Spam King' suspect seized

Feds say arrest may lead to sharp drop in illegal e-mail. May is the operative word here.

The Seattle man is accused of illegally clogging the planet's inboxes with billions of illegal e-mails using hijacked computer networks. You've probably heard from him, federal authorities say. Many times. And with his arrest, you could see an immediate decrease in the amount of spam e-mail in your inbox, they said.

One expert estimated that the man agents dubbed the "Spam King" when they arrested him Wednesday sent billions, perhaps even tens of billions, of e-mails a day.

On just two groups of servers, in just a few months, federal investigators found more than 200 million spam messages linked to 27-year-old Robert Soloway.

The online empire was run from Soloway's high-end, Harbor Steps apartment on the Seattle waterfront, investigators said. Wednesday, he appeared in court unshaven, wearing loafers with no socks, to hear Assistant U.S. Attorney Kathryn Warma announce that if he's found guilty of the fraud, money laundering and identity theft charges in the 35-count indictment, he could spend decades behind bars.

"We know that Robert Soloway is one of the most prolific spammers in the world," Warma said before the hearing. "He has condemned them (his victims) to perpetual spam hell" unless they escape by canceling their domain names or changing their Internet protocol addresses.

So notorious is Soloway that the Internet fumes with anti-spammers worldwide livid with his alleged activities. There are endless rants, tricks on how to stop him, a Web site called "solowaysucks.net," and all sorts of personal dirt -- from Soloway's driving infractions to clues on where he went to high school to a link on how to call his mother.

"Punk," "worm," "piece of (excrement)" and "bloody gutless coward" are among the nicer epithets.

But on Wednesday, many people rejoiced.

"Busted!" wrote one anti-spam activist online. "Fantastic news," wrote another.

"It's extremely gratifying," said Neil Schwartzman, the executive director for the Coalition Against Unsolicited Commercial Email, an anti-spam group. He said that Soloway not only spammed people, but targeted anti-spammers with "mail bombings."

The feds have taken steps to seize Soloway's bank accounts, but don't know yet how much money they contain.

http://seattlepi.nwsource.com/local/317795_soloway31.html

World fails to implode during Gates-Jobs gagfest

We led as two kings

We were expecting to wake up to technological armageddon this morning, following the endlessly trailed public meeting of Steve Jobs and Bill Gates at the All Things Digital conference (D5) near San Diego last night.

No such luck: instead of kicking off the final battle for dominion over the universe, the billionaires traded limp platitudes about how much the other has contributed to the technology industry. "I'd give a lot to have Steve's taste," said Gates, as he sat next to a man wearing a turtleneck, stonewashed jeans, and grey trainers.

In return, Jobs admired Microsoft's history of beating on its partners for cash: "I think if Apple could have had a little more of that in its DNA, it would have served it extremely well." They joined their wizardly powers to pump "post PC devices" - PDAs and their ilk - while predicting the resilience of the personal computing era.

Beyond that, the session stayed on the safe territory of the Apple vs Microsoft memory lane, latterly pedestrianised by Redmond's new Googlier nemesis in Mountain View, and Apple's dropping of "Computer" from its name to confirm its rebirth as a consumer electronics maker. The occasional rehearsed quip about Apple's anti-PC ad campaign, or satirical blogger Fake Steve Jobs, was about as entertaining as the encounter got.

Not that it will bother D5's organisers, the Wall Street Journal name brand columnists Walter Mossberg and Kara Swisher: the high-priced conference was attended by about 600 tech executives, and probably a similar number of enthralled reporters. Gates' and Jobs' joint appearance was their first since a looming projection of the Microsoft man was booed by Apple fanboys at MacWorld in 1997.

In a misty-eyed summation of the dynamic duo's role as high kings of tech, Jobs uncorked a cute soundbite in tribute to their omniscience. Invoking his new best chums The Beatles by quoting Two of Us, while also referencing Gates' 1995 crystal ball-gazing tome The Road Ahead, he said: "You and I have memories longer than the road that stretches out ahead."

The conference has provided a selection of "rip-roaring laughs" from the head to head in a highlights reel here. For those who feel their spleen might burst if they watch the pair's relentless gagsmithing edited together, the entire spectacle is also available as a seven-chapter epic.

http://www.marketwatch.com/News/Story/Story.aspx?column=The+Stockpickers

From Steve Jobs Secret Diary: This is a true story, I swear

I'm not supposed to tell anyone this. But here's what really happened behind the scenes at D yesterday. So as you recall, I did a solo appearance with Walt during the day and made that crack about how us making iTunes for Windows is like giving ice water to people in hell. Funny, no? Well, Beastmaster Bill went ballistic. Threatened to pull out of the joint appearance. Told Walt and Kara in no uncertain terms that he would pull out and never come back to their stupid show. Turns out Bill also really, really hates our "I'm a Mac" ads. Like he goes nuts if you mention them. So Walt and Kara had to appease him by promising that the joint appearance would be total softball, no tough questions. So Bill sniffed and said Okay, he was here anyway, so what the hell.

Then right before we were going onstage I walked over and handed him a bottle of ice-cold water. Nice touch, right?

I swear this is true.

http://fakesteve.blogspot.com/

Bill Gates, I am going to make you my bitch!

Well it's less than 48 hours until my historic showdown with Bill Gates at the D conference on Wednesday. Or, as it's now known, the Gunfight at the Goatberg Corral. I've been rehearsing all weekend and so far in our sparring rounds I've won 10 and lost zero against Guy Kawasaki. We're using the same list of questions that we've fed to Goatberg. And we've tried to anticipate where Gates will try to sting me. Example, the price of the iPhone being too high. My response? This just shows how Apple has totally gained the upper hand in the market and can command a huge premium for its products. Market share? Say something about McDonald's. My old comment about "Microsoft has no taste"? I stand by what I said. Especially since Vista came out and we found it's just XP in a skirt.

The timing for this could not be more perfect. Here, at D, we're going to offer a visual representation of Microsoft versus Apple, just like in our "I'm a Mac" ads. Gates surly and defensive and covered in dandruff, me classy and bearded and cool. The imagery alone will speak volumes and will call up other comparisons: OS X versus Vista, iPod versus Zune. The idea is just to keep drawing the contrast between us in sharp relief. We just hammer and hammer and hammer on it. (And yes, if you think this D conference set-up was our idea, you're correct. And if you suspect it's really a plan between us and Goatberg to ambush Gates, you're correct again.)

Once I've spanked Bill at D and demonstrated how far ahead of them we are, two weeks later at the WWDC we're going to take a huge leap forward and blow everyone away. Microsoft will be eating our wake. By the end of June, with the iPhone release, our stock will be at $130. Mark my words.

To get myself even more pumped up, every night, after rehearsal, I've been watching "Gladiator" and "300." Morituri te salutamus, as the ancient Spartans used to say.

http://fakesteve.blogspot.com/2007/05/bill-gates-i-am-going-to-make-you-my.html

Microsoft hopes 'Milan' table PC has magic touch Pong, anyone?

Will there be life after the mouse?

Five years in the making, company's new tabletop computer is controlled entirely through touch--there's no mouse or keyboard.

At first glance, Microsoft's secret project looks like a 2007 version of the sit-down arcade game Ms. Pac Man. But if this machine were running the game, you could just take your finger and flick away the monsters chasing the heroine.

Microsoft on Wednesday is taking the wraps off "Milan," five years in the making and the first in what the company hopes will be a long line of "surface computers." The Microsoft Surface tabletop PC, for which the company has created both the hardware and software, offers shades of the technology seen in the sci-fi thriller Minority Report. The whole unit is controlled entirely through touch; there's no mouse or keyboard.

To paint, people can pick up a paint brush or just dip their fingers in virtual paint cups. Sharing photos is similarly intuitive. A stack of pictures can be easily sorted through and shared. To resize a photo, just stretch two fingers apart. Pivot the fingers and the image rotates. More than one person can be interacting with the computer at a time.

"It's very approachable," said Pete Thompson, the former T-Mobile executive who runs Microsoft's surface-computing business. "You just want to touch it."

