Should The Jerrkoff Go Directly to Jail?

Apple has been doing an amazing job protecting its CEO, but with its ex-CFO pointing the finger solidly at Steve Jobs and the ex-general counsel expected to do the same, the base of information now seems to support civil -- and probably even criminal -- action against him.

So, assuming the various folks are mostly telling the truth -- which Jobs' defense team would likely challenge -- Steve Jobs publicly took US$1 a year as salary, but he was receiving millions for his private jet and big blocks of options. At Jobs' direction -- and after receiving advice from the CFO that he not do this -- he caused falsified documents to be drawn up, which allowed him to get options that were then not properly reported.

The stock price of Apple fell below the strike price for the options, and they were canceled and replaced by options which, because the stock price continued to fall, were also underwater -- and eventually they were replaced by stock worth nearly $100 million. The only things in contention are who ordered the falsified documents to be created and whether Jobs knew about it.

Now, I'm making this look a lot more simple than it actually is, but let's add to this the fact that many, if not most, people currently believe Apple couldn't survive without Jobs (I would probably include Apple's board with this group), and that with Al Gore on the board, any action against Apple by a Republican executive branch could be positioned as dirty politics and made part of what will likely be an incredibly nasty presidential election.

Now, while the damages to stockholders could be in the tens of millions of dollars, pulling Jobs out of the company could result in lost income in the billions. Finally, Steve Jobs is already playing this out in the media and has already apparently hired Mark Pomerantz, a top criminal attorney (he represented Frank Quattrone successfully), to represent him. That increases the odds that he will either get off on a technicality or receive what amounts to a hand slap.

This makes for a rather ugly decision for the federal attorney who has to prosecute the case. If I were in that position, I wouldn't do anything until after the trial of Apple's ex-chief counsel is over. Then, I would either hope that enough information came out of that trial to make the decision easier, or hope to be reassigned before Jobs would have to be charged. The delay might also get me past the elections; handling this outside of an election year would seem vastly easier.

This issue does not reflect on Apple products or whether you should buy from the company, but it is interesting to watch. What do you think the federal attorney should do? What would you do? How we answer that question probably says a lot about our ethics, and how well we balance risks and rewards.

http://www.technewsworld.com/story/57134.html

Vista bugs revive XP

Those who do not learn from the past are doomed to repeat it, said philosopher George Santayana. George (1863-1952) never got his paws on a personal computer, but had he lived to experience the switch from Microsoft's Windows XP to Vista he'd have had occasion to repeat his famous aphorism with some relish.

Dell, the number-one PC maker, is out to learn from the past and to repeat it, it seems. After a deluge of complaints from frustrated users seeking to master Microsoft's new Vista version of the Windows operating system, Dell's US headquarters says it will reintroduce the older Windows XP on some models.

In the US Dell replaced XP with Vista on all PCs and laptop models for the consumer market earlier this year. But now, after being blitzed with requests, it says it will offer six models with XP.

In Australia, this is less of an issue. Dell Australia, unlike its parent, has always offered buyers the chance to specify XP. Because all Dell PCs in this country are built to order, it's simple to load the chosen version of Windows.

It seems quite a few Aussies are taking the XP option. The funny thing is XP has generally been seen as the problem, not the answer. It doomed millions of PC users to endless rounds of patching to fix problems with security, crashes, freezes and other tedious issues.

Vista, Microsoft promised, would be faster, sexier and inherently secure. Users could expect "a rich digital lifestyle experience combined with secure operations and ease of use".

Alas, Vista has turned out to be a memory hog, especially if you want to access the sexy new Aero interface required for that rich experience.

Many users have also found that it won't run some older programs or allow their PCs to connect to some devices, including printers, scanners, modems, monitors and multimedia cards.

The latter isn't a Microsoft problem. It's caused by the tardiness of some third-party hardware makers in producing driver software.

Meanwhile, some security problems have already emerged with Vista, so many potential buyers of new PCs have been demanding the old XP.

Dell Australia has always been responsive to the situation, and its US parent finally got the message last week after consumers flooded IdeaStorm, a website where it seeks user suggestions, with requests for the resurrection of XP.

The company plans to take up two other ideas from IdeaStorm comments: a line of desktops running the Linux open-source system; and optional solid-state flash drives to replace traditional hard drives in some laptops.

Will Dell's move prompt a stampede back to XP by other makers? Double Click doubts it. Dell stresses that this is a temporary move until Microsoft gets the Vista bugs sorted and accessory makers update their drivers.

Also, Microsoft will stop supplying computer makers with XP software from early next year, effectively forcing all new Windows PCs to run Vista.

http://australianit.news.com.au/articles/0,7204,21634000%5E39525%5E%5Enbv%5E15309,00.html

Microsoft to tout plan on Web challenge

Seriously, folks....

Last week, Microsoft released gilded third-quarter results largely on the strength of Windows Vista and Office 2007. The report served to quiet some grumbling about the new operating system's performance and acceptance, and it seemed to assure investors that the cash cows are safely in the pasture.

Today through Wednesday, Microsoft is hosting Mix07, a major conference in Las Vegas to talk about another major source of grumbling: its strategy for competing in the next generation of software.

"It's the biggest challenge for Microsoft right now," said Brent Thill, an analyst at Citigroup who recently published a research report on the industry's transition. "I still have yet to see that they really have capitalized on this."

The sold-out Mix, in its second year, is billed as a chance for Web developers and designers, marketers and business decision-makers to learn about Microsoft's technologies for Web 2.0 — software as a service or, in the company's nomenclature, software plus services.

Sessions with titles such as "Windows Presentation Foundation and the Next Generation of Online Comic Book Reading" will surely appeal to a broad techie audience.

More than that, Mix — headlined by top execs Ray Ozzie and Robbie Bach — is a venue for the company to shed light on its progress and strategy.

"Especially now that Vista has shipped, this really seems to be their focus," said Ryan Stewart, a Seattle developer, consultant and blogger for ZDNet.com.

Who's talking and listening at the Mix07 conference for Web developers in Las Vegas.

Ray Ozzie: Microsoft's chief software architect and the man responsible for the company's software-plus-services effort headlines the event. His keynote presentation is this morning.

Robbie Bach: President of the Entertainment and Devices Division is scheduled to speak Tuesday afternoon.

The audience: Web designers, developers, business leaders and marketers. Microsoft would not disclose attendance at the sold-out event other than to say it's up 16 percent from last year and will be less than 5,000. The capacity of the main ballroom where the keynote presentations will be held is between 3,500 and 4,000.

Other companies: Microsoft is sharing the event with some of its would-be competitors and customers across several industries, including Yahoo!, MySpace, ABC, Coca-Cola and Amazon.com.

The technology industry is well into a transformation from software that runs just on the desktop, or just on the Internet, to programs that derive benefits from both: the processing power of desktop computing combined with access to information over the Internet.

Business models are still emerging and differ from corporate to consumer applications. Prominent examples include software services paid for through advertising revenue or subscriptions.

At Mix, Microsoft will tout new technologies and products for software plus services. These include its new Web browser, Internet Explorer 7; a staggering array of consumer Web applications under the "Live" brand umbrella; tools for creating digital media and services applications; and Silverlight, the new platform for delivering video content the company announced two weeks ago.

Formidable competitors are arrayed across all of these businesses, and Microsoft is coming from behind.

Salesforce.com, with its hosted customer-relationship management software, is a leader in bringing this technology to businesses, which are adopting it in growing numbers. Google has a suite of Internet applications centered on its cash-dispensing search engine. Adobe is going head-to-head with Microsoft on several technologies for developing and delivering this new breed of applications.

"Between Google on the Web and Adobe in this whole design space, Microsoft has really dropped the ball in a lot of ways," said Stewart, the ZDNet blogger. "I think this is their attempt at coming back."

Microsoft brings several strengths to the game: dominance of the desktop with Windows; legions of developers using existing platforms; the Xbox gaming platform and network; the industry's largest stable of partner companies, many eager to forge ahead in software services; a huge pile of cash; and executives willing to spend it long term.

http://seattletimes.nwsource.com/html/businesstechnology/2003686545_btmixpreview30.html

CEO Dell: We're losing our religion

That's us in a corner

Dell today leaked a memo to the press, hoping to prove that it's serious about making a strong comeback.

