21st > April > 1999 Archive

The Register breaking news

Compaq takes its earnings to the shrink

A year ago From The Register No 73, April 1998 Compaq's earnings slumped 96 per cent to $16 million in Q1, compared with the same period in 1997. Sales grew eight per cent to $5.7 billion against last time, which suggests the hardware vendor is flogging a hell of a lot more tin. Shareholders can't say they weren't warned. Earnings matched estimates of analysts, who had been alerted in early March by Compaq’s statement of US trading conditions. Eckhard Pfeiffer, Compaq's charismatic President and CEO, comments: "At that time, we said we would immediately reduce prices and aggressively promote commercial products in North America in order to reduce channel inventories and accelerate the implementation of our Optimised Distribution Model (ODM), and that is exactly what we are doing. As a result, we are seeing an acceleration of sales out of the channel." The company says it will "take another quarter of adjustment to put the Company's core business on a track of improved profitability." ® Compaq's latest earnings are out later today
Drew Cullen, 21 Apr 1999
The Register breaking news

IBM to buy Cyrix from NatSemi?

Early today we heard from a reliable source that IBM is to buy the Cyrix division of National Semiconductor. No confirmation from either company was available at press time but we will update this story today as more information becomes available. IBM formerly manufactured processors for Cyrix as part of a fabbing deal set up before National Semiconductor bought the chip company. Under that deal, IBM was allowed to take half of the wafers produced at its fabs and re-market them as the IBM 6x86 brand. If the rumours are true, it would mean that IBM could, once more, become a real player in the x.86 industry. And such a deal would change the fundamental balance of power in the processor market. IBM's financial results our out later today. ®
Mike Magee, 21 Apr 1999
The Register breaking news

Caldera unveils simple install Linux system

It is perhaps a little strange that Linux distributor Red Hat is the recipient of a great deal of corporate largesse, while Caldera Systems, which pitches itself as "the recognised technology leader in Linux for Business", has not benefited from the windfalls. Perhaps Caldera doesn't need funds as much as Red Hat (since Ray Noorda, former Novell CEO, is the backer). But it is good news for users that there are two prominent Linux distributors (and of course many second-tier ones too). This week at Comdex, Caldera launched OpenLinux 2.2, which claims to be the easiest Linux to install (in 15 minutes), and not to need any Linux expertise. Lizard, the Linux Wizard, is said to do everything, including partitioning the hard disk and installing the GUI. Caldera has positioned the product for the enterprise, so it is a little strange therefore to see it come with personal editions of Corel's WordPerfect 8, and StarOffice version 5, rather than professional versions. Hardware demands are not too serious, so a 32MB 80386 or equivalent, with a 300MB hard disk is the minimum requirement. The other side of Caldera's work is Caldera Thin Clients, which specialises in embedded solutions, set-top devices, and DR-DOS. Development is carried out in Andover, Hampshire, but without former CEO Roger Gross who has left to form iCentrix, which launches tomorrow a low-cost Internet appliance called MarioNet in a local school. Bryan Sparks, founder and CEO of the parent Caldera company is now also CEO of the thin client company. Caldera is widely known for its private antitrust case against Microsoft's alleged foreclosure of the DOS market to Digital Research, the original developer of DR-DOS, at Hungerford. ®
Graham Lea, 21 Apr 1999
The Register breaking news