Although consumers will be able to touch it later this year, most won't be able to buy a surface computer any time soon.

http://news.com.com/Microsoft+hopes+Milan+table+PC+has+magic+touch/2100-1041_3-6186732.html?tag=nefd.lede

How the Jerkoff Blew Over $4 Billion

Ray Wollney submits: As a former options trader (market maker) on both the Pacific Stock Exchange and the Chicago Board Options Exchange for a total of eleven years I have seen some bad options trades. I have made some myself.

Until 3/19/03 the worst and most expensive options trade I had ever seen was done by a market maker on the CBOE. This particular market maker was short enough puts on the day of the 1987 crash that he lost approximately $65,000,000 in one day.

However on 3/19/03 Steve Jobs relinquished 27,500,000 employee stock options (ESOs) on Apple in exchange for 5,000,000 shares of restricted stock valued at the time at 14.95 per share or approximately $75,000,000. Of the 27,500,000 ESOs, 7,500,000 were exercisable at 18.30 with an expiration date of 10/19/11 and 20,000,000 were exercisable at 43.59 with an expiration date of 1/12/10.

On Feb. 28, 2005 the stock split 2 for 1, therefore increasing the ESOs to 55,000,000. The exercise prices would then have been 9.15 on 15,000,000 and 21.80 on 40,000,000. The amount of shares Mr. Jobs had went from 5,000,000 to 10,000,000.

As of Friday, 5/25/07, Apple is trading for $112 per share. Therefore the value of the 10,000,000 shares assuming he still owned them all would be $1.12 billion.

However the value of the options would be far greater had he held them until now. The intrinsic value of the deeply in the money ESOs trading at 100 delta would be as follows: (112 - 9.15 x 15,000,000 = 1.54 billion) plus (112 - 21.80 x 40,000,000 = $3.6 billion) for a total of $5.14 billion.

So the exchange of the ESOs for the restricted cost Mr. Jobs over $4 billion. This is the most expensive and worst options trade ever made.

http://ce.seekingalpha.com/article/36615

Pentagon sez: China threatens cyberspace

Everybody panic!

A Pentagon report into Chinese military capability says that the People's Republic "is expanding from the traditional land, air, and sea dimensions of the modern battlefield to include space and cyber-space."

The "ANNUAL REPORT TO CONGRESS: Military Power of the People’s Republic of China 2007," was released by the Office of the Secretary of Defense on Friday, though elements of it had been leaked earlier. In it, the US military warns that the Chinese communists are developing new nuclear weapons, spy satellites, anti-spacecraft laser beams and "information warfare units to develop viruses."

The Pentagon analysts suggest that China is seeking to update its relatively small, old-fashioned nuclear arsenal. Beijing at present has just 20 proper ICBMs able to hit targets worldwide, and eighty or ninety other missiles which would only be useful for nuking things in its own backyard. The ICBMs are in traditional, fixed land silos - vulnerable to a stealthy pre-emptive strike. (China does have a single, elderly nuclear-missile submarine, but this isn't seen even by the most hawkish as a serious threat.)

Twenty fixed ICBMs is a bare-minimum deterrent force, putting China very much at the bottom of the major-power nuclear league table behind France and even the UK. The USA might, in the near future, be able to largely disregard such an arsenal. The US missile defence effort, combined perhaps with a pre-emptive American strike, might offer a scenario in which the chance of any Chinese nuke reaching the US mainland was low.

Unsurprisingly, the PRC is moving to upgrade its nuke armoury, in particular by acquiring new ICBM-firing submarines. Once these are in place, China can feel sure once more of its ability to nuke the continental US.

Hey, that doesn't mean that the Chinese will do so; in fact the PRC has declared that it will never be the first to use nukes, a stance which the US itself doesn't always take. But the Pentagon says that "China’s assertion of a nuclear 'no first use' policy ... is ambiguous."

http://www.theregister.co.uk/2007/05/30/pentagon_in_china_space_n_cyber_panic/

Silicon Valley Wide-Eyed Over a Bride

Sometimes life is like a fairytale. Well almost.

Consider Anne Wojcicki, the 33-year-old former health care investment analyst who this month married a handsome young computer scientist, who just happens to be one of America’s richest men.

As if the swirl of excitement around the Silicon Valley pairing of Ms. Wojcicki and Sergey Brin, a co-founder of Google, were not enough, Ms. Wojcicki has captured still more attention with a biotech company she recently co-founded, 23andMe. And her husband’s company is an investor.

Google disclosed last week in a regulatory filing that it has invested $3.9 million in 23andMe, a start-up that, according to its Web site, is developing ways “to help you make sense of your own genetic information.” The company’s name refers to the number of paired chromosomes in human DNA.

In an interview, Google’s chief executive, Eric E. Schmidt, declined to comment about 23andMe’s business or its future products, but he said that in the course of evaluating the potential investment, the company had instituted an array of checks and balances to ensure objectivity, including the recusal of Mr. Brin from any discussions.

“That was all done by the book beyond belief,” Mr. Schmidt said.

Google has invested in a handful of other start-ups, including FON and Meraki, both Wi-Fi start-ups, and Current, a company that delivers high-speed Internet access using existing power outlets.

Jon Murchinson, a Google spokesman, said that aside from 23andMe, none of the investments involved companies owned by a close relative of a senior Google executive.

Mr. Schmidt said that the Google investment in 23andMe would eventually benefit Google and its users.

Ms. Wojcicki (pronounced Wo-JIT-skee), and her 23andMe co-founder, Linda Avey, 47, declined to be interviewed at this stage in the company’s development.

23andMe, with headquarters in Mountain View, Calif., is based on the concept of individualized genetic mapping. “What used to cost billions now costs only $1,000,” Martin Varsavsky, an entrepreneur who has invested in the company, wrote recently in his blog. “So for the price of a laptop you can now learn the most intimate details of your genetic self.”

Mr. Varsavsky wrote that as medicine advanced, those who have had their genes mapped could be notified of developments concerning their own genes, including news of relevant drug discoveries.

Then there is the networking aspect.

“And what about relatives?” Mr. Varsavsky wrote. “If people are joining so many social sites to find out what they have in common, why not find out who the person who is closest to you in the genetic sense is?”

Even without a bit of mapping, Ms. Wojcicki’s own distinguished genetic heritage is evident. She comes from a family of intellectual high achievers. Her father, Stanley, is the chairman of the physics department at Stanford University; her mother, Esther, is a journalism teacher at Palo Alto High School. Ms. Wojcicki, the youngest of three daughters, attended Yale University, graduating in 1996 with a degree in biology.

Google has declined to disclose any details of the wedding, but according to various news reports, the location was such a closely guarded secret that wedding guests boarded the jet owned by Mr. Brin and Mr. Page unaware of their exact destination until they arrived on a private island in the Bahamas. Isn’t that special….

http://www.nytimes.com/2007/05/29/technology/29google.html?_r=1&ref=technology&oref=slogin

1 million Zunes sold, 99 million to go

Let’s see, with 100 million iPods sold vs 1 million Zunes, we have a clear winner – but Microsoft’s Robbie Bach says new Zunes are on the way and they’re in it for the long haul.

A fascinating interview at the San Francisco Chronicle with Robbie Bach, president of Microsoft's Entertainment and Devices Division, responsible for both the Xbox 360 and Zune unveils an update on the future of Zune and of Microsoft’s interconnected strategy. We learn that Microsoft has sold 1 million Zunes into the market, just beating their June target for that many units sold, and giving Microsoft what Bach says is a 10% share of the market.

That said, Microsoft must have sold quite a few Zunes recently, because February ’07 stats indicate that the iPod had a 73.7% market share, Sandisk number 2, Creative in third spot and Microsoft in fourth spot with only 2.4% of the market.

Bach told the SF Chronicle that: “We're still about nine months into having Zune in the marketplace. We're very pleased with the progress. We've sold a little over a million Zunes. In the category we're in, the hard-disk-based category, we've got about 10 percent market share. It's a good start. It's not an overwhelming start. I'm not going to pretend it's some gigantic move”.

Bach also told of a new factory being built in China which will manufacture 2nd generation hard drive Zunes as well as a new flash model. Questions about a Zune phone seemed to suggest Microsoft was happy with its existing Windows Mobile smartphones, without expressly ruling out a Zune Phone and exclaiming that the iPhone certainly was an interesting device.

