A bill introduced in the U.S. Congress would double the number of immigrant worker visas available each year under the H-1B program, earning the legislation praise from Microsoft.
The Innovation Employment Act, introduced by Representative Gabrielle Giffords, an Arizona Democrat, late Thursday, would increase the cap in H-1B visas from 65,000 a year to 130,000 a year. In addition, there would be no cap on H-1B applications for foreign graduate students attending U.S. colleges and studying science, technology and related fields. Currently, there's a 20,000-a-year cap on visas for graduate students in all fields.
The legislation would increase the H-1B cap to 180,000 in 2010 to 2015 if the 130,000 cap is reached the year before.
Microsoft Chairman Bill Gates called for an increase in the H-1B visa cap while testifying before the House of Representatives Science and Technology Committee Wednesday. In recent years, the H-1B cap has been filled days -- or even the same day -- after the government opened the application period.
"We provide the world's best universities ... and the students are not allowed to stay and work in the country," Gates said Wednesday. "The fact is, [other countries'] smartest people want to come here and that's a huge advantage to us, and in a sense, we're turning them away."
Microsoft praised Giffords' bill. The legislation "would boost America's competitiveness by giving U.S. employers the flexibility they need to hire the best talent available to fill a severe shortage of qualified U.S. high-skilled workers," Jack Krumholtz, management director of federal government affairs for Microsoft, said in a statement. The bill would also increase U.S. jobs; Microsoft hires an additional four people to support each H-1B worker, Krumholtz said.
The U.S. government will begin accepting visa applications for next year in April, and Microsoft predicted the cap would be filled the same day, as it was in 2007. "The current system effectively prevents American companies from hiring this year's foreign-born university graduates," Krumholtz added.
The Giffords' bill would also increase penalties for H-1B fraud and allows the U.S. Department of Labor to reject H-1B applications for "clear indicators of fraud," in addition the current rule of rejecting only applications that are inaccurate or incomplete. The bill puts important safeguards on the H-1B program in place, said C.J. Karamargin, a spokesman for Giffords.
The bill would prohibit companies from hiring H-1B workers, then outsourcing them to other companies, he said. H-1B opponents have complained that outsourcing companies are among the top users of H-1B visas.
The legislation would also prohibit companies with more than 50 employees that have more than half of their staff as H-1B workers from hiring more H-1Bs, and it would prohibit employers from advertising jobs as available only to H-1B workers, Karamargin said. "The bill would put some teeth in the Department of Labor's oversight role" of the program, he said.
Giffords sees the importance of H-1Bs because Southern Arizona has been growing as a hub for tech companies, Karamargin added. "There's a need to stay competitive and keep the momentum growing," he added. "That means making sure the talent is available to drive the local and national tech economy."
But despite some attempts at addressing H-1B fraud, Giffords' bill would do little to address worker concerns about the program, said Ron Hira, a public policy professor at the Rochester Institute of Technology and former chairman of the Career and Workforce Policy Committee at the Institute of Electrical and Electronics Engineers-USA.
"This bill takes none of the concerns raised by American technology workers seriously," Hira said. He called the bill a "massive" increase in the H-1B cap.
"This bill will basically do nothing to stem employers from using the H-1B program as a source of cheap labor and to substitute for American workers," Hira said. "It doesn't require any kind of labor market test -- demonstrating that a shortage actually exists before hiring an H-1B."
The bill doesn't fix "serious problems" in setting wage floors for H-1B workers, Hira added. "No matter how one dresses up this bill, it would do nothing to curb the practice of companies bringing in computer programmers for $12 per hour to displace U.S. workers," he said. "If this bill were to be passed as written, it would do serious damage to the American information technology labor market, displacing many American workers, discouraging the next generation of students from entering the career, and speed up the offshoring of high-wage high-technology jobs."
Sunday, March 16, 2008
Microsoft blames Xbox shortages for lagging sales
Microsoft is citing a shortage in console availability as the reason its Xbox 360 console trailed substantially behind competitors in U.S. sales for the second month in a row in February, according to the latest numbers from the NPD Group.
Xbox 360 sold 254,600 consoles in the U.S. in February, compared to 587,600 for the Nintendo DS; 432,000 for the Nintendo Wii; 351,800 for the Sony Playstation 2 (PS2); and 280,800 for the Sony PS3. Xbox 360 console sales also trailed competitors in January, according to NPD.
"Our retailers are telling us that Xbox 360 is selling as fast as they can restock, but due to this high demand, Xbox 360 is experiencing temporary shortages," Microsoft said in an e-mail from its public relations firm on Friday. "We are working as quickly as we can to replenish inventory."
Aside from acknowledging shortages, Microsoft also painted a rosy picture around other numbers associated with sales of games and accessories for the Xbox console. In its e-mail, the company said a combination of "consoles plus content plus community" is what "makes a winning platform," and aside from console sales, Xbox 360 continues to lead competitors in other areas of the market.
According to NPD, Xbox 360 has a U.S. installed base of 9.6 million versus the Wii's 8.1 million and PS3's 3.8 million. Moreover, US$159 million was spent on Xbox 360 games in January, compared to $131 million on Wii games and $80 million for PS3 games, according to NPD, Microsoft said.
Xbox 360 games also continue to sell better than games for competing consoles and held five of the top 10 spots for titles sold for game consoles, according to NPD. Xbox 360's Call of Duty 4: Modern Warfare, by Activision, held the number-one spot with 296,200 units sold, and Devil May Cry 4, by Capcom, held the number-two spot with 295,200 units sold.
According to NPD, the total video-game market value is about US$1.33 billion, compared to $992.2 million a year ago, a rise of 34 percent.
Of the markets for consoles, gaming software and accessories, the software market grew the most in the past year, followed by the market for accessories. The market for video game software rose 47 percent and is now $668.7 million, compared to $453.7 million a year ago, while the market for accessories is $185.3 million, a 36 percent rise over $136.1 million a year ago, according to NPD. The market for video game hardware is now $480 million, compared to $402.3 million a year ago.
The success of Microsoft's Xbox business is important to watch as the company strives to diversify its revenue stream and make profits in new markets, such as gaming, entertainment and advertising. Despite launching its first Xbox console nearly seven years ago, Microsoft's Xbox business has yet to be profitable, though company executives have promised it will be by the end of its 2008 fiscal year on June 30. The division that oversees Xbox 360, Entertainment and Devices, also is expected to be profitable at that time.
Xbox 360 sold 254,600 consoles in the U.S. in February, compared to 587,600 for the Nintendo DS; 432,000 for the Nintendo Wii; 351,800 for the Sony Playstation 2 (PS2); and 280,800 for the Sony PS3. Xbox 360 console sales also trailed competitors in January, according to NPD.
"Our retailers are telling us that Xbox 360 is selling as fast as they can restock, but due to this high demand, Xbox 360 is experiencing temporary shortages," Microsoft said in an e-mail from its public relations firm on Friday. "We are working as quickly as we can to replenish inventory."
Aside from acknowledging shortages, Microsoft also painted a rosy picture around other numbers associated with sales of games and accessories for the Xbox console. In its e-mail, the company said a combination of "consoles plus content plus community" is what "makes a winning platform," and aside from console sales, Xbox 360 continues to lead competitors in other areas of the market.
According to NPD, Xbox 360 has a U.S. installed base of 9.6 million versus the Wii's 8.1 million and PS3's 3.8 million. Moreover, US$159 million was spent on Xbox 360 games in January, compared to $131 million on Wii games and $80 million for PS3 games, according to NPD, Microsoft said.
Xbox 360 games also continue to sell better than games for competing consoles and held five of the top 10 spots for titles sold for game consoles, according to NPD. Xbox 360's Call of Duty 4: Modern Warfare, by Activision, held the number-one spot with 296,200 units sold, and Devil May Cry 4, by Capcom, held the number-two spot with 295,200 units sold.
According to NPD, the total video-game market value is about US$1.33 billion, compared to $992.2 million a year ago, a rise of 34 percent.
Of the markets for consoles, gaming software and accessories, the software market grew the most in the past year, followed by the market for accessories. The market for video game software rose 47 percent and is now $668.7 million, compared to $453.7 million a year ago, while the market for accessories is $185.3 million, a 36 percent rise over $136.1 million a year ago, according to NPD. The market for video game hardware is now $480 million, compared to $402.3 million a year ago.