Glowing MS figures mask major revenue decline

Microsoft will get the headlines it wants today: how it "beat the Street", or "exceeded (financial) analysts expectations", but the truth about Microsoft's third quarter results yesterday is a little different. Companies like to compare results with those of the year-earlier quarter, using the argument that seasonal factors make this more desirable. Indeed, comparing Microsoft's year-earlier quarters since 1989, there are no quarters that were lower than the year-earlier quarter for revenue or earnings. But product cycles are far more important for Microsoft than seasonal factors, so it is worth looking at Microsoft's results sequentially from one quarter to the next. If we do this, what emerges is a quite different story from the one being told elsewhere today. Comparing year-ago quarters, Microsoft's net income is up 40 per cent, and revenue up 15 per cent. That sounds good for shareholders, and bad for Microsoft's desired persona in court as a hard-pressed company trying to turn a profit in the face of tough competitors. It's also further good evidence for the DoJ, since the profits look suspiciously like monopoly profits. The net margin went up to 44 per cent from the year-earlier 35 per cent, which should help the DoJ's arguments in court. But if you compare what happened in the sequentially-previous quarter, the picture is very different. So far as revenue is concerned, there was a 12.3 per cent decline from quarter two to quarter three - only the sixth time this has happened in 39 quarters, and by far the greatest decline in terms of actual money ($607 million). So far as earnings are concerned, there have been nine quarters in which results have been sequentially down. For the quarter just reported, the decline in earnings is 3.3 per cent ($66 million), although this was not as bad as the quarter ended 30 September 1997 when earnings were down sequentially 37 per cent ($394 million). Looking at Microsoft's unaudited results announced yesterday, the much-vaunted R&D expenditure was up only 2 per cent, even compared with the year-earlier quarter. Legal cost increased more than R&D: the exact amount cannot be determined precisely from Microsoft's data, but the increase was something less than $40 million, it would appear. It is comforting to know that Microsoft will be paying income tax of $1.032 billion for the quarter. So far as cash and short-term investments are concerned, Microsoft had $21.761 billion at 31 March. It is becoming increasingly hard to find ways of putting this vast money pile to use, beyond obtaining some interest on it. If Scott McNealy's suggestion to The Register were followed, Microsoft would not be allowed to spend it on acquisitions. Even so, the regulatory hurdles that Microsoft would face with any major acquisition attempt would be severe, because competition is likely to be diminished if a major acquisition is allowed. Revenue was up in all geographical regions, and for OEMs. Even Asia managed a 22 per cent upturn in revenue, comparing the year-earlier quarter. During the quarter, there was an investment gain of $350 million. The non-delivery of Office 2000 caused $400 million of revenue to be deferred, probably to the next quarter. Microsoft patted itself on the back for "a fabulous start" to SQL Server 7 sales, which increased "more than 50 per cent" over the year earlier quarter (but that's nothing to shout about since Dataquest is predicting Microsoft might get 10 per cent of the market this year, significantly behind IBM's DB2 and Oracle). Microsoft really has advanced the art of presenting financial results to get the greatest spin. The fact that financial analysts estimates are always beaten by a few pennies (First Call suggested 32 cents/share, and the result was 35 cents/share) suggests that Microsoft may be making some last-minute decisions about what earnings to declare in its unaudited accounts. A true assessment of the future should be that Windows 2000 is Microsoft's greatest gamble ever, and that it is unlikely to achieve the level of acceptance that Microsoft desires. As The Register has pointed out more than once, the Windows roadmap is in tatters. Six months after Windows 2000 is actually released, the disastrous financial consequences are likely to be visible to all. ®
Graham Lea, 21 Apr 1999
The Register breaking news

Deutsche Telekom ducking competition via Italy deal

Privatised Italian phone monopoly Telecom Italia would rather climb into bed with white-knight Deutsche Telekom than risk a hostile takeover by Olivetti, it appears. Olivetti's $65 billion bid remains on the table as DT and TI attempt to tie the knot. DT is a most reluctant privatiser - the German government still has 72 per cent, and the German company is seriously challenged on its home turf by more than 50 competitors. It has already lost around a third of its long-distance market to companies like Mannesmann. Rather than confront the realities of the commercial world and compete, DT is looking to using its cash to gain revenue in overseas markets in what it sees as an opportunity move, rather than a love match. Meanwhile France Telecom is feeling huffy that its own Global One affair with DT, which included 2 per cent cross-ownership, has been ignored by its neighbour. The Global One collaboration (with Sprint as well) to provide services for conglomerates has so far been a financial failure. But it hasn't escaped DT that Telecom Italia has a balance sheet just waiting for some creative accounting, which would suit the debt-burdened DT very nicely. Telecom Italia needs restructuring and licking into shape, although DT may not be thinking very clearly about likely Italian reaction to a DT-led career-enhancement programme for great swathes of the workforce. For its part, France Telecom sees DT as a partner against the Baby Bells, and claims that any new Axis would be against its agreement with DT The DT/FT duo has already attacked the British market, allying with Energis to put fibre into Birmingham, London, and Manchester. The combined value of this new Axis would be around $180 billion, which would make it (just) the largest telco. The Italian board has some reservations about the role the German government would play after a merger. DT is expected to offer marginally more than Olivetti's 11.5 euros/share. The Italian prime minister said that in any merger, both sides must be on an equal fitting. It is expected that DT will end up with 56 to 60 per cent. A hurdle yet to be jumped is regulatory approval from the European Commission. The present situation is that after long bargaining sessions, Telecom Italia has approved the alliance conditionally: it wants to know how the German government will act while it still has a majority stake in DT. ®
Graham Lea, 21 Apr 1999
The Register breaking news

