23rd > November > 1998 Archive

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The trial this week: DoJ consultant in the frame

Microsoft has made it clear that it intends to spend several days cross-examining Dr Frederick Warren-Boulton, the consultant economist who testified for a day last week. Microsoft spokesman Larry West admitted that the monopoly issue was a key, substantive one in the case, which until now had dealt with finger-pointing matters. Since this week includes the Thanksgiving holiday, the court will be sitting for only two days, and James Gosling, the Java pioneer, is unlikely to be called this week. Microsoft is likely to attack the market definition that W-B used when he gave as his view that Microsoft has a monopoly. This is standard practice in an unfair competition case: the defendant tries to develop a market definition that can help it show that it did not compete unfairly in that market. This will be difficult for Microsoft because it has produced an abundance of bragging statements that show it dominant according to the market definition W-B is using. Microsoft will try to develop a broader market definition than just Intel, and include all operating systems. Confounding the general rule that Republicans do not believe in breaking up monopolies, a group of soi disant conservatives wrote to Richard Amey, the House majority leader, to say that complaints in Congress to the effect that the government's prosecution intrudes in an unregulated market should be ignored. Former chairman of the Federal Trade Commission Dan Oliver, who organised the letter, said that if the Microsoft case could not be supported by Congress, no antitrust case could be supported, and that breaking up Microsoft (or some other structural remedy) could be effective. Oliver, who is also legal advisor to ProComp, an anti-Microsoft industry body, was supported by James Miller, also a previous FTC chairman, and James Rill, who was head of the DoJ antitrust division under Bush. Microsoft has had a much-strengthened team of lobbyists working away to gain support in Congress, but sentiment is not swinging to Microsoft at present. The restaurants of Washington are the only real winners so far. Meanwhile, the original three issues in the Complaint have almost been forgotten: tying Windows and IE (the court of appeals supported Microsoft in June on this ); ISP contracts (Microsoft says it has voluntarily relaxed these); and first-screen requirements (which remain a problem for Microsoft as its defence - a consistent user experience - is weak). Legal argument about the DoJ's move away from these central issues, and Judge Jackson's latitude in allowing it, can confidently be expected from Microsoft. ® Complete Register trial coverage
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How Microsoft put spin on Japan ‘innocent’ verdict

"Microsoft welcomes decision by the Japanese Fair Trade Commission" means, to seasoned observers, that Microsoft has agreed to modify its anticompetitive practices to avoid further action. (Related story) Microsoft's press release on the subject last week was a masterpiece of misinformation. First there is a reference to Masaru Kitamura, "a lawyer and former Japanese Foreign Ministry official who represented the JFTC in its dispute with the United States before the World Trade Organisation concerning practices in the film market" saying that "a warning simply means that the JFTC started an investigation with suspicion about an allegation, but found no evidence of improper conduct." So why did the JFTC issue a formal warning to Microsoft? On Friday, the JFTC pronounced itself satisfied that Microsoft had backed down and had done what it required, but Kitamura said "This ruling represents a significant legal victory for Microsoft in Japan." It can hardly come as a surprise that Kitamura is in fact in the pay of Microsoft as a consultant, but regrettably Microsoft could not find space to mention this. Surely the eminent Kitamura's opinion could not have been influenced by his relationship with Microsoft? But this wasn't the only deviousness. Brad Smith, Microsoft's general counsel, international told Reuters that "Japanese competition law is in fact stricter than the United States, so we have satisfied a higher legal standard in Japan than we are going to have to do in Washington, DC." Well that seems clear enough - except that it just isn't true. Here's what Jeffrey Zuckerman of Curtis, Mallis-Prevost in Washington told the San Jose Mercury News on 13 January, just after the JFTC's raided Microsoft's offices in Tokyo to gather evidence: "For the Japanese FTC even to do any investigation is unusual. For it to do a dawn raid is reserved only for foreign companies being picked on. The JFTC is notoriously reticent about enforcing Japanese antitrust laws, especially against Japanese companies." Smith said Microsoft Co, the Japanese subsidiary (income Y159 billion in the year ending 30 June), had been co-operating with the JFTC since the fall of 1997, and that "Typically, antitrust agencies overseas use this [approach] if a company is not cooperating." So why then should the JFTC raid Microsoft's offices? One JFTC complaint, made by Fujitsu, concerned the tying of Excel to Word, to prevent Microsoft's competitor JustSystem Corp, providing its Ichitaro word processor, which was more popular than Word in Japan. Microsoft decided to back down on the requirement, in the face of a ruling from the JFTC. When Microsoft has done this in the past, it has increased the price substantially if the bundle is not taken (so-called cliff pricing), in order to convince recalcitrant licensees to come to heel. Another complaint by 11 ISPs concerned a Microsoft requirement that they had to use IE exclusively with Windows 95, in order to take part in a cross-marketing agreement. The contracts were determined by the JFTC to be exclusionary, and therefore illegal. Again Microsoft backed down and modified them in April. When Gates visited Japan in June to promote Windows 98, the JFTC announced the same day that including IE in Windows 98 did not violate Japanese law. Faces saved all round. It is clear that Microsoft policy is to conclude all competition law investigations outside the US as quickly as possible in order to marginalise the DoJ. Three members of the Senate judiciary committee wrote to Janet Reno, the attorney general, in July to express concern that Joel Klein, the antitrust chief at the DoJ, had been in touch with the JFTC, after which the raid had been launched. The approach looked very much like interference in the work of the judiciary by the legislature - something legally taboo in the UK, for example, but just part of politics in the US. ® Complete Register trial coverage
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Will Gates take the stand?

