4th > December > 1998 Archive

The Register breaking news

Four years ago: Chip makers ready steeds for Desperation Derby

Remember those days when you were a shy suitor and brought round a bunch of flowers for your sweetheart in the vain hope she might climb into the back of your dad's car with you later on? Or, alternatively, remember those days when some gawky pimply lad you couldn't stand, tried to lay you for the price of a box of chox and a bunch of roses? The politically correct must choose the opening paragraph which suits them best. All is fair in love, war and horse racing. It's not entirely clear whether Eckhard Pfeiffer has a single romantic bone in him, but he is noted for his probity. He has approached clone chip manufacturer NexGen with a bunch of poinsettias, The Register understands. NexGen, which uses IBM fabrication facilities, is set to roll out its answer to Intel's bid to sell megamillions of Pentiums in what is looking increasingly like the 1995 version of the Desperation Derby. Compaq likes NexGen. Second sourcing for Compaq remains a strategic lever it will use extensively in 1995. Compaq -- which has a one percent share in NexGen -- wants to use a variety of alternative sources to Intel. AMD and NexGen are favoured contenders. Other, stranger animals, are also understood to be attracting bets from Pfeiffer. In this race, Intel remains odds-on favourite to win, with allegations of nag nobbling clearly unsubstantiated. Horse racing -- like chip making -- is a competitive business and the stakes are high. In this type of race, rumours are rife. One example. AMD took on an incandescent glow last week at suggestions that Intel might sue customers Compaq and ICL. The insinuation emanated from one of the 6-1 outsiders in the race. Furious AMD company executives pointed out that after a court case over a telecommunications chip many moons ago, it indemnified all of its customers from these type of unfortunate repercussions. But The Register is beginning to think that the 1995 Desperation Derby will present a very strange picture indeed to punters. Rather than just be restricted to two year old geldings, the field is likely to be far wider than first anticipated. When the starting gate goes up, we're likely to see dromedaries, greyhounds, hares, red herrings and even dodos lumbering towards the finishing post. Place your bets. ® From The Register Number Nine
Mike Magee, 04 Dec 1998
The Register breaking news