CEO Michael Dell penned the memo that went out first to employees and then shortly thereafter to the Wall Street Journal, once Dell's PR team gave the all clear. The e-mail made ample use of broad statements and rhetoric to rally troops around the Dell 2.0 concept, which has a revitalized Dell trying new things like being nice to consumers to get back in the hardware game. In particular, Dell will work to make its management, manufacturing, supply chain and customer service more efficient, CEO Dell said in the memo.

Most reporters covering the leaky letter focused on two sentences.

"The direct model has been a revolution, but is not a religion," Dell wrote in the e-mail. "We will continue to improve our business model, and go beyond it, to give our customers what they need."

But Dell already used the "direct model is not a religion" shtick in a March speech to Duke University MBAs.

"I think first of all we have to state that our direct business model is not a religion," Dell told the students. "It's a strategy, a strategy that works pretty well, has worked well in a number of countries, a number of customers. But that's not to say that we can't have other strategies as well to sell our products, so we have a great distributor business throughout the Middle East and in a number of countries in Africa that's thriving."

[Has it really come to plugging sales in Africa? - Ed]

Poking fun at the 180 twist in direct model rhetoric proves easy. Every executive, including founder Michael, has turned to the "direct model" as an answer for Dell's successes and the answer for how it will fix failures.

"The direct thing is a religion," said (cough) former CEO Kevin Rollins, in an interview. "That's what we do, that's the basis. We have a better cost structure than any of our competitors, we can offer better customer support, so no. We'll experiment with things from time to time, but the core of the model is going to be direct."

And, er, there was that pesky interview with UCSD where the questioner asked Michael Dell if there was "any company religion?".

"Go direct to suppliers," Dell responded.

We've beat up Dell plenty over dishing the "direct model" line as a response to any question and thank the heavens that the company has finally decided to modify its marketing.

Beyond the direct stuff, Dell promised to craft a more efficient company.

"We need to streamline our management structure to speed decisions and remove bureaucracy," he wrote in the memo. "We're making improvements in pricing, product development and fulfillment, and customer experience."

Again, however, this is old news.

http://www.theregister.co.uk/2007/04/28/religion_dell_michael/

Vudu Casts Its Spell on Hollywood

For the last two years, the employees of Vudu Inc. have quietly toiled in a nondescript office in Santa Clara, Calif., in the heart of Silicon Valley. The only hint of the company’s plans are black-and-white Rat Pack photos that adorn its walls and oversized models of Gollum and R2D2 that watch over its cubicles.

Insiders familiar with Vudu’s hidden magic say that this 41-employee start-up has everything we’ve come to expect from Silicon Valley: a daring business plan, innovative technology and entrepreneurs prone to breathless superlatives when discussing their new offering’s possible impact on the world.

“This is something that is going to alter the landscape,” boasts Tony Miranz, Vudu’s founder, of the product he plans to begin selling this summer. “We are rewriting economics.”
Vudu, if all goes as planned, hopes to turn America’s televisions into limitless multiplexes, providing instant gratification for movie buffs. It has built a small Internet-ready movie box that connects to the television and allows couch potatoes to rent or buy any of the 5,000 films now in Vudu’s growing collection. The box’s biggest asset is raw speed: the company says the films will begin playing immediately after a customer makes a selection.

If Vudu succeeds, it may mean goodbye to laborious computer downloads, sticky-floored movie theaters and cable companies’ much narrower video-on-demand offerings. It may even mean a fond farewell to the DVD itself — the profit engine of the film industry for the last decade. “Other forms of movie distribution are going to look silly and uncompetitive by comparison,” Mr. Miranz asserts.

It is not only Vudu’s disciples who are zealous about the company’s prospects. Every major studio — except, for now, Sony Pictures Entertainment — and 15 smaller ones will make their films available on Vudu. And film executives largely wax adulatory when speaking about Vudu. Jim Rosenthal, president of the New Line Television division of Time Warner, says Vudu addresses “the two major issues that people think are getting in way of the growth of digital distribution: they are getting movies onto the television, and they are doing it in a way that consumers don’t have to sit there for two hours waiting.”
Despite such high praise, Vudu faces hurdles. It is wading into a field dominated by heavyweights whose own aggressive efforts to kindle movie downloading over the Internet have largely failed. There is also little proof that consumers care much about the wide selection or instant availability of movies downloaded from the Web, especially if a movie isn’t cheaper than buying a DVD.

Vudu also needs to persuade regular folks to drag another whirring, electricity-guzzling gizmo into their already-crowded living rooms. “Three hundred dollars for the privilege of paying another 6 or 10 for a movie is a high hurdle,” said Nicholas Donatiello Jr., chief executive of the market research firm Odyssey. “Americans do not want more boxes under their TV if they can avoid it.”

Even with such challenges, however, Hollywood itself says Vudu represents a real breakthrough.

“The first time I ever saw TiVo was an a-ha moment, and this was the same thing,” says Jim Wuthrich, a senior executive with Warner Brothers Home Entertainment Group. “It looks fairly sexy and inviting. This is going to pull people in.”

VUDU is arriving at a time of rapid change in the entertainment and media landscapes. This year, for the first time, a majority of American homes will have a broadband connection to the Web, according to iSuppli, a research firm. That benchmark has reshuffled the cards in the media and entertainment industries.

With versatile data pipes now reaching into most homes, the deep thinkers in Hollywood and Silicon Valley say they believe that television shows and movies — just like e-mail, Web pages, songs and albums — will one day be cheaply and efficiently imported into the home.

http://www.nytimes.com/2007/04/29/business/yourmoney/29vudu.html?_r=1&ref=technology&oref=slogin

Amazon takes on Apple

Doubled Q1 profits were the first surprise…..

Online retailer Amazon looks set to take on Apple in the downloadable music market, with plans to launch its own iTunes rival.

Reports claim Amazon is being tempted into the digital music market by EMI's agreement to sell tracks free from digital rights management (DRM) restrictions. The retailer is believed to be interested in offering a completely DRM-free store for customers, selling music in the MP3 format.

Rumour has it that the retailer has been busy over the past couple of weeks, establishing contact with the major record labels in the hopes of striking a deal. A deal with Universal Music to trial classical MP3 downloads is already believed to have been signed.

Of course, there's nothing official just yet, but if Amazon's music store becomes a reality, it could pose a threat to Apple's dominance of the market. iTunes currently accounts for about 80 per cent of the digital music market. Its recent deal with EMI to sell MP3 tracks instead of the digitally locked AAC files was considered a ground breaking move, with some analysts speculating that it meant the beginning of the end for restrictive copyright protection tools such as DRM.

Digital music is certainly a burgeoning market. According to a new report from Strategy Analytics, the global online music market will increase by 62 per cent this year, reaching $2.7bn. This is expected to increase further to more than $6.6bn by 2011.

"The recent move by EMI and Apple to drop DRM from premium tracks will produce a temperate increase in single track download revenues in the short- to medium-term," said Martin Olausson, director of Strategy Analytics' digital media strategies service. "However, long term revenue growth will come from hybrid subscription based services."

Meanwhile, Amazon revealed its profit had more than doubled in the first quarter of 2007, smashing analysts' predictions. The online retailer posted profit of $111m, or $0.26 per share, compared with $51m, or $0.12 per share in the same period a year earlier.

Revenue rose by 32 per cent to $3.02bn for the three month period. Analysts had expected $2.93bn in revenue for the quarter.

http://www.theregister.co.uk/2007/04/26/amazon_digital_music/

Chinese translation software blamed in racist sofa outrage

'Mommy, what colour is that?'

A Toronto family has been left traumatised after a software translation error led to the dark brown upholstery of their new sofa being labelled "nigger brown", AP reports.

Doris Moore explained that it was her seven-year-old daughter who first spotted the offending tag. She recounted: "My daughter saw the label and she knew the colour brown, but didn't know what the other word meant. She asked, 'Mommy, what colour is that?' I was stunned. I didn't know what to say. I never thought that's how she'd learn of that word."

Moore duly complained to Vanaik Furniture, the store which supplied the couch. The company denied responsibility, fingering the wholesaler, Cosmos Furniture in Toronto. Cosmos's Paul Kumar said: "It's not my fault. It's not the manufacturers' fault."

The blame, it eventually turned out, lay with Kingsoft Corporation - a Beijing-based software company. Huang Luoyi, a product manager for its translation software, told AP the problem lay with an old version of its translation engine: "I know this is a very bad word. We got the definition from a Chinese-English dictionary. We've been using the dictionary for 10 years. Maybe the dictionary was updated, but we probably didn't follow suit."