Gates' interview with Associated Press (Earlier Story), and his comments at Microsoft's annual meeting of shareholders recently, has increased speculation that Microsoft may yet use its chairman as a rebuttal witness. Each side is allowed two such witnesses that do not have to be named in advance. It is less likely that the DoJ would exercise its option to call Gates as it is already doing rather well with the Gates videotape extracts. But David Boies, the DoJ special trial counsel, certainly seems to be trying to entice Gates to come to the court, saying that Gates was "indicating more and more that he'd like to come and testify. I'm sure his lawyers would listen to him." Of course they would: he pays their bills. Boies suggested that the case was not going as well for Microsoft as it hoped, so a change in strategy was possible. This presents a dilemma for Microsoft: to call Gates would indeed be a tacit admission that things were not going well. But Gates' comment to Associated Press "if the government wanted me as a witness they could have called me as a witness" is, if anything, likely to result in increased public clamour for Gates to give live evidence and be subjected to a live cross-examination. Judge Jackson has also indicated that he regards Gates' evidence as extremely important. The result is that Gates, abetted by Boies, may have started a movement that will have to result in his appearance, lest he be called chicken. The Microsoft legal team is currently saying that Gates would appear if called by the DoJ, which is big of them since to refuse would be a serious contempt of court. Gates' last appearance as a witness was before the Senate Judiciary Committee when Senator Hatch gave him a rough time. He is emotionally unsuited for the courtroom and rather unlikely to help the case. A personal appearance by Gates could be a way to overcome the negative impact of the videotapes. If Microsoft is going to lose this round, then at least the legal and PR groups would have someone to blame. ® Complete Register trial coverage
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Microsoft Java plan tempts fresh Sun legal action

