21st > December > 2005 Archive

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Google and AOL cement ad love

The widely leaked alliance between Google and American Online has been confirmed with the two companies announcing a broad partnership on Tuesday. As leaked, Google takes a 5 per cent stake in AOL, a subsidiary of Time Warner, in exchange for a $1bn investment. In addition, Google gains access to more of AOL's content and will ensure that users of Google's instant messaging software can communicate with AIM users. The two companies also plan to collaborate on an online video service. The deal has been billed as "a global online advertising partnership." And it doesn't get much sexier than that. "AOL is one of Google's longest-standing partners, and we are thrilled to strengthen and expand our relationship," said Google CEO Eric Schmidt. "Today's agreement leverages technologies from both companies to connect Google users worldwide to a wealth of new content. We've also created a simple way for AOL Marketplace advertisers to buy and place search-related advertising across the AOL network." The voice of dissident Time Warner shareholder Carl Icahn apparently did little to block the union. Icahn, who speaks for a group of investors with a 3 per cent stake in Time Warner, said the tie-up could prove disastrous "if this agreement would make it more difficult in any way or effectively preclude a merger or other type of transaction with companies such as IAC/InterActive, eBay, Yahoo!, or Microsoft etc. etc..." Rumors have circulated saying that Microsoft was bidding hard to pair with AOL only to be bested by Google. AOL will now be able to sell ads on Google's own web sites and sites that display Google ads. In addition, AOL receives a $300m credit from Google to purchase keyword-based spots. AOL's content will apparently receive prime position in Google searches, but Google denies this will affect the nature of its search algorithm. Translation? Yep, it looks like Google will continue to water down its results, which already suffer from an unhealthy relationship with blog garbage. "We look forward to working with Google to extend our successful paid-search partnership to other forms of advertising," said Don Logan, chairman of Time Warner's media and communications group. "In addition, we're excited about the potential for driving more traffic to our network of Internet properties. . . . We're confident that this partnership marks the next big step in making AOL an even more important player in online advertising." The $1bn price for 5 per cent of AOL feels awful high. That would value the AOL business at $20bn. Anyone else feeling bubbly? ®
Ashlee Vance, 21 Dec 2005
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You're infected so pay us to get infested

Spyware spreaders have stepped up attempts to trick users into downloading malware using a combination of browser vulnerabilities and deceptive spam emails. In particular, bogus warnings about infestation are frequently being used to dupe Windows users into accepting potentially malign code, reports security vendor Websense. In many cases, these scam emails also request money in return for "fixing" supposed security problems that don't actually exist (example here). Such social engineering tricks represent a common-enough spyware scumbag ploy but Websense has identified a number of common factors within attacks launched over the last fortnight. Many of the sites involved in these scams are hosted in either the Ukraine or Russia. Their domain names are registered in countries such as Vanuatu and Mexico. Code downloaded from these sites often includes several pieces of spyware, adware, and other potentially unwanted software. Removing any of this software often forces users to fill out a survey. The same IP netblocks associated with these nefarious sites have often recently been used to host malicious code such as Trojan horse downloaders and host-file redirection software, Websense reports. Furthermore, IP netblocks of these scam hosting sites are often hosting other questionable sites such as fraudulent search engines. Several of the 1,500 sites analysed by Websense contain links to other sites that are hosting IE exploit code. In summary, these scam emails subject recipients to a noxious cocktail of unpleasantness that's best avoided. Screen shots of these spyware scam emails can be found on Websense's website here. ®
John Leyden, 21 Dec 2005
For Sale sign detail

