round victory in its suit against site hosting firm Verio.
Register.com's complaint states that Verio took information from the
registrar's Whois data base and used it to solicit Register's customers at
home and at work--first via e-mail, then over the phone when Register sent
Verio a cease-and-desist order. These actions violated the data base's "no
spamming" terms of use. On Thursday, Verio agreed to stop using Register's
Whois data base for marketing purposes, after receiving a temporary
restraining order. Incidentally, Verio owns Network Solutions, Register's
biggest rival.   

  

ICANN Pleases No One Yet Again
Poor ICANN; every time it does something, it seems to upset a different
group of people. After missing its own deadline on this issue, it extended
the deadline for submissions of new top-level domain proposals by one day.
Though originally planning to accept applications for two months, ICANN
changed the submission period to start September 3 and end October 2--less
than one month. The nonprofit domain referee said that the large number of
inquiries received about the application process caused the delay. In
response, it did what it should have done in the first place: posted the
guidelines on its Web site. Many observers complained about the $50,000
application fee, saying that it virtually shut out nonprofit organizations.
Then, after ICANN took criticism from the People for Internet
Responsibility for its board selection criteria, the Computer Professionals
for Social Responsibility weighed in to say that just over a third of the
18 nominees can really represent Internet users. The organization wants to
see nominees come forward to be considered. The CPSR examined each
nominee's technical expertise as well as their likely ability to represent
Internet users. Speaking of technical expertise, Network Solutions this
week complied with its agreement with the Department of Commerce and ICANN
to stop using the InterNIC name; among other things, this involved
activating four new name servers and preparing to deactivate the four old
ones, which included one named rs0.internic.net, the primary name server.
The operational change went very smoothly. 

  

Complaints, Changes in Instant Messaging
The battle over the instant messaging market continued as Tribal Voice CEO
Ross Bagully sent a letter to Federal Communications Commission Chairman
William Kennard as a follow-up to last month's public hearing on the
proposed AOL-Time Warner merger. In the letter, Bagully attacked AOL's
testimony at the hearing, saying that the company distorted the issue,
"sacrificing reality in the interests of theater in an FCC hearing room."
AOL has claimed that interoperability between its Instant Messenger program
and the instant messaging programs of its rivals would risk the privacy and
security of AIM users. AOL's product has the most active users, far more
than any of its rivals--many of whom have tried unsuccessfully to convince
AOL to allow AIM to interoperate with their systems. Tribal Voice kept busy
this week; it teamed up with NameZero.com to create a domain-name based
version of Tribal Voice's instant messaging service. The service includes a
wide assortment of capabilities, such as text and voice instant messages,
multi-user games, duplex voice chats, and user notification when a listed
friend is online. For those who like AOL's ICQ service but also think the
idea of being able to play games through a chat service is pretty cool,
Vivendi came up with an answer. Its Flipside.com licensed AOL software to
offer several two-player games for ICQ members to enjoy with friends while
using the service. The games can be downloaded from Flipside's Web site. 

  

The Government and the Internet: Drugs, Gambling, and Sex
Somehow, when the US government and the Internet cross paths, some sort of
vice seems to crop up eventually. The US Justice Department and the Food
and Drug Administration brought charges against four individuals and All
International, a pharmaceutical supply company, for conspiring to illegally
sell prescription drugs to consumers without valid prescriptions. The
defendants, who allegedly planned to sell Viagra, Xenical, Celebrex,
Propecia, and Claritin-D through a Web site dubbed the Norfolk Men's
Clinic, face charges which include conspiracy to commit money laundering,
mail fraud, violating the US Food, Drug, and Cosmetic Act, and obstruction
of justice. Also on the federal level, Jay Cohen earned the dubious
distinction of becoming the first person to be convicted of running an
illegal offshore Internet sports gambling business. Cohen was charged under
the Wire Wager Act, which outlaws the use of telephone lines in interstate
or foreign commerce to place sports bets. Even though Cohen's World Sports
Exchange was based in Antigua, where gambling is legal, a Manhattan jury
decided that it fell under the act, and US District Judge Thomas Griesa
sentenced Cohen to 21 months in prison. He also must pay a $5000 fine.
Finally, where federal and state law meet, US District Judge J. Harry
Michael Jr. prevented Virginia from enforcing legislation that outlaws
using the Internet to sell or otherwise provide "harmful" sexually explicit
pictures or written material to juveniles. According to the judge, the law
violates the First Amendment. The law had been contested by People for the
American Way and more than a dozen Internet companies, which firmly stated
that the only way they could stop juveniles from viewing such material
would be to get rid of it completely--and that would violate the rights of
adults to view such material, including artworks and sex education
information. 