DoJ expert – how MS pricing, market share climbed

Now that the transcript of the fifth and final day of DoJ witness consultant economist Dr Frederick R Warren-Boulton is available, it can be seen that there was a sea change in W-B's evidence. He was rejuvenated, and gave as good as he got from Michael Lacovara, a counsel for Microsoft. W-B responded well to government attorney Richard Schwartz's redirect, which was well-conducted and allowed some useful additional points to be made. Since his direct testimony was prepared, it transpired that W-B and colleagues had been working on data obtained by the DoJ under contract from Adknowledge, the Web advertisement market analysis firm. Schwartz focused on Microsoft's monopoly power in the PC OS market. W-B said there were two parts to the definition of monopoly power: the ability to control prices, and the ability to exclude competition. Microsoft's 90 per cent market share and high prices gave evidence of Microsoft's ability to control prices. In the upgrade market, Microsoft evidently used a focus group to help it decide on the price for the Windows 98 retail upgrade: $49, $89 or $129. W-B said that the fact that Microsoft could consider such a wide range of pricing was evidence that Microsoft enjoyed a monopoly. An unidentified Microsoft document (probably redacted -- ie. with the data withheld from the public) showed that if Microsoft charged $89, the sales would fall by only 30 per cent, giving a greater income at $89. In the case of OEMs, Microsoft could charge effectively what it wished, since OEMs had no real choice -- it was a case of very inelastic demand, in economists' argot. W-B also looked at prices over time and found, from Microsoft documents, that in 1991 the OS cost around 0.5 per cent of the cost of the PC, but this rose five-fold to 2.5 per cent by 1996 (with Intel's share tripling in the same time period). Even more startling, however, was the revelation that since 1996, from Microsoft's admission on its web site on 19 November -- the day W-B started testifying -- Microsoft said its share of PC cost was "only" five per cent, meaning that it had doubled in the last two years, and increased ten-fold since 1991. This is information that will probably come to haunt Microsoft in the years to come. Schwartz took W-B through a an exercise to show that the increase could not fairly be attributed to an improvement in Windows, because all aspects of the PC had improved. As to the exclusion of competitors, W-B drew attention to the barriers to entry and the conduct of Microsoft. An unsuccessful entrant would lose all its investment, since there is no other use to which the code could be put, but the greatest barrier is the lack of applications. W-B said that the barriers to entry were "very, very large and increasing". He pointed to the evidence from Apple and Intel as to Microsoft's efforts to force the exclusion of rival products. Part of the deposition of Microsoft VP Jim Allchin was read into the record. In it, he noted that Marc Andreessen of Netscape had said that Navigator would replace the OS. Allchin also admitted that it would be an advantage if, where there were two competing products, the distribution of the rival product was prevented. It was not necessary to spell out the implication. Allchin also admitted that early versions of IE were unsuccessful. Allchin put both feet in when he admitted that "when [browsing] started, it was just an application". Microsoft has been denying that browsing was anything but integrated. The point of the extract was for W-B to note that Microsoft saw Netscape as a direct competitor, a threat to its OS, and a potential distributor of Java Virtual Machines (JVMs). A videotaped extract of the deposition of Bryan Sparks, CEO of Caldera, was introduced. Sparks explained that Caldera at first thought that through its Linux distribution it could be a desktop competitor to Windows 95, but now saw it as a complementary product in a dual boot. Indeed, Caldera did not see Windows 95 as a competitor to its Linux distribution. Sparks said that Caldera was prevented from competing by Microsoft's control of the APIs in Windows -- Microsoft could add and change them at will, instantly making anything that Caldera might do incompatible. On the subject of Sun's Wabi, it was not a clone of Windows, Sparks said, because it required a copy of Windows 3.x. Andreessen appeared in the next video extract. He said that from 1994 to early 1996, Netscape was trying to develop Navigator into a platform to launch applications, but realised this was not possible. He now regarded Communicator as a platform for a class of network-centric software applications accessed with a browser, just as a relational database is a platform for a certain class of business applications, like a general ledger. Andreessen did not recognise that IE was part of the Windows 98 platform, of course. Later, in his re-cross, Lacovara brought up Andreessen's throw-away remark that Netscape would "reduce Windows to a set of DLLs", and introduced an extract from CEO Jim Barksdale's testimony in which he (Barksdale) put it down to jocularity, which did not help the Microsoft case. W-B's least successful testimony was about his idea for market testing, which seemed to be impossible in the market. But much more powerful evidence was introduced in the shape of a series of graphs analysing the gain of market share by IE. Lacovara objected strongly to their inclusion, demanding at one time another two hours to conduct a re-cross-examination should the exhibits be admitted. Microsoft had had the data, recently worked up by W-B and colleagues, for some two weeks but had not chosen to question any aspect of the methodology during that period. He was overruled. A particularly telling analysis was a caching study, using Adknowledge data. Schwartz said in response to an objection by Lacovara that caching had been mentioned during W-B's cross, but in fact this was not true. Nevertheless, Lacovara's objection to the introduction of new material was overruled. When a Web page is accessed, Adknowledge registers it, recording the browser and operating system in use. However, AOL's browser (and others) tend to cache frequently accessed pages, so that Adknowledge under-registers advertisement access. If this is allowed for, the evidence of Microsoft's browser dominance is even greater. W-B showed that in various groupings of ISPs, the relative dominance of Microsoft exactly followed theoretical predictions. Lacovara then undertook a tedious re-cross of W-B. His main useful point was that Microsoft would have to be told to stop innovating if competitors were going to develop a rival OS. W-B was ready for this one, and pointed out that this only applied to clone OSes, and had not been tried since DR DOS. It seemed that Microsoft's recent propaganda about attempts to stop "innovation" suggest that Microsoft has redefined "innovation" to be "tying to stop competition". So far as pricing was concerned, Lacovara showed that OS/2 and MacOS were more expensive than Windows. Judge Jackson took a strong line over Lacovara's desire to continue his re-cross the next day, and formally ruled that he had to finish at 5pm that day. Again, with an eye on the court of appeals, he also said that W-B could be recalled at the end of the case "if the record would be incomplete" without further evidence. Schwartz was given the chance for a last question in a further direct examination. He asked if the caching study of AOL were extended, what would be the result? W-B said the results "would have gotten stronger and stronger". Judge Jackson ruled perhaps a dozen times against Lacovara, and allowed him just one appeal against DoJ counsel Richard Schwartz's leading the witness. It was indicative of the judge's view of the case, it would seem. From his interjections, it is clear that Judge Jackson is reasonably on top of the technical issues. One of his relevant questions was the reason for having two operating systems, in a dual-boot situation. At the end of the day, Judge Jackson told W-B: "You are liberated." ® Complete Register trial coverage
Graham Lea, 04 Dec 1998
The Register breaking news