Lenovo replaces Big Blue CEO with Dell man

Lenovo has performed a CEO swap, bringing in Dell's Asia-Pacific chief and slotting old IBM hand and current CEO Stephen Ward into the role of consultant. William Amelio, the former SVP of Dell, will take on both Lenovo's CEO and President roles. Ward moves to the consultant office, assisting "in the transition." The executive switch occurs close to a year after Lenovo revealed plans to buy IBM's PC business. Ward, once the general manager of Big Blue's personal systems unit, helped sell and complete the Lenovo acquisition and has guided the company through a fairly smooth transition. Amelio has worked just about everywhere, including Dell, NCR, Honeywell, AlliedSignal and IBM. "Steve and Lenovo's board agreed that now is the right time for this transition," said Lenovo's Chairman Yang Yuanqing. "Bill Amelio's combined experience - in our industry, in emerging and mature markets, in senior operational roles and with IBM - gives him the perfect profile to lead Lenovo from the important stability we have achieved in the first phase of our integration, to the profitable growth and efficiency improvement to which we are committed in our next phase." Lenovo also crafted a canned quotation for the departing Ward. "Yuanqing and I have spent a lot of time thinking about this," he said. "Bringing in Bill Amelio is a great move. Lenovo is an incredible company and I have great confidence in its future success." It's quite a surprise to see Ward leave just 12 months into this massive transition. We'll wait and see what tales emerge to explain the shift. ®
Ashlee Vance, 21 Dec 2005
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PC, CE firms to develop 'unified' display connector

A consortium of computing and consumer electronics companies have come together to create the successor to today's DVI and yesterday's VGA display connectors. The next-generation connector, dubbed the Unified Display Interface (UDI), will provide compatibility with DVI and the HDMI (High Definition Multimedia Interface) currently favoured by HD TVs. The system will also support the HDCP (High-bandwidth Digital Content Protection) anti-piracy specification.
Tony Smith, 21 Dec 2005

20 Japanese giants sue US processor patent holder

Almost two dozen Japanese electronics companies have together filed five lawsuits against US intellectual property holding company Patriot Scientific. The lawsuits ask the US District Court in Oakland, California to declare three patents held by Patriot to be invalid. Patriot will be well-known to Register readers as the company that in January 2004 sued Sony, Toshiba, Matsushita/Panasonic, Fujitsu and NEC for alleging infringing its patent for a "high performance microprocessor having [a] variable speed system clock". The technology is detailed in US patent number 5,809,336.
Tony Smith, 21 Dec 2005
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Laptops to drive PC market forward in 2006

Low-cost and portable PCs will continue to fuel the PC market in 2006, despite economic slowdown and lower replacement activity. So says the latest research from IDC, which indicated that growth in the market, although slower, will stay in double digits in 2006, reaching 10.5 per cent. IDC cited the strength of the market, combined with the number of people turning to portable PCs, as a driving force behind the prediction. Moving back to the fourth quarter of 2005, IDC has estimated growth of almost 15 per cent, which will boost the annual growth rate for this year to 15.8 per cent, half a point more than 2004. The newest predictions from IDC mean that the market will experience double-digit growth for the fourth consecutive year, and will raise the four-year compound annual growth rate (CAGR) for 2005 to 2009 to 9.4 per cent. IDC is expecting total shipments to reach almost 300 million units annually in 2009, with shipment value predicted to expand by 3.5 percent in 2006, with a CAGR of 3.6 percent from 2005-2009. In regional markets, the predictions vary. Despite robust growth in previous quarters, in Western Europe, a weakening euro and downgraded GDP projections have led to expectations that growth will slow in 2006. Japan is also feeling the economic bite, as high oil prices and concerns about the durability of consumer demand have generated a cautious outlook The same concerns are not evident in the Asia/Pacific market, where despite the potential for some disruption from factors such as rising oil prices, a slowing Chinese economy and bird flu, IDC is expecting little or no impact on the PC market. According to the research firm, it is "business as usual" with strong demand in evidence. Meanwhile, following a strong performance in the third quarter, growth expectations in the US for 2006 have increased slightly, with portable PCs once again the driving force in the market. The devices are expected to account for more than half of client PC shipments by 2008. "Following the shocks of 2001 and 2002 many people were impressed with the strength of the market in 2004 but cautious about the foundation and longevity of this growth," said Loren Loverde, director of IDC's Worldwide Quarterly PC Tracker. "The fact that solid double-digit growth has continued through 2005 shows that the market recovery did not peak in 2004 as many expected but is still ongoing. The market may slow in 2006, but persistent growth over the past several years shows the appeal of low-cost and portable systems and the potential for both a longer recovery and a higher rate of long-term growth." Copyright © 2005, ENN
ElectricNews.net, 21 Dec 2005