Win2k beta offer escapes notice of most MS subs

Microsoft subsidiaries worldwide seem to have been caught flat-footed by the appearance of the Corporate Preview Program (CPP) Win2k beta 3 special offer. For $59.95, US customers can get Win2k beta 3 (see earlier Story), but it's not entirely clear what they get once the beta is over, and most of the local outfits currently seem entirely ignorant that the programme even exists. Microsoft may not actually know where it intends to take the CPP right now. It has a training-led offer that gives you the whole trip from Win2k Server beta through to gold code for $125, the PC companies who're shipping beta 3 with their machines will include an upgrade coupon for gold code, and the full-scale corporate programme will also give customers gold code. That surely makes the wider CPP a little anomalous if MS is just going to take the $59.95 and then hit users for some more once the (presumably) 90-day beta period expires. But a reading of the CPP site shows that it doesn't actually make any commitment beyond the beta, and doesn't say anything about what happens once it finishes. Nor, as far as we can make out, has MS actually announced the CPP anywhere. What it has done in the past 24 hours is update the site, but it only seems to have added some more spin about the limited support you're going to get, and shrunk the size of the text. Read it now before it gets any smaller, folks. The site includes links to a clutch of Microsoft international sites, but most of them don't actually lead to a local equivalent yet. The UK link leads to the Technet registration page, and it may be that MS UK will be running the programme through Technet. France isn't on the list, Germany and Austria are live with a CPP, the Australian page doesn't exist, and the Canadian one is just the MS Canada home page. And so on -- were we in some kind of rush to get this programme going? A spokesman for MS UK last night didn't seem to have heard of the programme, confusing it with the beta announcements Jim Allchin made last week. He did, however, seem to be under the impression that paid-for beta code would result in a coupon for gold code, but although that may seem optimistic, MS UK's marketing people obviously haven't been briefed on the CPP yet, so once the official line is developed, it might be different. But it might be a trickier one to resolve than it at first seems. Microsoft has done widespread free betas before, and with a free beta you don't really need to give users anything afterwards. But a paid-for beta is different, particularly if you've got other, slightly more upmarket, beta programmes running where the customers do get gold code at the end. ®
John Lettice, 21 Apr 1999
The Register breaking news

IDC slams press over reporting of NT ‘success’

Research outfit IDC has criticised media reporting of NT's success, and says that Microsoft's skills in "momentum marketing" have resulted in a false message being put out about the product. As the momentum marketing programme for Win2k cranks into action, it would be as well to bear that in mind when reading the media. According to a new report, Strategies for Windows NT in the Enterprise: "Media reports of Windows NT's acceptance have not given a clear picture of where and when Windows NT is really being used... [they] often leave the impression that Windows NT is being adopted by organisations of all sizes for every conceivable mission and that organisations are abandoning their investments in other operating environments." The reality, says IDC, is that Microsoft's "momentum marketing" turns "reports of strong growth in revenues, software licence shipments, or clients being supported into a message that Windows NT is becoming the de facto standard." Presumably IDC means that Microsoft is putting this information out, and it's largely going into the press, unchallenged and highly-spun. Despite what you read in the papers, IDC sees few organisations abandoning investments in other software. NetWare is most often used for file and print, directory and communications services, while Unix is most often used for transaction processing, database support, and support for custom commercial and technical applications. "In many cases," says IDC, "Windows NT has been brought in to work alongside the operating environments that were already in place in the mid-1990s -- supporting the organisation's applications portfolios rather than replacing them. "Windows NT's major use is as a departmental infrastructure server, for things like file/print, messaging, and communications, rather than as a major enterprise server running mission-critical applications." ®
John Lettice, 21 Apr 1999
The Register breaking news