Big Blue bull(ish) about e-business

European businesses have a far more pragmatic approach to conducting business electronically than their US counterparts, according to the latest research from IBM. Big Blue's latest study reveals that 85 per cent of European companies believe they must invest in e-business or face competitive disadvantage. But the study further revealed that European companies are more inclined to see e-business as a way of achieving real value within their organisations and not just as a tool for out-doing the competition. The findings appear to contradict the widely held belief that the US leads the way in the development of electronic commerce. Equally, it also points to the growing maturity of the market in Europe, a view shared by Irving Wladawsky-Berger, general manager of IBM's Internet Division. "The Internet is not a strictly US phenomenon," he said during a press conference broadcast live on the Web. "The Internet is not limited to the industrialised world. It is a worldwide movement that is reshaping business of all sizes, and in more and more ways, society as a whole." IBM also carried out some amazing number crunching, predicting that by 2002, $600 billion -- out of a total worldwide IT spend of $1.6 trillion -- will be spent on e-business. Undeniably, it must have taken some impressive modelling and computer simulation to come up with that kind of prediction. It's just a shame Big Blue couldn't have applied similar resource to its own figures. Wladawsky-Berger proudly announced that IBM now generates $10 million worth of business online each day, but the company is unable -- or unwilling -– to say exactly how this is generated. Hmmmmm, the jury is still out. ®
Tim Richardson, 04 Dec 1998
The Register breaking news

Microsoft claims Sun-Netscape carve-up

Microsoft attorneys yesterday produced evidence that two years ago Sun and Netscape were engaged in one of the very activities Microsoft itself is accused of -- carving up the browser market. DoJ attorney David Boies dismissed the evidence -- Sun internal documentation -- as irrelevant, but an examination of the parallels and the differences between what Sun and Microsoft were up to is instructive. For Microsoft, Tom Burt produced an internal email that suggested that Sun and Netscape had been engaged in a series of meetings in order to avoid competing with one another in Internet software, and to "unify browser efforts; stop competing". There are several ways you can look at that. From the point of view of antitrust law you might reckon there's a clear difference between Microsoft doing this kind of thing and other companies doing it. If it is established that Microsoft has a monopoly position, then the construction of no-competition agreements and dubious-sounding alliances via that monopoly is clearly anticompetitive. But if a group of companies (Oracle, Sun, Netscape and IBM, as Microsoft has claimed) get together to challenge Microsoft, but don't themselves have a monopoly, then they're not necessarily doing anything wrong. They may well agree not to compete with one another, but that's different from Microsoft striking a deal (or allegedly attempting to strike a deal) whereby Microsoft got the exclusive on Windows browsers and Netscape got everything else. It's a fine point, and you can see why it frustrates Microsoft. Sun, IBM and Oracle clearly do want to destroy Microsoft's 'monopoly', and it seems obvious to Microsoft (and indeed to any rational person) that if they succeeded they'd replace it with their own cartel/monopoly. So it's not illegal to be so successful that you end up with a monopoly, it's just illegal to have one and (allegedly) abuse it. The philosophical point is too tricky for the Redmond mindset. But if we look at it another way, we can see that in the Sun-Netscape case a clear-cut definition of where the monopoly lay is a lot trickier, and that's good new for Microsoft. In 1996 Microsoft ran the desktop, and maybe we could call it a monopoly. But it didn't run the browser market. Netscape had been pretty close to a monopoly of browsers before Microsoft introduced Internet Explorer, in late 1995, and leveraging Netscape out was at least initially tricky for the company, particularly as by its own admission early version of IE weren't very good. So you could say at this point that Microsoft was the challenger while Netscape was the monopoly. Sun had been working on its own browser, Hot Java, and although IBM's browser didn't come up in court yesterday, it had one of its own too. But Sun didn't pursue Hot Java (because, said Sun VP James Gosling yesterday, it couldn't see how to make money out of it when IE was free) and IBM also abandoned its browser. In some lights, this might start to look like a smoking pistol - in an effort to stop Microsoft, the rivals put their weight behind Netscape, and it can at least be argued that they were shoring up a monopoly. Unsuccessfully, though. So is it legal to try to protect a monopoly so long as you fail? You can see why Redmond doesn't grasp that one either. But although Microsoft's case might seem superficially strong at this point, there's yet another way to look at it. The Microsoft view that Sun and Netscape were trying to protect a monopoly by decreasing competition crumbles if we remember first, that Sun and Netscape are not the defendants in the current antitrust case, and second that Microsoft is being accused (among other things) of attempting to achieve a monopoly in the browser market via unfair means. Microsoft has indisputably increased its share of the browser market, and if it can be proved that it did so via unfair agreements with ISPs and OEMs and by tying the browser to the OS (where, to labour the point, it did and does have a monopoly), then Microsoft's and Sun's alleged attempts to stitch up deals with Netscape are clearly entirely different matters. The difference between pooling efforts and agreeing not to compete with one another may be a fine one, but both of these are wildly different from using one monopoly in order to create others. Redmond must have trouble understanding that one too. ® Complete Register trial coverage
John Lettice, 04 Dec 1998
The Register breaking news