Intelligent design ordered out of class

A US court has delivered a setback to religious conservatives hoping to get the theory of intelligent design onto the school curriculum. A district judge has banned the teaching of intelligent design at schools overseen by the Dover Area School Board in Harrisburg, Pennsylvania, ruling it advances "a particular version of Christianity" and is unconstitutional because it violates the notion of the separation of church and state. Judge John Jones ruled intelligent design was "nothing less than the progeny of creationism," the belief that the world was created by God as outlined in the Book of Genesis. In a 139-page ruling, Jones also lambasted the Dover school board for its "breathtaking inanity" in using intelligent design as a pretext for its real purpose, which was to promote religion in the public school classroom. Transcripts from the case can be viewed here. Intelligent design holds that certain features of the universe and living things are best explained by an intelligent cause rather than an undirected process such as natural selection. Intelligent design is popular among the US religious right and endorsed by President George W Bush who last summer said US children should be taught both intelligent design and evolution "so people can understand what the debate is about." As such, schools are on the front line. In Kansas, state education officials last month adopted new classroom science standards that cast doubt on evolution and redefine science to allow for non-natural explanations, such as a creator. A federal appeals court in Georgia, meanwhile, has heard arguments over whether an Atlanta school district had the right to put stickers on biology textbooks that describe evolution as a theory, not fact. A federal judge in January had ordered the stickers to be removed. Dover had added language about intelligent design to its biology curriculum. In a four-paragraph statement, it claimed evolution was not a fact and there were gaps in the theory that could not be explained. Students were referred to a book called Of Pandas and People - universally panned by Amazon.com reviewers - to "gain and understanding of what intelligent design actually involves." The board's decision was challenged by a group of 11 parents, who subsequently brought a suit against the board. The ruling is unlikely to be appealed as recent elections changed the composition of the Dover school board, which is now opposed to intelligent design.®
Gavin Clarke, 21 Dec 2005

'Crazy Frog' firm fined £40k

One of the firms behind the "Crazy Frog" ringtone service has been fined £40,000 because for misleading punters about the real cost of the service. Service provider mBlox was also ordered to refund all 338 people who complained to premium rate services (PRS) regulator ICSTIS. They had thought that when they bought the ringtone it was a one-off payment for a single download and were unaware that they were, in fact, signing up to an expensive premium rate subscription service. Both mBlox and Crazy Frog's content provider Jamba! attended a hearing but under ICSTIS' rules, the regulator only has jurisdiction over service providers and not content providers. In the end the panel overseeing the hearing found that the promotions required "a lot of interpretation, application and patience from consumers" to figure out what they were signing up to. "A great deal of thought had gone into producing the advertisements but, in contrast, little time appeared to have been spent on the terms and conditions," said the regulator in a statement. ICSTIS Director George Kidd said: "The Hearing Panel has made clear that consumers should not be made to work to find out what any premium rate service involves or costs. "Although the Panel found that there was no fraudulent or malicious intent behind the service, the companies concerned showed a careless disregard and unprofessional attitude to consumers in failing to be clear on the exact nature of the service." In a statement mBlox has said it "fully accepts ICSTIS' adjudication on the appropriateness of the Crazy Frog promotion" but believes the rules that govern the premium rate industry should change and is considering requesting a judicial review of the interpretation of the ICSTIS code "that has held mBlox responsible for the action of a third party such as Jamba!". ®
Tim Richardson, 21 Dec 2005

Intel to 'bring forward' Conroe release date

Intel is to align the launch of its next-generation desktop processor, 'Conroe', and its upcoming 965 family of chipsets, delaying the latter and bringing forward the former. So claim Taiwanese motherboard-maker sources cited by DigiTimes. Conroe is the first desktop processor to be based on Intel's next-generation architecture, the successor to today's NetBurst technology. Essentially, Conroe takes key NetBurst features and integrates them into a new core developed on the back of what the company learned when it created today's Pentium M chips.
Tony Smith, 21 Dec 2005
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Seagate to buy Maxtor