Interestingly, Bach was asked about the Wi-Fi features in the Sansa Connect, which are superior to those of the Zune, and he explained that while they were keeping an eye on Sandisk’s progress, improvements to the Zune could come as easily as writing new software to support more Wi-Fi capabilities, giving hope that the Zune’s Wi-Fi could be about to get a whole lot more useful, without specifically making any such promises.

Bach was also delighted with the success of the pink and watermelon colored Zunes that have just been released, with the watermelon colored model a favorite of his children.

With the iPhone just around the corner, and the potential of 100Gb or larger widescreen iPod models that use the iPhone interface without necessarily including phone functionality, the pressure on Microsoft to release snazzy new models is rapidly building, with the pressure on to deliver more of a knockout blow with the second generation models, although no-one expects a second generation Zune to suddenly start outselling the iPod.

As with all Microsoft products, a gestation period is always needed to refine the product, work out bugs and come up with a version that seems to please most people most of the time.

It usually takes Microsoft a legendary three goes to get to the first really ‘good’ version, although so far the Xbox 360 means they’ve done it in two with games consoles.

http://www.itwire.com.au/content/view/12480/1103/

GoogleClick Mashup Gets FTC Masher Note

You had to know this was coming. According to the Times tonight, Google's Doubleclick deal is getting some antitrust-centric FTC scrutiny.

So, does it matter? I'll say No. This was inevitable, and given the spate of recent acquisitions in this area the FTC (and/or DOJ) will look selectively screwy if they block this one, but let go aQuantive, 24/7, Right Media, etc. While Google is doing well in ads, it's strange justice to nail Google for its buy, and let the other consolidators go.

Ads are a fast-moving marketplace, and about the best thing for competitors is if Google places bets all over place in older technology. After all, it then faces a year or three of integration, during which all things ad-related change apace, perhaps leaving Google more vulnerable than it would have been if it hadn't been distracted. I'm not saying that's the only scenario, just that regulators are crummy in fast-moving markets where today's supposed dominant player is often tomorrow's beleaguered has-been.

http://paul.kedrosky.com/archives/2007/05/28/googleclick_mas.html

Is Fake Steve better than the real thing?

I suspect more people read what Fake Steve has to say purely because the real Steve has so little to say outside tightly scripted keynotes. The exception to that might be when Steve has to step in to make sure that the Directors know their proper role in a stockholders' meeting. I think the Steve Jobs' thong is a hoot especially after the iPod sex toy brouhaha. Still, the Fake Steve phenomenon is not exactly hard to explain. Steve, as brilliant as he is, rarely shares any personal thoughts with mere peons like us.

Of course Apple's "enlightened" blogging policy reminds me more of the fenced chickens than it does anything else. That being the case we are not going to hear any back door snippets of Steve either. If Steve is the spokesperson for almost all things Apple, perhaps he no longer has time for any personal thoughts?

As the Apple world is ramping up for WWDC, most of the rest of the world is getting ready for summer and exceedingly high gas prices. If you ask one hundred people what WWDC stands for, I'm pretty sure you'll only find one or two that know the answer even if Apple's market share is rising from oblivion.

That reminds of the odd paradox that WWDC often brought to internal Apple people, especially those of us on the east coast. It was the only time that I thought perhaps Steve Jobs was actually a little insecure.

Each year we would go through a charade of trying to prepare customers for the possibly-maybe opportunity of being invited to our facility to see whatever Steve had decided to let the developers of the world and a selected few see.

Since federal government CIOs (and in fact every CIO that I know) are busy folks, they often do not want to take the time to see something which has nothing to do with their mission. Having an event where you don't know the content of the main speaker is challenging to sell to anyone but the already faithful.

But every year we sold precisely that idea of listening to Steve successfully. We always had some very important people who wanted to see the keynote but could not justify a trip to see an undefined something or other. Thus we would try to get approval to have customers join us in Apple's soon to be abandoned 1892 Preston White Drive facility.

Each time we wanted to do this, it had to be approved by Steve Jobs himself. I distinctly remember (note to Apple legal, I have a good memory and don't have the email) that with one of the approvals came a copy of correspondence between Steve Jobs and Katie Cotton.

Steve was asking Katie if it was okay to let customers into the Reston facility for the WWDC Keynote. That almost floored me. I had seen Avie Tevanian himself sweat bullets over potentially missing a meeting with Steve. I was around to witness Apple vice presidents almost collapse in relief when they had escaped a meeting without being a Steve target. Finally I watched typically haughty Apple marketing folks almost abandon great projects just because Steve might not like it, or that it might not have perfect results.

Then here was Steve asking Katie for permission. What was that all about? Maybe I'll ask Fake Steve Jobs.

http://viewfromthemountain.typepad.com/applepeels/2007/05/is_fake_steve_m.html

Jobs Vs. Gates: Prepare Your Battle Stations!

Next week at the Wall Street Journal D5 conference in San Diego, a very public conversation, which is being touted as nothing short of history making, is set to take place. Apple's Steve Jobs and Microsoft's Bill Gates will take to the stage for a 75-minute "joint interview" to talk tech.

The conference itself is aimed toward corporate executives hoping to learn a thing or two about technology and business from those who have had tremendous success with both.

This will be the first time Jobs and Gates will share the stage together (in person) since 1983. According to WSJ, the two will trade barbs over, "Issues such as whether it is wiser for a company to partner or build everything itself. Or the primacy of software versus hardware in personal computers. Or which is more important: how easy it is to use a product or what it can do once you figure out how?"

The two will then be laced up in boxing gloves to compete in a gladiatorial no-holds-barred, tooth-and nail fight to the death.

In the interest of full disclosure, it's very possible we've replaced certain facts in this article with things we'd like to see happen. But, we'll leave it to you to figure out which ones.

http://www.switched.com/2007/05/24/jobs-vs-gates-prepare-your-battle-stations/

Linux Foundation Fires Back at Microsoft

Hey, if you earned $34 million a day from Windows and Office, you too would try to spook the market with patent threats

Last week, Microsoft (MSFT) initiated what can only be described as a rather bizarre public-relations campaign in which they alleged that Linux and Open Office may violate hundreds of the software maker's patents. While some of the mainstream press reported Microsoft's statements as news, many journalists and bloggers keenly identified the most intriguing aspect of this aggressive maneuver: a glimpse of a threatened giant struggling to keep a grasp on its empire. What most people don't realize is that the story really isn't about patents at all—it's about a rational actor trying to protect its privileged position.

In the time it will likely take you to read this article, Microsoft will have made $500,000 in net profit. It's instructive to note that the majority of that profit comes from its Windows operating system and Office suite of business software. Not coincidentally, those are the two product lines most threatened by Linux operating systems and Open Office.

Given the high stakes involved, it's not surprising that Microsoft would take steps to protect its turf. In fact, it makes perfect sense. Let's face it: If you were making $1 billion a month, what would you do? Perhaps engage in rhetoric and hyperbole to generate some old-fashioned FUD (fear, uncertainty, and doubt)? Just looking at the numbers, it's easy to see that even if the scare campaign merely delays a customer's migration from Windows to Linux by a single day, Microsoft is $34 million dollars better off.

But as we said before, Microsoft is, above all, a rational actor. The software maker is hesitant to instigate a patent war, as it has too much experience with the downside of such litigation. Just ask Microsoft about its MP3 patent dispute, in which a jury recently ordered the software maker to pay $1.5 billion to Alcatel-Lucent (ALU).

The Linux Foundation's membership comprises hundreds of companies, organizations, and individuals heavily invested in the continued success of a vibrant Linux ecosystem. Microsoft, our membership, and software users in general all know that a patent war guarantees only one sure outcome: The customer loses. Customers want choice and innovation. That's why open-source is winning. That's why Microsoft should embrace open-source to bolster competition in the marketplace. Competition will make us all better. Even Microsoft.

The Linux Foundation does believe the current software patent system is problematic. The superpowers have their stockpiles. The trolls have their stashes. Rather than spurring innovation, which is of course the raison d'être of the patent system, today's patent games will divert dollars away from research and development in the U.S. Instead, those dollars will fund innovative activities in countries that have better things to do with their time and money than litigate.