  

China Closes Web Site, Seeks Creators
The New Culture Forum, said to be the first dissident Web site based in
China, was shut down by the government, and Chinese police are hunting for
the site's creators. According to Human Rights in China, a US-based group,
the Web site posted counterrevolutionary content and was run by long-time
pro-democracy activists. In support of the New Culture Forum, the nonprofit
organization posted select content from the closed Web site to its own Web
site. China's Ministry of State Security described the New Culture Forum's
contents as "too sharp and anti-government." Xin Wenming, creator of the
New Culture Forum and currently in hiding, issued a statement denouncing
the Chinese government for its suppression of freedom of expression on the
Internet and calling for China to stop shutting down Web sites that engage
in political criticism. 

  

Copyright Holders, File Dispersers Set Lines of Battle   
With some people attempting to undermine trust in the Napster community by
naming nonsense-containing MP3 files after desirable copyrighted songs,
Aimster showed up just in time. Developed by programmers not associated
with America Online, Aimster allows users to trade files with "buddy"
groups through the ISP's instant messaging service. The product is said to
offer more secure trading of files than either Napster or Gnutella,
allowing more certainty that a user really is trading files with whom he
intends to trade. The application adds search and retrieval functions to
AIM's pre-existing feature allowing users to send files to each other. It
only works for AIM users on the Windows 95/98/NT platform. But such
applications may become more widespread if Intel has its way. Singing a
tune about peer-to-peer networking (which is the technical name for what
Napster's software enables), Intel sees many legitimate for the technology,
including sharing family videos, corporate documents, and network
resources. The chipmaker turned network player is expected to launch an
initiative related to the technology later this month. Meanwhile, the
Motion Picture Association of America and Eric Corley, publisher of hacker
'zine 2600, await a ruling from a US district judge in New York after
giving their final arguments in a case that raises both copyright and free
speech issues. The MPAA sued Corley and 2600 for their online posting of
DeCSS a software program that can decode DVDs so they can be viewed on PCs.
Slapped with an injunction forcing him to take the program down, Corley
did--and then put up links on his site to other sites displaying the code.
The MPAA, needless to say, was furious, and is seeking to prevent Corley
from doing even this much. According to the defendant's lawyers, the MPAA
did not present any hard evidence that the program had ever been used to
copy and illegally distribute DVDs, and that the association is trampling
on Corley's free speech rights. Speaking of movies and file swapping,
digital information sharing company Scour hired Fred Bartlit, Arthur
Miller, and Peter Toren to defend themselves against a lawsuit from the
MPAA, the Recording Industry Association of America, and the National Music
Publishers Association that claims Scour's search engine assists in online
film and music piracy. If the names of Scour's hired guns sound familiar,
it's because Bartlit represented Canada in a $1 billion lawsuit against RJR
Tobacco; Miller is a Harvard law school professor; and Toren formerly
served as the lead prosecutor for the Computer Crime and Intellectual
Property Section of the US Justice Department. That team might make even
David Boies pause. In a more clear-cut case, the New York Times, the
Washington Post, Gannett, and the Cable News Network filed a federal suit
in New York against GoSMS.com, an Internet company that pulls the news
articles from the companies' own Web sites and sends them to cell phone
customers of Pacific Bell in California. The suit charges GoSMS.com with
copyright and trademark infringement, false advertising, and unfair
competition. GoSMS.com CEO Yuval Golan maintains that, given the
limitations of displays on cell phones, his company is justified in taking
the information. Finally, computer gamers got their own file swapping
engine. Jeff Freeman, looking to add something to his resume while in
college, created Swapoo, a Napster-like application that allows users to
share video and game files. He intended it to be used for freeware, but
like other file-swapping services, it has become a tool for trading
copyrighted material. He added anti-piracy features to the program, and is
thinking of adding other features that would allow users to pay companies
for copyrighted items. Sega, Nintendo, and others in the video game
industry are watching Swapoo with piracy concerns foremost in their minds.
Maybe they should hire Freeman instead; his resume can be viewed at
Swapoo's Web site.  