Kingsoft described the sorry affair as a "regrettable error", but this cut little ice with Moore. She said the matter had "taken a toll on her family", and is accordingly seeking compensation. She is reportedly consulting lawyers and last week "filed a report with the Ontario Human Rights Commission".

She said: "Something more has to be done. We don't just need a personal apology, but someone needs to own up to where these labels were made, and someone needs to apologise to all people of colour. I had friends over from St Lucia yesterday and they wouldn't sit on the couch."

Romesh Vanaik of Vanaik Furniture described the sofa in question as a "best seller". He said he'd checked the rest of his stock, but hadn't found any similarly-offensive labels.

http://www.theregister.co.uk/2007/04/20/translation_error/

Jobs’ butt saved by the rising stock

Thursday will mark a red-letter day for Apple: For the first time its stock will rise above $100 a share, a tenfold increase in a little more than three years. Think about that: If Google had risen that much since its IPO, it would be trading at $850.

Apple’s stock was trading at $102 in aftermarket trading Wednesday, a 7% surge above its formal closing price of $95.35. Unless something big happens overnight, Apple’s stock is likely to see a similar jump Thursday.

And why not? The company posted a net profit of 87 cents a share. That’s 85% above the 47 cents a share in the year-ago quarter and 36% above the consensus forecasts among analysts. This is a textbook case in a blowout earnings report and reason to wonder why analysts bother with Apple estimates.

Unfortunately, the success will also probably keep CEO Steve Jobs from facing deeper scrutiny for the company’s backdating scandal, an omission of clarity that could cause harm far beyond Cupertino.

The future looks just as bright. Sales for Mac products were up 36% year over year, substantially faster growth than in iPods and iTunes, which were up 25%. Apple is successfully broadening away from dependence on music products, a trend likely to strengthen later this quarter with the introduction of the iPhone.

The report caps a week that will probably be remembered as a milestone in the apotheosis of Steve Jobs. Looking past Apple’s earnings and its stock price, it’s getting harder and harder to pretend that Jobs didn’t violate securities law in the options-backdating scandal facing the company.

The SEC filed civil charges this week against Apple’s former CFO Fred Anderson, who has settled with regulators, and its former general counsel Nancy Heinen. Then Anderson, who might just as soon put the episode behind him, took the extraordinary step of issuing a public statement saying Jobs misled him on board decisions on options and that Jobs knew about the risk of a backdating charge.

Mark McQueen, CEO of Wellington Financial, a firm that manages $400 million, summed it up well on his blog

“When was the last time in recent memory that a corporate scandal led to very serious charges being brought against the CFO and General Counsel, but not against the CEO? … It’s curious that a former Apple CFO pointing fingers isn’t sufficient for the Securities Exchange Commission to proceed against Steve Jobs.”

Anderson’s version of events actually makes sense, given Jobs’ reputation as a control freak and his instrumental role in using options to lure in talent after he returned to Apple. But Jobs is unlikely to face any action from the SEC, even though Anderson’s statement is begging for a deeper probe.

Why? Ask any attorney who has left the SEC’s enforcement division in the past few years. They’ll tell you the department is well-intentioned and talented, but criminally understaffed and toothless. They took on Anderson and Heinen to set a high-profile example in the options scandal, which involves more than 100 companies.

But they didn’t take on Jobs. And the Justice Department, which may be looking into the Apple as well, is unlikely to either. He has become, more than any American businessman, an icon of success. It’s like throwing the golden goose under the train. There would be a massive revolt among Apple shareholders.

It was a similar case with Mark Hurd, who accomplished the near impossible by turning around H-P. When it became clear he was involved in the pretexting scandal, ethicists suggested he should step down. Shareholders said he shouldn’t, and they won.

I like Steve Jobs. But I’m troubled by the very real possibility he participated in options fraud and is being treated as above the law. Otherwise, regulators are sending a disturbing message to tech executives: As long as your stock is soaring higher, you can dabble in whatever scandals. If we ever get back in a bubble - when all stocks are surging, not just the deserving ones like Apple - that thinking will cause a lot of accounting messes.

http://gigaom.com/2007/04/26/apple-jobs-1q-2007-earnings/

A modern-day Gerstner is needed to cure all of Microsoft’s ills

Time for Ballmer to drink the Koolaid..

Later today Microsoft will release its figures for the past quarter, and there’s more than a good chance that financially speaking, things will be pretty much okay. But no better than that.

Increasingly there is an opinion forming that Microsoft is nearing an inflexion point in its success and that both success and share price have peaked, after which the company, its products, and all its attempts to invade all of its neighboring business areas, may be doomed to mediocrity, and a downward spiral, reminiscent of IBM when it reached the 1980s. IBM needed a change of management, which was affected by ousting John Akers and putting Louis Gerstner, ex-Nabisco in charge, to rethink its direction pull it out of the mire.

It’s hard to picture a glowing outlook for Microsoft in the near to medium term future while being run by Steve Ballmer, and when it has so many failures on its hands and when its strategy is fundamentally “knee jerk” and based on Windows.

It puts us in mind of that age old joke about travelers asking a local yokel how to get back to a town they recognize on the map. He replies “If I was going there I wouldn’t start from here.” Where Microsoft is right now is a lousy place to start and it seems to us it is looking less promising by the day.

Although Microsoft knocking copy has fuelled writers for many years, this is not knocking copy, just an observation that times have changed and the Microsoft needs to move on. Anti-Microsoft arguments have always been based on resentment at the company’s seemingly unending and perhaps in some cases, unjustified, successes. No longer. Today it is the evidence that points to a Microsoft that is moribund on the innovation front and which is a ragbag of separate and loosely tied together business units, each with the same operational formula, and only slightly varying missions. Loosely expressed that reads “Get Google, and Push Windows.”

We would argue that that Microsoft really has reached its inflexion point whereas for some commentators in the past it was just wishful thinking. One indicator this week is that Google just leaped over Microsoft, in the eyes of consumers, as the world’s most successful brand, as measured by US researcher Millward Brown, measuring brand value (rather than pure consumer recognition).

This has happened despite Microsoft spending hundreds of millions a year in advertising, while the Google brand spreads by word of mouth and internet usage. Microsoft’s brand value fell to third place and co-incidentally Nokia, Apple and Samsung now sit in 12th, 16th and 44th places, but significantly these brands are all moving up in value as Microsoft moves down. The conclusions were reached by interviewing people in all the major countries around the world, not just the US.

But on the face of it there is little wrong at Microsoft. That’s if you accept the Microsoft version of events. It remains dominant in the office and the enterprise, it has just shipped its most sophisticated operating system upgrade ever, and will soon ship the office suite to go with it. It has given billions to its shareholders and yet still has $29 billion in the bank.

And in the Faultline territories of digital media, Microsoft could argue that it’s doing a great job. It has the dominant media player, the dominant PC based Digital Rights Management software, it has finally brought its VC-1 codec to a point where it can be licensed and it remains the lead software supplier to the largest Telco in the US, AT&T in its IPTV roll-out, a rollout that is vital to the long term financial health of that company.

Microsoft has converted a third placed gaming console position to a market leading position, is growing market share among handsets and has made a recent shrewd acquisition in in-game advertising networks and is building out it AdCenter product line to position itself better against Google, and it has launched the Zune and its PlayReady handset DRM to better position itself against the iPod and the iPhone and others.

The Xbox Live network and the other Microsoft Live network offerings in instant messaging, VoIP and conferencing are all generating more and more revenues in some cases in partnership with some of the biggest operators in the world, in others, like Xbox and MSN, directly from consumers.

And if you are a Microsoft employee and you regularly drink your own Kool Aid, then read no further. Because it is starting to become apparent that the invasions of turfs in entertainment, networks and gaming are costing Microsoft a fortune and not getting it very far. Last quarter Microsoft revealed losses in all of these activities, just as it has for many of the last few years and just as it will when it launches its first calendar quarter (its third financial quarter) numbers again today.

Its losers are Online Services Business (OSB) which includes MSN and Windows Live and Hotmail, and the Entertainment and Devices Division (EDD) which includes the Xbox 360, mobile and IPTV and peculiarly Mac Office, which somewhat lifts the division. Last quarter the losses for OSB were around $155 million on revenues of $624 million while EDD was responsible for flat losses of around $290 million on revenues on $2.9 billion.