That said, we are also rational actors working within an existing system. Touch one member of the Linux community, and you will have to deal with all of us. Microsoft is not the only—perhaps not even the largest—owner of patents in this area. Individual members of the Linux ecosystem have significant patent portfolios. Industry groups, such as the Open Innovation Network and our own legal programs at the Linux Foundation, aggregate our membership's patents into an arsenal with which to deter predatory patent attacks. With our members' backing, the Linux Foundation also has created a legal fund to defend developers and users of open-source software against malicious attack. We don't expect to but, if needed, we will use this fund to defend Linux.

In 2005, Microsoft General Counsel Brad Smith called on Congress to reform the patent system for software, stating reforms were needed to curb "abusive litigation." We agree. In fact, we call on Microsoft to work with the Linux ecosystem to restore confidence in the patent system by making sure they are issued only for truly unique, innovative, and novel functions that advance the state of the art.

We ask Microsoft to stop engaging in FUD campaigns that only serve to undermine confidence in the U.S. intellectual-property system. Instead, please work with us to make the patent system tighter, more reasonable, and efficient for everyone in the software business.

http://www.businessweek.com/technology/
content/may2007/tc20070525_325967.htm?chan=top+news_top+news+index_technology

Apple throws toys out of the pram over sex toy

What’s that funny moaning sound? A sex toy being peddled by adult retailer Ann Summers has miffed the legal eagles at the maker of entertainment gear Apple.

Ann Summers has been flogging a £30 sex toy called the iGasm which connects to any music player and uses the beat to make the earth move.

Oddly it is not the device itself which has got Apple moaning. MacWorld reports that Jobs' Mob feels it is being shafted by Ann Summers' promotion of the device, and is demanding all posters for the gadget be taken down.

The advertisement shows a female silhouette holding an oval white device with two cables - one connected to a pair of white headphones, the other heading south. The motto for the advertisement is "Go at it hard and fast with a pounding drum 'n' bass track or chill with an ambient classic."

Apple believes that it has the sole right to use silhouette-based images in its advertising. As the silhouette is named after Etienne de Silhouette, the French finance minister whose name is synonymous with anything made cheaply, we can see why.

http://www.theinquirer.net/default.aspx?article=39822

Gates, Jobs square off

For more than two decades, Apple CEO Steve Jobs and Microsoft chairperson Bill Gates have sparred over the issues that were crucial to the development of the technology industry. Issues such as whether it's wiser for a company to partner or build everything itself. Or the primacy of software versus hardware in personal computers. Or which is more important: how easy it is to use a product or what it can do once you figure out how?

This jousting over big ideas, sometimes friendly but often not, has always been from a distance. Although Gates made a famous phone call to Jobs in 1997 and the two shared a stage briefly at a 1983 Apple promotional event, the two industry icons have never had a public conversation.

So when they sit down next Wednesday for a 75-minute joint interview in front of a gathering of tech executives, their long history and competing philosophies should make for an interesting - if not history-making - discussion. The conversation at the fifth annual "D - All Things Digital" conference in Carlsbad, California, comes as Gates and Jobs are head in very different directions, and as the companies they co-founded both face big challenges.

Gates, who long ago turned the Microsoft chief-executive chair over to Steve Ballmer, surrendered his chief-software-architect role last June to focus on the Bill and Melinda Gates Foundation. The charity - devoted to curing diseases, mostly in developing countries - got a big boost last year when Gates, the world's wealthiest person, convinced fellow billionaire Warren Buffett to donate most of his estate.

While the 51-year-old Gates is slated to become a part-time Microsoft employee next year, Jobs, 52, is as engaged as ever at Apple as CEO, product-design guru and public pitchman. The iPod, Apple's iconic digital music player, has changed the way people buy and listen to music. Its massive popularity - 100 million units sold, and counting - has revitalised the company and sent its shares (AAPL) soaring over the past four years.

Now, Jobs is readying the release of the iPhone, a combination cellphone and music player that will put Apple in direct competition with much larger rivals such as Nokia and Motorola.

Apple's success in the media-player market has been a late-career vindication of Jobs' philosophy that hardware- and software-product design be closely integrated from the start. His insistence on that approach led to his ouster from Apple in 1985 and helped relegate the company to a single-digit-market-share niche of the PC market. Meanwhile, Gates' strategy of focusing on software while partnering with machine makers propelled the Windows operating system to world domination.

By the late 1990s, with Apple struggling while Microsoft's sales and share price were soaring thanks to Windows 95, the battle of ideas seemed to be over - even though the OS then showcased the easy-to-use graphical interface that Apple had rolled out years earlier.

Perhaps it was that bitter irony that inspired Jobs to try for a second act. After rejoining Apple when it bought out his PC company, called Next, Jobs shocked the Apple faithful by cutting a wide-ranging deal with Gates, who invested $150m in Apple and agreed to keep making software for the Macintosh. The agreement, made public in a phone call that Gates placed to Jobs while the latter was onstage at an Apple event, made the cover of Time and Newsweek and helped rescue Apple from oblivion. And the strategy that backfired on Jobs so badly in the PC market turned out to be precisely the right one in the market for digital music, at least so far.

Apple has grabbed a dominant share of the portable-music-player market in large part because the iPod device, its user interface and the software for the online iTunes music store work together seamlessly.

http://www.fin24.co.za/articles/companies/display_article.aspx?Nav=ns&lvl2=comp&ArticleID=1518-1783_2118532

Tech brands branded totally bogus

What? Centrino Pro no go

A resarch report suggests that chip brands are universally rubbish. A combination of bad naming and so-called 'brand attacks' from AMD have left Intel wanting, after the retirement of its solid gold Pentium brand, said In-Stat. The boffins said that the use of model number schemes for processors had further increased confusion, which will please Charlie, who has been bonking on about model numbers for years.

This is bad news for Intel, which spent a good few million dollars to bring in Samsung marketing guru Eric Kim to rebrand. Shortly after finishing the exercise, he was effectively demoted, as the engineers took back Intel from the marketing bods. But Intel isn't the only brand to suffer - DAAMIT, IBM and VIA all came in for a kicking, too.

The In-Stat report has a lot of 'duh, obviously' quotes, such as revealing that similarities in product brand names, like Core 2 Quad and Geforce Quadro, can be confusing to consumers. No, really?

Intel now has a raft of model-based processors in the Core 2 Duo and Celeron families, which themselves form parts of various professional and consumer platforms such as Viiv and Centrino. Centrino has been the one 'hit' in all these branding exercises, pairing a brand that not only had massive OEM support but hit the market at the right place and the right time to get mass consumer acceptance.

Things are about to get more complicated, as AMD introduces the Phenom brand to replace the Athlon and a new FASN8 gaming rig to take on Intel's Skullcrushing monster. Naming suggestions are still pouring in from readers, with Nathan Der Weise pointing out that FASN8, in German, becomes Fasnacht, which translates to "carnival". AMD is certainly planning a bit of a dog and pony show around this one, but did it mean it quite so literally?

http://www.theinquirer.net/default.aspx?article=39760

From The Secret Diary of Steve Jobs: A new lie from Microsoft? Or just wishful thinking?

See here. Headline reads: "Next version of Windows to be `fundamentally different.'" Um, no it won't. It will be fundamentally the same. It will suck. For a quarter of a century these guys have been putting out sucky operating systems and vowing that the next one is not going to suck. Or won't such as much. Or something. But they always suck. They can't help it. The suckitude is ingrained in their culture. It's in their DNA. Sorry, Bill. We can discuss this at our historic appearance at the D conference next week.

http://fakesteve.blogspot.com/

Intel Goes Swiss

In a move to shed an unprofitable business as its turnaround gains traction, the Intel Corporation announced Tuesday that it would join with STMicroelectronics, a Swiss semiconductor maker, to form a new company to sell flash memory chips.

Flash memory is used in cellphones, digital music players and digital cameras and is considered one of the most erratic segments of the semiconductor market.

Intel will sell only the part of its flash business known as NOR, used in cellphones, and will receive a stake of about 45 percent in the new company and $432 million in cash. STMicroelectronics, which will sell both its NOR and NAND flash memory businesses, will receive a stake of about 49 percent, along with a payment of $468 million.

The new company, still to be named, will also receive a $150 million investment from Francisco Partners, a private equity firm based in Menlo Park, Calif., which will hold a stake of about 6 percent. The companies also said that they had arranged for $1.3 billion in loans to help finance the venture.