Figures suggest chip market on rise

Figures from the Semiconductor Equipment and Material International (SEMI) said that worldwide sales of manufacturing equipment rose by 14 per cent in March, worldwide. According to the trade association, the equipment market posted a book-to-bill ration of 1.30, meaning $130 of orders were received for every $100 of products shipped. SEMI said that first quarter orders for the equipment used to make silicon chips were stronger than expected. Growth is also continuing in Korea and Taiwan, according to Stanley Myers, president of the organisation. ®
Mike Magee, 21 Apr 1999
The Register breaking news

Yahoo! sues spam merchants

Internet heavyweight Yahoo! has joined a growing stable of companies hoping to give the perpetrators of unsolicited junk email a bloody nose and a thick lip. In the first round of a bout that could last some years, Yahoo! is suing two companies for allegedly using its domain name, yahoo.com, to send thousands of unsolicited emails to Net users. Yahoo! was responding to some 7150 complaints it had received from Net users about the two companies. With a few carefully aimed jabs just to soften them up, Yahoo! maintains that Information Technologies Corp and World Wide Network Marketing deliberately sent spam using Yahoo!'s domain to avoid detection. Incredibly, this is the first time Yahoo! has taken such action against spammers. It hopes that filing this lawsuit in the US District Court for the Northern District of California and throwing a few punches, other spammers will get the message. "There's more going on here than a direct dollars-and-cents cost to Yahoo," said Jon Sobel, Yahoo! senior corporate counsel in an interview with the Bloomberg newswire. "The lawsuit is about the damage to our name and the user experience," he said, adding that this spam action was an infringement of Yahoo!'s trademark. Earlier this week UK ISP Virgin Net announced it was suing a Surrey businessman for using its service to send out junk email. And independent UK Net company BiblioTech said it was continuing its legal action against a US company that allegedly sent spam to users of its free e-mail service. ®
Tim Richardson, 21 Apr 1999
The Register breaking news

PointCast rejects founder's buy-back offer

Former PointCast CEO Chris Hassett has been rejected by the company he founded after the ailing push technology provided let his second offer to buy the company lapse. Hassett made a bid for PointCast earlier this month, following the collapse of a deal with a consortium of US local telecoms companies (see PointCast ex-CEO looks to re-acquire company). That failure in turn led the company to axe one third of its work force as current CEO Phil Koen (not the guy behind the telco deal -- that was his predecessor, David Dorman) began his attempt to streamline the business to make it more attractive to investors and, more importantly, possible buyers. Hassett's bid, however, appears to have demanded too much control from the company's current leaders, and was rejected. Further negotiations led to a second bid, made on Monday. However, according to sources cited on US newswires, PointCast allowed the deadline on Hassett's latest offer to expire. The same source claimed Hassett has now abandoned his plan to buy the company. The search for a backer continues... ®
Tony Smith, 21 Apr 1999
The Register breaking news

Compaq posts Q1 results

Compaq has posted its first quarter earnings for 1999, and acting CEO Ben Rosen, who engineered the removal of former CEO Eckhard Pfeiffer last weekend, has described the results as disappointing. The company posted worldwide sales of $9.4 billion, with net profit for the quarter amounting to $281 million. While sales have risen by 66 per cent over Q1, 1998, profits declined. Rosen said: "Despite our overall corporate strength, our first quarter results are disappointing and unacceptable. We will aggressively pursue the actions necessary to realise our enormous potential, achieve our traditional levels of profitable growth and build long-term shareholder value." Product sales for Q1 1999 amounted to $7.8 billion, 40 per above the same period in 1998. Rosen said channel inventories continued at just under four weeks. Compaq said that it did not meet the revenue performance it wanted in high end enterprise systems to meet revenues and gross margins it had projected. Service sales for Q1 1999 amounted to $1.6 billion, and Rosen said that the company continues to expect profitable growth in the future. ®
Mike Magee, 21 Apr 1999
The Register breaking news