The success of Microsoft's Xbox business is important to watch as the company strives to diversify its revenue stream and make profits in new markets, such as gaming, entertainment and advertising. Despite launching its first Xbox console nearly seven years ago, Microsoft's Xbox business has yet to be profitable, though company executives have promised it will be by the end of its 2008 fiscal year on June 30. The division that oversees Xbox 360, Entertainment and Devices, also is expected to be profitable at that time.
Buggy Microsoft Excel patch causes bad math
If you installed one of those Excel security patches issued by Microsoft earlier this week, you may want to double-check your math.
That's because a bug in the recent MS08-014 patch is causing Excel to return zeroes instead of the correct number when certain types of macros are run within the program.
The issue, which does not affect all Excel users, messes up calculations for Office Excel 2003 users who are grabbing data such as stock quotes or inventory levels from sources in real time and plugging them into an Excel array.
"If you have applications that leverage Real Time Data sources in Visual Basic for Applications functions, we recommend that you perform additional testing before initiating a wide deployment of the update," Microsoft said in an updated frequently-asked-questions section of the bulletin on the MS08-014 update.
As a workaround, Microsoft recommends that users run affected Real Time Data functions on individual cells within the spreadsheet, rather than throughout the whole array.
Microsoft warned users of the problem late Thursday, and the company is working on a fix. The company's public relations agency could not immediately say Friday when this update might be released.
Ironically, Office 2003, Service Pack 3 users are not affected by the security flaw that is fixed with this patch, but Microsoft is still pushing this update out to these customers. Microsoft says that this is happening because the update files have higher version numbers than the existing files on Service Pack 3 systems.
Microsoft released four critical security patches on Tuesday, all related to Office. Of these, the MS08-014 update is one of the most important. It fixes a publicly disclosed flaw in Excel that hackers had been exploiting in online attacks since the middle of January.
That's because a bug in the recent MS08-014 patch is causing Excel to return zeroes instead of the correct number when certain types of macros are run within the program.
The issue, which does not affect all Excel users, messes up calculations for Office Excel 2003 users who are grabbing data such as stock quotes or inventory levels from sources in real time and plugging them into an Excel array.
"If you have applications that leverage Real Time Data sources in Visual Basic for Applications functions, we recommend that you perform additional testing before initiating a wide deployment of the update," Microsoft said in an updated frequently-asked-questions section of the bulletin on the MS08-014 update.
As a workaround, Microsoft recommends that users run affected Real Time Data functions on individual cells within the spreadsheet, rather than throughout the whole array.
Microsoft warned users of the problem late Thursday, and the company is working on a fix. The company's public relations agency could not immediately say Friday when this update might be released.
Ironically, Office 2003, Service Pack 3 users are not affected by the security flaw that is fixed with this patch, but Microsoft is still pushing this update out to these customers. Microsoft says that this is happening because the update files have higher version numbers than the existing files on Service Pack 3 systems.
Microsoft released four critical security patches on Tuesday, all related to Office. Of these, the MS08-014 update is one of the most important. It fixes a publicly disclosed flaw in Excel that hackers had been exploiting in online attacks since the middle of January.
Intel expects Atom desktops for $199
Taking advantage of dropping hardware prices, Intel expects to plug its newest Atom chips into desktops that will be available later this year from under US$200.
Intel expects an Atom chip, code-named Diamondville, to be used in fanless desktop computers designed for basic tasks like surfing the Internet or viewing standard-definition DVDs. The company expects the systems to be priced in the $199 to $250 range.
The Atom chips do not have the processing power required for more intense computing tasks like viewing high-definition DVDs, said Noury Al-Khaledy, general manager of Intel's Atom desktops, which the company called "Nettops." An Atom desktop could serve as a second machine in developed countries or a primary desktop in developing countries, he said.
The Nettops will run either Windows Vista Starter, Windows XP or Linux, Intel said. PC makers will decide which OS they use and set the exact pricing.
Intel has made it clear it wants to push Linux with the Nettop platform, said Roger Kay, president of Endpoint Technologies Associates. The Nettops are being conceived more as an appliance, and Windows Vista Starter is not designed for that type of machine. In addition, Windows Vista Starter will only be offered in developing countries.
The low-cost desktops are part of Intel's plan to push Atom chips into new product categories, which also include low-cost notebooks and "ultramobile" devices. The company is putting single-core Diamondville chips in notebooks priced between $250 to $300 and Silverthorne chips in ultramobile PCs, which Intel calls mobile Internet devices (MIDs).
Nettops may carry a dual-core version of Diamondville, which Intel is developing. Diamondville is based on Silverthorne, which has a small size and is designed for ultramobile devices.
The chip for Nettops has been designed from the ground up for low-cost desktops, Al-Khaledy said. It is not a modified version of Intel's Celeron and Core 2 Duo chips, which are capable of handling more intense computing tasks, he said.
Atom desktops may appeal to users in developing countries looking to buy their first computer, Kay said. They may also appeal to price-sensitive buyers, but not to people who need more computing power such as gamers and office workers, he said. Atom desktops also may not be as successful as MIDs, Kay said.
"Intel's throwing a lot of mud up against the wall, and some of it may stick, and some of it may not. Nettop seems like one of the more likely to fall off," Kay said.
Intel expects an Atom chip, code-named Diamondville, to be used in fanless desktop computers designed for basic tasks like surfing the Internet or viewing standard-definition DVDs. The company expects the systems to be priced in the $199 to $250 range.
The Atom chips do not have the processing power required for more intense computing tasks like viewing high-definition DVDs, said Noury Al-Khaledy, general manager of Intel's Atom desktops, which the company called "Nettops." An Atom desktop could serve as a second machine in developed countries or a primary desktop in developing countries, he said.
The Nettops will run either Windows Vista Starter, Windows XP or Linux, Intel said. PC makers will decide which OS they use and set the exact pricing.
Intel has made it clear it wants to push Linux with the Nettop platform, said Roger Kay, president of Endpoint Technologies Associates. The Nettops are being conceived more as an appliance, and Windows Vista Starter is not designed for that type of machine. In addition, Windows Vista Starter will only be offered in developing countries.
The low-cost desktops are part of Intel's plan to push Atom chips into new product categories, which also include low-cost notebooks and "ultramobile" devices. The company is putting single-core Diamondville chips in notebooks priced between $250 to $300 and Silverthorne chips in ultramobile PCs, which Intel calls mobile Internet devices (MIDs).
Nettops may carry a dual-core version of Diamondville, which Intel is developing. Diamondville is based on Silverthorne, which has a small size and is designed for ultramobile devices.
The chip for Nettops has been designed from the ground up for low-cost desktops, Al-Khaledy said. It is not a modified version of Intel's Celeron and Core 2 Duo chips, which are capable of handling more intense computing tasks, he said.
Atom desktops may appeal to users in developing countries looking to buy their first computer, Kay said. They may also appeal to price-sensitive buyers, but not to people who need more computing power such as gamers and office workers, he said. Atom desktops also may not be as successful as MIDs, Kay said.
"Intel's throwing a lot of mud up against the wall, and some of it may stick, and some of it may not. Nettop seems like one of the more likely to fall off," Kay said.
India may stop short of BlackBerry ban over security
The Indian government is continuing in its demand that Research In Motion make it legally possible for the government to intercept and monitor emails on the BlackBerry service offered by Indian service providers, but it is not likely to use a ban of the service as a bargaining counter.
India's Telecom Secretary Siddartha Behura said Friday in Delhi that the government is keen to resolve the issue as soon as possible, but there is no question of banning the Blackberry services.
The issue has delayed the granting of government permission to Tata Teleservices, an Indian mobile services provider, to offer BlackBerry services. Other mobile service providers already offering the BlackBerry service have also been issued notices by the government to allow it to intercept emails by March 31.
The country's Information Technology Act of 2000 allows the government under certain circumstances to intercept and monitor email.
RIM has not commented on the government demand for easier access to BlackBerry email. RIM operates in more than 130 countries around the world and respects the regulatory requirements of governments, the company said in a statement earlier this week. RIM does not comment on confidential regulatory matters or speculation on such matters in any given country, it added.
India's Telecom Secretary Siddartha Behura said Friday in Delhi that the government is keen to resolve the issue as soon as possible, but there is no question of banning the Blackberry services.
