Jobs Leopard leaps out of the cage, but will Mac sales follow?

Will Leopard have legs?

Apple saw booming sales of the latest version of its operating system over the weekend, which may help boost momentum for the company's line of Mac computers during the holiday season.

Analyst Keith Bachman, of BMO Capital Markets, estimated that 200,000 of those 2 million sales included Macs that were pre-installed with Leopard. And coming off a quarter in which Apple sold 2.16 million Macs running the previous operating system called Tiger, the question facing Apple is whether Leopard will be a force in adding to Mac sales during the end-of-the-year holiday shopping season.

"Consumers typically don't understand or know why they should care about an operating system," said J.P. Gownder, principal analyst with Forrester Research. "But in the Apple ecosystem, there are lots of evangelists that play a large role in proselytizing for Apple."

Apple has a tough act to follow regarding Mac sales. In addition to Apple just coming off its first quarter of more than 2 million Mac sales, technology research firm Gartner Inc. said Apple claimed about 8% of the U.S. PC market during the third quarter of the year.

Most analysts expect Mac sales to weaken slightly in the December quarter, as sales have historically been stronger during the back-to-school season. Apple shipped 1.6 million Macs during the final quarter of 2006.

Still, Gene Munster, of Piper Jaffray, said that the numbers illustrate the strong loyalty to the Mac and Apple's ability to sell frequent operating system upgrades to a greater share of its Mac customer base.

"These numbers show the Mac user base is growing," Munster said, in a research note. "It also shows that it is an unusually active user base." Munster has an outperform rating and $250 a share target on Apple's stock.

Bachman, of BMO Capital Markets, called the first weekend of Leopard's sales "impressive" and said his estimates for 2.15 million Mac sales for the quarter will likely turn out to be lower than Apple's final results.

In a research note, Bachman said Mac sales "will be in a barbell distribution this quarter, [with] lots of sales at the beginning with Leopard's release, and at the end of the quarter with holidays."

.http://www.marketwatch.com/news/story/apples-leopard-leaps-mac-sales/
story.aspx?guid=%7B0B191961-D06D-4DDA-9458-89910C2D8274%7D&dist=MostTopHome

Google and Friends Gang Up on Facebook

Google and some of the Web’s leading social networks are teaming up to take on the new kid on the block — Facebook.

On Thursday, an alliance of companies led by Google plans to begin introducing a common set of standards to allow software developers to write programs for Google’s social network, Orkut, as well as others, including LinkedIn, hi5, Friendster, Plaxo and Ning.

The strategy is aimed at one-upping Facebook, which last spring opened its service to outside developers. Since then, more than 5,000 small programs have been built to run on the Facebook site, and some have been adopted by millions of the site’s users. Most of those programs tap into connections among Facebook friends and spread themselves through those connections, as well as through a “news feed” that alerts Facebook users about what their friends are doing.

The New York Times learned of the alliance’s plan from people briefed on the matter. Google, which had planned to introduce the alliance at a party on Thursday evening, later confirmed the plan.

“It is going to forestall Facebook’s ability to get everyone writing just for Facebook,” said a person with knowledge of the plans who asked to remain anonymous because he was not authorized to speak on behalf of the alliance. The group’s platform, which is called OpenSocial, is “compatible across all the companies,” that person said.

“Facebook got the jump by announcing the Facebook platform and getting the traction they got. This is an open alternative to that,” the person also said.

The alliance includes business software makers Salesforce.com and Oracle, who are moving to let third-party programmers write applications that can be accessed by their customers. The start of OpenSocial comes just a week after Google lost to Microsoft in a bid to invest in Facebook and sell advertising on the social network’s pages outside the United States. And it comes just before the expected introduction by Facebook of an advertising system next week, which some analysts believe could compete with Google’s.

Joe Kraus, director of product management at Google, said that the alliance’s conversations preceded Microsoft’s investment in Facebook. “Obviously, we would love for them to be part of it,” Mr. Kraus said of Facebook. Facebook declined to comment.

Facebook’s success with its platform has proved that the combination of social data and news feeds is a powerful mechanism to help developers distribute their software. They are now seen as must-have functions for many Internet companies. Other social networks and Web companies, including MySpace and the instant messaging service Meebo.com, have announced plans to open their sites in similar ways.

http://www.nytimes.com/2007/10/31/technology/31google.html?ex
=1351483200&en=ffeaa22f4e2aa416&ei=5124&partner=permalink&exprod=permalink

Bubble Watch: Is Web 2.0 Ready for Puncture?

The Silicon Valley venture capitalist Michael Moritz is kinda-sorta the West Coast version of New York’s own Steve Rattner. Like Rattner, who (famously) was on the journalistic fast track at the New York Times before he (even more famously) jumped the rails for investment banking back in the early eighties, Moritz, at almost precisely the same time, was a writer on the rise in the San Francisco bureau of Time magazine before he took the plunge into high-tech finance. In the nineties, Moritz, a wry Welshman, bankrolled such monster Web start-ups as Yahoo, PayPal, and Google; according to the latest Forbes 400 list, his net worth stands at $1.3 billion. So Moritz is Rattner—only richer.

I mention all this because the other day, I found myself out in Northern California at the annual Web 2.0 Summit, lobbing questions at Moritz onstage. That morning, the Times had run a front-page story that was a kind of curtain-raiser for the conference, full of spicy tales of sky-high start-up valuations and the general-purpose giddiness now rampant in the Internet business, the thesis of which was summed up neatly by its lead: “Silicon Valley’s math is getting fuzzy again.”

I asked Moritz what sort of piece he would have done, were he still a hack, to capture the industry’s gestalt. Cheekily, Moritz replied that he would have written about the irrelevance of such stories: Who reads newspapers anymore, anyway? (Touché!) Eventually, though, Moritz got around to opining on the bubbliness of the second-generation Web boom. “The great news for me about these times of enthusiasm is that inevitably there’s a lot of bedlam, undoubtedly there’ll be carnage, there’ll be all sorts of carcasses strewn across the road,” he said. “But there will also be a handful of companies that will emerge to become very significant. And that’s what working and living and investing in Silicon Valley has always been about.”

Now, to skeptics, Moritz’s answer will sound like familiar Valley boilerplate—or the purest brand of bullshit. But to me, it says much about why the debate over whether Web 2.0 is a bubble has been so inconclusive and incoherent, conducted as if one side were speaking Swahili and the other barking like a dog. It’s also revealing about the yawning gulf that still divides the two coasts with regard to high-tech moneymaking. And about why, for all its many and manifest virtues, New York remains such a sad-assed backwater when it comes to the Internet industry.

It doesn’t require a Mensa-level IQ to make the case that the Web 2.0 boom is in fact a bubble. There’s the glut in venture capital: $3.4 billion invested in fledgling Internet firms in 2007, the most torrid pace since the height of the Web 1.0 mêlée. There are those lunatic valuations: A year ago, the burgeoning social-networking outfit Facebook was nearly bought by Yahoo for $1 billion; today, the price tag is $15 billion, an eye-popping number that did nothing to dissuade Google and Microsoft from bidding richly, fervently, to buy a tiny sliver of the company—a competition that Microsoft finally won last week. There’s the frothy run-up in the nasdaq, which has lofted Amazon’s stock back to its all-time high, has inflated Yahoo by almost 30 percent this year, and is rapidly propelling GOOG toward $700. And then there’s the flood of derivative, dum-dum start-ups inducing a severe case of dot-com déjà vu. To wit: MyCatSpace.com.

The nature of bubbles, of course, is that they pop. And today there’s no shortage of folks who believe that the end of this one is nigh. Among the doomsayers is the former Merrill Lynch analyst–cum–Eliot Spitzer whipping boy Henry Blodget, who’s lately resurrected himself with a smart new Web publication, Silicon Alley Insider. For Blodget, who headlined a recent blog post “Dear Internet Industry: Brace for Hard Times,” the signs of a looming Web recession are everywhere: in the meltdown of the mortgage market, which could hammer online advertising; in the slowdown in broadband adoption rates; in the rash of me-too competition among start-ups. Howard Lindzon, the founder of Wallstrip, worries that “the deals and rises are too easy and too loose. Too much back-patting and knuckle fives.” Even my friend Fred Wilson, the Über–NYC VC, has started fretting about “the coming downturn.”

