21st > January > 1999 Archive

Corel spins off Linux hardware business

Corel is to spin off its Linux hardware business to Hardware Canada Computing in exchange for a 25 per cent stake in HCC. The latter company, which specialises in Unix, NT and Sparc and has revenues in the region of C$60 million, will acquire all the assets of Corel Computer. The Corel Computer division has been developing the NetWinder range of ARM-based Linux thin client/thin server machines for some time now. Corel CEO Mike Cowpland yesterday said that development was "essentially complete", and initial sales had indicated "extremely positive acceptance". Cowpland also said that Corel has considered spinning off the NetWinder business in the past, but decided not to do so "until the time was right and in a fashion that would deliver the fullest possible value to our shareholders". The nature of the acquirer will, however, be a matter of some concern to the Linux community. In the Canadian market HCC is a substantial player, claiming to be one of the country's largest VARs, but it clearly doesn't yet have the international heft to build NetWinder sales quickly. HCC president Mike Mansfield, however, claims that "Linux and open source code is the future", adding that the acquisition "has vaulted us into a world-class opportunity which will let us move forward with an initial public offering later this year". Corel meanwhile intends to stick to its knitting, concentrating on the WordPerfect and CorelDraw product lines in the future. Yesterday, the company announced that it was back in profit, showing revenues for Q4 1998 up 54 per cent to $67.2 million, and net income of $6.8 million. For the year revenues were $246.8 million, with a net loss of $30.4 million. This compares to $260.6 million and a loss of $231.7 million for fiscal 1997. ®
John Lettice, 21 Jan 1999

China jails software developer for selling email addresses

The owner of a Chinese software company has been jailed for two years after a Shanghai court found him guilty of sending 30,000 e-mail addresses to US-based pro-democracy organisation VIP Reference. Arrested in March last year and convicted last month behind closed doors, Lin Hai was sentenced yesterday. As well as being jailed and fined £750, the court also ordered officials to confiscate Lin's computer equipment. Throughout the trial Lin maintained that he sold the addresses as part of a business deal but the court ruled instead that his actions were tantamount to subversion against the state. ®
Tim Richardson, 21 Jan 1999

S3 retires Virge

Graphics specialist S3 has formally discontinued its Virge graphics acceleration chip thanks to lack of demand. That leaves the company pushing its Savage3D accelerator against the likes of 3Dfx's Voodoo2 and nVidia's Riva TNT. Given both those companies' market and mind shares, S3 will have it's work cut out, though it should be encouraged by its recent design win with Fujitsu -- the Japanese giant is building Savage3D into its high-end multimedia PCs. The once-popular Virge family allowed S3 to make major inroads into the OEM PC market. Of late, though, the company lost customers to more advanced 3D graphics technologies from the likes of ATI, which now pretty much rules the PC vendor market roost. ®
Team Register, 21 Jan 1999

Witness claims MS keeps sales data on handwritten bits of paper

Last year the Department of Justice experienced considerable difficulty in gaining access to Microsoft sales data, and yesterday company witness Richard Schmalensee blurted out a possible reason why - it keeps its sales data on handwritten sheets of paper. At least that’s what he claimed. "Microsoft’s internal accounting systems don’t always rise to the level of sophistication one might expect from a firm as successful as it is," he told DoJ attorney David Boies. So when Schmalensee was researching his massive deposition for Microsoft he was simply unable to gain access to sales data. Schmalensee’s claim is somewhat difficult to credit, to say the least. Microsoft does have a sales database, which may not actually run on Microsoft software, and which is the very one the DoJ had some trouble crowbarring information from. Microsoft’s executives demonstrably spend a great deal of time bashing out frantic emails to one another, so how come when it’s down to sales numbers they start scribbling on pieces of paper? Yesterday he also claimed that these pieces of paper don’t cover the profitability of Microsoft’s operating systems - that Microsoft, in fact, does not track operating system profitability at all. The enterprise customers who’ve been listening to Microsoft presentations on the value of corporate Digital Nervous Systems would do well to bear this in mind. The company that’s trying to sell the concept actually uses something you might call an Analogue Nerveless System. Allegedly. ® Complete Register trial coverage
John Lettice, 21 Jan 1999