The issue has delayed the granting of government permission to Tata Teleservices, an Indian mobile services provider, to offer BlackBerry services. Other mobile service providers already offering the BlackBerry service have also been issued notices by the government to allow it to intercept emails by March 31.
The country's Information Technology Act of 2000 allows the government under certain circumstances to intercept and monitor email.
RIM has not commented on the government demand for easier access to BlackBerry email. RIM operates in more than 130 countries around the world and respects the regulatory requirements of governments, the company said in a statement earlier this week. RIM does not comment on confidential regulatory matters or speculation on such matters in any given country, it added.
Trend Micro hit by massive Web hack
Security vendor Trend Micro has fallen victim to a widespread Web attack that splashed malicious software onto hundreds of legitimate Web sites in recent days.
A Trend Micro spokesman confirmed that the company's site had been hacked Thursday, saying that the attack took place earlier in the week. "A portion of our site -- some pages were attacked," said Mike Sweeny, a Trend Micro spokesman. "We took the pages down overnight Tuesday night -- and took corrective action."
On Thursday security vendor McAfee reported that more than 20,000 Web pages have been affected by the attack. The pages are infected with malicious code that tries to install password-stealing software on the PCs of people who visit the sites.
Researchers are still not sure how the attackers are managing to hack these Web pages, but the pages all seem to use Microsoft's Active Server Page (ASP) technology, which is used by many Web development programs to create dynamic HTML pages. A software bug in any of those programs is all the attackers need to install their malicious code.
The infected Web pages are not obviously malicious, but the attackers have added a small bit of JavaScript code that redirects visitors' browsers to an invisible attack launched from servers based in China. This same technique was used a year ago, when attackers infected the Web sites of the Miami Dolphins and Dolphins Stadium just prior to the 2007 Super Bowl XLI football game.
The JavaScript attack code hosted on these infected Web sites takes advantage of bugs that have already been patched, so users whose software is up-to-date are not at risk. However, McAfee warns that some of the exploits are for obscure programs such as ActiveX controls for online games, which users may not think to patch.
If the code is successful, it then installs a password-stealing program on the victim's computer that looks for passwords for a number of online games, including the "Lord of the Rings Online."
It's embarrassing when security vendors fall victim to the attacks they are supposed to prevent, but Trend Micro is not the only company to have had its Web site hacked in recent months. In January, parts of CA's Web site were infected with a very similar type of attack.
A Trend Micro spokesman confirmed that the company's site had been hacked Thursday, saying that the attack took place earlier in the week. "A portion of our site -- some pages were attacked," said Mike Sweeny, a Trend Micro spokesman. "We took the pages down overnight Tuesday night -- and took corrective action."
On Thursday security vendor McAfee reported that more than 20,000 Web pages have been affected by the attack. The pages are infected with malicious code that tries to install password-stealing software on the PCs of people who visit the sites.
Researchers are still not sure how the attackers are managing to hack these Web pages, but the pages all seem to use Microsoft's Active Server Page (ASP) technology, which is used by many Web development programs to create dynamic HTML pages. A software bug in any of those programs is all the attackers need to install their malicious code.
The infected Web pages are not obviously malicious, but the attackers have added a small bit of JavaScript code that redirects visitors' browsers to an invisible attack launched from servers based in China. This same technique was used a year ago, when attackers infected the Web sites of the Miami Dolphins and Dolphins Stadium just prior to the 2007 Super Bowl XLI football game.
The JavaScript attack code hosted on these infected Web sites takes advantage of bugs that have already been patched, so users whose software is up-to-date are not at risk. However, McAfee warns that some of the exploits are for obscure programs such as ActiveX controls for online games, which users may not think to patch.
If the code is successful, it then installs a password-stealing program on the victim's computer that looks for passwords for a number of online games, including the "Lord of the Rings Online."
It's embarrassing when security vendors fall victim to the attacks they are supposed to prevent, but Trend Micro is not the only company to have had its Web site hacked in recent months. In January, parts of CA's Web site were infected with a very similar type of attack.
Microsoft to buy Rapt for ad management tools
Microsoft hasn't yet snagged Yahoo, but it plans to acquire another company it hopes will boost its online advertising yields: Rapt, of San Francisco.
Rapt sells advertising yield management tools for online media companies. The tools are designed to predict demand for advertising and optimize the price and placement of ads, improving revenue.
Microsoft plans to incorporate Rapt's tools and consultancy business into its Atlas Publisher Suite. That will allow it to offer publishers an integrated service to manage advertising sales, it said.
Microsoft obtained Atlas as part of its acquisition of aQuantive for US$6 billion last May. It did not say how much it will pay for Rapt.
Rapt already counts a number of online services among its customers, including Microsoft, Expedia, Dow Jones and The New York Times, according to Microsoft. One Rapt customer Microsoft forgot to mention is Yahoo, which has used Rapt's Price Director software in the U.S. since 2004, and worldwide from October 2005, according to Rapt.
Yahoo executives reportedly met with Microsoft representatives Monday to explore Microsoft's unsolicited $44.6 billion bid for the company. If that deal goes ahead, the companies' work with Rapt may help them integrate systems, but if it fails, Microsoft's control of Rapt's yield-improvement technology could hurt the profitability of Yahoo's online advertising model.
Rapt was exploring one other partnership that Microsoft might put a stop to: In December, Rapt said it was in talks with DoubleClick, now part of Google, about a possible integration of their advertising management systems.
Rapt sells advertising yield management tools for online media companies. The tools are designed to predict demand for advertising and optimize the price and placement of ads, improving revenue.
Microsoft plans to incorporate Rapt's tools and consultancy business into its Atlas Publisher Suite. That will allow it to offer publishers an integrated service to manage advertising sales, it said.
Microsoft obtained Atlas as part of its acquisition of aQuantive for US$6 billion last May. It did not say how much it will pay for Rapt.
Rapt already counts a number of online services among its customers, including Microsoft, Expedia, Dow Jones and The New York Times, according to Microsoft. One Rapt customer Microsoft forgot to mention is Yahoo, which has used Rapt's Price Director software in the U.S. since 2004, and worldwide from October 2005, according to Rapt.
Yahoo executives reportedly met with Microsoft representatives Monday to explore Microsoft's unsolicited $44.6 billion bid for the company. If that deal goes ahead, the companies' work with Rapt may help them integrate systems, but if it fails, Microsoft's control of Rapt's yield-improvement technology could hurt the profitability of Yahoo's online advertising model.
Rapt was exploring one other partnership that Microsoft might put a stop to: In December, Rapt said it was in talks with DoubleClick, now part of Google, about a possible integration of their advertising management systems.
Arcot brings two-factor authentication to Google Apps
Google Apps users now have a more secure way to log on to the online groupware service.
Arcot Systems on Wednesday announced that it was making its A-OK On-Demand authentication service available to Google Apps Premier Edition users to add another layer of security to the logon process.
Typically Google Apps users enter a username and password to get access to the Web-based mail, calendar and groupware software, but with the A-OK product they also use an encrypted file that is stored on their computer to add a second factor of authentication. As with online banking products, if the user tries to log on from a different computer, A-OK will ask predetermined questions, such as "What high school did you attend," before granting the user access to Google Apps.
This is the first time that Google has partnered with someone to provide two-factor authentication for Google Apps, according to Eran Feigenbaum, senior security manager with Google Enterprise. "Google has the tools to show you how to pick a good password," he said, "But to the companies that are concerned about users losing their passwords, I think the Arcot two-factor authentication product is perfect."
Since launching more than a year ago, Google Apps has added more than 500,000 customers, but some of them are looking for a higher level of security when it comes to signing on to the service, Feigenbaum said.
Feigenbaum hopes that Arcot's two-factor product will make Google Apps more appealing in markets where this kind of strong authentication is a common requirement, such as the financial services and defense industries.
The A-OK On-Demand service is available now for Google Apps. It costs US$1 per user per year, and is available only to users of the Premier Edition of Google Apps.
Arcot Systems on Wednesday announced that it was making its A-OK On-Demand authentication service available to Google Apps Premier Edition users to add another layer of security to the logon process.
Typically Google Apps users enter a username and password to get access to the Web-based mail, calendar and groupware software, but with the A-OK product they also use an encrypted file that is stored on their computer to add a second factor of authentication. As with online banking products, if the user tries to log on from a different computer, A-OK will ask predetermined questions, such as "What high school did you attend," before granting the user access to Google Apps.