All of these are clever dudes. And they’re hardly congenital bears. Quite the contrary. But the interesting thing that ties them together, along with most of the other prophets of implosion, is that none of them resides in Silicon Valley. Indeed, at the Web 2.0 shindig, in three days I couldn’t find a single digital Jeremiah in the bunch.

http://nymag.com/news/politics/powergrid/39954/

The Google Phone: Is It Soup Yet?

If you believe the Wall Street Journal, Google Inc. is close to unveiling its long-planned strategy to shake up the wireless market, people familiar with the matter say. The Web giant's ambitious goal: to make applications and services as accessible on cellphones as they are on the Internet.

In a move likely to kick off an intense debate about the future shape of the cellphone industry, Google wants to make it easier for cellphone customers to get a variety of extra services on their phones -- from maps to social-networking features to video-sharing. To get its way, however, the search giant will have to overcome resistance from wireless carriers and deal with potentially thorny security and privacy issues.

Google is trying to loosen the grip wireless carriers have over the software and services consumers can access on cellphones. Carriers have considerable clout, especially in the U.S., where they control distribution of phones to consumers through their retail stores.

Within the next two weeks, Google is expected to announce advanced software and services that would allow handset makers to bring Google-powered phones to market by the middle of next year, people familiar with the situation say. In recent months Google has approached several U.S. and foreign handset manufacturers about the idea of building phones tailored to Google software, with Taiwan's HTC Corp. and South Korea's LG Electronics Inc. mentioned in the industry as potential contenders. Google is also seeking partnerships with wireless operators. In the U.S., it has the most traction with Deutsche Telekom AG's T-Mobile USA, while in Europe it is pursuing relationships with France Télécom's Orange SA and Hutchison Whampoa Ltd.'s 3 U.K., people familiar with the matter say. A Google spokeswoman declined to comment.

The Google-powered phones are expected to wrap together several Google applications -- among them, its search engine, Google Maps, YouTube and Gmail email -- that have already made their way onto some mobile devices. The most radical element of the plan, though, is Google's push to make the phones' software "open" right down to the operating system, the layer that controls applications and interacts with the hardware. That means independent software developers would get access to the tools they need to build additional phone features.

"The most likely scenario from a Google perspective is to build some, if you will, inspirational platform [applications]; but primarily focus on getting third parties to do it because that's where the innovation will come from," said Google CEO Eric Schmidt, speaking at the All Things Digital conference in May. He said that "the new model of these phones is going to be person-to-person" with people exchanging videos and other types of data.

http://online.wsj.com/article/SB119369951717475558.html

The Official Apple Word : Apple Sells Two Million Copies of Mac OS X Leopard in First Weekend

Apple today announced that it sold (or delivered in the case of maintenance agreements) over two million copies of Mac OS® X Leopard since its release on Friday, far outpacing the first-weekend sales of Mac OS X Tiger, which was previously the most successful OS release in Apple’s history. Sales included copies sold at Apple’s retail stores, Apple Authorized Resellers, the online Apple Store®, under maintenance agreements and bundled with new Mac® computers. Leopard is the sixth major release of Mac OS X and is packed with more than 300 new features.

“Early indications are that Leopard will be a huge hit with customers,” said Steve Jobs, Apple’s CEO. “Leopard’s innovative features are getting great reviews and making more people than ever think about switching to the Mac.”

Leopard introduces Time Machine, an effortless way to automatically back up everything on a Mac*; a redesigned Finder that lets users quickly browse and share files between multiple Macs; Quick Look, a new way to instantly see files without opening an application; Spaces, an intuitive new feature used to create groups of applications and instantly switch between them; a brand new desktop with Stacks, a new way to easily access files from the Dock; and major enhancements to Mail and iChat

http://www.apple.com/pr/library/2007/10/30macosx.html

Meanwhile Back to Reality: “So Long Apple. The Party's Over”

You only have to spend a few minutes at JavaOne to know that Apple is popular with Java developers. Everywhere you look, you will see someone carrying around a shiny brushed metal MacBook Pro, or a gloss black or gloss white MacBook. Rick, Matt, and I, all have MacBook Pros. In addition, I have a dual core G5 PowerMac on my desktop, and Rick has a MacPro. Between company purchases from Apple, and our own personal purchases, we've spent tens of thousands of dollars with Apple on computer products. I think we've been quite loyal to Apple. But as of today, that's all changing for me. Today I am saying "so long Apple. The party's over."

What party do I mean? I mean the free ride that I as a Java developer have been giving Apple for way too long now. And as we have remained loyal to Apple, Apple has basically spit in our face. Not only did Leopard not ship with Java 6, but Apple, in typical fashion, apparently thinks it has no obligation to its customers to inform them about why the plans changed, and when (or even if at this point?) Apple will ever have a working copy of Java 6. Apparently, Apple has even been just deleting threads in their forums where people are complaining that Java 6 doesn't exist, rather than actually respond to them and let them know if there is any kind of time line for Java 6. But wait... It gets worse...

Java 5 on Leopard is so broken, that some of it is flat out unusable. For example, I recently tested an application I wrote that uses Java2D for image zooming. On Linux, Windows, and on Java 5 in OS X Tiger, it worked fabulously. The scaling and zooming are very smooth. On Leopard, it is not even usable. It's slow, and manages to rescale during zooming at about 1 frame every 5 seconds. Working with IntelliJ IDEA in Leopard has been no picnic either. On a fairly regular basis, it will seem to just hang for 10 seconds or more and then start working again. I suspect the garbage collector is having problems, but once again, these are problems that did not exist in Java 5 with the previous version of OS X.

http://www.javalobby.org/java/forums/t102936.html

Dreaded Blue Screen of Death effs up some Leopard installs

Unsanity at Deaf Leopard?

Apple support drones are getting an earful from Mac users who are getting the dreaded Blue Screen of Death while trying to update to the latest and greatest version of OS X.

A thread in Apple's official support forum titled Installation appears stuck on a plain blue screen had more than 300 posts when this article was last updated. A large percentage of the writers report getting a persistent blue screen after installing Leopard and then rebooting for the first time. These early-adopters have no option but to forcibly shut the machine down.

Among the early signs that something was awry was the following post from a Mac user in Australia:

I've just been on the phone to Apple AU support for an hour (around half of that spent on hold, but on-and-off as they sometimes consulted other techs), and they definitely know of the BSOD issue, said they started taking calls from 9am Friday as the first (early courier!) deliveries of Leopard were installed, and they've been flat out, "phones ringing non-stop" since then. Implied that Apple stateside has been swamped (as you can imagine) and they haven't been able to pinpoint the issue causing the BSOD but "they're looking into it".

It's still not clear what's causing the snafu. Seems at least some of the the people experiencing problems had a third-party developer app called Application Enhancer installed. Some also had external disks or other peripherals attached when they pulled the trigger on the Leopard install. But plenty of people reporting problems swear they aren't in either category. Incompatibilities with DIVX Application Support and Tiger's RAID system may also be at play.

This MacFixIt article offers a succinct list of trouble-shooting tips.

The OS went on sale on Friday all over the world. Many users later reported they were able to successfully install, but it sure was a messy road to redemption.

To recover, users were instructed to rip Application Enhancement, made by a company called Unsanity, from the Leopard's maw. The process is too gory for us to print here, but suffice it to say that, among other things, it had users use a command line to purge files with names like "Enhancer.prefpane" and "com.unsanity.ape.plist." Another remedy being suggested is to use the OS X feature Archive and Install, rather than the default Upgrade method. Some users say they are still unable to load Leopard even after following all of the aforesaid instructions.

Apple PR reps didn't respond to a request to comment by time of writing. We'll be sure to update if they do.

El Reg is eager to publish screenshots or snapshots of the fatal install. We'd imagine Steve Jobs to come up with more of an Azure or Cobalt Blue shade. If you have shots, please contact the reporter here.

We can only hope the normally smug Mac Guy is duly red-faced. After all, aren't BSODs, botched installs and kludgy fixes the stuff of the inferior OS to Cupertino's North? Not that we don't look forward to updating to Leopard soon. But as was the case with users of the iPhone, we think it'd be better to hold off a little while, thank you very much

http://www.theregister.co.uk/2007/10/27/leopard_install_problems/

Microsoft racks up best quarter since 1999

You mean someone's actually buying Vista?