Primax, Visioneer and Xerox in ménage à trois

Visioneer is to buy into the ScanSoft division of Xerox and at the same time said it would sell its hardware outfit to Taiwanese company Primax. Primax will buy the hardware component for around $7 million and will call the subsidiary Visioneer. Visioneer will create a new company called ScanSoft, specialising in scanner software with a 55 per cent stake. Xerox will keep 45 per cent of its stake. And they will all be snug together in their new bed. ®
The Register breaking news

Channon walks out on ilion

Wayne Channon has resigned as chairman and chief executive of troubled networking distributor ilion. Serge van Gorkum, who was group product and marketing development director until June this year, has rejoined the company as group chief executive. As the founder of ilion's French subsidiary and a previous director of the company, van Gorkum has a "deep understanding of the group's business", a spokesman for the company said. Existing non-executive director Michael Sayers has taken over the role of non-executive chairman. Last month the company announced that its pre-tax profit would be "materially below expectations" for the current year, ending 31 December 1998. ®
Tim Richardson, 04 Dec 1998
The Register breaking news

Palm III proves a hi-tech helper for car thieves

A 3Com Palm III and software that lets the handheld control TVs and VCRs through its infrared port are all you need to nick a car these days, it seems. Danish IT journalist Lars Sorensen made the discovery when testing the sofwtare's legitimate uses. The software samples a TV's remote control signals so it can replicate them -- Sorensen wondered if it would do the same with a car's infrared lock and found that it would. Here in the UK, estimates from the Motor Insurance Repair Research Centre, quoted in New Scientist magazine, suggest that three million of the 22 million cars on the road are vulnerable to Palm-toting thieves. Interestingly, older cars that are more at risk than newer models. Most modern vehicles contain locking systems that change the locking code every time the key is used from sequences of 10 to the power 64 (a one with 64 zeros after it) making it virtually impossible to predict the code at any given instance. That said, Sorensen was able to enter a 1998 model, so no one can be sure they are safe. ®
Tony Smith, 04 Dec 1998
The Register breaking news

It's Jocks away for Osmosis

Osmosis has opened a Scottish office, in Livingston, its second regional division this year. The move comes six months after the hardware and software distributor started its Dublin office, becoming Ireland's first Authorised Microsoft OEM Product Distributor. Osmosis Scotland's general manager, Nick Grecian, described the Scottish market as "booming", but said its present channel was lacking the necessary support and financial investment. Osmosis Technologies, started ten years ago, is also a major distributor of IBM, LG, Panasonic and Samsung. The company said the Dublin division had quadrupled its business in its first half year. ®
Linda Harrison, 04 Dec 1998
The Register breaking news

RBR Networks bouncing following increase in turnover

Former beté noire of the Cisco channel, RBR Networks, has cited its single-vendor focus as the reason for the increase in its turnover by around 100 per cent. The company’s marketing director, Jos White, said turnover had gone from £26 million to £47 million and pointed to year-on-year growth of 175 per cent over the last five years. "A lot of broadline distributors are in trouble," he said. "We only sell Cisco, so we can be focused. On top of which, we are a young company still hungry for success." RBR was bought in September by South African company Datatec for £25 million. Last month it was handed three awards by Cisco; UK distributor of the year, EMEA North distributor of the year and overall EMEA distributor of the year. The distributor had been grey importing Cisco kit prior to getting its Cisco authorisation in October 1997. "Before that point we were really only a secondary supply channel for Cisco dealers," White said. White was reluctant to reveal the company’s profit figure, but said it made something in the region of £8 million. He also admitted that margins had been squeezed in order to push sales up. "You have to take a realistic view of these things, margins are coming down across all sectors. Also, we’re now selling much more of the low end Cisco kit." He went on to say that new owners, Datatec, are looking to introduce the single vendor model into other European territories next year.®
Sean Fleming, 04 Dec 1998
The Register breaking news