This is the first time that Google has partnered with someone to provide two-factor authentication for Google Apps, according to Eran Feigenbaum, senior security manager with Google Enterprise. "Google has the tools to show you how to pick a good password," he said, "But to the companies that are concerned about users losing their passwords, I think the Arcot two-factor authentication product is perfect."
Since launching more than a year ago, Google Apps has added more than 500,000 customers, but some of them are looking for a higher level of security when it comes to signing on to the service, Feigenbaum said.
Feigenbaum hopes that Arcot's two-factor product will make Google Apps more appealing in markets where this kind of strong authentication is a common requirement, such as the financial services and defense industries.
The A-OK On-Demand service is available now for Google Apps. It costs US$1 per user per year, and is available only to users of the Premier Edition of Google Apps.
Wall Street Beat: IT M&A provides opportunities
Though many tech vendors are suffering as the widening U.S. financial crisis slows down consumer and business spending, IT mergers and acquisitions including bellwethers such as Microsoft, Google, Yahoo, Electronic Arts and AOL continue to reshape the technology landscape and provide opportunities for investors.
AOL's announcement on Thursday that it will buy social-networking site Bebo for US$850 million is just the latest example that IT companies are not letting a depressed market get in the way of strategic purchases.
The macroeconomic news and fresh data on IT returns this week are, as usual, not heartening. A survey released Thursday by research company ChangeWave shows that the U.S. economy is already in recession. The Feb. 27-March 5 survey of 3,345 professionals in U.S. businesses found, among other things, that 30 percent of those polled forecast first-quarter sales to come in below plan. This is 5 points worse than the company's previous poll.
"You have to go all the way back to 2002 to find a downturn of this magnitude in a ChangeWave corporate survey," said Tobin Smith, ChangeWave founder, in an e-mail note accompanying the report. "There’s no doubt anymore – the recession is now here," he said.
The general downturn is having a marked effect on many IT vendors. For example, in a software research note, Citi Investment Research on Thursday reported a marked decline. "After five years of positive full year returns, the software sector is posting negative returns so far in 2008," wrote Brent Thill and John Reilly Walsh.
Median software company earnings are down this year by 14 percent, compared to the tech-heavy Nasdaq Composite Index's decline of 15 percent. Since October, software sector returns are down 20 percent, matching exactly the Nasdaq's fall since then.
What's an IT investor to do?
"In this uncertain environment, potential M&A targets may provide the best opportunities for appreciation," wrote the Citi research team.
Overall tech M&A activity will likely decline this year as turmoil in financial markets dampens tech buyouts from private equity firms, which had a record for acquisitions in 2007. However, this will not necessarily deter cash-rich tech companies themselves from acquisitions. Acquisitions are a quick way to bring in new technology in fast-moving sectors like the Internet, or expand market reach in mature sectors such as enterprise software.
The most obvious example of these trends is Microsoft's bid for Yahoo, announced Feb. 1. The offer was originally valued at $44.6 billion. Since Microsoft stock is part of the deal, the total value of the deal has dropped as the software giant's share price declined after the offer was announced. Many industry insiders believe that Microsoft will find it hard to integrate the companies, which have overlapping product lines and services. However, the offer has boosted Yahoo's share price, from the $19 level at the end of January to the $28 level now. One caveat, if Yahoo successfully resists the deal: Look for its share price to fall again.
On Thursday, shares of game developer Take-Two Interactive jumped $0.73 to close at $25.64, after Electronic Arts offered shareholders a tender offer of $26 per share. EA made the offer after Take-Two's board continued to resist its entreaties. EA has been pursuing Take-Two since Feb.19, when its offer was a 64 percent premium on Take-Two's Feb.15 share price of $15.83.
Share prices of acquiring companies don't often go up on acquisition news because a big buyout can dilute earnings for a while. EA's share price has fluctuated with the market in the past few weeks, closing at $48.95 on Feb. 21, when the offer was made public, and $47.26 on Thursday.
Google's share price has plummeted along with the market in recent weeks, but rose Tuesday by $26.22, to $439.84, after European regulators approved its purchase of DoubleClick. With DoubleClick, Google should be able to deliver more relevant advertising.
If you were not an investor in Yahoo or Take-Two (DoubleClick and Bebo were private companies), take heart, there are plenty of takeover targets out there.
Citigroup says to take a look at, among others, data-integration software vendor Informatica, trading at $17.79; middleware vendor Tibco, trading at $7.55; and data-center software provider Bladelogic, trading at $23.71. In any case, these companies are cheaper than Google, trading at $443.01 on Thursday.
AOL's announcement on Thursday that it will buy social-networking site Bebo for US$850 million is just the latest example that IT companies are not letting a depressed market get in the way of strategic purchases.
The macroeconomic news and fresh data on IT returns this week are, as usual, not heartening. A survey released Thursday by research company ChangeWave shows that the U.S. economy is already in recession. The Feb. 27-March 5 survey of 3,345 professionals in U.S. businesses found, among other things, that 30 percent of those polled forecast first-quarter sales to come in below plan. This is 5 points worse than the company's previous poll.
"You have to go all the way back to 2002 to find a downturn of this magnitude in a ChangeWave corporate survey," said Tobin Smith, ChangeWave founder, in an e-mail note accompanying the report. "There’s no doubt anymore – the recession is now here," he said.
The general downturn is having a marked effect on many IT vendors. For example, in a software research note, Citi Investment Research on Thursday reported a marked decline. "After five years of positive full year returns, the software sector is posting negative returns so far in 2008," wrote Brent Thill and John Reilly Walsh.
Median software company earnings are down this year by 14 percent, compared to the tech-heavy Nasdaq Composite Index's decline of 15 percent. Since October, software sector returns are down 20 percent, matching exactly the Nasdaq's fall since then.
What's an IT investor to do?
"In this uncertain environment, potential M&A targets may provide the best opportunities for appreciation," wrote the Citi research team.
Overall tech M&A activity will likely decline this year as turmoil in financial markets dampens tech buyouts from private equity firms, which had a record for acquisitions in 2007. However, this will not necessarily deter cash-rich tech companies themselves from acquisitions. Acquisitions are a quick way to bring in new technology in fast-moving sectors like the Internet, or expand market reach in mature sectors such as enterprise software.
The most obvious example of these trends is Microsoft's bid for Yahoo, announced Feb. 1. The offer was originally valued at $44.6 billion. Since Microsoft stock is part of the deal, the total value of the deal has dropped as the software giant's share price declined after the offer was announced. Many industry insiders believe that Microsoft will find it hard to integrate the companies, which have overlapping product lines and services. However, the offer has boosted Yahoo's share price, from the $19 level at the end of January to the $28 level now. One caveat, if Yahoo successfully resists the deal: Look for its share price to fall again.
On Thursday, shares of game developer Take-Two Interactive jumped $0.73 to close at $25.64, after Electronic Arts offered shareholders a tender offer of $26 per share. EA made the offer after Take-Two's board continued to resist its entreaties. EA has been pursuing Take-Two since Feb.19, when its offer was a 64 percent premium on Take-Two's Feb.15 share price of $15.83.
Share prices of acquiring companies don't often go up on acquisition news because a big buyout can dilute earnings for a while. EA's share price has fluctuated with the market in the past few weeks, closing at $48.95 on Feb. 21, when the offer was made public, and $47.26 on Thursday.
Google's share price has plummeted along with the market in recent weeks, but rose Tuesday by $26.22, to $439.84, after European regulators approved its purchase of DoubleClick. With DoubleClick, Google should be able to deliver more relevant advertising.
If you were not an investor in Yahoo or Take-Two (DoubleClick and Bebo were private companies), take heart, there are plenty of takeover targets out there.
Citigroup says to take a look at, among others, data-integration software vendor Informatica, trading at $17.79; middleware vendor Tibco, trading at $7.55; and data-center software provider Bladelogic, trading at $23.71. In any case, these companies are cheaper than Google, trading at $443.01 on Thursday.
Gates: Next decade will bring huge software advances
The coming decade will bring even more advances in software and computing than the last 10 years, bringing new ways to watch television, to use telephones and to input information into computers, Microsoft Chairman Bill Gates predicted Thursday.
Changes in software and computing over the next 10 years will be "very substantial" and will permeate all facets of life, Gates told a crowd of about 1,100 people during a Northern Virginia Technology Council breakfast in Washington, D.C. Computers and software have changed how people take photographs and purchase music, but other industries will be affected just as much in coming years, he said.