Lycos seeks investment partner, preferably non-smoker

Internet portal Lycos has confirmed it is seeking a partner to bring more than a little development funding to the company. According to Eric Gerritsen, Lycos' VP for international business development, quoted in the Financial Times, the company is in "informal discussions" with a number of media and telecoms operations. On the table is at least 20 per cent of Lycos -- Gerritsen said the company as a whole was not up for sale. The investment could total $1 billion, he added. Still, Lycos' motives are apparently not financial. Gerritsen claimed the company doesn't need the money -- "but we could do with the global clout a large media or telecoms group would bring". Its pitch to possible buyers is presumably in the form of a once-in-a-lifetime opportunity to get into the portal business easily. While Lycos was yesterday trumpeting market research data that put it a gnat's wing behind Yahoo! in terms of audience reach (see earlier story) -- almost certainly in a move to improve its negotiating position -- it neglected to mention that the same data still leaves it some way behind AOL. Lycos was one of the first Internet search engine services, and the first to go public, but has generally failed to achieve as high a market profile of Yahoo!, Infoseek and Excite. That's largely because its strategy has been more focused on building a range of branded Web sites, such as Tripod and HotBot (acquired through the company's purchase of Wired magazine's online resources), rather than on a single, readily identified brandname. A deal with the likes of Germany's Bertelsmann (which already owns a share of AOL UK, along with AOL itself), Microsoft, CBS or even online retailer Amazon.com, all of whom have been mooted as investors in or buyers of Lycos, would give it the cross-media promotion it needs to raise its profile to the level of the other leading portals. ®
Tony Smith, 21 Jan 1999

IT chiefs make loadsamoney – official

Corporate fat cats at Yahoo! and IBM have topped a list of CEOs whose share options gained the most in 1998. Timothy Koogle of Yahoo! saw his option rocket to $488 million -- not surprising since his company's stock went through the stratosphere last year as it registered an increase of 584 per cent. And Big Blue's Lou Gerstner watched his options jump $338 million in value, even though his company's stock climbed a disappointing 76 per cent by comparison. Graef "Bud" Crystal, editor of compensation newsletter Crystalreport.com, which compiled the survey, said: "When the market really goes up, these options turn to liquid gold." The Register would respectfully like to point out that the value of shares and the income from them can fall as well as rise... ®
Tim Richardson, 21 Jan 1999

HP exec to MS: we'd dump Windows if we could

Microsoft's efforts to control the desktop via the "Windows Experience" prompted Hewlett-Packard's R&D manager to tell the company: "If we had the choice of another supplier, based on your actions in this area, I assure you would not be our supplier of choice." John Romano was writing to Microsoft business manager Dave Wright in 1997, and was seriously ballistic on the subject of Microsoft's "edicts", which he claimed had had the net effect of seriously damaging HP's PC business, forcing up returns and tech support calls. "As was clearly stated on many occasions to you and other members of the [Microsoft] OEM team, Microsoft's mandated removal of all OEM boot sequence and autostart programs for OEM licensed systems has resulted in significant and costly problems for the HP-Pavilion line of retail PCs." Microsoft had in this period been progressively forcing OEMs to remove tailored software from their systems so that all PC users had a standard, "consistent Windows Experience". Romano goes on: "Our data (as of 3/10/97) shows a ten per cent increase in W95 calls as a percentage of our total customer support calls (increase from 23.72 per cent to 33.51 per cent). This data is measured against a base of 109k calls for the pre-OSR2 'Microsoft-mandated changes'. The base for the post measure is 28k. This is enough to ensure a high degree of significance to the data. "Our registration rate has dropped from the mid-80 per cent range to the low 60 per cent range. "There is also subjective data from several channel partners that our system return rate has increased from the lowest of any OEM (even lower than Apple) to a level comparable to the other Microsoft OEM PC vendors." Hewlett-Packard had basically been attempting to differentiate its PCs by adding software which made them easier to set up and use, but as this interfered with the "Windows Experience", it had been forced to dump all of this under the contract for the OSR2 version of Windows 95. Romano is therefore saying that Microsoft's demands for control of the desktop were making his PCs less usable, and produced the data to back this up. "This situation must change. We find Microsoft control over our Customer's Out of Box experience totally unacceptable." Register historical factoid: In early 1995, Microsoft was flexing its muscles over OEM requirements for the then forthcoming Windows 95 product. Jacques Clay, wily French boss of HP's PC operation, really did threaten to ship OS/2 instead, and secured some easing of terms from Microsoft. ® Complete Register trial coverage
John Lettice, 21 Jan 1999