Microsoft made revenues of $13.76bn in the three months ended 30 September 2007, an increase of 27 per cent on the same period last year. Net income was $4.29bn, up from $3.48bn in the same three months of 2006.

The company credited good consumer sales of Vista and sales of Halo for its success.

Chief finance officer Chris Liddell said it was an outstanding start and the company's fastest revenue growth since 1999.

The client division brought in $4.1bn, servers and tools made $2.9bn, and the firm's online services business turned over $671m. Online services made another loss this quarter, $264m compared to a loss of $102m in the same period last year. The Microsoft business division saw revenues of $4.1bn and the entertainment and devices division made revenues of $1.9bn

The news sent Microsoft shares to a six year high in after market trading - up 10 per cent on the day.

Looking forward, Microsoft predicts revenue of between $15.6bn and $16.1bn for the quarter ending 31 December 2007 and operating income of between $5.9bn and $6.1bn.

http://www.theregister.co.uk/2007/10/26/ms_quarterlies/

What Does A Tycoon Do After He’s Made His First $100MM? Try, Try Again

A few years ago, Mr. Levchin, one of the young princes of Silicon Valley, bought his first home, a 12-room Edwardian high atop a hill here, for $3.4 million. But Levchin, who made a fortune at age 27 selling PayPal, the online payment service he helped start in 1998, never moved in. He sold it two years later without having slept there for even one night.

Levchin, 32, is typical of a new generation of junior titans in Silicon Valley who might be called the prematurely rich — techies worth tens of millions of dollars, sometimes more, at an age when many others are just starting to figure out what to do with their lives. They are happy to be wealthy, of course, but many of these baby-faced technology tycoons often seem indifferent to the buying power of their money. Instead, nearly all of them have chosen to throw themselves back into a start-up, not so much because they want a spectacular new home or a personal jet — though many of them do — but because they are in a competition with themselves and one another.

Even among this jittery group of overachievers, Levchin stands out. In part that is because outdoing PayPal may be an all-but-impossible goal. Levchin acknowledges that he has already earned more money than he could ever spend. But he said he would not consider Slide.com, the photo and video sharing site he founded in 2005 that is still in its start-up phase, a success unless it is ultimately worth, in real dollars, “at least $1.54 billion”— the price eBay paid for PayPal. “Otherwise,” he asked rhetorically, “what have I learned?”

These days, despite the phenomenal success of PayPal, which gave him the bulk of a fortune worth around $100 million, Mr. Levchin continues to work an average of 15 to 18 hours a day. So committed is Mr. Levchin to seeing Slide.com succeed that he keeps a blood-pressure monitor on his desk. “I don’t know what I would do if I couldn’t start companies,” he said.

http://www.nytimes.com/2007/10/28/business/28invent.html?em&ex=
1193803200&en=a37ec3773b496f0e&ei=5087%0A

The Empire Strikes Back - MSFT: $4.3 Billion Profit . . . GOOG: $4.2 billion Revenues

Microsoft Corp. today announced revenue of $13.76 billion for the quarter ended September 30, 2007, a 27% increase over the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $5.92 billion, $4.29 billion and $0.45, respectively.

At first glance, the numbers look similar, except then you notice that MSFT reported more in profit ($4.3 billion) than GOOG reported in total revenues ($4.2 billion).

Google reported revenues of $4.23 billion for the quarter ended September 30, 2007, an increase of 57% compared to the third quarter of 2006 and an increase of 9% compared to the second quarter of 2007.

We will all end up working for MSFT, mark my words, many already are.

http://www.siliconvalleywatcher.com/mt/archives/2007/10/the_empire_stri_1.php

Job’s Leopard Pounces on Tokyo

The man is a total self-involved power-loving control freak and (obviously) we have no love for him, but we've got to hand it to him....

The update to Apple's Mac OS X operating system, called Leopard, went on sale at the Apple Store in Tokyo on Friday evening, part of a global launch that will unfold around the world over the next 24 hours.

Apple is putting the software on sale at 6 p.m. local time at stores worldwide. That means customers in Australia and New Zealand got a head start on the rest of the world, although Tokyo marks the first launch of the OS, also called Mac OS X 10.5, at an official Apple Store.

About 200 people queued in light rain in Tokyo's Ginza district for the start of sales, looking on as Apple staff prepared themselves for the event with cheers, countdowns and high-fives. The Apple store had been closed since 4 p.m. to allow for the launch preparations.

At 6 p.m. the first customers entered the store, already clutching T-shirts and a copy of the OS that Apple staff were handing out as they entered. Then it was off to the counter to pay.

Leopard is the fifth major upgrade that Apple has made to its OS, and its first in two and a half years. The software will be installed on all new Apple computers, or priced in the US at $129 for an upgrade. Apple has said the vast majority of Macs sold over the past four years will be able to run Leopard, as well as some older machines depending on their configuration.

http://www.pcworld.com/article/id,138977-c,macos/article.html

And now for something completely different: Virgin Mary pebble provokes holy online bidding war

Bidding on a Virgin Mary pebble simulacrum picked up on a New Zealand beach had this morning reached a rather silly NZ$26,700 on Trade Me after the owner declared she wouldn't take less that NZ50k for the mineralogical marvel.

The Virgin Mary pebbleThe 1cm stone was discovered last year by Christchurch woman Lisa-Marie Corlet on Kaikoura's South Beach. According to stuff.co.nz, she didn't realise the significance of the find until she got home, and friends quickly advised her to cash in on the rock.

Corlet, however, decided to hang onto the Holy Mother as a "good-luck charm". She confirmed: "I got it and I started having an awesome run of luck."

That didn't last, however, and she eventually decided to auction off the artifact, mindful of previous Virgin Mary simulacra money-spinners. She said: "I won't take less than $50,000 for it. If someone is willing to pay $28,000 for a piece of toast, I'm sure someone out there would pay at least that for rock."

Corlet's first auction was aborted after the winning bid turned out to be false. The relisting is evidently rousing the faithful to online economic excess, so it looks like the vendor's luck is about to change for the better once again.

It's a case of caveat emptor, though, according to NZ's Catholic church. Spokeswoman Lindsay Freer said: "The church's approach [to purported Virgin Mary simulacra] is always very cautious because no one has ever seen Mary, so how would they know what she looks like?"

http://www.theregister.co.uk/2007/10/24/virgin_mary_pebble/

Piper Jaffray: AT&T paying Apple $18 per iPhone, per month

No wonder Jobs wanted to stop the AT&T desertions! The exact details of AT&T's revenue-sharing agreement with Apple have not been disclosed, but one analyst thinks that over the two-year life of a user contract, the amount exceeds the actual price of the iPhone.

Silicon Alley Insider spotted a research note from Piper Jaffray's Gene Munster estimating that Apple is receiving $18 per month for each iPhone subscriber, under the revenue-sharing agreement between the two companies. Apple has confirmed that such an agreement exists, but has not shared the details about exactly how much cash it's getting from the revenue AT&T makes on iPhone customers using the carrier's data network. In July, Munster estimated Apple was receiving just $3 per iPhone subscriber and $11 per iPhone customers new to AT&T, but he's rethought the numbers after Apple's latest earnings release.

Munster takes the 1.4 million iPhones that Apple has sold since the device made its debut, and subtracts the 250,000 iPhones that Apple said it believes were bought to unlock from AT&T's network, to calculate that there were 1.15 million revenue-generating iPhones in play during Apple's fourth quarter. He then uses the $118 million that Apple recorded in iPhone-related revenue during the quarter to estimate out how much service revenue Apple took in from its share of AT&T's data charges by subtracting his estimate of hardware revenue generated by the sale of each iPhone, based on the average selling price.

iPhone users on AT&T's data network could be giving Apple as much as $18 a month under their revenue-sharing agreement. It's a little tricky because the iPhones that were sold in June and July have obviously been generating revenue for longer than the ones sold in September, but he arrives at a figure of $18 per iPhone subscriber in monthly payments to Apple during the fourth quarter.