Hi-tech loses favour with HRH

The Queen's Awards for Technical Achievement threw up a bountiful assortment of 14 winners yesterday, but only three went to our fair industry. This number was down on last year, when electronics companies netted eight of the gongs celebrating British innovation. The businesses blessed with HRH's prestigious prize were Digital Engineering, a Belfast ISDN developer, and Hampshire-based Snell & Wilcox, for its MPEG compression pre-processor for noise reduction or digital decoding of video signals. Hewlett-Packard's telecoms division also picked up an award for its acceSS7 standard, which corrects phone network faults in real time. There was frustration at the low number of hi-tech winners in this category, with other companies picking up awards for a wound dressing, a propeller and a press compensating mat (we don't know what it is either, but we suspect Intel would like one given its attitude journalists). But there has been a general decline in the number of entries from hi-tech firms. Anne Glover, managing director at venture capital firm Amadeus Capital Partners, told Electronics Weekly that the falling interest was not due to a reduction in UK technological innovation. "We are seeing some very vibrant sectors in electronics," she said. Ann Summers, perhaps? Others, like Danny Chapchal, chief executive of Cambridge Display Technology, said he would keep the IT flag flying and enter his company in next year's competition. He said he believed the Queen's Awards had lost none of their appeal. There were 101 honours given out for the three separate Awards categories: Export, Technological and Environmental Achievement. Eight out of the 82 Export awards went to electrical companies, including well-known British company Motorola, Compugraphics International, Evans & Sutherland, Data Connection and Pilkington Micronics. A full list of winners can be found today, the Queen's personal birthday (overseas readers: she has two, one personal, the other official) in the London Gazette. ®
Linda Harrison, 21 Apr 1999
The Register breaking news

HP unveils 24-7 unlimited Linux support

Hewlett-Packard has followed the lead of IBM to offer corporates Linux support 24 hours a day, seven days a week irrespective of hardware and who's version of the open source operating system the customer has installed, as prediced. The support package also covers HP's own Linux applications. The company also said it will be extended to cover future Linux distributions, most notably its forthcoming IA-64 version, plus the Apache Web server and other third-party apps. HP also said it will offer Linux training programmes. The $130-per-server support fee will allow customers to make unlimited phone calls to HP's support centres. The package also provides email support. HP's support programme is the latest in a line of moves made following the company's decision to support Linux as one of its core operating systems (see earlier story). That plan involves not only shipping Linux on its Intel-based servers and the development of a version for its Merced machines but a PA-RISC release too. IBM's Linux support programme was announced at the start of March (see IBM to support all major Linux distributions ). ®
Tony Smith, 21 Apr 1999
The Register breaking news

NSI URL monopoly ended

The monopoly on the sale of URLs has ended, despite the US government dragging its heels. The international overseer of Cyberspace, ICANN, has ordained five companies, including AOL, the Internet Council of Registrars, France Telecom and Melbourne IT to rival Network Solutions (NSI) -- until today the government's sole contractor in registering jewels in the treasure trove of top domain names ending .com, .org and .net. Under an agreement between the federal government and NSI, the scheme will start next Monday and conclude 24 June. It will then be opened to accredited registrars. The announcement follows a fraught few days. Internet Corporation for Assigned Names and Numbers (ICANN) proclaimed it was ready for the announcement, the US government was still wrangling with NSI yesterday afternoon, according to US newswires. The two were unable to agree over virtual pricing issues, with negotiations described as "intense". Joe Sims, outside counsel for ICANN and a partner with Jones Day Reavis & Pogue in Washington, DC, said ICANN would announce the five companies whether the talks were completed or not. Any delay to the agreement could postpone the companies gaining access to NSI's technical data, which requires a licensing agreement. "It's conceivable the date of competition could slip a few days past April 26," he said, but believed the start up would proceed as planned. Last year, the government handed over core Internet administration to ICANN. It will complete the transfer of the IP address space, assignment co-ordination and root-server management by September 2000. Around 50 companies have been registering addresses as NSI resellers and there are 150 country code registrars. ®
Linda Harrison, 21 Apr 1999
The Register breaking news