Seagate its to acquire rival hard disk drive maker Maxtor the two companies announced today, in a stock-swap valued at $1.9bn. If shareholders and regulators back the deal, Seagate will offer 0.37 of its own shares for every Maxtor share issued, splitting the merged business 84:16 between Seagate and Maxtor shareholders. The deal is a classic attempt to cut costs and achieve better economies of scale by bringing two companies together - 'Maxgate' expects to achieve approximately $300m of annual operating expense savings "after the first full year of integration". It also eliminates a competitor. The last couple of years have proved hard for hard disk makers, thanks to aggressive competition, falling margins and plunging prices. In October, Maxtor fell back into the red after a brief stint in profitability. It lost $7.1m on sales of $926m. Seagate, the most successful of HDD companies of late, announced net income of $272m on sales of $2.09bn in what was effectively the same three-month period. Once the acquisition has been completed - sometime in H2 2006 - the merged company will trade as Seagate and continue to be run by Seagate executives. Maxtor CEO and chairman, C S Park, gets a directorship in the merged operation. Until then, the two companies will operate as separate businesses. Seagate said it is sticking by its previous forecast of Q2 FY2006 - due to end 31 December 2005 - sales of $2.2bn with earnings within the 53-57 cents a share range. ®
Tony Smith, 21 Dec 2005
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CAN-SPAM working - FTC

Legal action and email filtering are helping to minimise the nuisance of spam, according to US federal regulators. In a report (PDF) to Congress on the effectiveness of the US Federal CAN-SPAM Act, the Federal Trade Commission (FTC) concludes that technology has reduced the amount of junk email reaching consumers' in-boxes. Meanwhile rigorous law enforcement has had a deterrent effect on spammers. "Consumers are receiving less spam now than they were receiving in 2003" when the CAN-SPAM Act was enacted, the FTC concludes. The regulators' upbeat assessment that the war against spam - if not won - is going in the right direction is supported by figures from some security vendors cited in its report. According to email firm MX Logic, spam accounted for 67 per cent of the email it processed in the first eight months of 2005, down nine percentage points from the 76 per cent spam-rate MX faced in the same period last year. The FTC has brought 21 cases under CAN-SPAM compared to 62 cases against spammers it filed before the enactment of the law. Several important steps can be taken to improve the efficacy of the CAN-SPAM Act, the FTC advises. Laws and needed to help the FTC and other regulators in their quest to trace spammers and sellers who operate outside of the US. Improved user education on spam prevention and continued improvement in filtering tools and techniques to trace spammers will also assist in the fight against junk mail, the FTC reckons. ®
John Leyden, 21 Dec 2005

Palm sales surpass expectations

Palm posted strong sequential and annual sales gains yesterday when it reported its Q2 FY2006 financial results. Revenues hit $444.6m, up 18 per cent on the year-ago quarter and 29.9 per cent on the previous quarter's $342.2m - and better than the firm had previously forecast. Net income for the period, which ended 2 December 2005, was $260.9m ($5.02 per share), though $226.3m of that arose from a "partial reversal of a deferred tax asset valuation allowance", slightly less than the $240-250m gain the company forecast last quarter. Ignore that and other one-off charges, and the figure was a more modest $24.4m (47 cents a share), down on Q2 FY2005's $27.2m (53 cents a share) but up from $21.1m (41 cents a share) in the previous quarter. Palm said it shipped 602,000 Treos during the quarter, 81 per cent more than it did in the year-ago three-month period. The company claims a 78 per cent share of the US PDA market and a 36 per cent share of the US smart-phone arena. It said it makes eight of ten best-selling PDAs in the US. Looking ahead, Palm said it expects the current quarter, Q3 FY2006, to yield revenues of $370-375m - post-Christmas is typically a quieter time for device makers like Palm - and earnings of 46-49 cents a share on a GAAP basis. Its gross margins will fall between 33 per cent and 35 per cent, the company forecast. ®
Tony Smith, 21 Dec 2005