Microsoft may be heading for more trouble with the courts over the route it proposes to take to 'remove' its Java 'enhancements' from Windows 98. Rather than take them out and ship Sun Java, the company is going to switch them off and allow developers to switch them back on if they want. A US judge last week granted a preliminary injunction to Sun ordering Microsoft to start shipping Sun Java and stop shipping its own within 90 days, but Microsoft's minimalist interpretation of compliance could trigger a repeat of last year's wrangle over the injunction ordering it to dis-integrate IE from Windows 95. Before that one was overturned, Microsoft was facing the prospect of hefty daily fines for contempt of court. In a combative press release on Friday, Microsoft sales and support VP Jeff Raikes said the company sees "little or no impact" from the ruling by Judge Whyte that Microsoft must include Sun's Java Native Interface in Windows 98. Microsoft said that it would not remove any of its technology, but would modify VJ++6.0 (yes, version 6 but don't look for too many earlier versions in Microsoft's software museum). In effect, it would make the product look like a cigarette packet warning to developers. "Legal notice: by choosing Microsoft's enhancements [sic] you will be writing an application that may only run on Windows". To get around the preliminary injunction, developers will have to choose affirmatively to turn on Microsoft's "enhancements". It will be very interesting to see if affirmation takes one click and denial two clicks, and whether Sun challenges such a procedure as a contempt of the judge's Order. Microsoft says it is planning Web site patches and a service pack for those who wish to modify their software. Microsoft spokesman Greg Shaw said on Wednesday that Microsoft planned to appeal the preliminary injunction, but by Friday there was a different story at Fort Redmond. Tom Burt, Microsoft's associate general counsel said that Microsoft had 30 days to file any appeal and had not yet decided whether to do so. Microsoft VP Paul Maritz also floated the possibility that Microsoft would produce its own "clean room" version of Java that excluded any Sun technology. In the meantime, Sun's official version will be used. All in all, the most unpleasant aspect for Microsoft has been its loss of face to its most determined rival. Sun will be asking for the preliminary order to be made permanent, and is seeking as-yet unspecified damages. Curiously, Sun has had to put up a $15 million bond in case the final ruling reverses the preliminary one, but Judge Whyte is unlikely to overturn his own ruling that Microsoft had violated the terms of the licensing agreement for Java. ® Complete Register trial coverage
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AOL and Sun plan to carve-up Netscape

Browser carve-up? Now AOL and Sun are poised to announce a carve-up of Netscape, according to US reports. The $4 billion merger deal divvying-up the company between the two is expected to be announced early today, and could have interesting implications for the current antitrust action against Microsoft. Netscape and AOL were known to be in discussion last week, but the full implications have only started to become apparent in the last few hours. The deal is to take a similar form to the one AOL struck with CompuServe and WorldCom last year. AOL will take Netscape's Netcenter portal and browser software, while Sun gets the business software, and the two companies co-operate in development and marketing. Provided the deal goes ahead, Microsoft's attorneys may initially have difficulty in doing much more than pointing, fish-mouthed - there is indeed a princely cynicism to AOL's move, and a certain element of collusion to Sun's. As trial documentation has clearly shown, it was seen by Microsoft as absolutely vital that AOL be brought on-side in the early days of Internet Explorer, and AOL's version of IE these days accounts for a fairly high proportion of total shipments. AOL defecting to a Netscape browser it now owned would undo a lot of Microsoft's efforts, and perhaps provide evidence that AOL will do anything for money (or for purely commercial reasons, as the company has it). The 'own brand' nature of AOL's version of IE gives us something to speculate about too. Is the company going to go for a completely standard version of Netscape Navigator, or will it, er, integrate a specific version with its own system? That would prompt more eye-rolling from Microsoft, but might have the bizarre side-effect of driving AOL's rivals into the arms of IE. From Sun's point of view, the proposed deal looks excellent. Netscape is a leader in the Web server market, and Sun's Solaris is a leader as far as the base OS for these is concerned. So Sun can add muscle to Netscape development, cover the bases better by being able to offer more multi-platform support (Intel being particularly important, Linux also being a handy one), and leverage its new AOL relationship for all it's worth. Microsoft should soon find itself very locked out of AOL indeed, and thrown further back onto the defensive in all sorts of related fields. So the first Redmond marketeer to drag themselves out of bed in Seattle and stop gawping for long enough to shout, "Look! We told you everybody did it!" is no doubt in for a fat bonus from Bill. ®
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HP CEO calls in consultants for top-to-bottom review