Europe, US to harmonise encryption export controls

US and European Union (EU) officials have reached an agreement on export controls for cryptography software, the New York Times has reported. According to US special envoy for cryptography David Aaron, quoted by the NYT, representatives of both blocs agreed to restrict the export of encryption software that uses keys of 64 bits or more. US law currently forbids companies from exporting software that uses that level of encryption. That's why US versions of Web browsers contain 128-bit encryption to encode e-commerce transactions, but European versions use a much lower level of security -- just 40 bits per key. The agreement, reached yesterday by the 33 members of the Wassenaar Arrangement, will impose those export restrictions on European software suppliers. The more bits in the key, the harder it is to crack. The US government claims 64-bit keys are sufficient for almost all uses. However, earlier this year, researchers were able to break a 56-bit code, albeit using a network of hundreds of PCs operating in parallel. Much tougher keys, including the 128-bit keys commonplace in e-commerce applications, are thought to be virtually impossible to crack using today's technology through the next few generations of processor. ®
Tony Smith, 04 Dec 1998
The Register breaking news

Arbitration panel to rescue LG, Hyundai on anti-dumping

Micron is likely to be disappointed at a decision by the World Trade Organisation (WTO) which will make the US government take LG and Hyundai off its anti-dumping list. According to a report in English language paper Korea Times, the WTO is likely to rule that a US refusal to take the companies off an anti-dumping list is unjustified. The South Korean government asked the WTO for a ruling last year after LG and Hyundai had anti-dumping tariffs imposed on them for three consecutive years. The US and the South Korean government had failed to reach a compromise and the WTO appointed three arbitrators to come to a conclusion. ®
A staffer, 04 Dec 1998
The Register breaking news

Cambridge IT firm sells out to South Africans

Black economic empowerment group PanTech has joined the ever growing list of South African companies hot on the acquisition trail in the UK. PanTech yesterday bought Cambridge-based Cruisequest, which will complement the South African company's IT division, BizTech. The UK consultancy and IT services company will become PanTech’s European subsidiary. It will be the European funnel for PanTech's products and services, as well as continuing to service its own customers. Cruisequest's clients include Marshal of Cambridge Aerospace and Denel Aviation. Bought from Alan Luus, the deal is subject to SA Reserve Bank approval. PanTech is flowing with the tide of South African offshore acquisitions in recent months. In September Gloucestershire-based distributor RBR Networks was bought by Datatec and Surrey corporate reseller Bytes Technology Group was bought USKO in October. ®
Linda Harrison, 04 Dec 1998
The Register breaking news

Channon ‘throws himself on sword’

Wayne Channon has resigned as chairman and chief executive of troubled networking distributor illion group plc. Channon, who founded the company in 1989 is reported as saying that he recognised it was "time to go" before deciding to take the honourable way out. And although he took full responsibility for, in his words, "throwing himself on the sword", it seems that there were plenty of people around happy to sharpen it for him. Only last week the company announced that its pre-tax profit would be "materially below expectations" for the current year, ending 31 December 1998. A year ago the company warned that profits for the year would be down by around £2 million from £8 million. In September this year the company said performance was impaired by slower growth in the UK than was expected and by losses in some Continental subsidiaries. ilion's problems have been consistently blamed on slow sales and low profitability in the UK organisation. But today, the list of ilion's woes has grown longer with one spokesman blaming the company's poor performance on lack of expenditure by the City and on the strength of sterling. Channon's resignation has come as little surprise to industry watchers. "You simply can't escape the fact that the company has had three profit warnings in the last year," said one source. illion has been quick to replace Channon, whose departure takes effect immediately. Serge van Gorkum, who was Group Product and Marketing Development director until June this year but who left for "a holiday" has rejoined the company as group Chief Executive. As the founder of ilion's French subsidiary and a previous director of the company, he has a "deep understanding of the group's business", the company said. Existing non-executive director Michael Sayers has taken over the role of non-executive chairman. ®
Tim Richardson, 04 Dec 1998
The Register breaking news