Telewest punter hounded by Bulldog calls

A Telewest customer is trying to figure out why he received hundreds of phone calls yesterday for Bulldog's customer support at his home in Kent. The man, who asked not be identified, began receiving calls early yesterday morning. The callers were all trying to reach Bulldog's business customer support line. In the end he was forced to record a message informing callers that they were calling a private number and not Bulldog support. The problem was finally fixed early yesterday afternoon but only after he had received several hundred calls. He's still waiting for an explanation as to what happened and an apology from the Cable & Wireless-owned broadband operator. No one from Bulldog was available for comment at the time of writing although it's understood the ISP is looking into the matter. ®
Tim Richardson, 21 Dec 2005

Palm pledges three new smart phones in 2006

Palm will unveil three new smart-phone products in 2006 in addition to the already announced Windows Mobile-based Treo 700w, the company's chief said yesterday. Speaking during a conference following the announcement of the company's Q2 results, CEO Ed Colligan confirmed earlier analyst claims that Palm will offer new smart phones at different price points to the current Treo line-up. "We'll announce three additional new smart phones during calendar year 2006," said Colligan, adding that they will sport new looks and feature more advanced network support - presumably a reference to 3G and possibly the long-awaited addition of Wi-Fi too.
Tony Smith, 21 Dec 2005
fingers pointing at man

Hackers download pirate movies onto compromised PCs

Hackers have developed a sneaky technique for installing pirated movie files on Windows PCs infected with the lockx.exe rootkit. Doctored copies of BitTorrent are loaded on infected machines and used to download Disney movies or the film version of Mr. Bean. The motive for the bizarre (and short-lived) attack, linked to a Middle East-based group in control of the network of infected machines - remains unclear. FaceTime Communications, the firm which uncovered the attack, reckons the assault is an experiment which might be applied to far more malign purposes in future. The trick creates a scenario where an infected users might be accused of sharing copyright-protected contact without ever using file sharing software. The lockx.exe rootkit file was bundled with a variant of the notorious SDBot worm that spread across AOL's IM network in late October. ®
John Leyden, 21 Dec 2005
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Tomorrow's paper will be digital

Belgian daily De Tijd is to be distributed electronically in what is claimed to be the first complete solution for portable electronic reading and writing. Available from April 2006, the Iliad platform allows for customised versions of an electronic reader that can be created for special markets. Dutch manufacturer iRex Technologies BV, a spin-off from Royal Philips Electronics with backing secured from major independent equity investors, was also involved with the first commercially available E Ink display in 2004, an electronic book reader by Sony. Since 2001 Philips and US based E Ink Corporation have been developing electrophoretic technology for thin displays, whereby oppositely charged bright and dark particles move through a clear solution. If bright particles are moved forward, the perceived image is bright. If dark particles are moved forward, the perceived image is dark. The electronic paper will get its content from various sources, using a Wi-Fi connection or flash memory cards. The 8.1 inch display with 16 grey levels ensures excellent legibility both indoors and outdoors, the company claims. The battery runs for 14 days. iRex is working on additional projects with other publishers in Sweden, the UK and the USA later next year. The device won't be available in retail, but is offered only through content channels. CEO Hans Brons says his company will focus explicitly on B2B partners: for news, educational and professional publishers. The device will be able to offer always up-to-date information and the low cost structure should make it easier to reach and even define new markets, Brons says.®
Jan Libbenga, 21 Dec 2005