Hewlett-Packard has begun a top-to-bottom review of the company's operations, covering the whole of its business lines and strategies down to corporate culture. CEO Lewis Platt told staff of the review, which is being conducted by external consultants, in a memo last week. The company's sudden attack of navel-gazing comes after a fairly lacklustre year where although it has been able to at least hold its position in the sales tables, revenues have flagged. It improved profits in its most recent quarter, but largely through tightening the screws on expenses. So far, HP has blamed reduced sales growth on the Asian crisis, but the company's margins must of necessity have been hit by its push for volume in, for example, the consumer and Intel workstation markets. It is also the last of the major computer companies to have so far avoided radical corporate surgery. It may well be that Platt has decided on the review as a mechanism for carrying this out before an IBM, Compaq or Dell style emergency makes it unavoidable. There is as yet no announced date for the completion of the review, nor are there many clues as to the likely outcome. Likely consequences however include spinning off and/or separating out some of the company's multitude of businesses. Test and measurement equipment would seem a likely candidate for this, but it will also be worth watching HP's enterprise operations. HP has only just merged its Intel and PA-Risc enterprise operations into one unit in a bid to combat tougher competition from Sun and IBM. It'll be interesting to see if Platt's consultants support or reject that move. ®
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OFT set to investigate PC pricing

Dixons yesterday lashed back against accusations it has a monopoly of high street PC sales by putting the blame on the Government's shoulders. The move came after Peter Mandelson, trade and industry secretary, became embroiled in the row over the retailer's prices. Dixons claimed that government VAT and duties charged on PCs and computer components were partly responsible for pushing up prices in the UK. But Mandelson has written to John Bridgeman, director general of fair trading, which should trigger an Office of Fair Trading (OFT) inquiry into retail PC prices. Mandelson's intervention came after both Intel and the OFT last week said Dixons' highly artificial prices were holding back UK PC sales. (see Consumers’ Association calls for investigation into Dixons). Dixons refused to comment on the trade and industry secretary's action, saying it had yet to receive a copy of the letter. However, a spokesman argued: "We believe we are contributing hugely to the aggressive price campaign in this country. All the evidence shows that PC prices are on the way down." The OFT has confirmed it will refer the issue to the Monopolies Commission if it finds any abuse of the electronic retailer's position. ®
The Register breaking news

CDT shows first colour polymer screen

Cambridge Display Technologies (CDT) says it has produced a full colour screen using the company's patented Light Emitting Polymer (LEP) technology. LEP technology is intended to provide a lower cost mechanism for producing large, colour flat panel displays than can be achieved via current technology. CDT announced a mono display in February, produced via a joint development deal with Seiko-Epson. The latest display is a 3in square striped backlight made from red and green LEPs. Colour is achieved by sequential switching between the red and green fields of the backlight in synchronisation with driving a ferroelectric liquid crystal display. This system, says CDT, replaces the white flourescent backlight and colour filter components used in current LCDs. A future development is intended to be a full colour display using ink-jet patterning of LEPs. CDT has received £750,000 in research funding from the UK Department of Trade and Industry, and boasts one of the world's wackier investor lists. These include Intel, Genesis (the group, honest...), Queen Esther Dyson, Acorn founder Hermann Hauser, former Power Computing president Steve Kahng, and the Sculley brothers. The Sculley brothers, you ask? John and Arthur, who's less famous than John, but isn't responsible for bolloxing Newton either. ®
The Register breaking news

Sony gives memory some stick

As thick as a piece of Wrigley's chewing gum and no longer than the severed little finger of a contrite member of the Yakuza, the Memory Stick could become the 'must have' storage gadget for next year. A portable, re-recordable memory drive, the Memory Stick can save digital photos, data, music -- in fact anything that can be stored on a traditional disk. It's ingenuity lies in the fact that it's so small: only a couple of millimetres thick and 40mm long. Created by Sony, the device can be inserted into a range of products as a means of transferring data. Showing off their latest miniature technowizardry at Comdex last week, Sony demonstrated how a digital photo could be captured on a Memory Stick and transferred to someone else using phones fitted with memory stick drives. It also showed how music could be recorded and played back. Although Sony has included memory stick drives in a few digital cameras in Japan, in future they could be incorporated into personal stereos, set-top boxes, remote controls and electronic books. Sharp, Olympus, Casio, Aiwa, Sanyo and Fujitsu have all said they will support the technology and other agreements are in the pipeline, the company says. Sony used Comdex to launch the product onto the US market and is working round the clock to build support technology for the product. A 4MB Memory Stick sells for around $30. The 8MB version is available for $40. Sony says it will release 16MB and 32MB versions in the spring. Sony also unveiled its prototype electronic tablet aimed at non-PC users. Although still in its early stages, the Single Media Activated Platform (SMAP) could be used as an electronic book, an Internet reading device, e-mail platform or a hand-held personal digital assistant (PDA). In effect, the SMAP acts like a blank piece of paper. Its function is dependent on which PC Card controller is inserted into the machine, turning it from, say, a PDA to an electronic book in seconds. The SMAP prototypes on display featured a MIPS processor, 140MB memory and a 12.1in screen. Data is entered via touch panel or a keyboard. ®
The Register breaking news