Calluna hits first ever profitable month

Too early for Calluna's long-suffering shareholders to crack open the champagne, but a jar or two may be in order to celebrated the first ever profitable month recorded by the niche hard drive developer. Scottish-based Calluna blames the operating profit achieved in October on rising sales. It did even better in November, the company says. And following a "successful demonstration" of PC Bodyguard, the brand name for its hardware-based firewall Hardwall at Comdex, the company trumpets its first significant orders for the product. How significant and who's buying, Calluna's not saying. The good news accompanies a huge leap in sales for the half yearlies to 30 September 1998 -- up 268 per cent to £10.8 million (1997: £2.9 million). Pre-tax losses remain at a stubborn £2.7 million (1997: £2.765 million). The company ended the period with £1.3 million in cash. Significantly increased sales of the CT520 Type III disk drive account for the turnover increase. It has a forward order book of 55,000 units for the line. Calluna also looks to have overcome earlier production problems, with the "successful transfer" of production to more cost-effective single disk design. It has scheduled early 1999 for initial manufacturing for its new Type II 5mm (ultra slim) disk drive. And it reports an "enthusiastic" response to engineering samples from potential high volume manufacturers. So much good news and all in one day... is this company softening up the market for a rights issue? ®
Drew Cullen, 04 Dec 1998
The Register breaking news

Tinker, Tailor, Soldier, Northamber

Check out the latest range of portables at Northamber, the Chessington-based distie. Brushing past Northamber's fiercesome security force, a 40-strong contingent of travellers have set up camp in the company's car park. With satellite dishes on their caravans and road digging gear in tow, the squatters are settling in nicely …
Drew Cullen, 04 Dec 1998
The Register breaking news

Hyperlink poaches Oracle man for MD

Hyperlink has appointed a new MD to help "ensure fast managed growth" at the Web agency, based in London's Covent Garden. Tim Jenner left Oracle UK more than a month ago, where he was regional director for Internet, intranet and decision support solutions, to take up the post. He replaces John Lambert who remains at Hyperlink as chairman. Founded in 1994, the company has increased its turnover by 3772 per cent over three years and now employs more than 40 people. Its clients include Allders, Waterstone's, The Economist, Alliance & Leicester, and the Beeb. ®
Tim Richardson, 04 Dec 1998
The Register breaking news

PR man falls in love with politician

Pictured here is one of our favourite spin doctors, Mr Chaz Brooks (01483 277711) who bumped into Her Majesty's Leader of the Opposition at a heliport in London. His first words to William Hague? "Come fly with me." ®
Ozark Bosch, 04 Dec 1998
The Register breaking news

Survey: online sales top $4.5 billion

Computer hardware and software, travel, and books account for more than three-quarters of all online sales notching up more than $3.5 billion in sales out of a total global spend of $4.5 billion in 1998. But the dominance of computer-related sales online -- which accounts for $1.65 billion or nearly 40 per cent of Net sales this year -- is set to decline in the next couple of years as it's overtaken by more mainstream consumer items, according to industry watcher eMarketer. By 2002, travel -- which includes airfares, accommodation, car rental and tourism services -- and food will topple the computer sector from its current number one slot and relegate it to third place. eMarketer predicts that the travel sector will generate more than $8.14 billion in retail sales by 2002. Food and drink, led primarily by the greater acceptance of online shopping for groceries, will jump from lowly seventh place today to second place in three years with sales topping $7 billion. "Most people think of computers, travel and books as being popular online," said eMarketer statsmaster Geoffrey Ramsey. "But our revenue figures reveal just how powerful these categories actually are in today's online marketplace." Which is great news for e-commerce enthusiasts -- if only it can be believed. For eMarketer has broken ranks and questioned the accuracy of a number of e-commerce statistics currently doing the rounds. Depending who you believe, anything from $1.3 billion to $4.4 billion is going to be spent online during the fourth quarter this year as more and more people turn to the Net to buy their Christmas presents. eMarketer blames these variations on academic differences. But when pressed on the issue and asked to give any lead to confused readers, they simply shrug their shoulders and say, "You decide." Very helpful. Is The Register alone in thinking that the only people making any real money out of e-commerce are the pseudo-academic researchers plucking fictitious numbers out of the air? Surely not. ®
Tim Richardson, 04 Dec 1998
The Register breaking news