The only positive thing about these numbers was that EDD had risen its volumes considerably through the Xbox. But if there was a division for law suits at Microsoft, then that would have lost the most money by far. The various anti-trust and patent actions that Microsoft is involved in is expected to use up between $1.5 and $1.8 billion of the poor shareholder’s money, and although much of that has been set aside, this is as a direct result to the knee jerk way Microsoft reaches for bundling and the way that it uses other companies’ intellectual property without asking, and that’s a management issue. And it’s worth reminding ourselves that if the intellectual property trial that went in Alcatel-Lucent’s favor over MP3 patents is upheld on appeal, Microsoft can double the amount it expects to lose in legal actions.

http://www.theregister.co.uk/2007/04/26/microsoft_needs_a_gerstner/

eBay, PayPal face court action

eBay warned shareholders yesterday that it is facing a possible class action suit in the state of California and is likely to be hit by more patent cases. The suit alleges that eBay and PayPal acted "to improperly 'monopolise' the forms of payment that sellers can use on eBay".

The plaintiff claims treble damages and an injunction to stop eBay behaving in a similar way again. The news emerged from eBay's filing of its annual statement with the Securities and Exchange Commission. The case was originally to be heard in Texas.

The statement adds that eBay's ticket subsidiary StubHub is also facing a purported class action case for allegedly printing receipts which contained more than the last five digits of credit card numbers. eBay said: "We believe that we have meritorious defenses and intend to defend ourselves vigorously."

eBay also warned that it expects to face a growing number of patent cases. The quarterly report says: "We will increasingly be subject to patent infringement claims as our services expand in scope and complexity. In particular, we expect that we may face additional patent infringement claims involving various aspects of our Marketplaces, Payments, and Communications businesses."

The online auctioneer warns it could also face legal action for breaching copyright and trademarks, especially in Europe.

http://www.theregister.co.uk/2007/04/26/ebay_lawsuits/

Ex-Apple exec 'warned' the Jerkoff over options

Why would the Jerkoff pay attention to a lowly peasant?

Jobs was warned that manipulating the dates of share-option grants could have serious accounting implications, according to the company's former CFO.

The allegations contradict public statements by Jobs, and were made yesterday by Fred Anderson as he agreed to pay $3.6m (£1.8m) to settle charges laid by the regulator, the Securities and Exchange Commission.

Apple's former chief lawyer, Nancy Heinen, was charged yesterday with faking board meeting minutes so as to give the impression a multimillion-dollar share-options grant to the executive team below Jobs had been approved on 17 January 2001 - a date when there hadn't been a board meeting. She denies the charges. The made-up date was picked by Jobs and Ms Heinen, Anderson claimed yesterday.

By changing options dates, hundreds of companies were able to inflate executive compensation and avoid showing the true cost of the options in the accounts. The SEC alleges that backdating the executive team grant, and a further grant to Jobs himself, meant Apple overstated its profits by $39.2m.

In a statement through his lawyers, Anderson said he would pay back $3.5bn of inflated share-options gains and pay a $150,000 fine. He was fired by Apple last year, and is now concentrating on Elevation Partners, the private equity group he founded with Bono, the U2 frontman.

Anderson claimed Jobs told him in late January, 2001, that a board meeting at the start of the month had approved the grant to the executive team but, to avoid the appearance of impropriety, pricing of the grant was being deferred to 17 January, after the annual MacWorld conference which led to a share price spike. The SEC says the grant was only properly approved the following month.

Anderson's lawyer said: "Fred cautioned Jobs that the grant would have to be priced based on the date of the actual board agreement or there could be an accounting charge. He was told by Jobs the board had given its prior approval and the board would verify it. Fred relied on these statements by Jobs and from them concluded the grant was being properly handled."

Apple maintains while Jobs helped choose favourable dates for options grants he was unaware of the accounting implications and did not personally benefit.

The SEC said it would not bring any action against Apple itself, praising its "swift, extensive, and extraordinary cooperation in the commission's investigation".

http://news.independent.co.uk/business/news/article2483920.ece

What's 10 years old and worth more than Coke? D'oh Google

Google now has a marque worth $66.4-billion (U.S.), and has bumped GE from the top spot, a global market research study discloses

A decade after its launch, Google has overtaken General Electric as the world's most valuable brand. The marque is worth $66.4-billion (U.S.), according to a study by global market researcher company Millward Brown Optimor. Its study calculates the value of brands based on their ability to drive profits and their growth prospects.

Google ranks ahead of technology rivals Microsoft (No. 3), IBM (9), Apple (16) and Yahoo (42). But the list also places Google - a brand so famous that it was added as a verb in the New Oxford American Dictionary - ahead of some of the world's most storied brands, including Coca-Cola (No. 4), McDonald's (11) and American Express (19).

Google's rise to the top is remarkable for a company begun in 1996 as a research project in a college dorm room. The domain name Google.com was first registered on Sept. 14, 1997. The company was incorporated in a garage a year later.

"The speed of growth of some of these companies in the Internet world is certainly a lot quicker than in the past," Mr. Middleton said. "But the potential vulnerability of these is also much higher."

While awareness of the Google brand grew quickly, the company's profitability came more recently.

Mountain View, Calif.-based Google makes most of its money by serving up paid links to people who use its search engine, but the company is also expanding into other areas. It paid $1.76-billion last year to buy online video site YouTube Inc. And Google has partnered with newspapers, radio and television stations to broker advertising in other media.

"Google is a technology brand that - until recently - was almost universally loved," Ms. Campbell said.

She said that as Google expands into new areas, the company must worry for the first time about not being seen as the next Microsoft Corp. Redmond, Wash.-based Microsoft gained a reputation in the late nineties as a corporate bully because of its near monopoly in the market for personal computer operating systems.

Google has about a 50-per-cent share of the U.S. online search market. Its market share is even higher in Canada.

"People are starting to worry that Google can go into new areas unimpeded because they've got such a big war chest," Ms. Campbell said.

http://www.theglobeandmail.com/servlet/story/LAC.20070424.RBRANDS24/TPStory/Business

Ex-Apple Execs Smacked with SEC Suit

Two former Apple executives expect to be sued this week by the Securities and Exchange Commission over the company’s backdating of employee stock options, several people involved in negotiations between the former executives and the government said yesterday.

The move against the two would be the first fruit of separate investigations into Apple’s options practices by the commission and the Justice Department. The investigations, into events more than five years ago, have cast a cloud over the company even at the height of its iPod-driven renaissance.

After its own investigation late last year, Apple acknowledged improper dating of options grants to Steven P. Jobs, its chief executive, and others. It cited “serious concerns” about the actions of two unnamed former officials, but absolved Mr. Jobs of any responsibility.

One of the executives facing S.E.C. action is Nancy R. Heinen, Apple’s former general counsel and a longtime confidant of Mr. Jobs. Her lawyer said she would contest the accusations, which involve options grants to Mr. Jobs and others in 2001.

“We have a very good defense,” said the lawyer, Cristina Arguedas. The expected lawsuit against Ms. Heinen was reported yesterday in The San Jose Mercury News.

The other executive, Fred D. Anderson, the company’s former chief financial officer, is preparing to enter into a settlement with the S.E.C. over the dating of an option grant to senior officials in January 2001, according to a person close to the settlement negotiations.

The settlement terms are said to include a payment of about $3.5 million, an amount representing his personal gains from the options and a small civil penalty.

Significantly, as part of the agreement, Mr. Anderson will not be required to give up his role as a director of several public companies, the person close to the negotiations said. He is currently chairman of the audit committee of eBay and a managing director at Elevation Partners, a venture capital firm.

A spokesman for Mr. Anderson said he would not comment, pending a decision by the S.E.C. to file a lawsuit. A commission spokesman also declined to comment.

Mr. Anderson joined Apple in 1996 and left as chief financial officer in 2004 to join Elevation Partners. He stepped down from the Apple board last October in the course of the internal investigation of options practices. Ms. Heinen, who followed Mr. Jobs to Apple from Next Software in 1997, left the company last spring.

It is not clear whether the two prospective S.E.C. civil lawsuits will be the extent of the commission’s action against Apple or its executives over the backdating activities. Nor is it clear when an investigation by the United States attorney’s office in San Francisco will come to a conclusion. A spokesman for the office had no comment yesterday.

But Apple’s stock rose $2.54, to $93.51, yesterday after an article in The Mercury News on Sunday, citing unidentified sources, said evidence suggested that Mr. Jobs was unlikely to face civil or criminal charges.