Cirrus signs 3D audio deal with CRL

Cirrus Logic says it has licensed Central Research Labs' Sensaura 3D positional audio technology for use with its Crystal Audio products. Sensaura produces 3D positional audio from two standard speakers, and has been licensed by 70 per cent of vendors in the audio chip market. CRL claims that 130 games supporting the system are either released or in development, and says Sensaura also supports Microsoft's DirectSound 3D standard. CRL is an audio industry veteran, having been involved in the invention of stereo in the 30s. Sensaura was originally developed for the music industry, and according to Cirrus is "used by many recording artists including the late Frank Sinatra." So when the Sensaura-enabled Cirrus gear ships in Q1, presumably it'll be just like having the late Frank in the same room as you... ®
The Register breaking news

Sat phones will get smaller, but prices will stay high

The first generation of Iridium phones may be bulky and expensive, but Kyocera aims to halve the size within 18 months, said a senior company executive here today. Prices however will stay high for the next few years. Takashi Kuki, manager of the international sales department at the Kyocera Corporation said he expected the cost of satellite telephony to drop to more affordable levels in the next five to 10 years. Iridium itself, which went live earlier this month, is back on track, he said, and initial delays and data difficulties to be ironed out this week. Meanwhile, rumours were circulating in Japan that Kyocera is set to take over rival Oki. The latter turned in poor financial results recently and Kyocera has baled it out over its telecomms division, it emerged. ®
The Register breaking news

Heroically pointless products from Comdex

Putting different devices together to produce new product categories is what convergence is all about - but isn't embedding digital recording into your mouse mat and commercial radio in your mouse going too far? Not according to two Comdex exhibitors. The MemoMouse pad from Questech International is a 'super-charged' mouse mat with a built-in digital voice recorder which is capable of holding up to 80 seconds of recorded speech. The idea is that instead of writing down a telephone number or important appointment you simply press the record button on your mouse mat and save the information for later when your electronic diary is open on your computer. The MemoMouse mat also has a built-in calculator which is both solar and battery powered so, for example, you can calculate your expenses while talking to your editor on the telephone. The company hopes the MemoMouse will make an ideal promotional gimmick. The suggested retail price for this product is in the region of $40-$50. If you thought that mice and voice recorders are a strange match, what about the FM radio mouse from SonnenData? It comes in two formats - with USB or PS/2 connexions - and lets the PC user listen to his or her favourite radio station while working away merrily on the computer. The radio requires no batteries since it draws power via the interface port. The Radio mouse has an embedded speaker so you can hear the music - or follow the cricket test match - with no fuss. The alternative requires hooking up a an internal PC radio card to your computer's sound cards and speakers (Or you could just buy a normal radio - Ed). The mouse's left and right buttons allow you to scan the spectrum for your favourite station and the middle scroll button doubles as the radio's volume control. Sonnendata even claim the mouse is plug and play compatible so installation is fast and efficient. ®
The Register breaking news