"There are great realms of activity that digital approach has not yet touched on," Gates said.
Among Gates' predictions for the coming decade:
-- Television will be married with the Internet, allowing for personalized news and commercials. People will watch more of their home movies on their TV screens, and TV sets and computers will be increasingly connected. Television will be an "utterly different thing," he said.
-- Telephone sets will increasingly be able to handle video, e-mail and other digital media. Speech recognition will allow telephone users to ask for information such as nearby restaurants.
-- More and more software will be delivered as a service over the Internet, instead of residing on individual computers.
-- Computer users will have more options for inputting information beyond the mouse and keyboard. Speech and handwriting recognition software will gain in popularity. Computers will move off the desktop, with speech recognition and motion-sensing cameras allowing users to control screens embedded into desktops or whiteboards.
-- More schools will ditch textbooks for tablet PCs that hold dozens of books. New types of textbooks will increasingly contain video and other media.
-- Companies and government agencies will embrace three-dimensional computing, giving users new ways of interacting with virtual worlds. Students will increasingly use software to simulate experiments.
"In a broad sense, we can say that information workers ... are not yet empowered to collaborate in the way that they should," Gates said. "I think the opportunity is stronger than it's ever been."
Gates said he's "very optimistic" about the future of the tech industry, even with the current questions about the U.S. economy. "I don't think anything will stop the rapid advances," he said.
Gates also repeated his concerns about the number of H-1B and other immigrant worker visas available to U.S. companies. He testified before the U.S. Congress on the issue Wednesday.
On most technology, the U.S. portion of the world's innovation is "extremely high," Gates said, but the U.S. government needs to be aware that other countries are catching up. U.S. policymakers need to look at long-term implications of immigration policy, he said.
Some lawmakers and tech worker groups have questioned the need for more high-skill immigrant visas, saying many U.S. workers could fill those jobs.
Changes in software and computing over the next 10 years will be "very substantial" and will permeate all facets of life, Gates told a crowd of about 1,100 people during a Northern Virginia Technology Council breakfast in Washington, D.C. Computers and software have changed how people take photographs and purchase music, but other industries will be affected just as much in coming years, he said.
"There are great realms of activity that digital approach has not yet touched on," Gates said.
Among Gates' predictions for the coming decade:
-- Television will be married with the Internet, allowing for personalized news and commercials. People will watch more of their home movies on their TV screens, and TV sets and computers will be increasingly connected. Television will be an "utterly different thing," he said.
-- Telephone sets will increasingly be able to handle video, e-mail and other digital media. Speech recognition will allow telephone users to ask for information such as nearby restaurants.
-- More and more software will be delivered as a service over the Internet, instead of residing on individual computers.
-- Computer users will have more options for inputting information beyond the mouse and keyboard. Speech and handwriting recognition software will gain in popularity. Computers will move off the desktop, with speech recognition and motion-sensing cameras allowing users to control screens embedded into desktops or whiteboards.
-- More schools will ditch textbooks for tablet PCs that hold dozens of books. New types of textbooks will increasingly contain video and other media.
-- Companies and government agencies will embrace three-dimensional computing, giving users new ways of interacting with virtual worlds. Students will increasingly use software to simulate experiments.
"In a broad sense, we can say that information workers ... are not yet empowered to collaborate in the way that they should," Gates said. "I think the opportunity is stronger than it's ever been."
Gates said he's "very optimistic" about the future of the tech industry, even with the current questions about the U.S. economy. "I don't think anything will stop the rapid advances," he said.
Gates also repeated his concerns about the number of H-1B and other immigrant worker visas available to U.S. companies. He testified before the U.S. Congress on the issue Wednesday.
On most technology, the U.S. portion of the world's innovation is "extremely high," Gates said, but the U.S. government needs to be aware that other countries are catching up. U.S. policymakers need to look at long-term implications of immigration policy, he said.
Some lawmakers and tech worker groups have questioned the need for more high-skill immigrant visas, saying many U.S. workers could fill those jobs.
Report: Microsoft, Yahoo enter tentative discussions
Microsoft and Yahoo executives met for the first time on Monday to discuss Microsoft's initial $44.6 billion cash and stock bid for the company, the Wall Street Journal reported on Thursday.
The meeting is the first since Microsoft made the unsolicited offer on Jan. 31, and gave Microsoft a chance to pitch its vision of the future of the two companies. Yahoo rejected the initial offer last month, saying it was too low.
The meeting included several executives from both companies but was not a negotiation and no investment bankers attended, the report said. No further talks have been scheduled.
The report said it wasn't immediately clear if the CEO's of either company attended the meeting.
The meeting is the first since Microsoft made the unsolicited offer on Jan. 31, and gave Microsoft a chance to pitch its vision of the future of the two companies. Yahoo rejected the initial offer last month, saying it was too low.
The meeting included several executives from both companies but was not a negotiation and no investment bankers attended, the report said. No further talks have been scheduled.
The report said it wasn't immediately clear if the CEO's of either company attended the meeting.
Red Hat buys Amentra to bolster JBoss enterprise plan
Red Hat has purchased Amentra, an IT consulting firm with open-source expertise, to sell its JBoss Java infrastructure to enterprises as the basis for SOAs (service-oriented architectures).
Amentra, a privately held systems integrator that specializes in SOA and business process management, will continue business as usual as an independent company owned by Red Hat. The specific financial terms of the deal were not disclosed. Amentra's 140 employees will continue to work out of their current offices in Washington, D.C.; Philadelphia; Charlotte, North Carolina; Tampa, Florida; and Richmond, Virginia.
Amentra is a certified JBoss systems integrator that has a solid reputation among enterprises; ExxonMobil, Pfizer and Merck are among its clients. The company also has been recognized for its expertise in providing open-source and SOA services by research firm Gartner.
Red Hat said it's tapped Amentra to support what it calls its "Enterprise Acceleration" initiative, which is aimed at providing the JBoss open-source middleware in the enterprise for SOA and BPM deployments. When the plan -- which includes sales and marketing support and new JBoss technology testing centers -- was unveiled last month, Red Hat Middleware Business Vice President Craig Muzilla said Red Hat hopes that JBoss will play a major role in 50 percent of all enterprise software infrastructure deployments by 2015.
Red Hat purchased JBoss in April 2006 and, like its Linux OS, now has two versions of the software -- a community ".org" version that is free for everyone to use and an enterprise version that has fees and maintenance tied to it. The company is hoping to use JBoss as a springboard to become successful beyond its enterprise Linux business and quiet critics who claim the company can't make a multi-product portfolio work.
Amentra, a privately held systems integrator that specializes in SOA and business process management, will continue business as usual as an independent company owned by Red Hat. The specific financial terms of the deal were not disclosed. Amentra's 140 employees will continue to work out of their current offices in Washington, D.C.; Philadelphia; Charlotte, North Carolina; Tampa, Florida; and Richmond, Virginia.
Amentra is a certified JBoss systems integrator that has a solid reputation among enterprises; ExxonMobil, Pfizer and Merck are among its clients. The company also has been recognized for its expertise in providing open-source and SOA services by research firm Gartner.
Red Hat said it's tapped Amentra to support what it calls its "Enterprise Acceleration" initiative, which is aimed at providing the JBoss open-source middleware in the enterprise for SOA and BPM deployments. When the plan -- which includes sales and marketing support and new JBoss technology testing centers -- was unveiled last month, Red Hat Middleware Business Vice President Craig Muzilla said Red Hat hopes that JBoss will play a major role in 50 percent of all enterprise software infrastructure deployments by 2015.
Red Hat purchased JBoss in April 2006 and, like its Linux OS, now has two versions of the software -- a community ".org" version that is free for everyone to use and an enterprise version that has fees and maintenance tied to it. The company is hoping to use JBoss as a springboard to become successful beyond its enterprise Linux business and quiet critics who claim the company can't make a multi-product portfolio work.
Oracle lags on patch management
Oracle needs to improve patch management, an area where it's currently lagging five years behind Microsoft, according to database expert Karel Miko at Czech consultancy DCIT.
"When Microsoft announced Trustworthy Computing a lot of people laughed, but now you see a real difference," said Miko, who spoke at the European Computer Audit Control and Security Conference in Stockholm.
"I don't like Microsoft, but Oracle definitely has something to learn," he said.