Three charged over Xbox chipping

Three men have been charged in the US with selling illegally modified Xbox game consoles that allow the devices to play pirated video games, according to reports. Two of the suspects ran a video games shop in Los Angeles. Games consoles such as the Microsoft Xbox or Sony Playstation 2 include copyright protections that prevent them running pirated games or games subject to regional control (where a console bought in one part of the world cannot run games purchased in another). Mod chips are designed to circumvent these protections. As such, mod chips and "chipped" consoles are in breach of the US Digital Millennium Copyright Act (DMCA), which prohibits the manufacture and distribution of products or services that circumvent technological protection measures designed to prevent unauthorised access to and copying of copyrighted materials. According to a criminal complaint filed on Monday, Jason Jones, 34 and Jonathan Bryant, 44, both owners of Los Angeles-based ACME Game Store, used modified Xbox game consoles as demonstrators in their shop and would describe in detail to customers the advantages of the modifications. Customers would pay from $225 to more than $500 for the modifications, depending on the extent of the modifications requested and the number of games that were pre-loaded onto the hard drive. A third individual, Pei “Patrick” Cai, 32 from Pico Rivera, California, would pick up game consoles to be modified, modify the systems at his home, and then return the consoles to the shop, where they were picked up by customers, says the complaint. The trio were caught after undercover agents with US Immigration and Customs Enforcement (ICE) paid $265 to have a modification chip, a hard drive and 77 pirated games installed on an Xbox. ICE had been tipped off by trade group the Entertainment Software Alliance. The three men have all been charged with conspiracy to commit copyright infringement and to violate the DMCA, and face a maximum of five years in prison. They are due to appear in a Los Angeles District Court in late January. See also: Xbox chipper gets jailed and fined, OUT-LAW News, 16/09/2005 Man convicted for chipping Xbox, OUT-LAW News, 07/07/2005 Mod chips illegal in UK, says court, OUT-LAW News, 22/07/2004
OUT-LAW.COM, 21 Dec 2005
Casio Exilim EX-Z500

Casio Exilim EX-Z500 5mp digicam

ReviewReview The five-megapixel, 3x optical zoom Exilim EX-Z500's silmline design - it's just 8.9 x 5.7 x 2.1cm - and 2.7in LCD are the first things you'll notice when you take a closer look at this digital camera. The bright crisp screen is noticeably bigger than the one on most digital cameras available at the moment, save the Sony T range, and the extra 0.2in means it's even bigger than the latest iPod or Creative Zen Vision:M. If you've got one of these, you won't need to worry about viewing your images on anything else.
Stuart Miles, 21 Dec 2005
homeless man with sign

IBM buys Micromuse

IBM is buying network performance specialist Micromuse, boosting the data, voice and video management capabilities of its Tivoli infrastructure software suite. The $865m all-cash transaction will see Micromuse turned into one of IBM's Tivoli business units under general manager Al Zollar, and its products added to the Tivoli range and sold through IBM's sales channels and business partners. Zollar said the acquisition would help IBM's customers manage sophisticated IT environments, deploy new business service management solutions, and deliver new network-based services to customers, employees and trading partners. Micromuse provides tools to help diagnose and solve network problems that IBM said would extend its self-managing autonomic technologies when combined with the company's security management software for identifying attempted network breaches. Micromuse currently has more than 1,800 customers in banking, telecommunications, government and retail, including Deutsche Telecom, Fidelity Investments Services, Swisscom Mobile and Virgin Atlantic.®
Gavin Clarke, 21 Dec 2005

iTunes boosts traffic to Apple's site

Apple is the fastest growing site on the internet, with traffic up 57 per cent since last November, thanks to the popularity of its iTunes music service. According to the latest figures from Nielsen/NetRatings, Google and Amazon also saw significant year-over-year increases, growing 29 per cent and 16 per cent respectively. MapQuest - which provides free maps, driving directions and traffic reports - had the fourth biggest growth, followed by online media site Real Networks and online auction site eBay. Yahoo, Microsoft, AOL and MSN rounded out the top ten.
ElectricNews.net, 21 Dec 2005
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Ex-Qwest Chief indicted for insider trading

Former Qwest Chief Joseph Nacchio has been indicted on a whopping 42 counts of insider trading with the government accusing him of selling $101m in stock after discovering that the telco faced major financial risks. Nacchio - not to be confused with Karate Kid star Ralph Macchio or a Flingers appetizer - is accused of making 42 illegal stock sales over a five-month period in 2001. The government has been looking at the transactions as part of a close to four-year investigation into Qwest. Nacchio denies any wrongdoing and will plead not guilty. The US Securities and Exchange Commission has accused Nacchio and six other Qwest executives of inflating earnings by close to $3bn between 1999 and 2002. In 2004, Qwest agreed to settle fraud charges by paying a $250m fine. Former CFO Robin Szeliga in July pleaded guilty to insider trading and has agreed to help authorities with their investigations into the other executives. She stated that Qwest's senior management knew that revenue was being hiked via deals kept hidden from investors. ®
Ashlee Vance, 21 Dec 2005
For Sale sign detail

So what's the business case for Windows Vista?