That would mean that over the life of a two-year contract, AT&T will pay Apple $432 per iPhone subscriber. Silicon Alley Insider adds the $400 in revenue per iPhone and uses iSuppli's cost estimates to calculate a $565 profit per iPhone over a two-year period. I'm a little wary of those iSuppli numbers myself (they don't really account for things like research and development costs), but the exact number isn't really the point: Apple has a huge incentive to make sure iPhones stay on AT&T's network, even if Munster's numbers aren't perfect.

http://www.news.com/8301-13579_3-9803657-37.html

What bubble? Analysts defend $15 billion Facebook valuation

The new $15 billion price tag attached to Facebook was more a reflection of Microsoft's need to do a deal with the company rather than an indication of its true worth, analysts said today.

Fears that the internet industry - which has hosted a string of multi-billion dollar deals in recent months - was entering another bubble similar to the one it experienced seven years ago were also dismissed, with analysts pointing out that in most cases investment had come in areas that showed significant growth potential.

Yesterday Microsoft announced that it would buy a 1.6 per cent stake in Facebook for $240 million, ending a months-long bidding war with Google, its arch rival, which was also keen to share a piece of the lucrative advertising revenues that Facebook is expected to start generating.

As part of the deal, which values Facebook at roughly 100 times its estimated $150 million revenues, Microsoft will have exclusive right to serve ads on Facebook's platform, expanding an agreement which was already in place for ads on the US site.

Microsoft's investment, which makes Facebook's 23-year-old chief executive, Mark Zuckerberg, worth an estimated $3 billion - at least on paper - follows a string of high-value deals in the internet sector, including Google's acquisition of DoubleClick, the advertising platform, for $3.1 billion, and Microsoft's previous purchase of aQuantive, another server of internet ads, for $6 billion.

The deal gave rise to a wave of blog entries with titles like 'Facebook's funny money', and recalled the early valuations of Yahoo!, the search firm, which had a price to earnings multiple of 1,000 in March, 2000.

http://technology.timesonline.co.uk/tol/news/tech_and_web/article2738681.ece’

Apple Offers New Goodies in Leopard System

If you’re a computer company, what on earth do you add to the sixth annual version of your operating system? It’s not as though there are any glaring holes left. Nobody is still crying out for a better way to organize photos.

That’s the challenge that Apple faced in developing Mac OS X 10.5, code-named Leopard, which goes on sale tomorrow after a four-month delay. Price: $110 online, $190 for a family pack, or free on a new Mac. As Steve Jobs points out, for that money, “everyone gets the Ultimate version.” (That’s a swipe at Microsoft, which sells Windows Vista in at least five versions costing as much as $330 for the Ultimate).

Microsoft had it a little easier with Vista, because everybody knew what Windows needed: better security. Maybe Mac OS X is harder to hack, or maybe the virus writers consider the Mac’s 8 percent market share too piddling to bother with. But in its six years, Mac OS X hasn’t experienced a single virus outbreak or spyware infestation.

So Apple’s mission in Leopard was to make us aware of needs we never knew we had — something Apple is usually good at. Apple’s Web site lists 300 new features in Leopard. They’re not all earth-shattering; they include a Braille font, a “Word of the Day” screen saver and a Danish spelling checker. (Settle down, folks.) Fortunately, others really do make you slap your head and say, “Of course!”

The one Apple extols the most, with reason, is called Time Machine. It’s a backup program. Of course, the world is full of backup programs. But almost nobody uses them. Chances are extremely good that you, at this moment, do not have an automated, regular backup of your entire computer.

http://www.nytimes.com/2007/10/25/technology/circuits/25pogue.
html?ex=1350964800&en=46e6096639495a7a&ei=5088&partner=rssnyt&emc=rss

Google Execs Really Do Hate Evil

At the last day of the Web 2.0 Summit, attendees learned that having their genome mapped will set them back US$300,000 and that Google Inc.'s founders really stress over the prevention and extermination of evil.

During a panel of former Google employees, they confirmed to moderator and conference chair John Battelle that, yes, Larry Page and Sergey Brin do factor heavily into business and technology decisions whether they will have evil consequences.

WeatherBill CEO David Friedberg belonged to Google's Corporate Development team and, when negotiating acquisitions, it wasn't unheard of for either Page or Brin to ask hard questions about the deals if they sensed that the members of companies' management teams had an evil streak, he said.

Meanwhile, entrepreneur Bret Taylor, who developed products at Google for four years, said Page and Brin were excellent at steering product teams to think big while reminding them always keep in mind the question of evil.

Earlier in the day, genetics maverick J. Craig Venter informed attendees that mapping a person's genome these days costs about $300,000, but that, as happened with calculators, the price will tumble over time. For instance, if you can wait a couple of years, the cost will probably be closer to $100,000. That's a bargain compared with the about $70 million that it cost to map Venter's genome.

Venter's genome is posted on the Internet. He joked that there might come a day when singles on the dating scene will be able to do a Google search for potential mates' genomes, especially if they might at some point consider becoming fruitful and multiplying.

The son of a man who died of cardiac arrest at age 59 and of a woman who is still playing golf at 85, Venter has identified genes in his map both for heart disease and longevity. However, he estimates that scientists will need a critical mass of 10,000 human genomes in order to engage in the type of analysis that will lead to major, unequivocal insights about genetic traits.

And in a rare display of corporate affection, representatives from Internet archrivals Google and Microsoft sat beside each other at a panel on online maps and exchanged pleasantries.

The slightly surreal moment came about halfway through the a panel titled "Edge: Mapping." Brian McClendon, engineering director and product manager of Google Earth, commended his Microsoft peer Erik Jorgensen, general manager of Live Search, for Microsoft's support of Google's Keyhole Markup Language (KML).

KML is the language used to create data files for both Google Maps and its sister desktop application Google Earth. On Monday, Microsoft announced that its Live Search engine's local search component has gained support for KML, giving it access to the wealth of mapping data created with KML and available on the Web.

Microsoft and Google can "duke it out" for customer acquisition, but "the fight shouldn't be on file formats, so cooperating on this makes all the sense in the world," Jorgensen said during the mini lovefest.

http://www.pcworld.com/article/id,138707-page,1/article.html

GMail shakes IMAP out of coma

Google has slipped IMAP support into its GMail service, allowing users to manage their mail on the server and access it using different clients, with the status of their messages maintained.

IMAP is a vast improvement over POP3 - the more popular protocol for collecting email - though it seems GMail will continue to support both. The feature was reported by DownloadSquad, which says not all users have access to the functionality yet, though it is spreading.

Users can try logging off and reconnecting, or use the newly available help pages.

The POP3 user connects to the server, downloads their mail, and disconnects. Once they've downloaded their mail they can sort it into directories and see which messages they've read, or not. IMAP provides that same functionality, but on the server, so the user can create folders for their mail, read messages, and see the messages they've sent from any IMAP client.

Readers with long memories might recall using IMAP 10 years ago, when Netscape started supporting the protocol, and being delighted to see all their mail from anywhere without mucking about with synchronisation protocols or carrying a laptop around. But IMAP suffers from two drawbacks which have, until now, limited its deployment.

With IMAP all email is stored on the server, including sent mail, which can easily add up to several GB of data that ISPs (who used to run mail servers in the days before Hotmail) didn't want clogging up their servers. The other problem is that IMAP requires the user to remain connected, which back in the days of dial-up internet wasn't easy to arrange, but now is much less of a challenge.

So the clients and servers have supported IMAP for decades, and the space and connectivity have finally caught up with the protocol. The real question, therefore, is why it's taken Google so long, and how long it will take its competitors to catch up.

http://www.theregister.com/2007/10/24/gmail_imap/

M'SOFT AND GOOGLE DUKE IT OUT OVER HOT SITE

Google is threatening to once again beat rival Microsoft to the deal punch, this time in the white-hot Facebook investment sweepstakes.

Microsoft and Google are each vying to take a stake of between 5 percent and 10 percent in Mark Zuckerberg's social-networking site, with a deal expected to be announced in the next 24 to 48 hours, according to three sources familiar with the situation.

Google, in keeping with its past modus operandi, has been trying to drive the price up to a point that would scare away Microsoft. Running point for the Internet giant in its talks with Facebook is Tim Armstrong, the same executive who helped Google elbow Microsoft out of a deal with AOL similar to the one being talked about with Facebook.

This time around, however, Microsoft is hanging tough, despite recent comments by CEO Steve Ballmer that social-networking sites were "a bit faddish." One source said the Redmond, Wash.-based company is "willing to give any valuation possible" to keep Facebook away from Google.