Apple said it was continuing to cooperate with the investigations.

http://www.nytimes.com/2007/04/24/technology/24apple.html?ref=business

Microsoft, Trying to Avoid a European Fine, Defends Demand for Royalties

Maybe Redmond realizes hitting them with your purse isn't enough

Microsoft, seeking to avoid another multimillion-dollar fine in its antitrust battle with the European Commission, filed documents with competition officials yesterday defending its demand to be paid royalties for releasing some software code to competitors.

Without disclosing what is in the documents, Tom Brookes, a Microsoft spokesman in Brussels, said the company filed its response to the commission’s charge on March 1 that it was violating a 2004 order to share the code at “reasonable terms” so competitors could design software that worked seamlessly with Microsoft computer servers.

The legal skirmishes over the European Commission’s antitrust ruling against Microsoft are moving into a fourth year. In its original ruling, the commission ordered Microsoft to sell a version of its Windows operating system without its Windows Media Player. Microsoft did so, but the so-called N version, which sold for the same price as Windows with the Media Player included, was a commercial flop.

Microsoft maintains that the other remedy imposed in the 2004 ruling — that it share its confidential server software code — implied that it could charge royalties.

But competitors say that Microsoft is asking exorbitant fees, discouraging many from designing software to work with Microsoft products. According to its Web site, Microsoft is proposing royalty fees that range from $5.60 to $666.75 a server under a formula that ties the fee level to the revenue generated by any software designed using Microsoft’s information.

In March 2004, the European Commission fined Microsoft 497.2 million euros (about $600 million at the time) for violating European antitrust law. Neelie Kroes, the European competition commissioner, imposed a further 280.5 million euros in fines in July 2006.

Under commission rules, Ms. Kroes could impose additional fines of up to 3 million euros a day, retroactive to last Aug. 1. Through Tuesday, that would add up to as much as 801 million euros (about $1.09 billion).

Jonathan Todd, a spokesman for Ms. Kroes, said that before she could levy more fines, she would have to consult an advisory committee of 27 European competition commissioners and, ultimately, win approval from the full European Commission.

http://www.nytimes.com/2007/04/24/technology/24soft.html?ref=technology

Is Wi-Fi bad for you?

Get a grip people.

No one knows. And that, say some groups, is the problem. The near-ubiquity of wireless networks has led to concerns over an "electronic smog" of radio waves that stretches from the home to Starbucks and the classroom; anywhere, in fact, that a computer can connect to the internet without wires. The rapid spread of the networks has been accompanied by negligible research into the potential risks.

Last night, the Professional Association of Teachers wrote to Alan Johnson, the education secretary, requesting a scientific inquiry into the potential health risks of Wi-Fi networks, and recommended that schools stop installing them until research declares them safe. Eight out of 10 secondary schools and half of primary schools have the equipment.

Fears over Wi-Fi networks run parallel to those over mobile phones and the masts they speak to. Sir William Stewart's report in 2000 concluded there was no firm evidence to show mobile phone radiation was a health risk, but as a precaution recommended children use them sparingly, because their brains are still developing.

There are reasons to believe Wi-Fi networks are safer than mobile phones. Because they only have to transmit a few tens of metres, Wi-Fi networks run at much lower power. The Health Protection Agency says a person sitting within a Wi-Fi hot spot for a whole year receives the same dose of radiowaves as a person using a mobile phone for 20 minutes.

Graham Philips of the pressure group Powerwatch remains concerned "We're seeing levels of behavioural problems increase in the classroom. We need research into whether these networks are causing these or other problems."

Philip Parkin at the Professional Association of Teachers said other countries are acting to reduce Wi-Fi exposure to children. "Here, these networks are being installed unchecked and unassessed."

http://technology.guardian.co.uk/news/story/0,,2064189,00.html

Stock probe guts Juniper's profits

Juniper Networks's first quarter income fell 12 per cent, attributed to operational costs and charges related to a stock options probe.

The network equipment maker's income tumbled to $66.6m from $75.8m a year earlier. Net revenues for the first quarter increased 11 per cent to $626.9m versus $556.7m in the same period last year.

Juniper CEO Scott Kriens could barely contain his enthusiasm in a statement describing the last three months. "Our first quarter results were in line with our expectations," Kriens gushed.
During the quarter, Juniper spent $4.7m investigating how the company has accounted for stock option grants and $7.6m in tax-related charges. Operating costs also grew 22 per cent to $354.3m, for research and development and sales and marketing expenses.

The company's second quarter forecast is for revenue between $640m and $650m. Analysts agree, seeing a $646.9m number in their crystal balls.

Juniper's full-year outlook is for revenue between $2.6bn and $2.7bn. Analysts are expecting that number to be more on the $2.7bn side.

http://www.theregister.co.uk/2007/04/24/juniper_q1_2007/

Big $, Little Screens: Google Honcho Says Innovations Coming

Some folks are never satisfied. Google is seeking to make money from people who are turning to their cell phones to find information. Google Inc. is looking beyond text ads as it seeks to make money from the increasing number of people who are turning to their cell phones to find information, an executive said on Friday.

The search and advertising giant, which Thursday announced a first quarter net profit of US$1 billion, launched its first mobile text ad service in Japan in April last year and the first year has been good, said Deep Nishar, product management director for Google's mobile offerings.

"It has done remarkably well for us," he said. Nishar was speaking at a mobile business conference at the Canadian Embassy in Tokyo, which was organized by several foreign embassies here.

"Having said that, there are probably other monetization means in mobile as well," said Nishar. "It's a very young business and we are not quite sure where this will go in the future. Mobile text ads is doing very well for us and we will continue to go down that path and there will be other monetization mechanisms in mobile that will come about and I would definitely watch this space closely because you will see more innovations from Google."

The mobile ads consist of two lines of text of about 18 characters long that appear when users perform a Google search on their cell phone. They can be used to link to the mobile or PC version of an advertiser's Web site.

Google has deals with Japan's top two mobile carriers, NTT DoCoMo Inc. and KDDI Corp., through which it's search box appears on the screens of about 71 million cell phones in Japan. The two carriers account for 84 percent of the mobile Internet market. The remainder is taken up by Softbank Mobile Corp., which features a Yahoo search box as it's parent company is the largest shareholder in Yahoo Japan Corp.

It has also inked deals with a number of cell phone handset makers. In the last quarter it concluded deals with Samsung Electronics Co. Ltd. and LG Electronics Inc.

http://www.pcworld.com/article/id,131013-c,cellphones/article.html

Click fraudsters flick industry the finger

Bots still faking it with bogus online ads

Incidents of click fraud have escalated despite the attempts of search engine giants such as Google and Yahoo! to stymie the growth of the problem.

Click fraud occurs when someone deliberately hits adverts on a website to push up costs for a rival firm.

Click Fraud Network, which monitors online activity in pay-per-click advertising campaigns, revealed data that shows the overall industry average click fraud rate was up by just over one per cent to 14.8 when compared to the final quarter of 2006. It also found that the average click fraud rate of pay-per-click adverts which appear on search engine content networks was up nearly two per cent on last year's Q4 figures, to 21 per cent.

Tom Cuthbert, president and CEO of Click Forensics, said: "It appears that click fraud perpetrators are becoming more sophisticated even as search providers step up their efforts to fight click fraud.

"Click fraud seems to be following a similar path as other online fraud schemes such as spam and phishing - the problem is growing as fraudsters fine tune their methods."

Earlier this year, both Google and Yahoo! talked up plans to help tackle click fraud. Talk as everyone knows, is cheap.

http://www.theregister.co.uk/2007/04/20/click_fraud_up/

Blog mogul wooing Don Imus?

Even for Jason Calacanis, this is opportunism taken to a dangerous extreme. The Weblogs Inc founder, now working with Sequoia Capital, the Sand Hill Road powerhouse, is said to be wooing Don Imus for a new web media network. (This is just a one-source rumor, but Calacanis is in Spain, and hasn't yet responded to email, so we're going with it.)

The loudmouthed blog mogul has, we're hearing, been bragging to colleagues that he's about to sign the disgraced radio host. Calacanis, who published Silicon Alley Reporter during the last boom, isn't clueless about the potential for bad publicity. The radio host -- fired from his CBS morning show for calling black basketball players "nappy-headed hos" -- would stick to less controversial topics, such as his work for charity. Which pretty much sums up the unique proposition of podcasting: the medium that can make even Don Imus bland. Natch, Calacanis denies it.

http://valleywag.com/tech/rumormonger/blog-mogul-wooing-don-imus-253804.php

Afghanistan succumbs to killer virus hoax

Mobile message of death crosses border. What are these people smoking?