Microsoft offers central patch management tools that allow customers to see what patches are missing and so on, whereas Oracle doesn't.
Oracle also doesn't make life easier for companies who want to keep their databases secure, according to Miko, making it complex to download and install patches.
It also has a strange approach to new vulnerabilities, he said.
"An independent consultant announces a vulnerability to Oracle. Three months go by, and nothing happens, six months, a year and still nothing. Oracle puts it in a queue and will solve it sometime, maybe," said Miko.
If customers put pressure on Oracle it might be prompted to improve, but Miko isn't holding his breath.
"Customers are very dependent on Oracle -- its database is number one. If you have an application based on an Oracle's database there is no way to change, in maybe 90 percent of all cases," he said.
Databases are one of the hottest topics at EuroCacs; no other product category has more sessions.
That's good because database security is lagging behind. Even though Oracle has been adding new security features customers aren't taking advantage of them.
"To be honest a lot of companies aren't even using the basic stuff that has been there since version 8," said Miko.
In the end database security is all about people.
"In my experience even some small enterprises have better administrators than large banks, and do a better job," said Miko.
"When Microsoft announced Trustworthy Computing a lot of people laughed, but now you see a real difference," said Miko, who spoke at the European Computer Audit Control and Security Conference in Stockholm.
"I don't like Microsoft, but Oracle definitely has something to learn," he said.
Microsoft offers central patch management tools that allow customers to see what patches are missing and so on, whereas Oracle doesn't.
Oracle also doesn't make life easier for companies who want to keep their databases secure, according to Miko, making it complex to download and install patches.
It also has a strange approach to new vulnerabilities, he said.
"An independent consultant announces a vulnerability to Oracle. Three months go by, and nothing happens, six months, a year and still nothing. Oracle puts it in a queue and will solve it sometime, maybe," said Miko.
If customers put pressure on Oracle it might be prompted to improve, but Miko isn't holding his breath.
"Customers are very dependent on Oracle -- its database is number one. If you have an application based on an Oracle's database there is no way to change, in maybe 90 percent of all cases," he said.
Databases are one of the hottest topics at EuroCacs; no other product category has more sessions.
That's good because database security is lagging behind. Even though Oracle has been adding new security features customers aren't taking advantage of them.
"To be honest a lot of companies aren't even using the basic stuff that has been there since version 8," said Miko.
In the end database security is all about people.
"In my experience even some small enterprises have better administrators than large banks, and do a better job," said Miko.
Otellini defends Intel in EU's antitrust hearing
Chip maker Intel fielded its chief executive Paul Otellini to defend the company's business practices at an antitrust hearing in Brussels this week. The two-day confidential meeting with Europe's top antitrust authority, the European Commission, also involved competitors including Advanced Micro Devices and the European consumer group BEUC.
The Commission has charged Intel with abusing its dominant position in the market by paying computer makers for scrapping or delaying the launch of machines fitted with AMD chips, and of selling its chips for server computers at below cost to large customers such as governments and universities.
Intel has consistently argued that it is competing fairly in a very competitive industry.
The Commission's antitrust officials will now begin drafting a final ruling. There is no formal deadline for antitrust decisions.
Speaking after the hearing, BEUC director general Monique Goyens explained her organization's interest in the case. "We want to ensure that the consumer interests are fully taken into account in competition policy in general and in its enforcement in the computer sector in particular," she said in a statement Thursday.
The Commission has charged Intel with abusing its dominant position in the market by paying computer makers for scrapping or delaying the launch of machines fitted with AMD chips, and of selling its chips for server computers at below cost to large customers such as governments and universities.
Intel has consistently argued that it is competing fairly in a very competitive industry.
The Commission's antitrust officials will now begin drafting a final ruling. There is no formal deadline for antitrust decisions.
Speaking after the hearing, BEUC director general Monique Goyens explained her organization's interest in the case. "We want to ensure that the consumer interests are fully taken into account in competition policy in general and in its enforcement in the computer sector in particular," she said in a statement Thursday.
Busy Twitter a poster child for new communications
Microblogging site Twitter had its busiest day ever Tuesday and needs more than 30 servers to help its thousands of users keep each other posted about their lives, founder Blaine Cook said Wednesday.
Cook's brief presentation was a highlight of opening day at the first Emerging Communications Conference (EComm) in Mountain View, California. The fast-paced, three-day meeting is focused on new communications applications for both the wired and mobile Internet. Along with nascent ideas, participants talked about looming challenges.
One of Twitter's hardest jobs is scaling up, according to Cook. The site, launched in 2006, lets users post 140-character statements about what they're doing or thinking in real time. In response to a question from the audience, Cook wouldn't say exactly how many people use Twitter or how many servers it takes to host it. But he did say that until recently the company had 30 servers, and that wasn't enough. Scaling features is another challenge: It would be hard to add groups and maintain Twitter's simple interface, he said.
The peak day of Twitter activity on Tuesday coincided with the popular South By Southwest media conference, where some participants reportedly complained about the service's performance sagging under heavy message-posting by participants. Cook said he was closely monitoring site performance that day and believes it was the Wi-Fi network at the conference that ran out of breath.
Several presenters at EComm focused on bringing together data networking and voice. One was Irv Shapiro, CEO and chief technology officer of startup IfByPhone, which showcased a platform for making applications available to any phone. For example, users could call a toll-free number, say phone numbers for a starting point and a destination, and then get directions over the phone. The system could make a Web site accessible by phone without the Web developer having to do any voice-recognition programming, because that function would be hidden in IfByPhone's infrastructure, he said. Also on the program was OpenMoko, a spin-off of First International Computer that is developing a mobile phone with both open-source hardware and software. This will let developers create both applications and specialized devices for niche markets, said Michael Shiloh, an evangelist for OpenMoko.
Independent telecommunications analyst David Isenberg cut into all the excitement by warning developers that politics could put an end to such conferences. The one-time AT&T Bell Labs researcher said carriers want to effectively dictate what applications can go on the network. Their lobbying already stifled competitive local exchange carriers that wanted to sell services over existing lines, he said. Today, carriers such as Verizon and AT&T are rolling out services such as TV to their broadband subscribers.
"If you guys care about your jobs, you should care about the politics in Washington, D.C., because the telephone companies will shut you down or buy you out," Isenberg said.
IDC analyst Will Stofega shares that concern.
"Telcos need to figure out what they want to be," Stofega said. "There has to be some sort of agreement on how this will work," or carriers will form a bottleneck to getting innovative services out to consumers and businesses, he said. Developers of mobile applications already voice this complaint about U.S. cellular operators.
However, Stofega believes that where there's a hot application, there's a way. Motivated developers will always find a way to get some applications out to the network and consumers will pick up on them, he said.
Cook's brief presentation was a highlight of opening day at the first Emerging Communications Conference (EComm) in Mountain View, California. The fast-paced, three-day meeting is focused on new communications applications for both the wired and mobile Internet. Along with nascent ideas, participants talked about looming challenges.
One of Twitter's hardest jobs is scaling up, according to Cook. The site, launched in 2006, lets users post 140-character statements about what they're doing or thinking in real time. In response to a question from the audience, Cook wouldn't say exactly how many people use Twitter or how many servers it takes to host it. But he did say that until recently the company had 30 servers, and that wasn't enough. Scaling features is another challenge: It would be hard to add groups and maintain Twitter's simple interface, he said.
The peak day of Twitter activity on Tuesday coincided with the popular South By Southwest media conference, where some participants reportedly complained about the service's performance sagging under heavy message-posting by participants. Cook said he was closely monitoring site performance that day and believes it was the Wi-Fi network at the conference that ran out of breath.
Several presenters at EComm focused on bringing together data networking and voice. One was Irv Shapiro, CEO and chief technology officer of startup IfByPhone, which showcased a platform for making applications available to any phone. For example, users could call a toll-free number, say phone numbers for a starting point and a destination, and then get directions over the phone. The system could make a Web site accessible by phone without the Web developer having to do any voice-recognition programming, because that function would be hidden in IfByPhone's infrastructure, he said. Also on the program was OpenMoko, a spin-off of First International Computer that is developing a mobile phone with both open-source hardware and software. This will let developers create both applications and specialized devices for niche markets, said Michael Shiloh, an evangelist for OpenMoko.