Intel to pour $100 million into Samsung

Intel is to invest $100 million in Korean chip manufacturer Samsung, it emerged yesterday. The deal hasn't yet been formally signed, but it will see the Great Satan of Chips buying $100 million worth of Samsung stock. The catch: Samsung has to use to the money to ramp up production of Rambus Direct DRAM. That's a pattern set down last October when Intel invested $500 million in Micron Technology through the purchase of six per cent of Micron's shares. Intel is clearly concerned that possible shortages of Direct DRAM could hinder the take-up of Rambus' next-generation memory technology, which Intel has been promoting for some time and will bring to the PC next quarter when it releases its Camino chipset. Similar fears of a dearth of Direct DRAM have prompted other chipset vendors, most notably VIA, SIS and Acer Labs, to support the PC133 SDRAM specification as an interim measure (see Chipset vendors prepare for Rambus shortage). IBM has also said it will produce PC133 products, in anticipation of keen demand (see IBM to offer Rambus alternative). ®
Tony Smith, 21 Jan 1999

Intel antitrust action delayed till March

Intel’s date with antitrust destiny has shifted back two weeks, to March 9, either because Intel didn’t turn over requested documentation to the FTC on time, or because both sides asked for the delay. According to Intel, the delay was by mutual agreement, but James Timony, an administrative judge for the Federal Trade Commission, said that Intel’s failure to hand over data had caused delays in the questioning of witnesses. The FTC is suing Intel, claiming the company withheld technical data from Intergraph, Compaq and Digital. The trial schedule has moved at a considerably more sedate pace than the DoJ’s action against Microsoft, and this may or may not be good news. On the one hand, there’s less chance of everybody’s brains being sprained by having to keep up with both trials at the same time, but on the other, the longer they’ve got to prepare, the more Intel trial documentation there’s going to be. ®
John Lettice, 21 Jan 1999

Intel adds serial numbers, random numbers to PIII

Intel is today due to announce that it will embed individual serial numbers first on every Pentium III it produces and later other chips, including future Celeron products. The move is geared to identify stolen PCs, either physically or via the Internet. It may also help Intel identify companies overclocking processors then selling then claiming their PCs contain faster chips than they do. It's likely each number will be exposed to software, potentially allowing, say, Web browsers to explicitly identify individual machines across the Net. Intel has said it will supply software that allows users to switch this feature off, which seems to defeat the object of adding serial numbers to chips in the first place. The Great Satan of Serial Numbers will also add random number generation hardware to each chip in an attempt to make encryption and security software tougher. This technology will appear in place of the encryption circuitry many pundits had predicted Intel would be adding to future chip designs. According to the company, it works something like this: instead of using the host OS' random number generation or its own, both of which can only create pseudo random numbers -- in other words, they appear random but detailed inspection reveals a consistent pattern to the numbers that it churns out -- software can use the PIII's totally random number array. With no hidden pattern, it's going to be much harder for hackers to break the code, claims Intel. Given it's mathematically impossible for any deterministic system (ie. a program or a silicon circuit), we're curious about just how random each PIII's array really will be, and what will stop a hacker reading the array off of his own PIII. ®
Tony Smith, 21 Jan 1999

MS cunning plan makes people register

Microsoft is building anti-piracy software into Windows 2000, so forcing people to register their software it they want it to work, it has emerged. Beta testers of Win2000 are vociferously crying foul at Microsoft for the feature. According to reports in an online newsletter, the Registration Wizard feature in NT 5.0 could be extended to all software products the software giant produces. One member of the forum said: "I predict that Microsoft will use this anti-piracy technique with all its products." He and others are complaining that the Wizard will let you launch the software 50 times and that's it. Unless you've registered the product, the CD ROM will never work again. ®
Mike Magee, 21 Jan 1999

Datrontech's Mr Intel jumps ship to join former boss

Mark Davison has quit Datrontech, where he was Intel business manager, to join his old boss, George Evans, at Making Markets. After six years at Datrontech, Davison left on Tuesday of this week and became marketing manager at Evans' Internet-based company. He took up his new post the following day. Davison's move comes in the wake of a string of recent departures from the Basingstoke-based distributor, which have included UK MD Martin Mulligan leaving in November after less than nine months, and George Evans, Datrontech's former head of components. Davison said: "I wanted to do something new. I wrote a wish list and it included working in a small environment and the entry-level within a company." The move coincided with Making Markets acquiring Portsmouth-based e-commerce company Internet UK. Internet UK developed the e-commerce software being used by Making Markets. The £3 million deal comprised £200,000 in cash and the rest in shares. A jubilant Evans gushed to The Register: "I was so impressed I bought the company." ®
Linda Harrison, 21 Jan 1999