Roam wasn't built in a day

While GSM globally has passed the 100th million subscriber mark (actually it's now over 120 million), this fact hasn't quite sunk in with everyday Americans. While it should be entirely possible to 'roam' with your GSM phone in most US cities, the obstacles to doing so are often insurmountable. In a classic display of the 'not-invented here' syndrome, GSM technology has reached North America but in a different format. Instead of using 900MHz or 1800MHz as in Europe and most of the rest of the world, the US is using 1900MHz -- known as DCS 1900. There are a number of dual-band mobile handsets available which support 900MHz and 1900MHz, and Bosch's World 718 phone -- a good example of this -- is reputedly on sale in New York's shops for $600. It just seems to be impossible to buy one right now. Never mind, the standard advice from European GSM network operators -- such as Orange in the UK -- is to take your SIM card with you and hire a handset on arrival in the US. Unfortunately most US handset rental companies are still only geared up for analogue phones. Obstacle number One. Your SIM card might not fit. Most European phones now take the smaller SIM (Subscriber Identity Module) cards whereas Motorola DCS phones (popular in the US) still take the larger SIMs. The solution: a SIM card adapter into which you can pop the smaller SIM. Obstacle number Two. Remember to ensure your SIM is enabled for international roaming and that international call barring is not operational. Obstacle number Three (the real killer): the personal unlocking code (PUC). Most cellular network operators bar users from using a SIM card from a rival operator using the PUC. In order to use your 'foreign' SIM card you need to obtain this special number by reading out the handset's unique serial number to the handset's network operator. This will unlock the phone. But an operator like Nevada Bell simply refers you back to the reseller. Unfortunately, Will Call Communications -- which was renting cellular phones at Comdex -- doesn't offer unlocked handsets for rental. According to Debbie Martinez, president of Will Call, this is a problem which her company is aware of but as yet her company doesn't offer such a service. The catch is that mobile phone resellers make their profit from airtime -- not rental. In the UK, Vodafone is aware of this problem and can put travellers in touch with a suitable rental company. The snag is you have to remember to arrange this before you leave the country since the UK reseller only publishes a UK freefone (0800) number. Whoops. ®
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Ex-Wintelers' share of iMac userbase up, claims survey

The number of iMac converts is booming, a survey by MacHome magazine has claimed. Of the 2400 new iMac owners quizzed, 26 per cent said the iMac was their first Macintosh. A staggering 29 per cent of this group had moved across from Windows or other non-Macintosh operating systems. This compares with Apple figures one month ago, where 12.5 per cent were switching from the Wintel platform (see Apple ships 278,000 iMacs). The survey also revealed that the typical iMac buyer is male, in his 20s with no children, and uses the machine for general home use. 30 per cent of respondents bought their iMac from a local retailer, 29 per cent from CompUSA. A quarter went through the more traditional Apple route of buying from mail order companies. The results follow a continuing downturn in iMac sales. Figures for September were down 50 per cent on August, the month the machine was launched. Last month sales fell again. What is not yet clear is whether the increase in the percentage of Windows converts from 12.5 per cent of buyers to 29 per cent is a sign of increased interest from that community or just a result of the tail-off of dedicated Mac buyers -- nearly a third of a small pie, isn't nearly so satisfying as 12.5 per cent of a much larger pie. The real test for the iMac will be whether sales pick up over the Christmas period, and whether, now the initial marketing campaign is over, the finance plan, offering the machine for $29.99 a month over 67 months, can provide a sustained boost. ®
The Register breaking news

Is the pen mightier than the mouse?

A researcher at the Sony's Computer Science Laboratories in Tokyo has devised an ingenious way of transferring files from one PC to another without touching a mouse or keyboard. Using a pen-like device, users simply touch the file on screen that needs to be copied or moved, and then tap the monitor where the file is destined. Although it appears that the file has literally been "lifted" from one screen to another as if stuck to the end of the pen, in fact, the file has been transferred between the two PCs over the computer network. The system works by first "tagging" the file with the pen's identity code. When the pen is then tapped onto another screen the computer recognises the same code and moves or copies the last file that was touched to the new position. It's believed that the system could be especially useful for people such as stock market traders or TV editors who regularly use two or more computers, according to a report in New Scientist. The discovery came about after the inventive researcher became frustrated by the mess and confusion caused by having three PCs on his desk. I didn't know which mouse belonged to which PC, he said. The system is still in development and a commercial application is still some way off. With only three pen identification codes at present, Sony would have to develop many more for this to become practical for a large number of users over a network. The Register, though, can help. If you're faced with a similar problem, stop being greedy and try and offload a few PCs to people less endowed than yourself. If all else fails and you just have to have a desk cluttered with PCs, you could always colour-code your mouse and PCs. A low-tech solution but highly effective. ® Register jokoid: Assuming Sony's pen/network system takes off, would the administrator be a PenIS manager? Ahem.
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Diamond ships Rio

