26th > July > 1999 Archive

The Register breaking news

Congress roasts NSI at ICANN hearing

The rhetoric was rough, mean-spirited, and distinctly partisan when the House Commerce Committee convened Thursday over the question, "is ICANN out of control?" Nonprofit ICANN, the Internet Corporation for Assigned Names and Numbers, was created by the Clinton administration last year, ostensibly to promote competition in the domain registry system. Competition, all right; but thus far its single greatest product has been controversy. The Democrats rushed onto the field, attacking not the marquee attraction, ICANN, but Virginia outfit Network Solutions, Inc., which holds a virtual monopoly on the perennially attractive .com, .org, and .net domain suffixes. NSI, not surprisingly, has been somewhat reluctant to transfer its pot of DNS gold to trust buster ICANN, created to redistribute the hotly contested wealth. Rep. Ron Klink (D--Pennsylvania) accused NSI of dragging its feet for profit: "The longer you drag it out, the more money you're making. And the longer you hold [the monopoly], that's gravy running all over your plate," he exclaimed. Rep. Bart Stupak (D--Michigan) also weighed in against NSI for holding up the inevitable succession with its endless objections to ICANN's legitimacy. Indeed, it was chiefly as a result of NSI's lobbying against ICANN that the hearing was called, and a great irony that they found themselves the central object of Congressional interrogation. "It seems to me that NSI questions the very authority of ICANN's existence," Stupak observed. "It sounds like a classic delay tactic." Network Solutions CEO Jim Rutt, a Capitol Hill newcomer only two months into his tenure at NSI, received a baptism by fire from the contentious Congressmen. His performance under fire was amateurish and unfortunate. He perspired in the spotlight; he evaded questions; he huddled with his lawyers repeatedely; he muttered again and again that he "would have to get back" to Congress on some of its most pointed questions. "We are in a fiercely competitive market," he whined, appealing to the fact that NSI is but one among nearly 250 competing domain registrars. But until recently, NSI was the only one permitted to register domain names ending in .com, .net, and .org, which, Rutt eventually confessed under aggressive grilling, represent nearly 80 per cent of names. He was, sadly, trying to spin the spinmeisters. Clearly a crash course in Cicero and an acting coach are in order. In another spectacular PR blunder, Rutt attempted to minimise the importance of his company's DNS registry with a badly miscarried sour-grapes appeal. He had come on board, he said, to help NSI grow in numerous directions, "and become an aggressive competitor in a fair and open market rather than waste my time and everybody else's in the industry on, frankly, small-change matters." Pennsylvania's Klink rounded on him: "Are you saying that the kind of money that NSI has been making off its virtual monopoly is small change," he asked sharply, as the company earlier that day had reported its 11th consecutive profitable quarter. "I'm saying that the money we are going to make off our other businesses is larger than what we will lose by what we will be giving up," Rutt warbled. ICANN, meanwhile, had preemptively defused much of the criticism surrounding its recent naughtiness by dropping its controversial proposal to assess a $1.00 US surcharge on all DNS registrations, and by agreeing to open its board proceedings to public scrutiny. But House Republicans managed to rattle their cage by circulating a March email message from an ICANN lawyer to the US Department of Justice urging the department to "increase the level of pressure" on the Department of Commerce to investigate NSI. ICANN lawyer Joe Sims maintained that his contact with Justice was proper. He'd done nothing more than merely ask them to act in their role as advocates, he promised. Network Solutions rep Chris Clough characterised the contact an abuse of power. "I think the idea that ICANN can call on the Attorney General and the Department of Justice to put pressure on NSI is shocking," he crooned. Shocking or not, Justice is now examining NSI's claim - which CEO Rutt repeated endlessly throughout the hearing - that the company owns the collection of names it has thus far amassed. The pressure from Justice may have been inevitable anyway, as it gives the Commerce Department some needed leverage. NSI remains deadlocked with Commerce on the pending agreement to open its registry to competitors, on the question of whether or not it actually owns the names the registry contains, and over its flat refusal to recognize ICANN's legitimacy. When NSI's contract with the government expires in September 2000, the power struggle will intensify mightily if it's not nipped in the bud. Under current plans, NSI is to maintain a master registry to which its competitors, presumably, will have access. Andrew Pincus, a Commerce Department counsel, said that the Clinton administration and NSI remain at loggerheads over several issues, most importantly the fee Network Solutions will be permitted to charge competitors for access to its data. In spite of Rutt's insistent claim that the company owns the database, Pincus indicated that Commerce could well relieve them of it and solicit bids for a more cooperative outfit to take it over. So there. The gambit here of course is to avoid a lengthy court battle between NSI and Commerce by threatening one. Apparently it's working. "We're negotiating [with ICANN] at a pretty good clip," Rutt admitted. ®
Thomas C Greene, 26 Jul 1999
The Register breaking news