Facebook's investors, which include Accel Partners and Greylock Partners, are looking for a pre-money valuation of $10 billion-$15 billion in any deal. On the high side, that means Microsoft or Google would have to come up with $1.5 billion for a 10 percent stake or $750 million for a 5 percent piece

Though both companies could afford to pony up that money on their own, neither is likely to do so, with one source saying an outside financial player will likely be brought in to help sell the round.

At stake is not just a seat at Facebook's table but also hundreds of millions of dollars in potential advertising revenue. Sources said if Google emerges victorious one of the first things the company is likely to do is unwind Microsoft's advertising deal with Facebook. Conversely, if Microsoft wins, it will likely look to expand that agreement.

Facebook is currently searching for a way to monetize that traffic on its site, with the company planning to make an online advertising announcement on Nov. 6.

Representatives for Microsoft, Google and Facebook all declined to comment.

http://www.nypost.com/seven/10242007/business/online_faceoff.htm?dlbk

AT&T Profit Surges 41%, Thanks to iPhone

The phone company said yesterday that its third-quarter net income rose 41 percent as the cellphone helped bring in new customers.

AT&T’s wireless unit added two million subscribers in the third quarter, an increase of 47 percent, for a total of 65.7 million subscriptions. The wireless growth offset a 4.7 percent loss of the San Antonio company’s landline customers.

“We had an excellent quarter in wireless growth,” Richard Lindner, AT&T’s chief financial officer, said in a conference call with analysts.

AT&T is clearly benefiting from Apple’s strong sales of the iPhone. It is the sole supplier of the cellphone service.

AT&T said it had activated 1.1 million subscriptions for iPhone users, and that roughly 40 percent of those subscribers were new AT&T customers.

Apple helped increase iPhone sales last month when it cut the price of the device from $599 to $399. AT&T reported net income of $3.06 billion, or 50 cents a share, in the third quarter, up from $2.17 billion, or 56 cents a share, in the same period last year. Revenue nearly doubled to $30.13 billion, from $15.6 billion in the quarter last year.

John Hodulik, an analyst with UBS, said that AT&T’s gross subscriber growth was particularly impressive considering that four out of five Americans already had cellphone service. AT&T took some market share from competitors during the quarter, he said. The company’s churn, or turnover rate, for customers under contract fell to 1.3 percent from 1.5 percent in the third quarter last year.

The company said that excluding costs related to acquisitions, it would have earned 71 cents a share, up from 63 cents a share a year earlier, which was in line with Wall Street’s expectations. The company announced its results before trading opened yesterday. AT&T shares increased more than 2 percent during the regular trading session to close at $42.02.

Revenue in AT&T’s wireless business increased 14 percent, to $10.94 billion, aided by increased use of data services like messaging, said Mr. Lindner. Wireless data revenue increased 64 percent during the quarter.

Most of the increase in AT&T’s wireless sales can be attributed to the company’s acquisition late last year of Bell South, which made AT&T the sole owner of Cingular Wireless.

http://www.nytimes.com/2007/10/24/business/24phone.html?
_r=1&ref=business&oref=slogin

Apple suspects 250,000 iPhones could be unlocked

Apple estimates over 250,000 iPhones are unlocked for use with other networksApple has released some numbers on iPhone sales and came to the conclusion that a lot more iPhones than most had suspected were actually purchased with the intention of unlocking and running on networks other than AT&T, likely overseas.

In the report, Apple guessed that as many as 250,000 of the 1.4 million iPhones sold were purchased by those with the intention of unlocking them and possibly reselling them to overseas customers to use on other networks. AT&T is currently the only approved carrier in the US to provide service for the iPhone.

In an effort to cut down on this, Apple issued a firmware update for the iPhone and the iPod Touch which would essentially “brick” the iPhone if it had been illegally unlocked. However, it was only a matter of weeks before hackers were able to work around the update and allow owners of unlocked iPhones to install the update and still be able to use their phones.

Apple has been having the same trouble with keeping hackers from creating software to allow the installation of third party applications on the phone, citing that this is not been allowed due to the security risks that come with opening up the platform. Recently Jobs and Apple have conceded some and have made plans to open up the iPhone platform and stop the cycle of hacking and blocking starting in February of 2008. It’s unlikely however that we’ll see the same thing happen with unlocking the phone for other carriers in the US in the near future due to the common exclusive deals phone makers create with carriers, in this case Apple and AT&T.

http://www.slipperybrick.com/2007/10/iphone-unlocked-250000/

British and Dutch police raids shut down the world's largest pre-release pirate music site

British and Dutch police today shut down the world’s biggest source of illegal pre-release chart albums and arrested a 24-year old man in an operation coordinated between Middlesbrough and Amsterdam.

The raids, which were coordinated by Interpol, follow a two-year investigation by the international and UK music industry bodies IFPI and BPI into the members-only online pirate pre-release club known as OiNK.

OiNK specialised in distributing albums leaked on to the internet, often weeks ahead of their official release date. More than 60 major album releases have been leaked on OiNK so far this year, making it the primary source worldwide for illegal pre-release music.

The site, with an estimated membership of 180,000, has been used by many hardcore file-sharers to violate the rights of artists and producers by obtaining copyrighted recordings and making them available on the internet.

It is alleged that the site was operated by a 24-year-old man in the Middlesbrough area, who was arrested today. The site’s servers, based in Amsterdam, were seized in a series of raids last week. OiNK’s operator allegedly made money by setting up a donations account on the site facilitated by PayPal.

OiNK used peer-to-peer technology called BitTorrent to distribute music. Torrent sites such as OiNK act as a library for torrent files. BitTorrent is the most popular software for internet file sharing and OiNK was the best-known for pre-release piracy.

http://www.ifpi.org/content/section_news/20071023.html

Comcast's less-than-free flow

The cable company appears to have been intercepting data sent through its network.

Internet users take for granted the free flow of information that has made the Net such a vibrant and innovative communications medium. But Comcast cable-modem users have discovered that certain types of information don't flow so well, and the company has been less than forthcoming as to why.

Recent investigations by the Associated Press, the Electronic Frontier Foundation and blogger Kevin Kanarski uncovered surreptitious efforts by Comcast to interfere with at least three types of traffic: packets sent via the BitTorrent and Gnutella protocols, which are forms of file-sharing software, and through Lotus Notes, an electronic messaging program. Comcast's equipment tried to interdict at least some of the data, particularly if it involved communications with non-Comcast customers. And it did so in a way that was designed to hide Comcast's involvement.

Comcast officials say the Lotus Notes problems were caused by a software glitch, adding that the company does not block customers from using file-sharing applications. It does, however, manage its network so that a few subscribers using bandwidth-hogging programs don't slow everyone else's Web surfing.

BitTorrent, which enables users to download as much data as their Internet connection can handle, can consume a lot of network capacity. Together with other file-sharing programs, it accounts for more than a third of all data sent across the Net. So it's not surprising that Comcast, the largest supplier of Internet service to U.S. homes, would try to manage the load that those programs place on its network.

The problemo is that Comcast has done that management secretly and unpredictably. To avoid the appearance of surveilling its users, it has applied its management tools indiscriminately, which means that legitimate BitTorrent downloads are affected as much as bootlegged ones. And while it insists that it doesn't block anything, it's easy to see how Comcast's interference could prove problematic for businesses using BitTorrent as a distribution platform.

The revelations about Comcast are the latest sign that stronger rules are needed to bar improper meddling by broadband providers, at least until consumers have more alternatives. Network operators shouldn't be able to dictate how companies distribute their wares online. Comcast's cable-TV arm, after all, competes with companies that use BitTorrent for online TV services, and consumers should be able to judge them without Comcast's influence. Nor should network operators surreptitiously impede data, leaving customers unaware of the extent or source of the interference. If customers are using a disproportionate amount of bandwidth, let them pay for extra for it.

http://www.latimes.com/news/printedition/asection/la-ed-
comcast23oct23,1,1569761.story?coll=la-news-a_section

iSales prop up Apple results

The fruity one nears a billion in fiscal Q4

Apple is celebrating a strong fourth quarter with revenues of $6.22bn in the three months ending 29 September 2007, and a profit of $904m, or just over $1 a share.