The announcement came as little surprise to analysts, who had long expected Intel to spin off the unprofitable business to focus on its core business of supplying the processors for personal computers. Last year, Intel’s flash memory business lost $500 million on sales of $2 billion.

In December, Intel sold its cellular chip business to the Marvell Technology Group, making Intel’s presence in the NOR memory business less strategic to the company, analysts said. Intel, based in Santa Clara, Calif., will continue to sell NAND flash memory, the faster-growing of the two segments, through a joint venture with Micron Technology.

Investors cheered the move, not just for Intel, but because further consolidation of the flash memory industry could lead to more stable pricing, according to Christopher Caso, an analyst with the Friedman, Billings, Ramsey Group. Shares of Intel rose 36 cents, to $22.99, while shares of STMicroelectronics, which is traded on the New York Stock Exchange, rose 38 cents, to $20.26.

The report also bolstered shares of Spansion, the flash memory company spun off by Advanced Micro Devices about 18 months ago. Spansion shares jumped $1.01, or nearly 10 percent, to close at $11.45.

The combined company, which will have its headquarters in Geneva, will have $3.6 billion in annual revenue and 8,000 employees.

Brian L. Harrison, vice president and general manager of Intel’s flash memory group, will become chief executive of the new company. Executives told analysts that they had no immediate plans to take the company public.

By joining forces, Intel and STMicroelectronics will gain the scale to make them more competitive, executives of the companies said. “Together the new company we are creating will achieve the level of scale that is needed to succeed in the flash market,” said Carlo Bozotti, president and chief executive of STMicroelectronics, who will be chairman of the new company.

Intel executives said that as a result of the deal, which is expected to close in the second half of the year, the company expected fourth-quarter revenue to decline slightly but remain within the company’s forecast.

http://www.nytimes.com/2007/05/23/technology/23chip.html?_r=1&ref=
business&oref=slogin

Google Investing in Company Started by Co-Founder’s Wife

Not exactly like Wolfowitz, but, well...close.....

In Silicon Valley’s version of “The Bachelor,” Anne Wojcicki not only landed one of America’s richest men, Sergey Brin, a co-founder of Google, but she also got her husband’s company to finance her start-up.

Google said Tuesday that it invested $3.9 million this month in 23andMe, the biotech company co-founded last year by Ms. Wojcicki, a former health care industry analyst.

Google’s investment was disclosed in a regulatory filing, which also officially confirmed that Mr. Brin, 33, and Ms. Wojcicki are married. The company had declined to comment on the couple’s relationship.

The company declined to disclose any details of the wedding, but various reports placed it in the Bahamas this month. Mr. Brin, Google’s president for technology, is said to be worth about $14 billion, according to Forbes magazine.

In a bit of classic Silicon Valley lore, the couple met after Ms. Wojcicki’s sister rented her garage to Mr. Brin and his partner, Larry Page, 34, to serve as office space for their search-engine venture. Mr. Page, Google’s president for products, also is worth about $14 billion, according to Forbes.

The filing with the Securities and Exchange Commission also stated that Mr. Brin had provided $2.6 million in interim debt financing to 23andMe and that his loan was being repaid as part of the financing of 23andMe.

“Our audit committee requested that we disclose this in order to be completely transparent with our investors about the facts underlying this investment,” said Jon Murchinson, a Google spokesman.

Mr. Murchinson said the search giant, which has invested in other start-ups, made the investment in 23andMe because it furthered Google’s goal of organizing the world’s information. “They are developing new ways for people to make sense of their genetic information,” Mr. Murchinson said.

According to 23andMe’s Web site, by encouraging individuals to learn about their own genetic information, the company will create a common, standardized resource that has the potential to accelerate drug discovery and bring personalized medicine to the public.

A press release on the site quotes Ms. Wojcicki as saying, “Our goal is to allow individuals to gain deeper insights into their ancestry, genealogy and inherited traits and, ultimately, the option to work together to advance the overall understanding of the human genome.” Reached by telephone, Ms. Wojcicki declined to comment further.

http://www.nytimes.com/2007/05/23/technology/23google.html?_r=1&dlbk&oref=slogin

Google's search dominance continues to grow

What did you expect? The Big G Clocks up 3.8 billion searches in April

Google accounted for 55 per cent of all search queries carried out in the US in the month of April, according to Nielsen/NetRatings data released Tuesday. Nearly 3.8 billion Google searches were carried out in the period, a 42 per cent increase on last year's results.

Main rival Yahoo! Search came in a distant second with just under 1.5 billion searches carried out. Together, Google and Yahoo! accounted for over three quarters of all searches carried out in the US in April.

Meanwhile, Microsoft's MSN/Windows Live Search service came in a far-away third, with nine per cent of the market or 612 million searches, representing a drop in market share since March, the first such drop in the past several months. Microsoft executives indicated back in January that they were not satisfied with the performance of the company's search service.

In a bid to push its dominance of the online search market even further, Google announced earlier this month that it would be integrating all of its various search services so that a single search query will now generate results from a variety of previously separate sources such as videos, images, news stories, maps, books, and websites. The move looks set to drive more traffic to the Google News aggregation service and Google-owned YouTube, further reinforcing Google's status as an online media gatekeeper.

"The ultimate goal of universal search is to break down the silos of information that exist on the web and provide the very best answer every time a user enters a query," commented Google's vice president of search products and user experience Marissa Mayer at the time.

Google also recently revamped its personalised homepage service, now renamed iGoogle. The relaunch though was marred by the loss of some users' personal information such as contact lists and diary dates.

http://www.theregister.co.uk/2007/05/23/google_search_dominance/

From The Secret Diary of Steve Jobs: A call to arms

Apple faithful, it is time for us to send a message to the world. Specifically, to the S.E.C. and the U.S. Attorney for Northern California. For months these frigtards have been hounding me. Distracting me. Tearing me away from the important work of creating beautiful objects that restore a sense of childlike wonder to people's lives. And though Apple has been cleared, I have not. Sure, I've tried to put on a brave face even while Fred and Nancy make up lies about me in order to save their own backsides. But the threat still hangs over my head, like a sword of Hercules.

So Apple PR has come up with a great idea. It's a visual statement. A way to tell the feds, "Leave our Dear Leader alone." They've drawn inspiration from that scene in "V for Vendetta" when all of London comes out dressed as Guy Fawkes to confront the fascist government pigs.

The idea is this. If you're coming to the WWDC, wear this T-shirt. We'll organize a rally in the plaza and bring in the press. Imagine thousands of us, together, dressed in long-sleeve black T-shirts and proclaiming in one voice: FREE STEVE.

Can ordinary people really band together to convince their government to stop the harassment of innocent individuals?

In the words of John Lennon: Imagine.

The shirts are available exclusively at our official Cafe Press store. The PR team went a little crazy and also made up Free Steve bumper stickers, dog shirts, teddy bear, baby outfits -- even a Free Steve thong.

Much love to our graphics partner, Mikolaj Kamler of Manufaktura Sweatshops in Warsaw. He did the design.

http://fakesteve.blogspot.com/

Steve Jobs in mimic mystery

Book deal now!

MEDIA HACKS are desperate to know which of them is penning a mock diary of the Apple's spiritual and temporal leader Steve Jobs.

The parody has been getting a large number of readers and according to the New York Post, the author has just wound him or herself a book deal.

To prevent the real Steve Jobs suing, the book has been called "Options: The Secret Life of Steve Jobs - A Parody by Fake Steve Jobs."

The advance is estimated to be only $75,000 which as far as advances is concerned is not much.

Valleywag.com had zeroed in on Leander Kahney, the Wired News managing editor, as the person most likely behind fake Steve but Kahney denies it. He told Valleywag that they had accumulated so much evidence, he was half convinced himself.

According to the NY Post, all that can be confirmed was that the column is not being penned by a Wired staffer.

http://www.theinquirer.net/default.aspx?article=39727

Apple Sued Over "Grainy" MacBook Displays

Apple has been hit with a class-action lawsuit by MacBook owners who claim the company falsely advertised the quality of the displays used in the Apple MacBook notebooks. Two California men allege they were promised displays capable of showing "millions of colors", but instead were sold displays of lesser quality that looked "grainy" and "sparkly".