Intel recaptures sub-$1000 PC market

Intel has taken the lead from AMD is the chief supplier of processors for the sub-$1000 PC market for the first time in almost 12 months, according to PC Data's latest figures for the US retail and mail order channels. The stats, for June, saw Intel take 45.4 per cent of the cut-price PC market, nudging ahead of AMD, which grabbed 43.2 per cent. AMD has commanded the sub-$1000 market since last July, largely thanks to its K6-2 CPU. In January, AMD took the lead from Intel throughout the retail channel, taking 43.9 per cent of all desktop PCs sold in that market. At that time it held 50 per cent of the sub-$1000 arena, compared to Intel's 25.4 per cent share. Throughout the period, however, Intel's Celeron has been winning OEMs back to Chipzilla. It's not the best-selling chip in the sub-$1000 space -- that's still the K6-2, powering 43 per cent of the desktops PCs shipped. And AMD still owns the retail PC market as a whole, but it's lead is down to eight per cent. ®
Tony Smith, 26 Jul 1999
The Register breaking news

Dos alive and well in Millennium, claims pundit

The 'Dos is dead' claims made in association with Microsoft's next rev of Win9x, codenamed Millennium, have come under heavy fire from Paul Thurrott of WinInfo. In a scathing article published over the weekend Thurrott blasts early reports of the content of Millennium as largely rumour, and if he's right, Dos is a lot healthier than quite a few people have been telling us. Thurrott's main target is Betanews.com, which was one of the first sites to suggest that legacy removal in Millennium would mean the removal of Dos. Betanews has been quoted by Ziff Davis several times on the subject of the removal of Dos, and ZD also claims to have seen internal Microsoft documents supporting the claim that Dos is on its way out. But Thurrott says he's heard from several testers who have the Millennium developer release code, and that they confirm that the new OS is - at least so far - a lot less radical than the rumour mill has suggested. The real story, he says, is as follows. Legacy I/O has not been removed; MS-DOS is still there, but is hidden from the user at boot and at shut-down; Millennium isn't sharing code with Win2k, it's "firmly rooted in Windows 98," and has had the Win2k shell grafted onto it; and then of course, the claims of a September 1 target date for beta 1 and shipment in Q1 next year are also wrong. Common sense tends to support his pitch, rather than the more radical claims for Millennium, simply because Microsoft hasn't had enough time to do a lot of heavy-duty work on the OS since it was first mooted earlier this year. But on the other hand, internal Microsoft documents covering the removal of Dos and radical surgery on legacy devices must exist, as Microsoft plans in this direction are cited in PC2001 (See story). Thurrott says that although Microsoft is aiming to ship in 2000, its "most optimistic predictions place the release mid-to-late 2000." But that itself raises more questions. If Microsoft does a relatively simply job of evolving Windows 98 for Millennium and ships it early in 2000, then heavy duty legacy removal doesn't need to take place. But ideally the company would want to do more in this direction as PC2001 and Easy PC platforms come on-stream in late 2000. So if Millennium doesn't ship until late 2000, Dos etc. might have to be canned after all. This one will run and run.
John Lettice, 26 Jul 1999
The Register breaking news