In the same period a year ago Apple made revenues of $4.84bn and profits of $542m. So for the fiscal year 2007 Apple made revenues of $24bn and a net profit of $3.5bn.

Mac shipments were up 34 per cent on last year - Apple shipped 2.1 million machines in the quarter.

Apple also sold 10.2 million iPods in the three months - up 17 per cent on the same quarter last year. The iPhone racked up 1.2 million sales, making cumulative sales for 2007 of 1.4 million.

For the first quarter of 2008, Apple expects turnover of $9.2bn and profits of $1.42 a share

http://www.theregister.co.uk/2007/10/23/apples_strong_quarter/

Dell to Sell Computers and Other Products at Staples

Dell plans to sell computers and other electronics gear at 1,400 Staples stores, taking another step away from the direct-to-customer business model it pioneered.

Dell and Staples announced Monday that Staples would offer Dell desktop and notebook computers, monitors, printers, ink and toner starting Nov. 11. Dell products also will be available on the Staples Web site.

Initial Dell computer models to be sold at Staples include Inspiron 1721 and 1521 notebooks, and Inspiron 530 desktops.

Dell, based in Round Rock, Tex., was founded in the 1980s on a lower-cost direct-to-consumer business model that made the company the global leader in PC sales. But Hewlett-Packard overtook the top spot last year, and Dell started considering new ways to sell its products beyond the Internet and telephone sales.

In May, Dell struck a deal with Wal-Mart Stores to sell PCs in about 3,000 stores. Dell also has struck partnerships recently with Bic Camera in Japan, Carphone Warehouse in Britain, and Gome stores in China.

With the Staples deal, Dell products will be available in more than 10,000 stores, Dell said.

Staples, based in Framingham, Mass., already offers several other major computer brands, including Hewlett Packard, Acer and Toshiba.

http://www.nytimes.com/2007/10/23/technology/23dell.html?_r=1&ref=technology&oref=slogin

Microsoft will not appeal EU monopoly fine

Towel thrown in

Microsoft has finally blinked in its three-year stare-out contest with the European Commission. Today the firm said it would not launch another appeal against the landmark €497m anti-trust fine slapped on it in 2004.

The vanquished vendor will not attempt to overturn the European Court of First Instance's September verdict. It'll now have to open up access to APIs to let other developers, including open sourcers, interoperate with Windows servers.

In a press conference in Brussels today, European Competition Commissioner "Steely" Neelie Kroes said: "I have been in almost daily contact with Steve Ballmer over the last two or three weeks. As a result of final contacts that took place early this morning, I am now in a position to present to you the results of those highly constructive conversations.

"I told Microsoft that its royalty rates were too high for the patents they claim are applicable to the interoperability information."

As a result, Microsoft has abandoned its attempts to charge an ongoing percentage royalty to third parties for licensing interoperability information. It'll now levy a one-off charge of €10,000. The royalty on related patents will also be slashed from 5.95 per cent to 0.4 per cent.

Microsoft sent us this reaction:

At the time the Court of First Instance (CFI) issued its judgment in September, Microsoft committed to taking any further steps necessary to achieve full compliance with the commission's decision. We have undertaken a constructive discussion with the commission and have now agreed on those additional steps.

We will not appeal the CFI's decision to the European Court of Justice and will continue to work closely with the commission and the industry to ensure a flourishing and competitive environment for information technology in Europe and around the world.

Kroes predicted that the agreement would profoundly affect the software industry for years to come. "The measures that the commission has insisted upon will benefit computer users by bringing competition and innovation back to the server market."

Kroes finished her speech with a warning: "[This] sets a precedent with regard to Microsoft's future market behaviour in this and other areas. Microsoft must bear this in mind."

http://www.theregister.co.uk/2007/10/22/microsoft_europe_agreement/

Street to Jobs: Prove It

Apple's fourth-quarter results after Monday's closing bell may show whether the recent innovation will validate a soaring stock.

The company showed its mettle during the quarter with an impressive update of its blockbuster iPod franchise and the increasingly popular line of Mac computers. It also made a wise -- albeit poorly timed -- midcourse correction to the price of its iPhone, which propelled sales above 1 million in early September.

As a result, Apple's stock has notched a series of all-time highs since mid-September.

On Friday, the stock fell along with the rest of the market, but still managed to close at $170.42, just below an all-time high of $173.50 reached in the previous trading session.

Analysts have helped fuel investors' expectations by steadily raising fourth-quarter earning estimates to an average of 86 cents a share on $6 billion in revenue, well above the company's forecast of 65 cents a share and $5.7 billion in sales.

While the iPod and iPhone have enjoyed much of the limelight, Apple's growth story is predicated mostly on the Mac. In the previous three quarters, Mac sales have outpaced other Apple products by increasing their contribution to sales from 36% to 41%.

http://www.thestreet.com/s/street-to-apple-prove-it/newsanalysis/techstockupdate/10385615.html?puc=googlefi

Analysts ecstatic over AMD's $226m loss in Q3

'Nice job, guys'

You have to appreciate Wall Street's unending desire to see AMD - the ultimate underdog - succeed.

The chip maker today posted a $226m loss in the third quarter, replacing a $121m profit in the same period a year ago. In addition, executives rebuffed any requests to commit to profitability down the road. But still the analysts patted AMD on the back for a quarter well done.

Krishna Shankar of JMP Securities dished out a "congratulations on the progress." JoAnne Feeney at FTN Midwest Securities provided a "congratulations on a nice quarter." And a Lehman Brothers analyst - Timothy Luke, we believe - came out with a "nice job on the execution." One last analyst whose name we didn't catch issued a "Congratulations on a very strong performance." Were you just to splice out the analysts' back-scratching, you'd have thought AMD a miracle maker.

It would seem the analysts were fixated on their own hopes and dreams or on AMD's 23 per cent year-over-year improvement in third-quarter revenue to $1.6bn. But not even AMD's CEO Hector Ruiz was as moved by the revenue rise as the analysts with their buy ratings on AMD.

"We are very encouraged by our progress but discouraged by our financial results," Ruiz said, during a conference call.

Later, CFO Bob Rivet could muster little more than faint hope that AMD may have a decent fourth quarter. "We will see in the fourth quarter," he said. "That is our goal to break even. Maybe we even have a shot at it."

Now, that's confidence.

AMD's chip sales fell to $1.28bn in the third quarter from $1.33bn in the same period last year. The company, however, added $252m in graphics chip sales from its acquisition of ATI that did not exist in 2006. The chip group saddled AMD with a $112m loss, while the graphics guys only lost $3m.

The consumer electronics group added $97m in revenue and a $3m loss.

AMD has spent years replacing the occasional strong quarter with strings of weak ones. Some pundits, including yours truly, thought that might change once Opteron gained a strong position in corporate accounts and AMD's overall chip technology improved. Well, no such luck. AMD's delays with four-core processors have now put it well behind Intel, which brings in more in profit than AMD produces in revenue.

Lest you think AMD has totally lost the plot, Rivet did show signs of focus.

"Our goal is to make money in any given quarter," he said. Phew.

http://www.theregister.co.uk/2007/10/19/amd_q3_chips/

Radiohead’s hit dooms record labels

Two weeks after Radiohead asked fans to pay only what they like before downloading their new album "In Rainbows," financial numbers are beginning to surface. So are the bloated carcasses of record labels. Why? Because by all accounts, Radiohead cleaned up without having to share a pound.

According to one source close to the band, reports The Seminal, fans downloaded 1.2 million copies of "In Rainbows" through October 12, two days after its release. But you already knew Radiohead had a large fan base.

What nobody knew was whether fans would pay for a Radiohead album if they didn't have to. Certainly, the record labels had to be hoping they wouldn't. Too bad for the fat cats, because reports are that the average price paid for "In Rainbows" fell between $5 and $8. A low estimate of Radiohead's take in two days is $6 million. Sounds like bands with a following now have permission to skip labels.

http://valleywag.com/tech/digital-music/radiohead-estimates-doom-record-labels-313395.php

Jobs, The Jerkoff, relents, but is it enough?

Yesterday, Steve Jobs announced that his company will release a software development kit (SDK) for the iPhone in February. Today comes word from the Paris-based International Herald Tribune that Apple has struck a deal in France with Orange, a division of France Telecom, to sell officially unlocked iPhones.