The suite, that seeks class-action status, was filed by Fred Greaves and Dave Gatley on May 3 in San Diego County Superior Court. The suit alleges Apple mislead them with MacBook and MacBook Pro advertising that claimed the displays are capable of 8 bits per channel, which may display as many as 16 million colors. Instead, the suit claims, Apple used displays in the MacBook that support only 6 bits per channel, offering around 262,144 colors.

The suit points to other disgruntled Apple MacBook customers who complained about the displays at discussions posted here and at Apple’s own Web site here. (At the time I posted this the forums were "temporarily unavailable".)

The suit alleges other MacBook customers who expressed concern over their purchases were "chastised by Apple agents and employees for being too picky about their assessment of the quality of the display." The suit also alleges "other dissatisfied purchasers were told that they were imagining the complained about defects."

The lawsuit is being handled by attorney Peter M. Polischuk on the behalf of the plaintiffs. A copy of the suit can be downloaded

http://blogs.pcworld.com/staffblog/archives/004437.html

Google and Salesforce.com, sitting in a tree

A little birdie told the WSJ

The Wall Street Journal has a hunch that Salesforce.com and Google have plans to further team against mutual rival, Microsoft.

An anonymous source familiar with the deal told the paper a new pact is expected to be announced in the next few weeks.

The WSJ's inkling, however, runs disappointingly short of ink. The brief article didn't offer specifics on the proposed partnership, but suggested it would be along the lines of integrating Gmail with Salesforce.com's customer relationship management (CRM) software. Salesforce.com customers could use such a service to track their accounts.

The deal carries with our Vulcan logic; after all, Google is already holding hands with Salesforce.com.

For instance, Salesforce for Google Adwords allows Salesforce.com customers to more efficiently buy Google search terms for online advertising.

Both companies also share Microsoft as a rival. Google wants to chip away at the armor of Microsoft Office with its Google Apps online suite. Microsoft and Google have also been butting heads in the search, advertising and web email business.

Salesforce.com can see on the horizon the release of Microsoft's own hosted, on-demand customer relationship management service — expected to arrive some time in the third quarter of this year.

Meanwhile, Salesforce.com is beefing up its compatibility with outside offerings. It announced today an extension to its Apex programming language and framework, which will allow data to move between different applications.

Revealed at the company's developer conference, Salesforce SOA allows developers mash-up different applications through web protocols with custom-written code hosted and run by Salesforce.com. The company said the application would allow its business processes to incorporate other web services such as Oracle Financials, SAP Order Management and FedEx.

Apex and Salesforce SOA are expected to be available in December

http://www.theregister.com/2007/05/21/google_and_salesforce_deepen_partnership/

Google Proposes Innovation in FCC Radio Spectrum Auction

Google filed a proposal on Monday with the Federal Communications Commission calling on the agency to let companies allocate radio spectrum using the same kind of real-time auction that the search engine company now uses to sell advertisements.

Executives at Google, based in the Mountain View, Calif., said that the company had no plans to bid in the closely watched sale of a swath of broadcast spectrum scheduled for February 2009 as part of the nation’s transition to digital broadcast television.

The company, the world’s dominant search engine, has, however, become an active participant in the debate over the control of access to broadband digital networks because it wants to create more competition among digital network providers like cable companies and Internet service providers.

The Google filing comes two days before a deadline for public comments set in an F.C.C. rule-making procedure for the sale of spectrum in the 700 MHz band, now largely used by UHF television broadcasters.

The agency is planning to set the rules for its auction this year as potential bidders, including telephone, cable and satellite operators — as well as potential consortiums interested in creating new next-generation digital wireless networks — jockey for position. Several groups of bidders hope to use the spectrum to create a new nationwide digital wireless network that would serve as an alternative broadband channel to businesses and consumers, competing with existing telephone and cable providers.

“The driving reason we’re doing this is that there are not enough broadband options for consumers,” said Adam Kovacevich, a spokesman for Google’s policy office in Washington. “In general, it’s the belief of a lot of people in the company that spectrum is allocated in an inefficient manner.”

In their proposal, Google executives argue that by permitting companies to resell the airwaves in a real-time auction would make it possible to greatly improve spectrum use and simultaneously create a robust market for innovative digital services. For instance, a company could resell its spectrum on an as-needed basis to other providers, the executives said in their formal proposal to the federal agency.

F.C.C. auction methods used in the past have been criticized because they required advance payments, leaving companies with less money needed to build infrastructure, resulting in fewer benefits to consumers in the way of advanced telecommunications services.

“In Google’s view, many of these thorny problems would be alleviated by a more open and market-driven spectrum access policy,” they wrote.

The Google proposal will be endorsed this week by one of the consortiums that is planning to bid in the spectrum auction: Frontline Wireless, an investor group founded by Reed E. Hundt, a former F.C.C. commissioner, with a number of Silicon Valley venture capitalists including the Google investors L. John Doerr and Ram Shriram.

“I’m hoping we treat spectrum as a scarce renewable resource which should be used for the common good of the consumer and to make available the most innovative devices that can connect to those consumers,” Mr. Shriram said.

Mr. Hundt said in an e-mail message: “We propose that one quarter of the capacity of the network that uses this spectrum must be sold not in a long-term service contract but instead in ongoing open auctions to any and all comers.”

The proposal is for the wholesale auction of spectrum. However, in the future such a system might require that advanced computing technology be built into wireless handsets and computers to automate the auction bidding process and permit it to take place without users noticing. The Google proposal states that such a system would reduce retail prices for wireless spectrum and extend Internet access into rural areas not now served by existing providers.

One significant issue in the debate is whether the F.C.C. will be able to meet a mandate in the digital television law calling for reallocation of the frequencies to public safety organizations while simultaneously making spectrum available for commercial applications.

http://www.nytimes.com/2007/05/22/technology/22google.html?ref=technology

The latest from the Secret Diary of Steve Jobs

You're welcome, Disney shareholders

I know you're pissed about the backdating stuff. But read this story about how I've transformed your boring old company into a cutting-edge Internet savvy media player. Sure, they give credit to Iger and his crew. But read between the lines. You know who's really pulling the strings.

http://fakesteve.blogspot.com/

Tech titans clash again

Is this what they mean by a circlejerk West Coast Style?

Redmond will continue to oppose Google’s $3.1 billion acquisition of Double Click, the online advertising company, despite spending twice as much money on its own move into digital marketing.

On Friday, Microsoft agreed to pay $6 billion in cash for Aquantive, a neighbouring Seattle company that owns three digital marketing specialists, including Avenue A Razorfish.

Chris Dobson, vice-president of global sales at Microsoft Online Services, said the combination of Google and Double Click would serve ads to 80% of all websites – raising competition concerns.

Microsoft was outbid for Double Click last month but has bought Aquantive for a price equal to more than 100 times last year’s profits and more than 13 times sales.

Dobson admitted that Microsoft was paying more for Aquantive than its business justified today. “The value that this company represents is beyond the strict [earnings] value today,” he said. “This is more about what capability it gives us in the market place and what that means in revenues and partnerships.”

Aquantive employs more than 2,000 people, mostly in America. Dobson said Microsoft would take care with the integration to ensure that it retained the firm’s talent. Brian McAndrews, Acquantive’s chief executive, will report directly to Kevin Johnson, president of Microsoft’s platforms and services division.

Analysts believe that ad-funded business models – such as Google – pose a threat to Microsoft’s traditional approach of charging for its software. Dobson said Microsoft was already experimenting with ad-funded versions of Office and Windows.

http://business.timesonline.co.uk/tol/business/industry_sectors/technology/article1812719.ece

The search is on to find ‘Britain’s Bill Gates’

It's hard to read this with a straight face!

Today marks the launch of a spectacular competition for British entrepreneurs, giving businesses around the country the chance to secure the biggest prizes ever offered to growing firms.

Bank of Scotland Corporate, in partnership with The Sunday Times, is pledging to provide up to £25m in funding for entrepreneurs who can show a sound track record and a convincing plan to expand. The funding will be completely interest-free.

Our £25m Entrepreneur Challenge marks a new milestone in The Sunday Times’s long-standing commitment to support businesses hungry for success.