Infineon makes profit shock

Siemens' spun-off semiconductor operation Infineon scored itself a $22.75 million profit for its latest fiscal quarter, ended 30 June. The division recorded sales of $1.25 billion. And Infineon is now set for a February/March 2000 IPO, according to Siemens CFO Heinz-Joachim Neuberger. Infineon has been well known for its overall inability to make money -- it's one of the reasons Siemens decided to spin the operation off in the first place. Indeed, for the nine months to 30 June, the company lost $34.5 million, sales of $3.35 billion. This period marks the only time Siemens has released separate results for Infineon, a move made earlier this year to comply with the US Securities & Exchange Commission. Infineon's new-found profit-making status probably explains the new IPO date. Earlier hints from Siemens and Infineon senior execs suggested the company was looking at this Autumn, though with a cautious "no sooner than October", just in case. Neuberger also said Siemens would float off its passive components business early Q4 1999. ®
Tony Smith, 26 Jul 1999
The Register breaking news

Philips and LG ink LCD deal today

The joint venture between Philips and LG Electronics to produce flat panel screens has been finalised today. The 50-50 deal which saw Philips part with an investment of $1.6 billion, will realise instant profit for the Dutch electronics giant, which only last week announced lacklustre results. It is the largest single foreign investment into South Korea and is Philips' largest ever single investment, the company said. It creates the world's largest active matrix LCD manufacturing company. Recent problems with the industry-wide shortage of LCDs will help the joint venture get off to a flying start. Philips expects to see a growth rate of 20 per cent per year from the LCD operation. ®
Sean Fleming, 26 Jul 1999
The Register breaking news

Man arrested over alleged hacking offence

Exclusive A 19-year-old man has been arrested in connection with the alleged hacking of a Web site owned by a Wapping-based business premises. The man -- who has not been named by police -- was arrested last Wednesday and released without charge. He was bailed to appear at Holborn Police Station in October pending further investigations. It is understood the arrest was part of a special operation conducted by the Computer Crime Unit based at New Scotland Yard. Last month the CurrantBun.Com Web site was hacked and the personal details of 50 people were published on the Net. CurrantBun.com is the portal of Britain's most popular newspaper The Sun which is based at Wapping, London. David Habanec claimed responsibility for the alleged break-in at CurrantBun.com. At the time he made no secret that he was responsible and went out of his way to court publicity over the alleged intrusion. He even published details of how he carried out the breach of security. In an exclusive interview with The Register Habanec said he did it to gain notoriety among the Internet community. He also alleged it was part of a revenge attack against Cheshire-based ISP Telinco, the company that provides the network for CurrantBun.Com. ®
Tim Richardson, 26 Jul 1999
The Register breaking news

Big Blue Shark attacks StorageTek

IBM has dumped StorageTek's SVA disk array and developed its own rival product – due to be launched today. Big Blue has had an OEM agreement with StorageTek since 1996, reselling StorageTek's SVA (Shared Virtual Array) which it rebranded RVA (Ramac Virtual Array). IBM sold all StorageTek's SVA stock. Big Blue was said to be weak on the developing, and StorageTek poor on the marketing side, so they both benefited from the long-standing partnership. The joint venture has around 6,000 customers worldwide. IBM has now developed its own disk array product – codenamed Shark – due to launch later today. This will replace the RVA and compete with StorageTek’s SVA for the very same 6,000 customers. StorageTek will retaliate by selling its own SVA product direct to the market instead of using IBM as a reseller. David Slater, StorageTek enterprise disk marketing manager, described IBM's new product as "a step backwards" because it did not have the "virtual" technology. Virtual disk arrays store more data on less disk space, and need less man management – users don't have to physically back-up data. It is also more cost effective, according to Slater. He said StorageTek wanted to show its customers that they hadn't been abandoned, despite IBM's move. StorageTek will honour any warranties from users wanting to upgrade from RVA to SVA. Slater said existing IBM customers would suffer from IBM's decision to go it alone. "A lot of customers have bought into the virtual approach. IBM will no doubt go ahead with virtual technology in the future, but we are selling virtual products now," said Slater. Claus Egge, IDC storage analyst, said the move would be good for IBM, which has big ambitions to get back into high-end storage manufacture. "Shark is not a virtual product, but IBM has shown commitment to virtual technology in the future," he said. Egge was unsure if users would stick with IBM or switch to buy direct from StorageTek. ®
Linda Harrison, 26 Jul 1999
The Register breaking news