Pan-Europe Net strike called for June

In a rare moment of European harmony and co-operation, ten countries are burying their differences and taking part in an Internet strike designed to force telecoms companies to cut the cost of Net access. Consumers in Belgium, France, Greece, Italy, Poland, Portugal, Romania, Spain, Switzerland and the UK are being urged to boycott all phones and modems for 24 hours on Sunday, 6 June as a show of unity and strength against unfair telco charges. In what could be start of summer of discontent, organisers are calling for: "1. Costs of all telephone calls to more closely mirror the independently audited cost to telecommunications operators of providing these calls, as already mandated by EU law. 2. Introduction of flat-rate charges for, in the first instance, local calls, so that anyone can talk to friends and relatives, and Internet users can dial up to Internet Service Providers using a modem, without worrying about the clock ticking and charges ratcheting up. 3. For any remaining metered calls, abolition of the minimum call charge so that calls are paid for solely by the time spent connected. 4. For Internet users, quicker introduction of modern access methods such as xDSL, cable modems and satellite access, which do not use the telephone modem and are a great improvement on it for users." The boycott is co-ordinated by telecom.eu.org, an umbrella organisation made up of different country pressure groups. European strikes have been held before but with limited success. While the last one in February had some impact in one or two countries, it flopped in the UK, with one activist even admitting that such action was a "dead loss" in the UK. A spokesman for British Telecom said he was aware of the action but said that in the past, the strikes had "no discernible affect on traffic". ®
Tim Richardson, 21 Apr 1999
The Register breaking news

Europe's lack of network expertise critical

Western Europe is in danger of engineering an economic slump because of its reluctance to tackle the predicted shortfall in skilled networking staff. Worst affected will be firms in the small and medium-sized sector, which are set to become more dependent on IT staff to underpin their business in the expanding electronic economy. "As one of the fastest growing sectors in Europe, the small to medium enterprise requires experienced networking professionals to cultivate their business effectively," said Puni Rajah of market researcher IDC, which carried out the research. "Already the scant supply of network skilled specialists has led to inflated salaries and an increased turnover of these staff. This in turn will have a dramatic effect on operating costs and profit levels for small to medium businesses across Europe." "If the situation is not rectified, Europe could see another economic slump," he warned. Come 2002, IDC predicts, there will be a shortfall of almost 600,000 skilled personnel with enough nous to design, build and manage the networks that are set to form the bedrock of almost every business and government worldwide. Mike Couzens, senior director for marketing and training at Cisco Systems EMEA, said: "If business and government do not act now to ensure they have the right skilled talent capable of running these systems, the situation will only get worse. "The pain is most likely to be felt in regions where the demand is growing at its fastest, most notably Switzerland, the Netherlands and Belgium where the acceleration of demand growth over supply growth is significant," he said. IDC predicts that the UK will need an additional 82,000 networking professionals, second only to Germany and its quest of finding 188,000 people. IDC's report, The Internet Economy -– An Employment Paradox? was commissioned by networking giant Cisco Systems which is has a track record of warning industry and governments of a skills shortages. ®
Tim Richardson, 21 Apr 1999
The Register breaking news

Brits beat Y2K Bug

Well done to the UK government for its progress in beating the Y2K bug on public transport. The plan to zap the Millennium Bug is on target for "all key sectors of the UK infrastructure -– road, sea, rail and air", according to a statement today. There should be no hiccups (official), and even Glenda Jackson, Transport Minister, announced she was pleased with the progress. "It is vital that transport services are maintained to customers over the millennium period. "Everybody responsible, including my Department, will continue working hard to ensure that it will be business as usual," Jackson reassured all those who had ever doubted the nation's transport punctuality promises. Our governing body has even spent time colour-coding all stages of Y2K compliancy as follows: Blue Assessment has identified no risks of material disruption. Amber Some risk of material disruption but agreed containment plan to rectify shortcomings. Red Severe risk of material disruption. Timely rectification may not be possible White Unable to form assessment with present level of information. We were only slightly perturbed to see that beloved institution, The London Underground, was sitting at the Amber light. Still, as most of the tube seems stuck in the 19th Century, chances are the system won't even notice the Millennium change-over... ®
Linda Harrison, 21 Apr 1999
The Register breaking news