The competition is offering five regional prizes, each giving an entrepreneur access to £5m for investment. The winners will pay no fees, no charges and no interest for three years, giving them the backing to develop their businesses. At current interest rates, this is worth more than £800,000 in cash.

The overall national winner will also be offered four days of mentoring by Sir Philip Green, head of the BHS and Arcadia retailing empires.

Entrepreneur Challenge was launched last week at a sparkling dinner at Quaglino’s restaurant in London attended by luminaries of the British business community.

Figures at the dinner included John Madejski, chairman of Reading Football Club; Tim Richards, who heads the cinema chain Vue Entertainment; Des Gune-wardena, who runs the restaurant group D&D London; and the Dragons’ Den judge Duncan Bannatyne.

Launching the competition, Peter Cum-mings, chief executive of Bank of Scotland Corporate, said: “Bank of Scotland Corporate is the bank for entrepreneurs – we’ve built our reputation on it. Now, with the Entrepreneur Challenge, we’re demonstrating our commitment by backing a new generation of entrepreneurs.

“By encouraging enterprising companies, we hope to see new jobs and new wealth created in our economy. I am sure Britain has a new Bill Gates – we just haven’t found him yet.”

Green, who will be one of the three national judges for the competition, said: “Bank of Scotland Corporate has been an important part of my career and I am very excited about being part of this and making it happen.”

Entrepreneur Challenge is open to virtually all British companies that have been trading for three years or more and have an annual turnover of at least £2m.

A team of regional judges, including John Duffield, founder of New Star Asset Management, will be assessing entries.

http://business.timesonline.co.uk/tol/business/related_reports/entrepreneurs/
article1812712.ece

Barbie's last online stand?

Barbie has long been the only doll in town for girls. But online, the fashion icon is struggling to stay the most popular in a class of virtual penguins, Mickey Mouse and small plush pets.

Mattel, the maker of Barbie, is preparing one of its biggest updates of the toy's image; this summer, it will start selling plastic "Barbie Girls," a handheld MP3 player that can be accessorized like a doll and used to unlock special animations, make friends and shop in a virtual world on the Web. The toy is likely to test Mattel's ability to stay relevant in a Digital Age that has changed the way little girls play and socialize.

Certainly, Mattel has tried to keep its brands Internet-savvy for more than a decade. Mattel's Barbie.com and EverythingGirl.com have the highest concentration of girls age 2 to 11 on the Web, according to researcher Nielsen NetRatings, but their overall audience hasn't grown much over the years.

The company is also being pressured by toys like Webkinz and an avalanche of virtual worlds designed for kids. Bratz, for example, the racier fashion dolls that have eaten into Barbie sales in recent years, plans to launch a virtual world called Bratz World (Be-Bratz.com) and a Rescue Pets (my e-pets.com) this summer.

"Mattel is the 800-pound gorilla in the toy industry, and it's worked hard to continually reinvent itself," said Lisa Bradner, senior analyst at Forrester Research. "I think they'll continue to be a very strong player, but it's hard to innovate at the speed and agility that a company like Webkinz can."

The overall audience for Barbie sites has declined slightly over the last year, and has failed to grow over the last three years. According to Nielsen NetRatings, the Barbie site attracted about 1.9 million unique visitors from home and work in April 2007, down from 2.1 million in April 2006. Those numbers are in line with about 2 million visitors in the same month in 2004.

In contrast, Webkinz--plush pets with corresponding virtual homes on the Web--have exploded in popularity over the last year. In April, Webkinz attracted 3.6 million unique visitors from home and work, up from just 285,000 a year before. Webkinz has even usurped the long-reigning virtual pets site of the Web--Neopets, which went from 2.6 million unique visitors in April 2006 to 3.2 million in 2007.

Another major contender in the kids category, ages 2 to 11, is Club Penguin, a virtual community of penguin avatars for children. It drew more than 4 million unique visitors in April. And Disney.com, the generalist playground of Mickey Mouse and other characters, attracted more than 11 million visitors that month.

"Certainly it's a competitive market. It's going to be up to Mattel to keep up with kids' interests," said Heather Dougherty, a senior retail analyst at Nielsen NetRatings. "They need a wildly popular Webkinz-like product."

Still, Mattel is hoping a Barbie MP3 player can lure an audience of little girls through music, and eventually outpace other real-to-virtual-world toys. (The music player, which will begin selling in July for about $60, can hold up to 120 MP3s or 240 WMA-file songs. Girls can buy $10 accessory kits to dress up the toy MP3 player.)

"This is a new type of play experience, with a real world and online experience," said Rosie O'Neil, brand manager in marketing and "chief Barbie girl" for Mattel. "In the real world, it's a next-generation fashion doll, an MP3 player that works like a Shuffle. It has a USB key to unlock a bunch of new features on BarbieGirls.com, where they can do things like adopt pets and buy furniture."

O'Neil added that the new BarbieGirls.com site is the first virtual world designed exclusively for girls, and that could go a long way to appeal to its target audience. (Mattel officially launched its new virtual world on April 26, and so far, BarbieGirls.com has registered half a million kids, according to O'Neil.) "We're growing at a rate that's unprecedented," she said.

"There is a large group of girls who still love Barbie, they're just playing with it in a different way." --Rosie O'Neil, brand manager in marketing, Mattel

"There is a large group of girls who still love Barbie, they're just playing with it in a different way," she added. "We found that with girls 7 to 12 they love the online experience. This is fusion of those worlds."

Mattel introduced Barbie in 1959, and she has been the No. 1 fashion doll for the last 49 years, according to the company. But Barbie has faced declining sales in the last five years in the face of new technologies and newer, racier rivals like Bratz.

In-store sales of Barbie in the United States, for example, were down 20 percent in the first quarter compared with the same period a year before. But Oppenheimer & Co. financial analyst Linda Bolton Weiser said in a research note that if the new Barbie MP3 player could leverage similarities to Webkinz's viral growth, Mattel could see some upside: a maximum annual sales potential of about $100 million.

Still, she warned of some weakness in the product, including the design of the virtual world that doesn't encourage "movement through the world and discovery of the content."

Like many major retail brands, Mattel has tried many Internet initiatives. As early as 1998, Mattel began letting kids customize a version of Barbie via a Web site. In the late 1990s, it launched a Barbie-themed PC, which failed to captivate the market. And during the dot-com boom, it also bought girls-game company Purple Moon, which operated a community site for girls. That site has apparently morphed into Mattel-owned EverythingGirl.com. It's even penned a Barbie blog, which seems to no longer exist.

That said, Bradner believes Mattel has an opportunity to capture the girls market online by differentiating itself with an MP3 player and a safe haven on the Web.

Mattel said it has infused safety in the product and virtual world. Among the safety features of its virtual world are filtered online chat that prevents hate language or girls from giving out personal information. It also requires that owners of Barbie Girls MP3 player physically connect the device to a friend's computer before they can be "best friends" in the virtual world, giving them special chat privileges like sharing that personal information.

Mattel could ultimately be hobbled by the nature of its business, however.

http://www.nytimes.com/cnet/CNET_2100-1041_3-6184743.html?_r=1&oref=slogin

Microsoft snags aQuantive for $6 billion

Microsoft announced Friday it is buying online ad agency aQuantive in a $6 billion cash deal, paying top dollar to buy into the suddenly hot sector. Microsoft paid $66.50 a share, an 85 percent premium over Thursday's close for aQuantive .

The deal is an indication of Microsoft's efforts to catch up in the growing online advertising space, and is just the latest deal in the sector, following recent moves by rivals Yahoo and Google.

"This deal takes our advertising business to a new level," said Microsoft Chief Operating Officer Kevin Johnson during a call with analysts Friday. "This allows us to take a bigger piece of that $40 billion pie that is still growing."

Microsoft executives said they were in a bidding war for aQuantive, although they did not identify the other bidder or bidders.

"We're happy with the price we paid. We believe it's exactly the right company to buy so we're willing to pay the value we are paying today," said CFO Chris Liddell. "We will use the strength of our balance sheet when we think it's necessary to drive growth going forward."

Liddell said the deal does not signal that Microsoft will turn more to acquisitions to keep growing in the future, although he added, "We certainly have the economic fire power if we decide to do more." Microsoft had about $28.2 billion in cash and short-term investments on its balance sheet at the end of the most recent quarter.