Independent telecommunications analyst David Isenberg cut into all the excitement by warning developers that politics could put an end to such conferences. The one-time AT&T Bell Labs researcher said carriers want to effectively dictate what applications can go on the network. Their lobbying already stifled competitive local exchange carriers that wanted to sell services over existing lines, he said. Today, carriers such as Verizon and AT&T are rolling out services such as TV to their broadband subscribers.
"If you guys care about your jobs, you should care about the politics in Washington, D.C., because the telephone companies will shut you down or buy you out," Isenberg said.
IDC analyst Will Stofega shares that concern.
"Telcos need to figure out what they want to be," Stofega said. "There has to be some sort of agreement on how this will work," or carriers will form a bottleneck to getting innovative services out to consumers and businesses, he said. Developers of mobile applications already voice this complaint about U.S. cellular operators.
However, Stofega believes that where there's a hot application, there's a way. Motivated developers will always find a way to get some applications out to the network and consumers will pick up on them, he said.
AOL to buy Bebo for $850 million
AOL will buy Bebo, a social networking site popular in the U.K., for US$850 million in cash, the companies said Thursday.
AOL, which is owned by Time Warner, said it sees opportunities to make money from advertising on Bebo, which has about 40 million unique users worldwide.
AOL is the latest of the major online players to grab a piece of the social networking pie. Microsoft is working with Facebook to deliver advertisements, and media giant News Corp. owns MySpace, the widest-used social networking site.
The acquisition comes as AOL has undertaken steps to revamp its business model from being an ISP (Internet service provider) to a media and content company. It has been speculated AOL would be sold by Time Warner, and the company has struggled to reinvent itself.
AOL said it will integrate its online advertising technology, called Platform A, with Bebo. Platform A cobbles together innovations from several other AOL acquisitions, including Tacoda and Third Screen Media, intended to fill out its ability to deliver Web-based and mobile ads.
In the U.S., Bebo ranks third behind MySpace and Facebook, but is first in New Zealand and Ireland and is widely used in the U.K., AOL said.
Bebo, a closely-held company, does not make public its revenue figures, which makes it difficult to gauge its financial success.
AOL Chairman and CEO Randy Falco defended the acquisition price. "In terms of Bebo, we think it's an excellent asset at a great price. We have a proven track record of spotting value," he said during a conference call.
Time Warner executives were "incredibly" supportive when AOL asked to go ahead with the deal, Falco said.
Social-networking sites such as Facebook and MySpace have been valued quite highly due to their wide user bases and potential for marketing and advertising. But the sites, which are free to join, are as of yet unproven money makers.
Bebo has looked to other ways to make money other than display advertisements. Bebo ran an online serial drama, "Kate Modern," and sold product placement slots to businesses. It has also let retailers such as Nike create themed marketing pages, which has proven to be a less intrusive way to attract interest from users.
One of the large looming questions is how social-networking sites will increase their revenue from advertising without frustrating users, who can always leave.
Facebook ran into trouble last year after a new advertising program, Beacon, caused a privacy outcry after users complained that it was too intrusive and stealthy in tracking their actions outside of the social-networking site. Facebook modified it twice to address the privacy concerns, some of which nonetheless persist.
AOL's Chief Operating Officer Ron Grant said the company plans to "supercharge" the monetization of the site. But Falco said AOL will be very careful about making changes that could reduce its user base.
Joanna Shields, Bebo's international president, said users only see one ad per page now. AOL plans to integrate its AIM and ICQ instant messaging applications into Bebo, Falco said.
AOL, which is owned by Time Warner, said it sees opportunities to make money from advertising on Bebo, which has about 40 million unique users worldwide.
AOL is the latest of the major online players to grab a piece of the social networking pie. Microsoft is working with Facebook to deliver advertisements, and media giant News Corp. owns MySpace, the widest-used social networking site.
The acquisition comes as AOL has undertaken steps to revamp its business model from being an ISP (Internet service provider) to a media and content company. It has been speculated AOL would be sold by Time Warner, and the company has struggled to reinvent itself.
AOL said it will integrate its online advertising technology, called Platform A, with Bebo. Platform A cobbles together innovations from several other AOL acquisitions, including Tacoda and Third Screen Media, intended to fill out its ability to deliver Web-based and mobile ads.
In the U.S., Bebo ranks third behind MySpace and Facebook, but is first in New Zealand and Ireland and is widely used in the U.K., AOL said.
Bebo, a closely-held company, does not make public its revenue figures, which makes it difficult to gauge its financial success.
AOL Chairman and CEO Randy Falco defended the acquisition price. "In terms of Bebo, we think it's an excellent asset at a great price. We have a proven track record of spotting value," he said during a conference call.
Time Warner executives were "incredibly" supportive when AOL asked to go ahead with the deal, Falco said.
Social-networking sites such as Facebook and MySpace have been valued quite highly due to their wide user bases and potential for marketing and advertising. But the sites, which are free to join, are as of yet unproven money makers.
Bebo has looked to other ways to make money other than display advertisements. Bebo ran an online serial drama, "Kate Modern," and sold product placement slots to businesses. It has also let retailers such as Nike create themed marketing pages, which has proven to be a less intrusive way to attract interest from users.
One of the large looming questions is how social-networking sites will increase their revenue from advertising without frustrating users, who can always leave.
Facebook ran into trouble last year after a new advertising program, Beacon, caused a privacy outcry after users complained that it was too intrusive and stealthy in tracking their actions outside of the social-networking site. Facebook modified it twice to address the privacy concerns, some of which nonetheless persist.
AOL's Chief Operating Officer Ron Grant said the company plans to "supercharge" the monetization of the site. But Falco said AOL will be very careful about making changes that could reduce its user base.
Joanna Shields, Bebo's international president, said users only see one ad per page now. AOL plans to integrate its AIM and ICQ instant messaging applications into Bebo, Falco said.
EBay now letting Skype be Skype, exec says
Two-and-a-half years after eBay bought Skype, the online auction giant has moved away from trying to create new, merged capabilities through the acquisition and is letting Skype be what it is.
"There's less focus at eBay today on finding the place where eBay and Skype intersect on the Web and mash up to create a new ... communication paradigm for eBay, and more focus on Skype growing its business and eBay growing its business," said Jonathan Christensen, Skype's general manager of audio and video, at the Emerging Communications Conference (eComm) in Mountain View, California.
The deal in October 2005 disrupted the pioneering VOIP (Voice Over Internet Protocol) software company for a while, Christensen said.
"In some ways, we stalled," he said. "There's almost always a period of integration (when) a lot of weird things are tried, and some work and some don't, and there's defocus." Along with that, there has been a management shake-up at Skype, he added. Founder Niklas Zennstrom resigned last October. Josh Silverman, CEO of eBay's Shopping.com unit, became CEO of Skype last month.
Today, however, the relationship between eBay and Skype is going "very well," Christensen said. "The projects that I'm leading on my team ... for the next two years, three years ... are groundbreaking," he said. He declined to give details of what's coming up, but in a speech at the conference, he recounted the history of Internet voice and said the next frontier is the mobile arena.
The approximately US$2.6 billion acquisition of Skype raised eyebrows among observers who didn't see a good fit between the two companies. It was not until June 2006 that eBay launched a limited trial of Skype buttons in its marketplace. The buttons let eBay buyers and sellers launch Skype and talk or text-message before making a purchase. Beginning last October, they became available for sales of all categories of products.
Last year eBay took an impairment charge related to the Skype deal and said it was disappointed in Skype's performance in the short term regarding user activity and monetization. EBay said it still believed Skype was a very valuable asset and was interested in the potential of services such as the SkypeFind business listing feature and SkypePrime advice service.
Skype now has 276 million regular users and is profitable, Christensen said.
"That sense of innovation and hard work and startup-ness is very much alive at the company," Christensen said.
"There's less focus at eBay today on finding the place where eBay and Skype intersect on the Web and mash up to create a new ... communication paradigm for eBay, and more focus on Skype growing its business and eBay growing its business," said Jonathan Christensen, Skype's general manager of audio and video, at the Emerging Communications Conference (eComm) in Mountain View, California.
The deal in October 2005 disrupted the pioneering VOIP (Voice Over Internet Protocol) software company for a while, Christensen said.
"In some ways, we stalled," he said. "There's almost always a period of integration (when) a lot of weird things are tried, and some work and some don't, and there's defocus." Along with that, there has been a management shake-up at Skype, he added. Founder Niklas Zennstrom resigned last October. Josh Silverman, CEO of eBay's Shopping.com unit, became CEO of Skype last month.