searchUK guns for Inktomi

searchUK -- which brags that it's the world's largest UK-only search engine, arf, arf -- is attempting to go head-to-head with market leader Inktomi to become a major provider of search services. It's planning to license its search engine technology to portals and Web sites to provide what it calls a low-cost option that's a "powerful alternative to Inktomi". Unlike competitors, such as Inktomi, searchUK enables a licensed search engine to be built from the ground-up, rather than providing re-hashed versions of an existing database, it claims in its promotional bumf. Ed Burt, founder of searchUK, is equally bullish: "searchUK is one of a handful of search engines in the world which own the rights to their search technology. "We've proved it works so now we're offering companies all of the power but none of the pain," he said. The Brentford-based company has already sold its service to Times Money, providing the internal search facility for Web site, and believes others will follow suit once they've seen the application for themselves. But Joe Frost, product marketing manager for Inktomi, which serves more than 20 sites including AOL, BT and Disney, believes having the application is only part of the story. With a third of all Web content already stored in Inktomi's databases, Frost believes that any company entering this rapidly expanding marketplace needs to be able to process a mass of data to ensure that what is presented is accurate and relevant. Still, ten out of ten to searchUK for trying. And ten out of ten to Inktomi for being an alternative to searchUK. ®
Tim Richardson, 21 Apr 1999
The Register breaking news

Compaq Q1 profit down 50 per cent on predictions

Compaq today posted "unacceptable" first quarter profits of $281 million. That's roughly half what Wall Street was expecting until the company admitted recently that things were not going too well, financially. Still, revenue for the period totalled $9.4 billion, up 64 per cent from the $5.7 billion it recorded last year. Sales of kit for the quarter were $7.8 billion, up roughly 40 per cent from the $2.2 reported in Q1 1998. Service sales increased considerably, totaling $1.6 billion, up almost sixteenfold on the $113 million Compaq made in this area last year. And most of the company's major outlays -- a $215 million restructuring charge, $126 million spent on buying back Digital stock and Shopping.com's $219 million price tag -- came out of its huge, $3.6 billion cash reserve. Chairman and acting CEO Ben Rosen said the results were "disappointing and unacceptable. We will aggressively pursue the actions necessary to realise our enormous potential, achieve our traditional levels of profitable growth, and build long-term shareholder value." Some people just aren't satisfied, it seems. Yet the company blamed its performance on "less than anticipated market demand", "increased competitive pricing" and "growth below plan". Rosen added that there had been "considerable moderation of commercial PC demand as compared to years past", and it's telling that on the same day Microsoft warned software sales would be hit as corporates put off buying new products in order to get their current systems to full Y2k compatibility. Presumably, that has had the same effect on Compaq, and it would go some way to explaining Dell's profit downturn, too. ®
Tony Smith, 21 Apr 1999
The Register breaking news

RealNetworks' revenue up for 15th quarter

Streaming media specialist RealNetworks yesterday announced its fifteenth consecutive revenue growth quarter. Revenues for the three months ended 31 March reached $23.5 million, up 88 per cent on the $12.5 million the company recorded for the same period last year. Trumpeting revenue growth makes sense when your company has yet to make any profit, and Real proved no exception: for Q1 1999, it lost $700,000, compared to the $2.2 million it lost in Q1 1998. The latest figure excludes the cost of Real's purchase of Vivo Software, so the company actually lost rather more than that, but at least it shows Real is moving in the right direction profit-wise. And Real's bosses were suitably ebullient. CEO Rob Glaser described the period as "another successful quarter". "We continue to be successful in our business based on four strong pillars: great technology, a huge registered base of 60 million unique RealPlayer users, connecting consumers to great content, and an ever-expanding ecosystem of strong industry partners." The latter presumably refers to Real's alliance with IBM and its Electronic Music Management System, and deals with a stack of US telcos and ISPs. Still, we find it hard not to believe that a company forced into using environmental metaphors hasn't got problems. And Real has a real big problem: Microsoft. The Beast of Redmond's Windows Media Technologies may not offer superior playback quality to Real's G2, for all Microsoft's claims, but it will be made accessible to so many computer users, it's hard not to imagine content providers moving to WMT or at the very least treating G2 as one option among many. And even Apple threatens to undermine Real's role as official opposition to Microsoft through its canny open source-ish release of QuickTime Streaming Server. Real has the lion's share of the streaming media market, but that business is too immature to generate real revenue for the company. And now that the market is taking off, Real faces competitors who can bring some heavy weapons to the fight. Turning its revenue into profit is going to be tough, no matter how bullish its CEO. ®
Tony Smith, 21 Apr 1999