GE Cap opens Gateway to corporate accounts

Direct selling PC giant, Gateway, has teamed up with multi-national channel monolith GE Capital IT Solutions, to target the corporate market. Despite a strong presence in the home and small business markets, Gateway’s attempts to win a significant share of the corporate market have yet to set the industry alight. The GE Cap deal could go some way to changing that. GE Cap is a dominant force in the US corporate channel and though a number of strategic international acquisitions now has a presence in almost all significant territories. Critics of the direct sales approach have argued that the one weapon missing from the armoury of the likes of Dell and Gateway, has been the provision of services to a demanding corporate market. The deal with GE Cap could see Gateway successfully bridge that gap. ®
Sean Fleming, 26 Jul 1999
The Register breaking news

NTL acquires CWC cable unit

Two years ago the UK had 24 cable operators. But now there are only two, following today's news that NTL is to acquire the cable television interests of Cable & Wireless Communications for £8.2 billion in cash and stocks. Meanwhile, Cable & Wireless, owner of 53 per cent of CWC, is buying out the data and business divisions, with its own shares, valueing this part of the business at £5.3 billion The upshot is that CWC, accounting for 24 per cent of Cable & Wireless turnover is dismembered; NTL becomes by far the most important cable operator in the UK, with customers in 2.8 million homes; and Cable & Wireless gains full control of CWC's 117,000 business customers. Post deal, it will also control up to 12.4 per cent of NTL. Indications are that this is a passive stake - Cable & Wireless promises to retain its holding for at least a year. The end game for the British cable industry could be only months away, with confirmation that New York-listed NTL is also wooing Telewest Communications, the UK's other remaining operator. That would give it near national coverage as a telco for consumers. NTL is also positioning itself as a credible contender in the new world of consumer broadband multimedia services, lining up against BT and BSkyB in the UK. The company has secured two big name backers -- France Telecom and Microsoft -- in its rush to create a British cable monopoly. France Telecom is by far the more important backer, in cash terms. It is underwriting the CWC take-over by pumping in $5.5 billion for up to 25 per cent of NTL. France Telecom already owns ten per cent of NTL. Microsoft operates an investment portfolio in several cable operators, including a small stake in NTL, but it disclaims any ambition to run its own cable operator. It is keen to establish its technology as the de facto set-top standard for cable TV. ®
Drew Cullen, 26 Jul 1999
The Register breaking news

Compaq man joins board of CallCentric

A little-known call centre consultancy firm has had its board bolstered by the addition of Compaq UK's managing director Joe McNally. The company is CallCentric, it was founded in 1997, and lists companies such as Lloyds TSB and Credit Suisse among those it has advised on establishing call centres. The consultancy received a £2 million shot in the arm from venture capital house 3i earlier this year. McNally is the man who established the UK subsidiary of Compaq in 1984 and has run the show ever since. Compaq UK is the most successful Compaq division outside of the US. According to research analyst firm Datamonitor, the European call centre sector is growing at around 30 per cent annually. David Beever, chairman KMPG corporate finance, has also been appointed – he and McNally will sit on CallCentric’s advisory board. David Berger, managing director of CallCentric, said: "I am delighted to welcome these two significant players to the CallCentric advisory board. The experience that Joe and David bring to CallCentric will strengthen our position as leaders in the fast growing call centre market." ®
Sean Fleming, 26 Jul 1999
The Register breaking news

Compaq still top of the PC pops

Worldwide PC sales increased 27 per cent for the second quarter, but at the expense of smaller vendors. Global PC shipments rose to 25.6 million compared to the same period last year, IDC reported. This was the biggest growth for several quarters, beating IDC initial forecasts of 21 per cent growth, according to today's Wall Street Journal. John Brown, IDC analyst, said the figures were surprising as the second quarter was traditionally the slowest part of the year. "The majority of what we're seeing is that the consumer market is out of control." He attributed this chaos to cheaper machines and the Web, adding: "We could be seeing a very good year". Reports from IDC, and also from Gartner Group, suggested that the biggest fish in the pond were benefiting at the expense of the tiddlers. All top five vendors in the US increased their market share, according to Dataquest. The same applied to worldwide sales, except for Japan’s NEC, said IDC. Compaq managed to cling onto the number one spot in the worldwide market. The vendor saw worldwide market share gain 0.6 per cent to 14.6 per cent. Shipments jumped 32 per cent against last year, according to IDC. But in the US market, Compaq and Dell held virtually equal market share. Dell's global shipments jumped over 50 per cent. Apple saw market share rise to 3.6 per cent from 3.2 per cent last year. ®
Linda Harrison, 26 Jul 1999
The Register breaking news