The killer mobile phone virus panic which last week gripped Pakistan had by Monday spread to Afghanistan, with rumours circulating that several people in Kabul had succumbed to the message of death over the weekend.

Pakistan's mobile operators were inundated with calls from concerned customers after they received a hoax message claiming a killer virus was being transmitted via their handsets. The operators duly issued a statement which read: "These rumours are completely baseless. They do not make any sense in technological terms."

Over the border, however, Kabul shop owner Ahmad Fawad persisted: "Don't answer any strange number because it contains a virus that will kill you."

Afghani officials were obliged to issue TV statements debunking the deadly rumour, Reuters reports.

http://www.theregister.co.uk/2007/04/18/killer_virus_hoax_spreads/

Google Encroaches on Microsoft Territory

Is Redmond going take this sitting down? Call the anti-trust lawyers!

No formal release date was given for Google's new PowerPoint alternative, called Presently, but Eric Schmidt, Google's chief executive, indicated Presently would debut soon. According to analyst Rita Knox, the introduction of Presently signifies that Google is "obviously filling out a Web-based suite" that competes in some ways with Microsoft Office.

On Tuesday, Google took another step closer to offering a complete alternative to Microsoft Relevant Products/Services's ubiquitous Office suite of desktop productivity applications. Eric Schmidt, Google's chairman and chief executive, announced that the search giant would add presentation software, dubbed Presently, to its emerging lineup of online office software.

"Collaboration is a killer app for how communities work," Schmidt said in his keynote presentation at the Web 2.0 Expo in San Francisco. His presentation was made using Presently, the new software designed to enable presentations to be made and shared over the Web.

The software essentially fills out Google's online package of Microsoft Office-like applications. The package of apps, called Docs & Spreadsheet, is free and can be accessed from any computer with an Internet connection. The apps enable users to save files locally to their computers or upload them to the Web and work collaboratively with other users.

No formal release date for Presently was given, although Schmidt indicated the software would debut soon. Google already has released a word processor, Writerly; an Excel-like program called Google Spreadsheets; and an e-mail service called Gmail. Separately, the company also offers Google Calendar, Google Talk, and Page Creator.

Schmidt denied the comparison between Google Docs & Spreadsheets and Microsoft Office. "It doesn't have all the functionality, nor will it ever have all the functionality, of products like Microsoft Office," he reportedly said at the conference.

On the same day that Google was presenting Presently, the Google blog was announcing that the company had acquired Tonic Systems, a company based in San Francisco and Melbourne, Australia. Sam Schillace, Google Engineering Director, wrote in a blog that Tonic has "some great technology" for presentation creation and document conversion.

http://www.sci-tech-today.com/news/Google-Encroaches-on-Office-Territory/
story.xhtml?story_id=10200BE02RXI

Windows XP and Office for $3, but there's a catch

Redmond holds its first red tag sale

There's a great old joke where Steve Ballmer goes into Gates's office and says "Hey, Bill, I've got some good news, and some bad news. The good news is that China is standardising on Windows XP. The bad news is that they've only bought one copy...."

This is an issue that raises lots of arguments because Microsoft has certainly benefited from piracy, which has helped to create a bigger market for Windows software and also made Microsoft file formats ubiquitous.

The company has certainly looked at a number of ways of trying to make Windows more affordable in less developed countries. Steve Ballmer once told me, to paraphrase, that if Microsoft could get some money for Windows, this would be better than getting no money, which is the case today.

Now it seems that "some money" could be as little as $3, which includes both Windows XP Starter Edition and the cheap version of Microsoft Office (Home and Student 2007). Bill Gates has just made the announcement in Beijing, China, according to a press release:

Through the Partners in Learning program, Microsoft today announced the Microsoft Student Innovation Suite, an affordable and reliable software package for governments purchasing and giving Windows-based PCs to primary and secondary students for their personal use at home and for schoolwork. The education suite includes Windows XP Starter Edition, Microsoft Office Home and Student 2007, Microsoft Math 3.0, Learning Essentials 2.0 for Microsoft Office, and Windows Live Mail desktop.

But there's a catch:

Microsoft will offer this suite in the second half of 2007 for $3 (U.S.) to qualifying governments that purchase and supply PCs directly to students. More information about the offer is available at http://www.microsoft.com/unlimitedpotential/MSIS

This could be a terrific deal because it can be used with refurbished PCs -- ones often donated by Western countries -- and because it could be a huge help to small, local PC manufacturers in third world countries.

However, there are not going to be enough takers to make a dent in the 200 million or so pirate copies of Windows out there today. To give you some idea of the scale of the problem, there are roughly 10 times as many pirate copies in use than there are copies of Mac OS X. And those pirate copies are a problem because they are not secure. Under the circumstances, it's no surprise how big botnets are: it's amazing they are not much bigger.

http://blogs.guardian.co.uk/technology/archives/2007/04/19/
windows_xp_and_office_for_3_but_theres_a_catch.html

Apple's iPhone on schedule for late-June release

Everything else you’ve heard is wrong. Totally. The iPhone, Apple Inc.'s first mobile handset, is on schedule to hit the U.S. market at the end of June, a senior executive with AT&T Inc. said on Wednesday.

AT&T's wireless unit has an exclusive U.S. deal to sell the highly anticipated new handset.

"Our expectations are good. Our testing has been good," said AT&T Chief Operating Officer Randall Stephenson. "The iPhone is on target to launch in June."

The iPhone has become one of the most highly awaited product debuts since Apple Chief Executive Steve Jobs demonstrated a prototype of the device in January. There had been speculation by some blogs and reports that the iPhone could be delayed due to technical issues.

Stephenson said more than 1 million customers have said that they would like to buy one of the phones when they're available for purchase. He made the comments while in Boston to speak at a Boston College Chief Executives' Club luncheon. Stephenson said he was not sure how many iPhones will be available at launch.

"We're sorting through that right now," he said. "We got a million people waiting to buy it so we're hoping we get a million."

http://www.chicagobusiness.com/cgi-bin/news.pl?id=24634

Microsoft to Apple: Stop Bitching!

The head of Microsoft's legal department has warned Apple to stop blaming the music companies for its 'inability to sell every conceivable iPod'.

General counsel Brad Smith said that Apple was 'doing pretty well', and that it was the music companies that were doing less well. It is they, not the company controlling the delivery mechanism, that Smith believes should be able to decide how their products should be provided to the general public.

However, he did concede that Microsoft would welcome a similar deal to the one Apple struck with EMI to be the launch partner for the British music publisher's DRM-free, higher-quality library when it debuts next month.

Digital Rights Management has become a hot topic in recent months after Steve Jobs penned an essay, Thoughts on Music, in February of this year. In it, he said that Apple would fully embrace any move by the music industry to sell non-rights-managed tracks, but that it was currently prevented from doing so.

http://www.pcpro.co.uk/news/110261/stop-whining-microsoft-tells-apple.html

iPhone: Harder to Build than Jobs Thought

Reports that Jobs, the jerkoff has moved more hands to the iPhone team may mean yet another product launch delay for the company The announcement that Apple would delay the release of its newest version of Mac OS X, known as Leopard, didn't surprise many people. A rumor suggesting such a delay was imminent had been circulating for weeks.

But Apple's Apr. 12 statement that it has redeployed some of its software engineering and quality assurance personnel away from Leopard to the team working on the June launch of the iPhone suggests that some last-minute problems are cropping up and raises questions about whether Apple has had to push back the iPhone release, if only by some weeks.

Various iPhone suppliers have been told that the iPhone may not be available until the end of June, according to Jagdish Rebello, an analyst with iSuppli, a market intelligence firm in Silicon Valley. Apple had never specified when in June the device would ship, but its wireless partner, AT&T had been cited in published reports naming a June 11 target date, the same day of an Apple software developers conference. "We're hearing it's mostly an issue with the complexity of the device, and that all the component suppliers are making their deliveries on time," Rebello says.

Apple hinted in the statement that making the iPhone is no cakewalk. The cell phone "contains the most sophisticated software ever shipped on a mobile device," Apple said. It added that the device had passed "several" of its required certification tests and would ship in "late June."