Good news for Dixons

High street retailer Dixons is set to rejoin the big boys in the FTSE 100 next week when the FTSE International meets to decide the latest quarterly changes to the stock market indexes. Dixons, which dropped out of the FTSE 100 in March, has done well recently as investors have flocked to the company. Most retail analysts are positive about Dixons' medium term prospects despite the recent accusations of price fixing levelled by Intel's boss, Craig Barrett. Analysts are saying that the continued growth of the personal computer market, along with the recent launch of digital television, means the technology cycle should remain at high levels despite the threat of a slowdown in the economy. Elsewhere, Sema Group PLC and Misys PLC, could drop down to the second-tier FTSE 250 index because of the sector's exposure to a general round of belt-tightening. Sema and Misys were the first IT companies to join the FTSE 100. ®
Tim Richardson, 04 Dec 1998
The Register breaking news

Microsoft gets Caldera evidence excluded from trial

Microsoft made a plea on Wednesday to have testimony excluded. It was not evident from the court transcript what this was all about, but The Register can reveal what was missed entirely by the media. Microsoft's Web site just happens not to mention a Microsoft Motion considered by the court on Wednesday. John Warden, the lead lawyer for Microsoft from Sullivan & Cromwell, turned up in court with just one copy -- none for the DoJ or judge -- of a list of designations (extracts from depositions) and asked the judge to exclude them from the trial. Warden was at his most unctuous, squeezing even three "your honours" into one sentence. Warden claimed that the designations were "highly prejudicial" and should be excluded. Judge Jackson said that admissions or material facts should be admitted. He said that he had not gone through the depositions designation by designation, which was a pity in view of the content of at least one deposition. Warden then claimed that "the procedures adopted by this court have departed from the rules in the ordinary course of judicial proceedings... one is the use of written directs and the other is the limitation on witnesses". Judge Jackson was not letting him get away with this: "I first proposed a limit of ten witnesses, and both sides came back and said, 'Can we have 12'? I said, 'Yes'." Warden blundered into it: "We came back to ask for 12 because we thought that your honour would not be receptive to more than that..." The judge responded: "What makes you think I wouldn't have been receptive?" Microsoft will not like this failure to extract the maximum number of witnesses from the judge, and it seemed probable that an application will be made by Microsoft to increase the number. Microsoft's general strategy seems to be to spin the case out for as long as possible. This was, however, a side issue, since Warden's main desire was to ensure that a deposition by Stephanie Reichel taken in the Caldera v Microsoft case was not used. Warden told the judge Reichel was "not employed by Microsoft at the time of their deposition in that case and therefore not in a position to make admissions on behalf of Microsoft. I take it they are excluded." The judge agreed they would be. Warden became positively oleaginous: "Thank you, and I assure your honour that whatever your honour's ultimate--" But the judge interrupted him: "Who are 'they', by the way? Who are 'they'?" They are Mr Barrett and Ms Reichel. The secret was out, but went unrecognised. Reichel, a former Microsoft employee in Germany, had been obliged to give evidence, according to Wendy Goldman Rohm, who first disclosed the connection in her book The Microsoft File. The DoJ confirmed some time ago that it had subpoenaed the tapes of the interviews (DoJ subpoenas Gates' former girlfriend over Vobis) because it is interested in emails that appear to have been deliberately destroyed. The incriminating evidence is said by Rohm to have contained details of Microsoft's dealings with Vobis and other German OEMs, and Microsoft's efforts to "persuade" Vobis to switch to MS-DOS from DR DOS. The deposition could contain evidence that Microsoft had tried to obstruct justice by destroying evidence, or give supporting evidence that Microsoft had used anti-competitive measures. Rohm has also claimed that Gates did instigate a revised policy for document destruction. Reichel was deposed by Steve Hill, a lawyer acting for Caldera. He said he was unable to give any detail about her responses to questions because of a protective order that Microsoft has obtained, which also points to the seriousness of her evidence. The courts take a dim view of deliberately destroying evidence. It was probably no accident that Charles Rule, a legal consultant to Microsoft, complained that the issue wasn't in the original Complaint [in May] and should therefore not be included. David Boies, for the DoJ, seemed to be not unduly dismayed, saying that he accepted the court's ruling that the Caldera evidence be excluded at this time, but was granted leave to pursue the matter later under rule 804(b)(1) if he so desired. Whether he is seeking further confirmation of document destruction is not known, but Microsoft's nervousness in the matter is, we hope, at least clear to readers of The Register, if not yet to the judge. ® Complete Register trial coverage
Graham Lea, 04 Dec 1998