  

Mercata Secures Patent
Online retailer Mercata received a controversial "business method" patent
from the US Patent and Trademark Office for part of its PowerBuy
group-purchasing technology. The system lets users form a group online to
gain volume discounts on merchandise. The patented part of the program lets
customers name their price, then sends the data to vendors, who can change
their prices in response. The company said it will examine its competitors
for possible patent infringements. Mercata has filed 11 other patents with
the PTO, all of which are still pending. 

  

Even Major Network Backing Doesn't Grant Immunity to Market Laws
NBC Internet said it will cut 170 jobs across the board, as part of an
overall revamping of the company. The cutbacks eliminate 20 percent of the
company's work force, and will leave NBCi with just 680 employees. While no
word was available on how much money this move would save the struggling
firm, an NBCi spokesperson said it would not change the company's goal of
turning a profit in 2002. For the quarter ended June 30, NBCi bled red ink
to the tune of $151.9 million on revenues of $30.5 million, but $94.9
million of that loss came from writing off goodwill. 

  

Outage Ticker: Savvis, eBay
The entire city of Pittsburgh, PA reportedly fell off of Savvis' Internet
network on August 6. The problem started at 8:00 AM and was allegedly due
to a hardware failure at the Pittsburgh POP, which affected all customers
wired to that POP. When asked for further information about the outage, a
Savvis spokeswoman refused to comment. Meanwhile, as a result of eBay's
attempts to improve the stability of its Web site over the past 10 days or
so, the site has become less stable. (Don't think about that too hard).
Intermittent problems included two full-blown outages and the
inaccessibility of certain features, such as starting new auctions and
viewing personal My eBay pages. Spokesman Kevin Pursglove refused to say
when the problems would be completely fixed, but gave assurances that the
company was trying to prevent these extreme annoyances from happening.  

  

Cyberscape Delight: Just How Strange is the Internet? We're Glad You
Asked... Few technologies prove quite as clearly as the Internet that, if
there is a way to do something, someone will try. Remember DotComGuy, who
promised to spend an entire year inside a townhouse, purchasing everything
he needs over the Internet--and letting the whole world watch him on his
Webcam? He gained a sailing counterpart this spring in Brady Gilchrist, who
loaded his laptop and mobile phone onto his 27 foot sailboat as part of a
five-month experiment to prove that the Internet alone can take the place
of television, books, CDs, videos, and other traditional media. Not quite
the exhibitionist that DotComGuy is, Gilchrist keeps a journal of his
experiment on a Web site devoted to it, rather than using a Web cam.
Communicating wirelessly on a sailboat is a good bit more sophisticated
than sending a note in a bottle--but for those who like the idea of sending
out a message with no idea who will see it or when, there's BottleMail. The
Web site allows users to send an e-mail to a single random person that will
arrive at an unspecified time in the future--like putting a message in a
bottle and throwing it out to sea. The site's creators see BottleMail as a
way to create unexpected connections between people around the world. The
Internet not only allows one to come up with fancier ways of doing
something old-fashioned; it lets one take relatively up-to-date ideas and
give them a whole new twist. Take television, for instance. Interactive
television may not have caught on--yet--but Intertooob.com hopes to change
that. The Canada-based Web site offers a daily schedule of more than fifty
interactive shows, in some cases inviting viewers to change the storylines
or the endings. Many of the creative individuals working on the
shows--actors, videographers, digital editors, and screenwriters--are
volunteering their time. To tune in, viewers should have Microsoft's Media
Player and either a cable modem or an ISDN line; a 56k line will carry only
a choppy feed. As with network TV, the creator of Intertooob.com hopes to
pay for the programming with commercials. Commerce and the Internet leads
one to think of online auctions...but for a change, the thought does not
lead directly to eBay, as delightfully strange as that site gets from time
to time. No, instead it leads to Disturbing Auctions. This is not an
auction service; rather, it's a compilation of various oddball, weird,
tasteless, and tacky items the Web site's creator (and like-minded
visitors) have found put up for auction on eBay and other auction sites.
The obvious hoaxes--kidneys, souls, babies, and other oddments--aren't
here, but a visitor can easily find such strange items as a doll made out
of beer cans, "ghost poop," a pregnant key chain, and other indescribable
delights that someone legitimately put up for auction, and in some cases
sold for a great deal of money. Pictures are included, of course, as well
as final bid price (if known) and biting commentary. For a limbless Barbie
doll, for instance: "Lets just say that Barbie will never borrow money from
the mob again."
   


*** Terri Wells, Faulkner Information Services *** 

  

  


CyberScape Digest, Copyright 2000, Faulkner Information Services. All
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