Microsoft at Work reappears like Phoenix in Birmingham

Microsoft has developed a product in a steel briefcase which it claims will respond to voice technology and is proof that Microsoft at Work (MAW) is not as dead as people thought. Mark Thompson, a product manager at Microsoft UK, gave members of the British Personal Computer Association (PCA), a sneak preview of the product. It is, as yet, unannounced. The product is part of a package including Auto PC for cars, and Thompson claimed that it plays CDs you ask it to, using voice recognition. However, when Thompson demonstrated it yesterday evening, the female voice which responded at boot time refused to execute any of his commands. Thompson said: "One potential idea is to combine everything in one box with nothing to plug in." He said: "The original idea of MAW was that it would diversify into every every market. Perhaps it's just as well it never really took off." Thompson also hit out at Windows NT. "NT is a difficult OS to embed because of its bulk and size." He said: "You'll see embedded 3.1 DOS in hospitals." He did not say whether Microsoft DOS 3.1 is Year 2000 compliant. He disclosed that Microsoft was making leaps and jumps to make sure the new technology worked, courtesy of Windows CE. He said: "Psion had great success [with small devices]. And so did Palm Pilot." He predicted that Microsoft would also have similar success when it launched its palm product in colour. However, he admitted: "CE doesn't stand for anything." We have a photo -- it will appear in this story tomorrow. ®
Mike Magee, 21 Jan 1999

Compaq results due today – maybe

Sources told The Register late today that Compaq's annual results -- due out today -- are likely to be delayed. But that doesn't mean they're bad. Far from it. The delay is due to some procedural scheme in place at Stalag Houston, we are given to understand. ®
A staffer, 21 Jan 1999