Free calls for a tenner as Freecall goes live

Freecall-UK -- the UK Net company that promised toll-free access to the Internet -- has finally launched its service after keeping people guessing for more than two months. Snag is though, it's not free. Anyone who wants to take up the offer first has to part with £6 ($10) to register in what is described as a "one-off administrative fee." Sick squid may not be a king's ransom but it's a couple of pints of beer more than many had expected to pay. Then again, it could net 0800 Connect Ltd -- the company trading as Freecall-UK -- a tidy little sum, even if only a fraction of the 180,000 people who registered their interest eventually sign up for the service. That said, there's little doubt the offer sounds tempting especially for those people who use the Net during the day. For every hour online during peak times users receive 30 minutes toll-free time in return. Less attractive paybacks apply to off peak hours and weekends. Yet this proposal is a far cry from Freecall-UK's early plan to provide toll-free access in return for users receiving online ads via email. In an email posted at the weekend, Freecall-UK CEO Richard Jay said the service would be one of the "next generation of Internet service providers." Net users in the UK may not agree. They've had to wait more than two months to find out exactly how the scheme works. Question is, was it worth the wait? ®
Tim Richardson, 26 Jul 1999
The Register breaking news

TechWorks debuts new cards

TechWorks has introduced a new range of PCI 3D sound cards – aimed at the serious PC gamer. TechWorks claims that its budget £19.99 PowerVortex1, based on the 8820 chip from Aureal and supporting the A3D 1.0 protocol, is the only true 3D sound card in its price range. At the high end is the PowerVortex2 SuperQuad. The £50 card is being touted as ‘the ultimate solution for gamers’ with output for headphones, two and four speaker setups with A3D 2.0, and an infrared SP/DIF out connector. The mid-range option is the £30 PowerVortex2 (but no SuperQuad). The card supports A3d 2.0 for two speakers and headphones. All prices include VAT, and more information can be found here. ®
Lucy Sherriff, 26 Jul 1999
The Register breaking news

Gold star and a tick for Ciscom

Teddington-based reseller Ciscom has become a Cisco Systems Gold Partner. It joins 17 other resellers in this elite networking channel group in the UK. Ciscom has the biggest number of Cisco sales staff in Europe and more Cisco Internetworking Experts (CCIEs) than any reseller or distributor in the UK, according to a company statement. Not bad for a company started two years ago with 80 staff spread between offices in London and Manchester. Iain McTaggart, Ciscom MD, said the company was taking on staff every week and sales were strong. "We're doing so well because this is all we do." Ciscom may be Cisco's blue-eyed boy, but it is not everyone’s favourite networking reseller at the moment. It is in the process of being sued by distributor ilion – which wants "substantial damages for losses…in connection with an irregular transaction" from Ciscom. ®
Linda Harrison, 26 Jul 1999
The Register breaking news

Keyword auctions ends at AltaVista

AltaVista has scrapped its Relevant Paid Links Program in the wake of mounting criticism about its practice of selling keywords to the highest bidder. In return for a stash of cash, AltaVista gave advertisers prime spots when Net users searched for certain products. These auctioned results were published ahead of the regular search queries giving these advertisers a prime spot on the Web's most powerful search engine. According to Wired News, which originally broke the story, no one at AltaVista was available to comment. Instead, a message posted on the site reads: "The Relevant Paid Links Program has been discontinued as of July 22, 1999. No more keyword bids are being accepted. If you have previously placed a bid and won a placement during the week of July 6 to 13, your relevant link will still run, during the week of July 19 to 26, without charge. If you have placed bids after July 13, your relevant link will not run and, subsequently, there will be no charge." The scheme was first introduced in April and is one of a number of money-making initiatives from AltaVista. ®
Tim Richardson, 26 Jul 1999
The Register breaking news