The earnings of aQuantive are miniscule for a company of Microsoft's size. The software giant reported net income of $14.2 million on revenue of $142.6 million in the first quarter when it released results last week. Microsoft executive said that the deal will not cause them to change any short-term earnings guidance.

The moves follow Thursday's deal by WPP Group, the world's No. 2 advertising firm, to buy online advertising company 24/7 Real Media for $649 million. Microsoft had been interested in buying 24/7 Real Media, according to some published reports.

Last month Yahoo bought the remaining portion of online ad firm Right Media that it did not already own for $680 million, while Google bought privately held DoubleClick for $3.1 billion.

Microsoft has raised anti-trust objections to the Google deal for DoubleClick, and on the call Friday Microsoft General Counsel Brad Smith said that the Microsoft deal for aQuantive by no means changes any of those objections.

"Microsoft today is in none of (aQuantive's) businesses," he said. "Google and DoubleClick have strongly overlapping businesses."

The traditional advertising agencies have also been making purchases in the sector.

Last month the Interpublic Group of Cos. announced it was buying a privately held marketing agency, Reprise Media Inc., for an undisclosed price. Paris-based Publicis Groupe (Charts) purchased online advertising company Digitas for $1.3 billion in a deal announced in December that paid a 23.5 percent premium.

Shares of Dow component Microsoft slipped 26 cents, or 0.8 percent, to $30.72 in early trading Friday, while shares of aQuantive shot up $27.63, or about 77 percent, to $63.50.

http://money.cnn.com/2007/05/18/technology/microsoft_aquantive/

FCC approves Apple’s iPhone

Apple’s iPhone has cleared a major hurdle on its way to a commercial release. According to a notification posted on the FCC’s website today, the organization’s Office of Engineering and Technology has officially approved Apple’s upcoming iPhone. Besides the fact that Apple has provide test results for the 850 MHz and 1900 MHz GSM bands, the filing does not reveal any additional information about the iPhone: Apple requested that documents that contain detailed information about the iPhone – such as the manual of product pictures - remain confidential until July 1 of this year.

However, we do know that the phone will have a 3.5” touchscreen with 160 dpi resolution. Rumor has it that Intel is supplying key hardware for the phone and that China-based Foxconn will assemble the device. At 11.6 mm, the iPhone is not the thinnest phone out there, but it is thin enough to be able to escape the definition of being bulky. Standard equipment include 4 GB or 8 GB of flash memory storage, Bluetooth and Wi-Fi connectivity, a web browser, push email (with Yahoo email). Instead of relying on other software companies, Apple decided to use Mac OS X as operating system for the iPhone.

At the time of its release, the iPhone will be available only from Cingular Wireless as a GSM/EDGE device for Apple mentioned in a newsletter that the iPhone will be available sometime in June, while an exact launch date has been withheld so far. However, News.com mentioned in a blog posting that a Cingular representative revealed that the iPhone will be introduced on June 11.

Pricing for the phone is set at $500 for the 4 GB version and $600 for the 8 GB model.

http://www.tgdaily.com/content/view/32091/145/

Apple Inc.: Strategic Misstep, Or Supreme Confidence?

Will stellar product development trump product overlap and uncharacteristically bad timing at this consumer tech powerhouse?

Calif.-based Apple Inc. announced the sale of the 100 millionth iPod. To say that iPod sales have been anything less than dramatic would be an understatement, and to call the revolutionary iPod anything less than an entire product ecosystem wouldn't be doing it justice. Between the more than 4,000 accessories to date and the billions in revenue generated by selling proprietary downloads of songs 99 cents at a time on iTunes (and now TV shows, movies, audio books, etc.), Apple has built a nearly flawless business model around the iPod that is the envy of big tech and big media companies alike, and as sales built to record numbers it seemed that the only thing that could slow the iPod's ascent off the sales forecast charts would be Apple itself.

As unlikely as that may seem, it may have happened. Apple co-founder, CEO and chief evangelist Steve Jobs is a charismatic public presence by any account, and his theatrical unveiling of a prototype of the company's new iPhone at Apple's Macworld Expo consumer conference this past January was met with near-rapturous outpourings of desire for this new "it" device. However, once the glow of the sneak peek at this new Apple product-to-be wore off, a more sober assessment of the situation revealed that the premature announcement wasn't as well timed a move as industry watchers are accustomed to expecting from Apple.

First of all, consider the name. At the time of the Macworld announcement, San Jose-based Cisco Systems owned the exclusive rights to the term iPhone, and although there was no doubt that Apple (the originator of the iMac and iMovie, iPhoto and the rest of the iLife line) would acquire the rights by any means necessary, such a high-profile announcement surely put a strain on negotiations -- pressure that presumably was not in Apple's favor. Since then, the two companies have reached an agreement to share the name, but as should be expected, the terms of the trademark-sharing deal were not disclosed.

Secondly, consider the fact that the iPhone was nowhere near ready to ship when the prototype was unveiled. Again, Apple usually has all its ducks in a row (and boxed up and loaded into trucks) before sweeping aside the veil of secrecy surrounding any new product. By giving such a long (it's been almost six months and still no iPhone) time lag, Apple has not only allowed excitement to dim but has also negatively impacted iPod sales in the interim. Even Apple true believers are unlikely to shell out a few hundred hard-earned dollars on a new iPod when the $500-and-up iPhone has up to 8GB of memory and is just around the corner. Also, by giving the world an uncharacteristic pre-launch peek at the iPhone, Jobs put every reverse-engineering department in the grey market into a frenzy to produce a competitive knockoff and steal some market share from the real thing.

To cap it all off, there was actually another very interesting, unique new product unveiled at Macworld -- AppleTV -- with a confirmed ship date and for which Apple was already taking pre-orders. The brightness of Jobs' iPhone spotlight inevitably meant that quite a few consumers were left in the dark concerning this new media extension device, which allows for the streaming and playback of downloaded audiovisual content from iTunes on a home theater system.

Despite what was widely characterized as bad timing by Jobs, the iPhone's unique intuitive interface, rich feature set and undeniable cool factor paired with Apple's pre-loaded customer loyalty means that, so long as Apple's product developers remain at the top of their game, no amount of marketing missteps can keep this new Apple product from getting eaten up by the market.

http://www.industryweek.com/ReadArticle.aspx?ArticleID=14206&SectionID=5

Judge in tech trial says he 'doesn't know what a website is'

Evidence has emerged today that British judges exhibit wildly differing levels of IT competence.
One beak at least is almost unbelievably ignorant. Judge Peter Openshaw reportedly told prosecutors at Woolwich Crown Court, South East London: “The trouble is I don’t understand the language. I don’t really understand what a website is.”

Lawyers tried to explain, but without success.

“I haven’t quite grasped the concepts," muttered the bewildered 59-year-old jurist.

When an expert witness was called to testify on IT-related matters, the technologically-challenged legal beagle became worried.

“Will you ask him to keep it simple?" pleaded Openshaw. "We’ve got to start from basics.”

The accused were Younes Tsouli, Waseem Mughal, and Tariq al-Daour, charged with various computer-related terrorism offences. The trial continues.

Meanwhile, it appeared that other judges had managed to master at least one basic digital skill - that of surfing for smut on their office computers.

The Times reports today that the Lord chancellor's Office for Judicial Complaints has been compelled to reveal that it is holding a secret list of judges who have been busted trolling the internet for smut.

"Secret list of porn judges 'does exist,'" trumpeted the paper.

Richard Thomas, the Information Commissioner, ruled that: “It is important for the public to know and be assured that the Lord Chancellor [now the Office for Judicial Complaints] thoroughly investigates each and every allegation of computer misuse by judges.”

The finding continued: “This knowledge of transparency would reinforce public confidence in the Lord Chancellor’s ability effectively to supervise the judiciary. A greater loss of confidence in the Lord Chancellor would arise from the public’s being ‘left in the dark’ on the true state of affairs.”

A ministry of justice spokesman confirmed that it did indeed have a list of judges disciplined for googling for filth, but wouldn't disclose any details. Shame. It would have been nice to know what type of smut the judicial connoisseur goes for. Probably involves wigs, we're guessing.

http://www.theregister.co.uk/2007/05/17/judge_website_shocker/