Schmalensee trips on DoJ banana skins

MIT economist Richard Schmalensee continued his Microsoft consultancy, answering questions from David Boies for the DoJ. His desire to please Microsoft showed all the fervour of a convert to a cause, so that he appeared to be more of a Microsoft salesman than an expert witness, abandoning any scientific rigour from his discipline in defending his client. Schmalensee suggested there was a time when Netscape and Microsoft were friends: there was "a period when Microsoft was treating Netscape as a preferred, indeed one of its most preferred ISVs. It was extending special co-operation and so forth". His best example of this alleged friendliness was "a presentation listing of hot Internet applications made by a Microsoft person in Germany in which Netscape was featured [in mid-1995]". This is indeed stretching the bonds of friendship... There was the expected verbal jousting about the term 'browser' versus 'browsing functionality', with Schmalensee still maintaining the Microsoft line, which has been essentially blown away in previous evidence from Microsoft emails, that developing a browser and making browsing part of Windows was a simultaneous and early decision: "I know someone was assigned the task of writing a browser. They had difficulty doing it. They licensed code. They may have been uncertain, when they decided to start that group, what the ultimate design decision was. That was 93 or early 94. The technology was in flux. Windows 95 was a bit of a gleam at this stage." Schmalensee then said this was in the first half of 1994, and that there were "roughly contemporaneous discussions, again with Booklink and then with Spyglass, having to do with possibly licensing code". Of course it is understandable that Schmalensee would want to help Microsoft in its rewriting of history, but the facts are different. What actually happened was that Microsoft had to license Internet Assistant from Booklink Technologies, so that Word could convert documents to HTML. Microsoft tried to buy Booklink's browser for $2 million, with no royalties, but was turned down. Unfortunately for Microsoft, just after Microsoft did the licensing deal, Booklink Technologies was bought by AOL, and had Bill Gates known this was going to happen, he certainly wouldn't have hyped the product so much at Comdex in November 1994. It was no doubt with some pleasure that AOL trumpeted that "America Online Booklink Unit announces licensing agreement with Microsoft". That rather firmly places the date at the end of 1994, and not in the first half at all. The Microsoft-sanitised version of events by Schmalensee omits that in the Fall of 1994, Microsoft had tried to license Navigator. The first public revelation of this was on 27 September 1995 in a Dow Jones story. It was for this reason that Microsoft turned to Spyglass. Although Schmalensee seemed unaware of it, the Spyglass negotiation was signed on 13 January 1995, after Microsoft had previously turned down Spyglass on the ground that it was going to build its own browser. Microsoft had tried to go around Spyglass, holder of the master licence from the National Center for Supercomputing at the University of Illinois, and deal directly with NCSC. It wasn't necessary, because Microsoft out-negotiated Spyglass completely, and got away with a deal that soon left Spyglass struggling. The deal was for the Mosaic browser, which Microsoft would call Internet Explorer. "The original code [for the browser] has been tightly integrated into the operating system," said Naveen Jain [Microsoft's senior technical manager for MSN] -- the implication at the time being that it would be difficult to remove the code if the DoJ objected to Microsoft bundling Windows 95 with MSN, which was a serious possibility shortly before Windows 95 was released. It seems that Microsoft had missed Joe Garvey's piece in Inter@active on 20 June 1995 about this, or it would have been shouting it from the rooftops. How "tightly integrated" Windows 95 and IE were at the time is a matter of conjecture, but Microsoft has produced no evidence that there was code sharing. It is noteworthy that accounts of these events usually omit that most of the coding for Mosaic was done by Eric Bina rather than Marc Andreessen (later of Netscape), and that Bina used as his basis the code by Tim (Rule Britannia) Berners-Lee. Another fact that seems to have escaped the contestants is that Microsoft extended its contract with Spyglass on 7 December 1995 (and added a Web server compatibility agreement), a few hours before Gates' announcement that Microsoft was giving its official recognition to the Internet. Spyglass' licensing arrangement with Microsoft ended in December 1998. So far there appears to be no hard evidence as to when Microsoft actually decided to give IE away free. Schmalensee was asked about a DoJ interrogatory (a question to which Microsoft has to provide an answer under oath): "Identify each current or former Microsoft employee who was responsible for the decision to price and distribute Internet Explorer free or without separate charge and, for each person identified, describe the role of that person in such decision and the date(s) of such decision." Microsoft's response was: "Bill Gates, Paul Maritz and others made the decision not to charge for Internet Explorer technologies apart from the price of the operating system. Bill Gates announced that decision during his Internet strategy speech on 7 December 1995." Schmalensee then put his foot in it by saying "I guess that strikes me as a non-responsive answer, since it doesn't give the date of the decision". At this point, Richard Urowsky, one of Microsoft's lawyers, bounced up to do his minder's job, and objected. His particular purpose seemed to be to convey a message to Schmalensee to be careful as to what he said. Schmalensee subsequently referred to the use of "announcement" as "a fairly difficult and slippery term", which scarcely helped his client's case. Since the Microsoft response was given under oath, the DoJ is entitled to assume that Microsoft decided to offer IE free at the late-night pizza-eating session on 6/7 December 1995 in Redmond in which the fax was kept busy agreeing the details of the Java licensing agreement with Sun. It is known that Spyglass was utterly amazed when it was announced that IE would be "forever free" because of the implications in its contract with Microsoft, which is understood, unusually, to allow for a royalty. Of course, the royalty on a price of zero is zero. Gates is believed to have a strong aversion to having royalty agreements with anybody on the grounds it would make it possible for Microsoft's claims about sales to be checked (by an auditor if necessary), which could prove embarrassing and costly for Microsoft. This is why Microsoft settled out-of-court when Spyglass eventually demanded an audit of IE sales following Microsoft's claim for millions of copies of its browser being deployed but no money from Microsoft. At the same time, this provides some circumstantial evidence that Microsoft had decided that IE would be free some time earlier, and did not therefore mind allowing Spyglass to have a royalty that it knew would be zero. Boies couldn't resist taunting Schmalensee about his colleague Professor Michael Dertouzos, Director of