Usually with two months or less to go before market release, a device like the iPhone would ordinarily be going through a heavy battery of testing in preparation for volume manufacturing. The apparently sudden shift of personnel away from Leopard suggests that a late wrinkle has emerged. "Typically the manufacturer and the service provider are making sure the phone meets all its specifications, and that all the production glitches have been ironed out," Rebello says. "It's clear they have found some issues that they need to fix."

Richard Doherty, director and co-founder of the Envisioneering Group, says he's tested the phone and didn't uncover problems with it. Apple may be beefing up software developer tools and fixing security concerns, he reckons. "Putting a powerful operating system on a phone took extra hands on deck," he says. "The last thing Apple wants is for the iPhone to be vulnerable to hacker attacks."

Apple hopes customers will use iPhone for online purchases, so it's making the operating system more powerful than existing mobile systems, such as Microsoft's (MSFT) Windows Mobile or Symbian, developed by a Nokia (NOK)-led consortium. "They don't want it to be a version 1.0 of the iPhone, but version 4.9," Doherty says. "Apple wants to get it right the first time."

Another challenge is giving the iPhone sufficient battery life. The battery will have to be powerful enough to handle a variety of functions, but it must also be compact, analysts explain. "There's a lot of skepticism about the iPhone's battery life," says Paul Sagawa, an analyst with Sanford Bernstein. The iPhone is expected to have two batteries, one for the phone and the other for the music player. The phone battery, which is very small, would have to power a huge screen, Wi-Fi network connections, and many other power-hungry features.

Wall Street analysts generally dismissed the Leopard release delay, saying there are plenty of other reasons to be bullish on Apple stock. Adobe (ADBE) will soon be upgrading its flagship creative software for the Mac, giving computer users another reason to buy new Macs. And barring any major glitches, many analysts are confident the iPhone will be a hit. "Although the push-out of Leopard is not ideal, we view iPhone as the delivery of the next leg to the Apple growth story," Goldman Sachs (GS) analyst David Bailey wrote in an Apr. 13 research note. Apple stock dipped 2.1% the day after the late afternoon announcement.

The delayed Leopard is the second rollout of a major Apple product this year. Apple also delayed the launch of Apple TV, which hit store shelves at the end of March. But Leopard's four-month delay is minor compared with the many delays that beset Microsoft's latest operating system, Windows Vista. The system was first due in 2005, but didn't hit store shelves until early 2007.

And the extra time means added weeks of speculation surrounding the features due to be included in Leopard, now slated for an October launch. However embarrassing the Leopard delay, the release of a bug-riddled iPhone would be disastrous, particularly since expectations have been set so high. "It's not easy to make a phone," Sagawa says. "The hype has risen to such a fever pitch that to disappoint people with the product would be quite a black mark."

http://www.businessweek.com/technology/content/apr2007/tc20070413_247721.htm?chan=rss_topStories_ssi_5

Panama? Fahgeddaboudit! Yahoo! profits nothing to write home about

Yahoo! first-quarter profit fell 11 per cent from last year, with the company falling short of analyst expectations for its new advertising platform, Panama.

Q1 profit was listed as $142.4m or 10 cents per share, down from $159.9m or 11 cents per share at the same quarter last year. Analysts had expected a profit of 11 cents per share, according to a Thomson Financial survey.

Although Yahoo! stock was up when the market closed, the penny-short profit made stocks fall by 6.3 per cent or $2.03 in extended trading.

Revenue rose seven per cent to $1.67bn with a strong demand for display ads and sales of text-only contextual ads late in the quarter. After subtracting commissions the company paid to advertising partners, Yahoo!'s total revenue was $1.18bn — $25m short of average analyst predictions.

Yahoo! has been fighting to keep up with net advertising giant Google which recently acquired DoubleClick for $3.1b cash. Acting CFO Susan Decker said Yahoo! planned to weed out poorly perfoming affiliates from its advertising network. Despite the setback, Yahoo!'s sales target for 2007 remain unchanged from a range of of $4.95bn to $5.45bn. Meanwhile, analysts are eyeing a sales number of $5.33bn

http://www.theregister.co.uk/2007/04/18/yahoo_q1_2007_earnings_report/

Microsoft the trust-buster?

What have they been smoking? You can sure tell the politics of antitrust enforcement have come full circle when Microsoft and AT&T are weighing in on behalf of the little guy. The two companies, along with media giant Time Warner Inc., are urging federal antitrust officials to scrutinize Google's pending purchase of the ad agency DoubleClick, arguing that it would diminish competition in online advertising.

Microsoft has plenty of expertise in anti-competitive behavior, having been slapped with injunctions in the United States and Europe for trying to parlay its virtual monopoly over computer operating systems into other software markets. And not only was AT&T subject to a landmark antitrust settlement in 1982, its top executives used a series of mergers in the last two decades to gobble up potential competitors.

The pair argue that a combined Google and DoubleClick would have unsurpassed economies of scale and a vast amount of information about Web users' behavior — assets that would help Google target ads more precisely, making it more attractive to advertisers and websites alike.

But as Microsoft urged less credibly during its own battles with the Justice Department, antitrust officials should bear in mind how quickly things change on the Net. Companies can shoot up (YouTube, for example) or fade (amihotornot.com) seemingly overnight. Remember that Yahoo bought Overture for $1.6 billion four years ago, yet that combination of online advertising powerhouses didn't stop Google from becoming the behemoth it is today.

It's telling that Microsoft, AT&T and Time Warner all tried to buy DoubleClick, only to be outbid by cash-happy Google. Although Google's money shouldn't buy it a free pass, antitrust officials should keep in mind the dynamic nature of the market they would regulate.

http://www.latimes.com/technology/la-ed-google17apr17,1,7572330.story?coll=la-headlines-technology

The Google Empire strikes back

Google continued to expand its advertising empire on Monday with a deal to sell on-air ads for US radio giant Clear Channel.

Google said it has a multi-year agreement to sell a guaranteed portion of the 30-second advertising spots available on Clear Channel's more than 675 AM/FM stations. Financial details of the deal were not disclosed.

Google planned to focus on wooing advertisers that advertise online but not on radio.

"This is a true win-win," said Clear Channel chief executive John Hogan.

"Clear Channel Radio gets access to an entirely new group of advertisers within a new and complementary sales channel, and Google adds another option for its existing customers."

The Mountain View, California-based Internet search powerhouse already provides text ads to Clear Channel's radio-station websites.

The enhanced alliance comes as Google works to strengthen its money-making online search advertising business and extend its ad-targeting prowess beyond the boundaries of the Internet.

Google, which already handles 30 percent of the world's online advertising, is pushing ahead with new ad formats for television, cell phones, video, newspapers and radio.

Analysts believe Google staged a costly coup on Friday when it closed a deal to buy online advertising specialty company DoubleClick for 3.1 billion US dollars in cash.

Google outbid US rival Microsoft for DoubleClick, which promises to improve Google's ability to target and delivery display and video advertising online, according to analysts.

http://www.theage.com.au/news/Technology/Google-ad-empire-grows-with-Clear-Channel-Radio-deal/2007/04/17/1176696781297.html

Microsoft and Adobe: Headed for a Shootout on the Web

Is this a duel till the death or just a ex-lovers spat?

Redmond and Adobe Inc. are on a collision course as they seek to dominate a new kind of software that will change how personal computers and the Web work together.

The companies have been partners in the past, and Adobe is one of the largest makers of software for computers running Microsoft's Windows operating system. The companies have also tussled before, but they have generally stayed in their corners of the tech arena.

Today, though, each company plans to introduce software that falls squarely on the other's turf and sets the stage for a broader battle over how Internet services and software will be built in the future. Both want to be the key supplier of cutting-edge software that handles functions like video and animation on the Web.

EBay is working on a program based on Adobe's new software.

Microsoft today plans to roll out a test version of its Silverlight software that can be used to build advanced programs that run on the Web. That's an area Adobe has dominated with products like its Flash software for Web animation and video.

Adobe, meanwhile, plans to preview new software called the Adobe Media Player, a free program that will let people play videos on their personal computers, which is the domain of Microsoft's Windows Media Player, among others. Adobe is also readying technology code-named Apollo that will enable companies to build Flash programs that will be installed on a PC but pull information from the Web.

The two companies' new programs will help Web sites handle video, animation and other features more dynamically than they can today. Major League Baseball, for instance, plans to use Microsoft's Silverlight to add real-time scoring, statistics and other interactive features to the 15 or so live baseball games it streams over the Internet daily, company executives say. Online auctioneer eBay Inc. is working on a program based on Adobe's Apollo that will let users buy and sell items more efficiently. The program, expected within a few weeks, will be connected to the Web so that it can constantly update data. It will also let users store several weeks of search results on their PC hard drives and quickly thumb through items for sale in one window without having to page back and forth in a Web browser.