Diamond Multimedia began shipping its Rio MP3 digital music player in the US, today, after the Recording Industry Association of America (RIAA) last month failed to get the device banned unless Diamond modified it to prevent it being used to pirate copyright music. The Walkman-sized device can store up to 60 minutes of music encoded in the MPEG-based MP3 format. Files are downloaded from the Internet or copied over from a CD onto a PC, from which they are then transferred to the Rio. Rio is retailing for $199.95. The UK release is in Decemeber, and it will cost £175 (inc. VAT) this side of the Pond. ®
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Cendant quits entertainment software business

French media company Havas is set for a $1 billion take-over of Cendant's consumer software business, helping Cendant recover from massive accounting fraud. Havas will buy entertainment and educational software sold under names including Knowledge Adventure, Blizzard Entertainment, Davidson & Associates and Sierra On-Line. Paris-based Havas is a subsidiary of Vivendi, a French utility and communications company. Cendant, a franchising and marketing company, saw share prices rise $1.25 to $15.68 in Friday morning trading on the New York Stock Exchange following news of the deal. US-based Cendant has been shuffling parts of the company around after years of acquisitions, trimming back to its main core business to raise cash and boost stock price. The software unit was part of CUC international, which merged with Silverman's HFS to form Cendant. Cendant has stated that CUC staff were responsible for posting $500 million in bogus business revenues, and $200 million in accounting errors over three years. ®
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Microsoft lawyer claims AOL deal makes lawsuit dead parrot

Microsoft general counsel William Neukom won the race to get out of bed and state the predictable about the Netscape-AOL deal, but as according to our calculations he couldn't have started stating much before 7am Seattle time, we don't think Bill should give him a rapid rebuttal or instant punditry bonus (Register prediction at bottom of story). Neukom stated, incorrectly: "From a legal standpoint this proposed deal pulls the rug out from under the government." From a legal standpoint, it does nothing of the kind. If it were the case - which it is not - that the government's action against Microsoft was directed entirely and narrowly at proving that Microsoft had competed unfairly with Netscape, then AOL's proposed purchase of Netscape now wouldn't change anything. If Microsoft attempted to destroy the company, AOL trying to buy it now doesn't erase history. Silly old Bill (Neukom) is deliberately missing the point here, and if Netscape is now so weak that it's willing to sell out, well, that might just show how successful Microsoft has been, and how much money it could cost Microsoft if it were proved Microsoft had been successful by foul means. But the DoJ's case is a lot broader anyway, and Silly Billy (Neukom) is one of the ones who's been complaining (unsuccessfully) about how the DoJ has broadened the brief from an originally narrow case (this is untrue as well, as we're rapidly getting bored of pointing out). The DoJ is set on proving Microsoft is a monopoly, and that it uses that monopoly unfairly - Netscape is just one of the alleged victims it is putting forward. Neukom does however have one point - or at least, the half of a point. "This proposed deal shows that the government's case was and is unnecessary. Microsoft's competitors have always had the ability and the resources to change the competitive landscape overnight." The second sentence is perfectly true, and describes the world as Microsoft would like it to be. Hardball-playing competitors pursue their ends ruthlessly, using all the resources they have available and, because the playing field is level - they all do it, they can all do it if they want to - it's not something the regulators have a right to mess with. You might say, but don't the weak get screwed then? Microsoft no doubt would say that's their own fault, because they're not strong enough. Meanwhile the other Bill has been catching it from his local paper, the Seattle Times, which in a piece headlined "Gates on video is a Microsoft horror show" concludes: "Now, just five weeks into what could be a four-month landmark antitrust trial, Microsoft must rescue Gates' credibility - or desperately argue that his testimony and memory are irrelevant." The Times draws attention to the strangeness of Bill Gates III, son of Seattle lawyer Bill Gates II, perpetrating a major screw-up by going into testimony entirely unprepared. Gates III, the paper reckons, must have found the antitrust case so impossible to take seriously that he, well, didn't… ® Complete Register trial coverage