the MIT Laboratory for Computer Science, who was going to testify. Bill Neukom, Microsoft's head lawyer, had said on 4 September 1998 in a press release that he would testify on the "technological benefits of Microsoft's decision to build Internet features into Windows". In the gentlest possible way, Boies asked Schmalensee if he had read Dertouzos' deposition and "if he described the browser as an application" in his deposition. In fact Microsoft dropped Dertouzos because he had described IE as an application, which impoverished Dertouzos mightily as a result, since he did not receive much of the Microsoft shilling. It was, of course, just coincidental that the MIT Technology Review, in its current edition, has an article Programs to the people by Charles Mann dealing with free software, which mentions how "Goliath gets nervous" (about Linux) and ends with a quote from Gandhi: "First they ignore you. Then they laugh at you. Then they fight you. Then you win." Schmalensee was tempted into venturing further opinions about software that he was unqualified to make. The theme started with how an application might or might not alter the operating system, and progressed to whether Word would cease to be a separate product if it were combined in the operating system. The breakfast cereal expert waffled on logorrhoeically (think of it as verbal diarrhoea) and finally came out with a startling scenario: "Suppose I am a WordPerfect user. Microsoft does what you describe [combines Word with Windows]. And I prefer WordPerfect to Word. And I find that the convenience of using WordPerfect, the speed, my ability to install it -- that in some obvious way I can't do as well as I could have done before, that's a harm." Techno-sabotage is a well-documented anti-competitive technique by Microsoft, which makes one wonder if Schmalensee had been privy to some Microsoft plan to take action against WordPerfect. On the face of it, it seems unlikely that Microsoft would merge Word into Windows, because of the very significant revenue stream it receives from the Office suite. Boies continued laying a trail of banana skins, asking Schmalensee an innocent question and then watching him slip on each as Boies produced quotations from writings and earlier testimony that controverted the present testimony. More and more it seemed as though the court was hearing evidence-to-order, and not true expert opinion. Urowsky became increasingly anxious, frequently jumping in vain up to object, as Schmalensee was systematically demolished as an expert with intellectual integrity. One example concerned tie-ins. Schmalensee had testified in the Data General case that there was a tie: "Power over price... includes the power to impose a tie, or other burdensome terms, in lieu of charging a high dollar price," he had said. There was also a discussion of software lock-in, and switching costs when changing systems. Boies proffered a banana skin, asking if one of the purposes of combining IE and the operating system was to increase the distribution of IE. "It certainly had that effect... I've no reason to think it was a surprise or undesirable to Microsoft." Then another Boies banana: "Do you recognize that one of the effects of combining IE with the operating system was to make it more difficult for Netscape to distribute its browser?" "I think that the answer is 'yes', " said the slippery one. Proffering another banana, Boies asked if combining IE with Windows made it more difficult for Netscape to become a platform competitor for Microsoft. Schmalensee: "I think that the fact that Microsoft offered a competitive browser and distributed it widely did make it more difficult..." Boies then turned to the question of the intent of a company in anticompetitive actions, and when Schmalensee was not forthcoming, Boies dug out the Bell Atlantic case in which he had testified that a pattern of conduct could be predatory, and therefore anticompetitive. Cunningly, Boies made use of the case a second time, by leading into how Microsoft had failed to fulfill its obligations with respect to Java. This time, Schmalensee stood on the banana skin, but Judge Jackson may well have thought that he slipped because of the analogy between AT&T's predatory actions that violated antitrust laws, and Microsoft's actions towards Java. Having established a virtual skating rink with all the banana skins, Boies then tossed to Schmalensee some technical questions about shared code in IE 1, 2, 3 and 4, the DLLs involved, and code sharing. It was a disaster for the skater: he shouldn't have been in the banana rink trying to answer computer science questions at all, and he landed up in a very unflattering position. Boies produced a Microsoft email from the Bristol versus Microsoft case (in which Schmalensee had testified): "We are now describing IE as part of the OS and putting it in the box. Conclusion: they already have rights to things like IE. It's a legal stretch, but I want to hear from our attorneys and you, Bob. But in any case, I'd rather use IE as a bargaining chip to clarify the extent of their rights; ie., treat IE as a separate deal and, thereby, set the precedent that apps in the box aren't really part of the OS." It now seemed that even Microsoft was willing to regard IE as something separate from Windows if it suited them. It was a very significant document. Urowsky was objecting furiously, but was overruled by Judge Jackson, who paraphrased Boies argument very well, thereby showing he was paying very close attention. The date of the email was 22 December 1995, just a couple of weeks after Microsoft's Internet strategy meeting in New York. "We have here Microsoft talking about applications in the box not really being part of the OS," Boies pointed out. Schmalensee valiantly tried to pass this off as "one person in Microsoft" putting forward a view, but he slipped again. Boies said he was concerned that Schmalensee says: "Pre-installation of software by Microsoft on the Windows desktop is not a significant method of software distribution by Microsoft or anyone else." Admittedly, Schmalensee is described as an economics expert, but this opinion certainly shows he has no knowledge or sound views about the software industry. Although Boies had by this time unexpectedly used up his supply of bananas, it was not hard to find evidence to the contrary. A Microsoft OEM marketing review of 27 May 1998 said: "'It came with my computer' is the number one reason people switched to IE." Even worse for Microsoft was: "Conclusion: OEMs are the best vehicle to gain browser share," which is pretty close to admitting that IE is a separate product. When Schmalensee did not know something on one occasion, he admitted that NERA staff had done the work, and that he had not read a deposition quoted in his direct testimony. Professionally, the weakest part of Schmalensee's direct testimony was the part dealing with survey data commissioned by Microsoft to investigate browser share. It turned out that the sample size was less than 300, and that the results were in sharp contrast with those from surveys using much bigger data sets. It was an attempt to show that IE market share was lower than it probably was. By this time the banana skins were beginning to get pretty smelly. ® Complete Register trial coverage
Graham Lea, 21 Jan 1999