Maxtor sees loss for Q2

Hard drive maker Maxtor has announced its Q2 financials for the period ending 14 June. Turnover was $524.6 million, down on last Q2's $531.3 million. The company made a net loss of $30.9 million -– it made a profit of $5.4 million for last year's Q2. It had expected to make a loss of around $50 million for this quarter. ®
Team Register, 26 Jul 1999
The Register breaking news

TurboLinux outsells Win 98, MacOS 8.5 – sort of…

This week's spurious statistic comes from Japanese market research company Business Computer News via TurboLinux, the Linux distributor formerly known as Pacific HiTech. Launched last week, TurboLinux's Japanese edition of its Workstation 4.0 edition, apparently managed to rack more retail sales than Windows 98, MacOS 8.5 and other varieties of Linux. To be precise, the open source OS achieved market share of 24.09 per cent for the first week of July, compared to 13.25 per cent for Windows 98 (upgrade), 10.23 per cent for MacOS 8.5, 9.15 per cent for the full version of Windows 98, and 2.64 per cent for RedHat Linux 5.2. TurboLinux Workstation 4.0's sales aren't in doubt here -- the figures are pretty decent, and good look to the company, we say -- but it's a moot point how valid a week's stats are. The figures also conveniently split Windows 98's sales into various upgrades and academic packages, which, if added together, total 29.9 per cent -- a little more than TurboLinux's share. All just clever spin, in other words. Still, we were surprised to see Connectix's Mac-based PC emulation software, Virtual PC, scoring a rather fine 8.77 per cent share (Windows and DOS versions combined) of the Japanese OS market. No wonder Japanese IT companies have such a downer on emulation. ®
Tony Smith, 26 Jul 1999
The Register breaking news

Associated Newspapers takes 50% share in free ISP

Associated Newspapers, publisher of UK tabloid the Daily Mail and local paper the London Evening Standard, today bought a half share in up-and-coming free ISP Zoom from its owner, clothing retail giant Arcadia. Arcadia owns High Street emporia TopShop, Principles and Burton. The deal values Zoom at £30 million -- rival free ISP Freeserve, which floated today, is said to be worth up to £2 billion. Arcadia's plan for the ISP centres on its role as an e-commerce facilitator, pulling in punters using the lure of free Net access in the hope of persuading them to spend money on wares offered by the online branches of Arcadia's stores. The deal with Associated brings in vital access to potential customers through the companies' papers -- they have a claimed combined readership of 13.5 million. In return, they get a service that will allow them to compete with rival services from The Sun and the Mirror. Arcadia itself brings a database of five million storecard holders to the table. ®
Tony Smith, 26 Jul 1999
The Register breaking news

Sign here for cheapo UK domain names

Our namesake, Register.com, is muscling into the UK with cut price domain names. The US-based reseller is offering co.uk and .org.uk extensions for the bargain basement price of £49, compared with the usual rate of £80-£90. UK-specific registration costs are almost twice as expensive as .com or .net domain names, according to Register.com. However, the upper price it quotes for UK domain names -- at £200 -- typically comes with email addresses and 20Mb worth of web hosting attached. ® You can get your cheap UK addresses at here
Drew Cullen, 26 Jul 1999
The Register breaking news

Sun to buy Linux competitor to MS Office?

Sun is poised to buy German software company StarDivision, according to Germany's c't. The magazine says that a deal is rumoured to be ready to roll next month, with Star Division poised to become a wholly-owned Sun subsidiary, under the banner StarOffice GmbH. StarOffice is StarDivision's major product, a potential Microsoft Office rival available in numerous flavours, including Solaris, Linux and OS/2. StarDivision offered StarOffice free for personal users late last year, but although it won substantial publicity and large numbers of downloads as the Open Source movement came to prominence, the suite hasn't carved an obvious slice of the market for itself. StarDivision also opened a US office and said it planned an IPO for this year, so if there's a Sun deal in the offing, that's now off the agenda. The company does however look a good fit for Sun. It has a well-regarded cross-platform suite, which Sun already offers as a free download, and which Sun could groom as a serious competitor to MS Office. ®
John Lettice, 26 Jul 1999
The Register breaking news