"The future battle lines are going to be drawn between Microsoft and Adobe in this space," says Chris Swenson, an analyst at NPD Group, a research firm. The market for this kind of "digital content creation" technology grew 16% to $3 billion in 2006 from $2.6 billion the previous year, according to research firm Jon Peddie Research.

Adobe's new software gives the company a chance to bring in new revenue. While computer users can download Adobe's Flash Player free of charge, Adobe sells the software used to build the online services and software that are based on Flash.

Microsoft's move is a new chapter in a long history of defending the company's crown jewels: the operating systems that have been the foundations for other programs to run on. Windows has long been Microsoft's largest source of revenue and profit and the cornerstone of most of its other software. Over the years, when any company challenged Microsoft's operating system, the software giant threw its full weight into fending off the interloper. Ten years ago, that rival was Sun Microsystems Inc. with Java, a programming language for writing software that could run outside of Windows. Another rival was Netscape, whose Web browser presented a threat that Microsoft eventually batted down with its own browser.

Now Adobe's Flash is becoming a foundation for Internet applications that won't necessarily work only with Windows PCs. Microsoft is "afraid that Adobe is going to start convincing corporate developers to use Flash to start developing Web applications," says Greg DeMichillie, an analyst at the research firm Directions on Microsoft. "It's the Java threat but with better technology."

Microsoft will still promote online services that are tightly tied to the Windows operating system, but increasingly the company realizes that it has to build software that's compatible with other operating systems, too. Says Microsoft Senior Vice President Bob Muglia, "If we don't come out there and provide innovation for customers, somebody else will."

At the center of the battle is an evolution in how software interacts with the Internet. Historically, software developers built programs installed on computers, while Web designers created Web sites.

http://online.wsj.com/public/article/SB117668634225970835-FVRZcPo5bJpxrx7Rw6KfN6j_UFY_20070515.html

Microsoft Urges Antitrust Officials to Scuttle DoubleClick Deal

Look who's bitching and moaning about tech bullies now

Microsoft, a veteran defendant of epic antitrust battles in the United States and Europe, is urging antitrust officials to consider scuttling Google’s plan to buy DoubleClick, an online advertising company.

Microsoft contends that the $3.1 billion deal, announced last Friday, would hurt competition in the fast-growing market for advertising on the Web and raise questions about how much personal information would be collected by Google, which is already a dominant player in online advertising.

In an interview today, Bradford L. Smith, Microsoft’s general counsel, said that the purchase of DoubleClick by Google would “combine the two largest distributors of online advertising” and thus “substantially reduce competition in the advertising market on the Web.”

Google dismissed Microsoft’s assertions. “We’ve studied this closely, and their claims, as stated, are not true,” Eric E. Schmidt, chief executive of Google, said in an interview last night.

Google and DoubleClick, according to Mr. Smith, would be in a position to “observe and capture consumer information on an unprecedented scale.”

Google tracks the interests and preferences among the millions of people who use its search engine. DoubleClick is the leader among companies that specialize in placing, or “serving,” the graphical and video ads that appear on Web sites. Ad-serving networks like DoubleClick place tiny programs on personal computers, called cookies, that monitor where an individual user goes online.

Microsoft was joined today by AT&T, a company that traces its lineage to the Ma Bell monopoly that was broken up in the mid-1980s. “We think antitrust authorities should take a hard look at this deal and the implications,” said Jim Cicconi, senior executive vice president for external affairs at AT&T. “If any one company gets a hammerlock on the online advertising space, as Google seems to be trying to do, that is worrisome.”

Microsoft was one the companies, along with Yahoo and Time Warner, that lost out to Google in the bidding for DoubleClick. Mr. Cicconi said that AT&T, by contrast, would be affected by a Google-DoubleClick combination because AT&T distributes services over the Internet like digital television, known as IPTV.

“For many of these new Web services, it could be that the advertising-supported model is the predominant business model,” he said. “The danger here is that Google could be in a position to pick winners and losers.”

This is not the first time that Microsoft, the biggest winner of the personal computer era, and Google, the emerging Internet powerhouse, have been on opposite sides of an anticompetitive claim. Early last year, Google complained to regulators that the design of Microsoft’s Internet Explorer browser steered users to Microsoft’s MSN search engine instead of rival search offerings from Google and Yahoo.

After reviewing the matter, the Justice Department said last May that Microsoft’s browser allowed users a fairly easy way to switch to non-Microsoft search services. So Microsoft’s product design, the department said, did not pose an anticompetitive threat. In that case, Google did talk to antitrust officials in Europe and the United States about its concerns.

Mr. Smith said Microsoft had not yet approached antitrust officials in the United States about its worries about Google’s purchase of DoubleClick.

http://www.nytimes.com/2007/04/15/technology/16softcnd.html?ref=business

Apple's Leopard delay may be hiding deeper problems

May be? Did someone say may be?

Or to put in another way, Apple's eyes may be bigger than its stomach.

Renowned in recent years for its operational excellence, Apple in the last two months has delayed two high-profile products, the Apple TV set-top box and now, it said Thursday, Leopard, the upcoming update to its OS X operating system. The company pushed back the release date of Leopard so it wouldn't have to delay an even more highly anticipated product, the iPhone.

The problem Apple is running into is that it's a relatively small company compared to tech giants such as Hewlett-Packard or IBM, said Van Baker, an analyst with research firm Gartner. As of last fall, Apple had about 18,000 full-time employees, compared to 156,000 for H-P, according to the company's annual reports.

"Clearly there's evidence that they're not executing to the same level they have in the past," said Baker.

While Apple hasn't been known for such delays, they're not surprising, Baker said, noting that Apple is "broadening their product offering, and they have only so many engineering resources to go around."

Apple said on Thursday that it was delaying Leopard, the fifth update of its OS X operating system, because it had to pull some of its engineering and quality assurance personnel from that project to help out with the iPhone. The much-hyped device, which Apple plans to release in June, will contain a new, slimmed-down version of the OS X operating system, which powers Apple's Macintosh

The move follows the delay in shipping Apple TV. The company originally planned to ship the new set-top box, which allows users to play movies and songs bought from iTunes through their living room entertainment centers, in Feburary, but didn't end up shipping the devices until mid-March.

By delaying Leopard in favor of the iPhone, Apple is obviously showing which product it thinks is more important. Given the hype around the iPhone and its potential, that's not surprising. But it likely won't come without a cost, a fact Apple acknowledged in its statement.

"Life often presents tradeoffs, and in this case we're sure we've made the right ones," the company said.

But by shifting resources to the iPhone away from Leopard, the company is favoring an unproven product that will compete in a very challenging industry, notes Richard Shim, an analyst with IDC, a market research firm.

The delay - and the reason behind it - are "a risk and a sign of how Apple is changing and diversifying," said Shim. "It's also a sign that they'll have to be more careful with spreading themselves too thin."

When Apple released Tiger, the last version of its operating system, two years ago, the program helped boost the company's overall software sales by more than 50 percent. Analysts have been expecting similar results with Leopard, which promises a number of new features, including a new backup program called Time Machine and advanced 3-D animation features.

Now Apple will have to wait several months for those sales, which will now come after the end of its fiscal year in September. That could lead analysts to lower their sales and earnings estimates for the company this year - and potentially lead to a lower stock price.

Indeed, in after-hours trading following Apple's announcement of the Leopard delay, the company's stock fell $1.94, or 2.1 percent, to $90.25.

But the delay could have a wider affect for Apple, potentially hurting near-term sales of its Macintosh computers during the important back-to-school season.

Perhaps more importantly, the delay gives archrival Microsoft extra time to convince computer shoppers debating between the two that its new Windows Vista operating system is every bit as good as OS X.

"This might give Microsoft a one-up to get that consumer that doesn't want to wait for Leopard," said Baker.

The delay in Leopard and the earlier delay with Apple TV may serve as a reality check for investors and analysts who have been expecting big things from Apple. Indeed, many have been salivating at the thought that the iPhone or Apple TV may become as big a hit as the company's iPods.

In recent years, investors have had little to reason to fear that the success of those products might be affected by Apple's own operational problems.

http://origin.mercurynews.com/breakingnews/ci_5652124