Apple was forced to make the move because French law forbids telecom service providers from tying handsets exclusively to their networks; the law continues to insist that cellphone users can move to a different service provider and take their phones with them. So Orange will sell two iPhones: a locked model, and an unlocked model.

One catch with the unlocked iPhone is that buyers must prove they live in France. Another catch is that it will be more expensive than the hefty $560 (U.S.) Apple plans to charge French customers for the locked version.

Meanwhile, Apple has signed deals that resemble the exclusive one it made with AT&T in the United States with companies that do not operate under French laws: O2 in Britain, the wireless division of Spain's Telefonica, and Germany's T-Mobile, a subsidiary of Deutsche Telekom.

It must have galled Jobs, a notorious control freak, to loosen his grip on the iPhone innards. I can understand some of his reluctance to delay the SDK, which could leave an Apple product vulnerable to hackers and virus makers. Apple has, after all, managed to stay afloat on a reputation that its products are almost impervious of viruses, worms and various other villainies.

It’s an enviable record, and if Jobs credits his reluctance to lift the lid on his products as the reason for that record, then it will be hard to dissuade him.

There are two thoughts that come to mind in light of these events.

First, that the United States has lagged behind Europe in its attitude toward business. Under the guise of not interfering with the marketplace, U.S. lawmakers have backed off corporate restrictions to protect consumers. And guess what? Corporations have seized the bit and are heading furiously toward monopolistic practices. In high tech, that has resulted in the arrogance of Microsoft, which thought that the European Union would collapse as easily as Washington did before the gods of free enterprise, but got soundly slapped around by the EU anti-trust forces; the same mule-headedness forced Apple to decide whether to maintain its control of the iPhone and kiss the French market goodbye, or to relent and offer an unlocked version to comply with French law.

The kind of pro-consumer hardball played by the EU and France is actually forcing companies to give competitors a level playing field. Laying off corporate greed is not the way to encourage competition, despite what Washington has come to believe.

Second, it’s really astonishing that Apple wanted to protect its mobile operating system from application developers, even for the first few months, when companies such as Microsoft have clearly shown that the more access you give developers, the stronger the product becomes.

Soon, Google is rumoured to release its hush-hush mobile GPhone with an open-source operating system, Skype is rumoured to be considering its own competitive product, and FIC has announced it will release its Neo1973, which runs on the OpenMoko Open Source operating system.

What’s common to these competitors is that they’re all using open-source software. Soon, the iPhone will be swamped by serious competition.

No doubt the Apple iPhone will still look better — no one can match Apple’s design team — but the damage has been done: Apple is behaving like a stodgy manufacturer desperately hanging on to its product and trying to control the way you use it and the way you buy it.

It won't wash.

http://www.theglobeandmail.com/servlet/story/RTGAM.20071018.WBcyberia

20071018164855/WBStory/WBcyberia

Microsoft: Time To Plot A Comeback?

It happened. Microsoft, better known as the Dark Side, is now the underdog to Google in the game of technology world domination.

The Redmond, Wash.-based software giant faces growing competition in its core software business, which dominated the industry for two decades, and it hasn’t had a bottom line-galvanizing success in any other area recently. It was late to online advertising, letting Google all but run away with that sector. It hasn’t had a big Web 2.0 hit yet. Thank god for Halo 3!

But Ballmer isn’t worried. The bombastic chief executive of Microsoft was brimming with confidence and good cheer about the company’s future at the Web 2.0 conference on Thursday in San Francisco. He told a packed room that Microsoft is working hard on several fronts so it can become a "three- or four-trick pony," holding onto the top spot in business software, but also becoming a force in search, advertising and entertainment.

Just give Microsoft a little more time, Ballmer said.

"I’m happy with everything but everything needs some improvement –sort of like your kids," said Ballmer, who strode onto the conference stage toting a vente-sized Starbucks iced tea. "There will be more operating systems releases. In the enterprise business we’re going gangbusters, but there’s so much of the enterprise market we haven’t tapped."

Asked if he thought Google’s word processing and spreadsheet applications were good, Ballmer was blunt: "No, I don’t."

Microsoft has been criticized for getting into online search and advertising late and with services that weren’t quite ready for prime time. But Ballmer said he’s not upset and knows it will be a long haul to go head-to-head with Google. To Microsoft’s advertising unit, he’d offer these encouraging words: "You’re 3-years-old and you’re playing basketball with 12-year-olds. You’re going to dunk on the other guys some day!"

On the acquisition front, Ballmer did not address questions about whether Microsoft will take a stake in Facebook. He did say, however, that he’s pleased with his company's recently announced advertising partnership with the social networking site.

And what about Microsoft’s rumored offer on the table for Yahoo! (nasdaq: YHOO - news - people )? Industry observers think the deal makes sense since Yahoo! would give Microsoft instant heft in search technologies. "That may or may not make sense to us or to Yahoo!" Ballmer said. "We believe in our independent path. We like what we’re going. If you talk to Jerry at Yahoo! he’d say they like what they’re doing."

Ballmer indicated that buying Yahoo! would be a stretch. He said Microsoft would prefer to acquire 20 companies a year for up to $1 billion, rather than a single business that would cost far more.

Still, Ballmer knows Microsoft needs another hit –soon. For the past year, the company’s stock has waffled in the high $20s. It closed on Thursday at $31.16. The stock hasn't been north of $32 since 2003. And there’s nothing like a new blockbuster product or service to lift share price. "If we produce an advertising business that generates another $5 to $10 billion profit, Wall Street will reward that," Ballmer predicted. "We just have to do that."

Yeah. High time to start working on that comeback strategy, schmuck!

http://www.forbes.com/technology/2007/10/18/microsoft-google-domination-
technology-software-cx__wt_1018microsoft.html

China shanghai’s Google, Microsoft, and Yahoo! traffic?

'You will use Baidu and you will like it’

It looks like China is hijacking web traffic from Google, Microsoft, and Yahoo!.

This morning, TechCrunch reported that at least one China-based visitor to Google Blog Search was redirected to Baidu, a search engine born and bred in the Far East, and the Silicon Valley uber-blog soon tossed up a second post that said much the same thing was happening with Microsoft and Yahoo! domains.

Similar reports have popped up in the past. In 2002, Reuters suggested that one of the country's largest ISPs, China Telecom, was rerouting Google traffic under pressure from government authorities.

When we contacted Google, the company confirmed that the Chinese are up to their old tricks. "We've had numerous reports that Google.cn and other search engines have been blocked in China and traffic redirected to other sites," said a company spokesman. "While this is clearly unfortunate, we've seen this happen before and are confident that service will be restored to our users in the very near future."

Microsoft told us it was "looking into the matter." And Yahoo! has yet to respond to our request for comment.

TechChonch claimed that the Google Blog Search redirect occurred over an internet connection provided by China Netcom, a China Telecom competitor. Meanwhile, it pointed to posts on other blogs and online forums that said traffic was being hijacked from Yahoo.com and various sub-sites as well as Microsoft's Live.com.

http://www.theregister.com/2007/10/18/china_hijacks_google_microsoft_yahoo_traffic/

Big media gangs up on pirates, file sharers

Copyright cabal ahead

A large group of media giants is poised to announce a new system for copyrighting content on t'internet. The US edition of the Wall Street Journal reports CBS, Microsoft, News Corp's Fox and MySpace units, NBC, Viacom, and Walt Disney are all part of the group. Reuters has more here.

Reuters says: "The agreed principles include using technology to eliminate copyright infringing content uploaded by users to websites and blocking any material before it is publicly accessible."

Notably absent from the group is Google, which launched its own effort to clean up YouTube videos on Monday (more here).

We don't know how the technology will work, but we do know that every attempt at making such technology in the past has quickly been followed by a pesky hacker breaking it.

Details are expected later today.

http://www.theregister.co.uk/2007/10/18/media_bigwigs_copyright_effort/

Cyberwar: China Declares War On Western Search Sites

Further to our earlier story on visitors to Google Blogsearch being redirected to Baidu in China, new reports have surfaced that would indicate that China has unilaterally blocked all three major search engines in China and is redirecting all requests to Baidu.