Freeserve soars in first day trading

Hats off to Dixons and its serried ranks of financial advisors for getting away (with) the Freeserve IPO. Shares catapulted nearly 50 per cent on the first day of trading, valuing Freeserve at an astonishing £2.2 billion. Astonishing because Freeserve turns over much less than £10 million and loses money, its customers don't spend very much time staying on its Web site, and prospects for overseas growth are somewhat limited because competitors are copying its business model in other European countries. Also astonishing because Freeserve's placing price of 150p was already at the high end of the pre-float spread indicated by Dixons. The electricals retailer could charge this because the offer for 20 per cent of Freeserve shares was oversubscribed by more than 30 times. Therein lies the key for the first day madness. Freeserve is now Europe's biggest pureplay Internet stock, and it has got investors -- institutional and retail -- excited. The scarcity value of Freeserve stock has ensured a wildly successful float, as we predicted, oh, weeks ago. All the company has to do now is justify its share-price. And that means buying wisely. ®
Drew Cullen, 26 Jul 1999
The Register breaking news

Mail wars: the Microsoft versus AOL square-off

Here's a shocker: Microsoft is seeking immediate penetration with a product it has only just developed, into a market someone else has cultivated. Only days after its release, Microsoft's new knockoff chat client, MSN Messenger Service, has been twice booted from America Online's well-developed and costly chat networks. Microsoft has tweaked its system to get back in, and AOL has counter-tweaked to keep them out, tit for tat. Apparently, AOL thinks Microsoft can afford to develop its own chat networks. Microsoft finds that entirely unfair, and is loudly calling for open standards among all chat clients to make them fully interoperable. This would be good for consumers, the company says. It would be no different than the phone system which allows people to ring each other from anywhere in the world, it says. AOL, which added ICQ to its chat networks last year at a cost of $325 million US, sees it differently. "We support open standards," AOL's Ann Brackbill told The Register, "but there are technical issues to be resolved." Among them is the click-and-drool security AOL's users have come to expect. The company enjoys a reputation as an exceptionally safe Web environment, which it naturally wants to defend, as that forms the basis for its pricey, "premium" service. At issue here is an AOL password prompt appearing in the Microsoft client. Microsoft assures us that the login data go directly to AOL, thus bypassing MS servers entirely. Brackbill concedes that the practice is harmless in itself, but points out that AOL doesn't want its users developing slack security habits, such as entering their passwords in an outside context. To bolster this impression of openness, AOL points to the fact that anyone can download their chat client, AOL Instant Messenger, and use it regardless of which ISP they connect through. The chief objection to Microsoft, Brackbill says, is that "they did this in a way that was not disclosed to us". The battle could turn legal, as industry front-groups are already lining up across the divide forming two camps, those supporting and those opposing open standards for chat clients. There are big players on both teams. AOL says it is not among those opposed, but would welcome an agreement on open standards, and probably hopes to achieve one without the participation of the sort of big-gun lawyers Microsoft can produce in endless supply. Still, AOL may have shot itself in the foot by publishing an open-source version of Instant Messenger. The company says it did so to encourage Linux users to get on board, and never intended for industry giants like Microsoft to exploit it to gain "unauthorised access" to its systems. But the cat is out of the bag: the temptation now is for others to develop competing, interconnective products and implement them without giving AOL a second thought, thus increasing the likelihood that outstanding issues will need to be resolved in court after the fact. Since publication, Yahoo! and Prodigy have made use of the code to develop their own, fully interoperable clients, both of which are at present blocked from AOL's servers. It remains a headache for AOL to keep the invaders at bay, no doubt; and at present the whole dynamic inclines uncomfortably toward future resolution in the courts. That'll teach them to share. Thus far Microsoft appears to favour fighting for what AOL might just give it if it asks nice. It will be worth watching this to see if negotiation can win over the urge to do battle in America's litigous corporate cosmos. In the mean time, those who wish to multiply AOL's labours can download Microsoft's chat client free at the MSN Web site. ®
Thomas C Greene, 26 Jul 1999