The next few weeks could be crucial in the evolution of Windows Vista, Microsoft's next client operating system. Microsoft engineers will crunch through feedback from 500,000 beta testers who evaluated the latest Windows Vista Community Technology Preview (CTP). At stake is a "feature complete" Windows Vista CTP due for release in "early" 2006. At last, after three years of big promises and broken dreams, we should be able to cut away the hype and get a realistic idea of Windows Vista's features and capabilities. As Microsoft decides what to put into Vista, one thing has become clear: after months of glitzy presentations Microsoft must explain in unambiguous terms why exactly corporate IT departments should bother upgrading, instead of waiting to receive the new software when they buy their next round of PCs. Analysts at Directions on Microsoft believe the company has - as it did with Windows XP four years earlier - focused on features that are likely to appeal to consumers instead of those that would benefit business users. Rob Helm, research director at Directions on Microsoft, argues that this a really big problem because now, more than ever, Microsoft needs business customers to buy copies of the software rather than wait for them to upgrade when they buy new PCs. PC upgrade cycles can run from two to four years, with some customers going longer. Sales from upgrades under Microsoft's volume programs are called "unearned revenue." During Microsoft's first fiscal quarter for 2006 unearned revenue for Windows XP fell from 30 per cent of total revenue to just over 20 per cent. Overall, unearned revenue fell by four per cent compared to the fourth quarter of fiscal 2005. "You are looking a pretty significant fall," Helm told The Register. "[Customers] are buying licenses with their hardware." Seasonal spending factors aside, there are two key reasons for the drop: one, is the aging life of the current client, Windows XP. Four-years in, and we are safely past any adoption spike. The second factor is the disastrous introduction of Licensing 6.0 and Software Assurance (SA), programs that proved wildly unpopular after they put volume customers on an upgrade treadmill. In theory, customers paid to receive upgrades as the new software became available during the lifetime of their support contracts. In reality, few upgrades were forthcoming, meaning Licensing 6.0 and SA increased customers' software costs ,according to analysts. Microsoft is still experiencing fall-out from the introduction of Licensing 6.0 and SA. Early indications are Windows Vista should have features that would appeal to business users. This week's CTP introduces group policy management of USB devices to stop illegal copying of data and files, added security for laptops, caching to boost performance and a beefed-up Internet Explorer to stop viruses and phishing. "Security and more reliability are the big things so far," Helm said. But it is painfully clear that Windows Vista falls far short of the grand client vision that Bill Gates, Microsoft's chief software architect, unveiled in 2003. And it is in no-way this decade's equivalent of Windows 95 - the mantra being fed to a younger generation of Redmond engineers who weren't around in 1995. A new storage subsystem has been radically trimmed while the Indigo web services communications layer and Avalon interface will be back-ported to Windows XP and Windows Server 2003, making it even harder to justify Windows Vista. "With Windows Vista, Microsoft has a real challenge," Helm said, looking ahead to the next 12 months for Microsoft. "It has to make the case to corporates this is an important upgrade that they need to make before they buy new hardware, or sales will continue to erode."®
Gavin Clarke, 21 Dec 2005