ITG to boost wins DTI licences

Internet Technology Group -- whose subsidiary Global Internet was recently named best Internet Service Provider by Internet Magazine -- is to expand its telecoms networks after being awarded two licences by the Department of Trade and Industry. As well as developing its UK network, the company has already secured similar licences in the US with regulatory approval by the Federal Communications Commission. Accoding to Laurence Blackall, CEO of ITG, winning these licences is critical for the company as it continues its transformation into a facilities-based ISP. "With our national infrastructure and substantial international backbone already in place, we now have the most extensive IP network of any independent UK service provider," he said. In October last year, ITG announced that its subsidiary, GX Networks, had teamed up with Fibernet Group to develop its national networking capability and expand its corporate business. The three year agreement will give GX Networks access to a national network with three Super Points of Presence and access to a further 30 POPs through Fibernet's existing network. ®
Tim Richardson, 21 Jan 1999

US papal visit site defends dodgy advertising

The company behind an irreverent Web site covering the Pope's visit to the US at the end of the month has vowed to fight a court decision to close it down. Seth Warshavsky, president of the adult content company Internet Entertainment Group, alleges that the federal judge in the case "trampled on [his] Constitutional rights" and has called in a hotshot attorney to lead the appeal. Judge Stephen N. Limbaugh ruled that the site, www.papalvisit1999.com, was, in effect, a trademark of the St Louis archdiocese and, therefore, infringed its ownership. "This was an absurd ruling that oppresses our freedom of speech and allows the Church to dictate who will cover the Pope's visit to St Louis and under what circumstances," said Warshavsky who has republished the material on a different site. Both sites contain information on the Pope's visit as well as adverts and links to a number of IEG's adult-oriented sites. The St Louis Archdiocese argued that visitors were confused by the name of the site and offended by its content. ®
Tim Richardson, 21 Jan 1999

Break-up fee agreed if Excite deal falls through

@Home stands to make $200 million from Web portal Excite if the agreed take over deal falls flat on its face or if it isn't completed by 30 September 1999. The payment of the break-up fee, reported by Broadcasting & Cable online, appeared in a US Securities and Exchange Commission filing and seems to signal @Home's eagerness to buy into the number two portal. Earlier this week the high speed US Internet service provider announced it was to pay $6.7 billion for Excite (see Merger makes Excite feel @Home). The company hopes that the deal will accelerate the adoption of broadband technology by showing Excite's narrowband users the benefits of a fat pipe service. ®
Tim Richardson, 21 Jan 1999

Intel's Grove attacks UK journalism

A document with a foreword written by Andrew Grove, president of Intel, has specifically targeted UK journalists for criticism. Today, Register journalists were shown a document called Working with the European Press which outlined Intel's ideas about the whole of Europe, including Israel and South Africa. But the document journalists saw was particularly damning about UK journalists. Six bullet points outlined Intel's thoughts about UK hacks. Said the document: "Journalists are cynical in the extreme. Be clear and firm about your arguments. The British dislike the Goliath's (sic) of this world and always support the underdog. Each sentence is carefully monitored in or out of context for quoteworthiness. Never be negative about anyone or anything, never go 'off the record', Be discrete (sic) in tone and volume, and especially about picking up the check/bill, Praise local customers, local innovation." Further, the document we saw quoted the famous Guardian journalist James Cameron. That quote is: "It was long ago in my life as a simple UK reporter that I decided that facts must never get in the way of truth." The document we saw covered many European countries, including Hungary, Spain and Holland but there was no copyright notice, tempting us to think it a public document about press. ®
Mike Magee, 21 Jan 1999

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