Digital Marketing Blog posts that all requests to Yahoo.com and sub-sites are being redirected to Baidu. Google Blogscoped forums indicate that Live.com is also being re-directed to Baidu, as well as confirming the Yahoo story and our earlier Google post. The re-direct would also appear to apply to YouTube.com.

There is some suggestion that the news of the Dalai Lama being awarded a prize by US President George W Bush may be behind the move, but this is unable to be confirmed.

I’ve written previously on the possibility that China may use its firewall as an economic tool as opposed to a censorship tool alone, and although censorship may be partially behind todays blanket ban of US search sites, the redirect to Baidu would indicate an economic motive; if the Chinese Government were serious about censorship alone we would have reports of page not found/ blocked messages, not redirects to Baidu. The Chinese Government is clearly using its censorship regime to the economic benefit of a Chinese owned (but NASDAQ listed) company. Although the United States Government is a poor WTO member (Antigua anyone) given that China is a recent member the US Government should lodge a complaint with the WTO. China expects free and open access to Western nations but is now not only blocking, but also redirecting domestic traffic away from Western internet sites that compete with local firms

http://www.techcrunch.com/2007/10/18/cyberwar-china-declares-war
-on-western-search-sites/

Silicon Valley Start-Ups Awash in Dollars, Again

Silicon Valley’s math is getting pixilated again.

Internet companies with funny names, little revenue and few customers are commanding high prices. And investors, having seemingly forgotten the pain of the first dot-com bust, are displaying symptoms of the disorder known as irrational exuberance.

Consider Facebook, the popular but financially unproven social network, which is reportedly being valued by investors at up to $15 billion. That is nearly half the value of Yahoo, a company with 38 times the number of employees and, based on estimates of Facebook’s income, 32 times the revenue.

Google, which recently surged past $600 a share, is now worth more than I.B.M., a company with eight times the revenue. More broadly, Internet start-ups are drawing investment based on their ability to build an audience, not bring in revenue — the very alchemy that many say led to the inflation and bursting of the dot-com bubble.

The surge in the perceived value of some start-ups has even surprised some entrepreneurs who are benefiting from it.

A year ago, Yahoo invested in Right Media, a New York-based company developing an online advertising network. Yahoo’s investment valued the firm at $200 million. Six months later, when Yahoo acquired Right Media outright, the purchase price had swelled to $850 million.
What changed? According to Right Media’s chief technology officer, Brian O’Kelley, very little, except that Yahoo’s rivals, Microsoft and Google, were writing billion-dollar checks to buy online advertising networks, and Yahoo thought it needed to pay any price to keep up.

“I have to say I giggled,” Mr. O’Kelley, 30, said of the deal that earned him millions. He has since left Right Media and is starting another company. “There is no way we quadrupled the value of the company in six months.”

The trend is described as a return to madness (by skeptics) or as a rational approach to unlimited opportunities presented by the Internet (by true believers). Greed, fear and a desperate rush to pick the next big winner are all adding fuel to the fire that is Silicon Valley’s resurgence.

“There’s definitely a lot of betting going on, and it’s not rational,” said Tim O’Reilly, a technology conference promoter and book publisher.

Mr. O’Reilly is credited with coining the phrase “Web 2.0,” which refers to a new generation of Web sites that encourage users to contribute material. His Web 2.0 conference, which begins Wednesday in San Francisco, has become a nexus for the optimism around the latest set of society-changing online tools. But that has not stopped Mr. O’Reilly from worrying that the industry is minting too many copycat companies, half-baked business plans and overpriced buyouts.

When the bubble inevitably pops, he said, “there are going to be a lot of people out of work again.”

Putting a value on start-ups has always been a mix of science and speculation. But as in the first dot-com boom and the recent surge in housing, seasoned financial professionals are seeming to indulge in some strange instinct to turn away from the science and lean instead on the speculation.

This time around, people indulging in that optimistic thinking are not mom-and-pop investors or day traders but venture capitalists whose coffers are overflowing with money from university endowments and hedge funds. Many of those financial professionals say that this time, everything is different.

http://www.nytimes.com/2007/10/17/business/media/17bubble.html?
_r=1&ref=technology&oref=slogin

Congress accuses Yahoo execs of lying

The House Foreign Affairs Committee has called for Yahoo CEO Jerry Yang and senior vice president Michael Callahan to testify on the company's practices in China at an upcoming hearing. The company is accused of providing false testimony to Congress during previous hearings about the role that the company played in assisting with the Chinese government's efforts to imprison dissidents.

The dispute revolves around the case of Chinese journalist Shi Tao, who was imprisoned by the Chinese government for "illegally providing state secrets to foreign entities" after he used a foreign web forum to anonymously publish information about the persecution of pro-democracy activists. Chinese officials ascertained Shi Tao's identity by obtaining his e-mail records and IP address from Yahoo.

In a testimony before Congress, Callahan claimed that the nature of the investigation wasn't revealed to the company. That claim was later challenged by human rights group Dui Hua. The human rights group published a translated version of the Chinese government's request which revealed that the charges against Shi Tao were in fact known to the company when they rendered assistance in capturing him. The head of the House Committee on Foreign Affairs responded by condemning the company. Now, Foreign Affairs Committee Chairman Rep. Tom Lantos (D-CA) wants to get to the bottom of the matter.

The Committee wants Callahan and Yang to come back for another hearing which is scheduled for November 6. "Our committee has established that Yahoo! provided false information to Congress in early 2006," said Lantos in a statement. "We want to clarify how that happened, and to hold the company to account for its actions both before and after its testimony proved untrue. And we want to examine what steps the company has taken since then to protect the privacy rights of its users in China."

http://arstechnica.com/news.ars/post/20071017-congress-accuses-
yahoo-execs-of-lying-about-assisting-with-arrest-of-chinese-dissident.html

Apple faces Greenpeace suit over iPhone

Are these guys publicity whores or is this the real thing? A consumer watchdog group is considering a lawsuit against Apple, after the release of a Greenpeace report that alleges the company's iPhone contains toxic chemicals, though some critics have labeled the study a publicity stunt.

According to the conservation group's report, scientists at Greenpeace Research Laboratories at the U.K.'s University of Exeter who dismantled the phone and tested 18 of its components found brominated flame retardants (BFRs) and polyvinyl chloride (PVC). Greenpeace claims BFRs can release toxic chemicals when recycled, and products with PVC have come under fire in the past few years for potentially leaking harmful chemicals.

The report acknowledged, however, that the levels of both substances found in the phone were in accordance with U.S. and European government regulations.

In response to the Greenpeace report, the California-based Center for Environmental Health filed a notice of intent to file a lawsuit Monday, according to a spokesman for the center.

A 60-day notice is required before filing a lawsuit in California. The organization believes using the iPhone could leave consumers at risk to several harmful PVC byproducts and plans to do its own research during the next 60 days.

"We'd like Apple to reformulate the product to eliminate or reduce toxic chemicals," communications director Charles Margulis told ABCNEWS.com.

In its defense, Apple responded to the report by reiterating its original "green Apple" statement, pointing out that the levels of chemicals in its products adhere to government standards.

http://www.abcnews.go.com/Technology/story?id=3736524&page=1

Microsoft talks up “their vision thing” on unified communications

That bloated has-been, Microsoft, hasn't given up yet. It rolled out its latest software designed to provide unified communications services for enterprises.

Office Communications Server 2007 and Office Communicator 2007 bundles VoIP telephony, instant messaging and video conferencing applications into a single offering.

Microsoft also unveiled five additional communications offerings, including an updated version of Office Live Meeting and a new videoconferencing phone with a 360-degree video camera, and a service pack for Exchange Server 2007.

The new products are part of a larger campaign to push Microsoft's unified communications offering.

"Unified communications software will transform business communications as fundamentally as email did in the 1990s," said Jeff Raikes, president of Microsoft's business division.

Chairman Bill Gates has expressed similar sentiments about the importance of unified communications.

Gates wrote in an open letter to customers that the concept of tying all office communication into a single source will "eliminate the boundaries between the various modes of communications we use throughout the day".

"Soon, you will have a single identity that spans all of the ways people can reach you, and you will be able to move a conversation seamlessly between voice, text and video and from one device to another as your location and information sharing needs change," he wrote.

http://www.vnunet.com/vnunet/news/2201322/microsoft-pitches-unified