Fines rise for premium-rate phone offences

Parliament has approved an increase in the maximum fine that can be imposed on premium-rate rogues. The cap on the fines that can be imposed by Britain's premium-rate services regulator is going up to £250,000 from 30 December 2005. The current limit is £100,000, but this has been found to be ineffective as a deterrent, particularly against fraudsters using rogue internet dialler services. A rogue dialler is software that installs a premium rate number as the default dial-up number on a victim's computer without his knowledge, resulting in an unexpectedly expensive call every time the computer connects to the internet. According to ICSTIS, this type of scam has caused far more widespread consumer harm than any other premium rate services to date. But rogue diallers have not been the only scam. There has been a proliferation of ‘spam and scam’ text and voicemail promotions claiming that consumers have won 'prizes' and urging them to call expensive premium rate numbers to make a claim. Such phone prize scams frequently rely on automated calling equipment to make the promotional calls – a practice that can be illegal. All of these supposed ‘services’ could generate significant sums of money beyond ICSTIS’ existing £100,000 fine limit, says the watchdog. The increased maximum fine limit follows one of the recommendations in the Ofcom Review of the Regulation of Premium Rate Services. The Review, conducted by Ofcom with ICSTIS, was carried out at the Department of Trade and Industry's request, and secured Ministerial approval in December 2004. “Our current fine limit of £100,000 is no longer sufficient to deal with the worst services we see. A new fine limit, combined with the other proposals in the Ofcom review to strengthen consumer protection, should ensure that the relatively small number of rogues out there do not continue to damage trust and confidence in the entire premium rate industry,” said ICSTIS Director George Kidd. He warned that ICSTIS was reviewing its sanctions policy, and expected to publish a new, tougher, version early in 2006. According to ICSTIS, this could include the power to apply the new fine limit on a per breach basis, in certain tightly defined circumstances. ICSTIS is considering the matter, following a recent ruling by the Independent Appeals Body. Copyright © 2005, OUT-LAW.com OUT-LAW.COM is part of international law firm Pinsent Masons.
OUT-LAW.COM, 21 Dec 2005
globalisation

Subscriber love drives Red Hat in Q3

Red Hat has impressed once again, posting a 44 per cent surge in revenue during the third quarter. The software maker's results mark the second stellar quarter in a row. Red Hat's revenue hit $73.1m in the period, which compares to $50.9m in the same period last year. Net income surged as well to $23.2m - a 114 per cent rise year-over-year. During the quarter, Red Hat benefited from a 54 per cent jump in subscription revenue to $60.2m. "Our third quarter results reflect return on investments in people and infrastructure made in prior periods," stated Charlie Peters, executive vice president and chief financial officer of Red Hat. "Solid growth across key metrics indicates not only strength in the demand for our solutions but also continuing improvements in the day-to-day operations of our business." Investors appeared pleased with Red Hat's performance, sending shares higher three per cent during regular trading and then adding close to five per cent again in the after-hours market, following the release of the third quarter results. At the time of this report, Red Hat hit $27.86 in after-hours trading - above a 52-week high of $26.50. In September, Red Hat's shares surged as well after it reported banner second quarter figures. Red Hat has now grown revenue by more than 40 per cent two quarters in a row. Red Hat has yet to provide a forecast for the fourth quarter. ®
Ashlee Vance, 21 Dec 2005

North Carolina paves the way for drunk Segwaying

The Segway scooter has a purpose after all. It'll help you get home after an all night boozer without a DUI charge. That seems to be the major lesson learned from the case of Kevin Crow - a North Carolina scooter aficionado. A sheriff's deputy charged Crow with scooting while intoxicated, noting that he scooted past a stop sign and weaved in his scooting lane. After testing, the sheriff's office discovered Crow's blood alcohol level to be .13 - well over the .08 limit. Crow, 27, was then convicted and appealed the verdict, citing what is now to be known as the Segway Defense. Crow argued that scooters deserve the same protection as bicycles, horses, lawnmowers and even the lowly Segway. Such items are not considered "vehicles" under state law, but the scooter is. Despite Crow's best efforts, the appeals panel upheld the ruling. One judge noted that close to 100 people were near Crow's scooter, adding that the "defendant's behavior subjected these pedestrians and motorists to a high degree of danger". Crow could end up serving 14 days in jail and have his license taken away for two years. So, that's a lesson to you all. When in North Carolina, make sure you drink and Segway. You won't get a ticket, but you may get shot. ®
Ashlee Vance, 21 Dec 2005