Today, however, the relationship between eBay and Skype is going "very well," Christensen said. "The projects that I'm leading on my team ... for the next two years, three years ... are groundbreaking," he said. He declined to give details of what's coming up, but in a speech at the conference, he recounted the history of Internet voice and said the next frontier is the mobile arena.
The approximately US$2.6 billion acquisition of Skype raised eyebrows among observers who didn't see a good fit between the two companies. It was not until June 2006 that eBay launched a limited trial of Skype buttons in its marketplace. The buttons let eBay buyers and sellers launch Skype and talk or text-message before making a purchase. Beginning last October, they became available for sales of all categories of products.
Last year eBay took an impairment charge related to the Skype deal and said it was disappointed in Skype's performance in the short term regarding user activity and monetization. EBay said it still believed Skype was a very valuable asset and was interested in the potential of services such as the SkypeFind business listing feature and SkypePrime advice service.
Skype now has 276 million regular users and is profitable, Christensen said.
"That sense of innovation and hard work and startup-ness is very much alive at the company," Christensen said.
Asus predicts Windows Eee PC will outsell Linux version
Asustek Computer (Asus) predicts the Eee PC it has started selling with Microsoft Windows XP Home edition on board will outsell the original Linux-based version by a ratio of 6 to 4 in the market by the end of this year, a heady prediction considering the Windows machine costs nearly twice as much as the cheapest Linux one.
The company has forecast Eee PC shipments at around 5 million units this year. Based on the 6 to 4 ratio the company predicts, Asus could ship around 3 million Windows Eee PCs and 2 million Linux ones.
"A lot of people have been waiting for the Windows version," said Jonney Shih, chairman of Asus, at a news conference in Taipei on Thursday.
The company is selling two different versions of the Windows Eee PC laptop. The cheapest one, the Eee PC Surf XP, costs NT$12,499 (US$408), has a 7-inch LCD screen, 4G-bytes of NAND flash memory for storage, and 512M-bytes of DDR2 DRAM (double data rate, second generation, dynamic RAM). The more expensive version, the Eee PC 4G XP, costs NT$14,490 ($473) and includes an additional 4G-byte SD (secure digital) card for storage as well as a slightly better battery able to last up to 3.5 hours, versus 2.8 hours for the cheaper model, and a built on 3-megapixel digital camera.
The laptops both run on Intel Pentium M 650MHz to 900MHz chips and weigh less than a kilogram.
The lowest cost Eee PC available runs on a Linux OS from Xandros, carries just 2G-bytes of NAND flash for storage and sells for around NT$7,999 ($261).
Asus formally launched the Eee PC with XP on board at the Cebit trade show earlier this month, in Germany. The devices can be found at stores or online in most countries, but prices vary slightly depending on local costs, taxes and duties, said Jose Liao, head of Taiwan sales for Asus.
The version of XP running on the Eee PC is not the one being designed in conjunction with the One Laptop Per Child (OLPC) Foundation, said Davis Tsai, general manager of Microsoft Taiwan. Microsoft has been working with OLPC to develop a scaled down version of XP for the XO laptop developed by the group. Windows XP requires more storage capacity than was originally built onto the XO laptop.
The company has forecast Eee PC shipments at around 5 million units this year. Based on the 6 to 4 ratio the company predicts, Asus could ship around 3 million Windows Eee PCs and 2 million Linux ones.
"A lot of people have been waiting for the Windows version," said Jonney Shih, chairman of Asus, at a news conference in Taipei on Thursday.
The company is selling two different versions of the Windows Eee PC laptop. The cheapest one, the Eee PC Surf XP, costs NT$12,499 (US$408), has a 7-inch LCD screen, 4G-bytes of NAND flash memory for storage, and 512M-bytes of DDR2 DRAM (double data rate, second generation, dynamic RAM). The more expensive version, the Eee PC 4G XP, costs NT$14,490 ($473) and includes an additional 4G-byte SD (secure digital) card for storage as well as a slightly better battery able to last up to 3.5 hours, versus 2.8 hours for the cheaper model, and a built on 3-megapixel digital camera.
The laptops both run on Intel Pentium M 650MHz to 900MHz chips and weigh less than a kilogram.
The lowest cost Eee PC available runs on a Linux OS from Xandros, carries just 2G-bytes of NAND flash for storage and sells for around NT$7,999 ($261).
Asus formally launched the Eee PC with XP on board at the Cebit trade show earlier this month, in Germany. The devices can be found at stores or online in most countries, but prices vary slightly depending on local costs, taxes and duties, said Jose Liao, head of Taiwan sales for Asus.
The version of XP running on the Eee PC is not the one being designed in conjunction with the One Laptop Per Child (OLPC) Foundation, said Davis Tsai, general manager of Microsoft Taiwan. Microsoft has been working with OLPC to develop a scaled down version of XP for the XO laptop developed by the group. Windows XP requires more storage capacity than was originally built onto the XO laptop.
Heart device hack a shocker
It didn't take much to hack into the heart monitoring device and get it to administer a 137-volt shock: an oscilloscope, a PC, a wireless radio with a couple of antennas and some free software.
With those tools, a group of university researchers were able to gain access to what is known as an implantable cardioverter defibrillator (ICD), reading sensitive patient information, disrupting its operation and even programming it to repeatedly administer strong electric shocks.
These tiny life-saving ICD devices are surgically implanted in the chests of heart patients, wired to the heart so they can shock it out of ventrical fibrillation. This is a heart-attack condition in which the heart muscle twitches randomly instead of pumping blood in a coordinated fashion.
They've been used in the U.S. since 2003, but until now have never been subject to a rigorous public security review, according to Tadayoshi Kohno, an assistant professor with the University of Washington, who co-authored a paper looking into the security of ICDs and pacemakers.
"We conducted some experiments that show that although there is a very remote risk of someone tampering [with] or accessing someone's implantable device, there is a risk," he said.
Part of the problem is that some pacemakers and ICD devices, including the Medtronic Maximo studied by the researchers, are designed to be remotely controlled over an unencrypted wireless protocol. That means that, given a "fair bit of time" to figure out the wireless protocol, a technically savvy hacker can start reading data and controlling the defibrillator.
The kind of shock that these devices can deliver at their most powerful settings can be intense, feeling like a kick to the chest.
The research shows that medical regulators now need to think about new issues as computerized and networked equipment is being implanted into humans, said Gadi Evron, a networking security expert based in Israel. "What I would like to see are security standards being put into place alongside with the regulations," he said.
Device manufacturers need to think more about security, said Evron, who discussed the idea of viruses in human implants at the Chaos Computer Camp hacking conference last year.
Although the results of Wednesday's study may seem scary at first glance, Kohno says the odds of someone actually carrying out this attack are low, because the hacker would have to somehow get all of this equipment within 4 inches (10 centimeters) of a target ICD.
And while Kohno is by no means advising heart patients to stay away from these life-saving devices, he believes that the research should help the medical industry take security more seriously as it develops the next generation of these products, some of which may have a much greater wireless range. "Future devices need to incorporate a strong security mechanism," he said.
Kohno has already seen first-hand what happens when insecure technology becomes widely adopted. He was one of the authors of an influential 2003 paper on the security of electronic voting machines that helped push many states to re-evaluate their use of these devices.
"One of the lessons… we learned from electronic voting, [is] it's important to understand the risks of new technologies before they're widely deployed," Kohno said. "I really wish that someone had done a similar type of public analysis five or 10 years before we did the analysis that we did."
Published on Wednesday, the paper was written by researchers at the University of Washington, the University of Massachusetts, Amherst, and Harvard Medical School. They will publicly present their findings in May at a security symposium in Oakland, California.
With those tools, a group of university researchers were able to gain access to what is known as an implantable cardioverter defibrillator (ICD), reading sensitive patient information, disrupting its operation and even programming it to repeatedly administer strong electric shocks.
These tiny life-saving ICD devices are surgically implanted in the chests of heart patients, wired to the heart so they can shock it out of ventrical fibrillation. This is a heart-attack condition in which the heart muscle twitches randomly instead of pumping blood in a coordinated fashion.
They've been used in the U.S. since 2003, but until now have never been subject to a rigorous public security review, according to Tadayoshi Kohno, an assistant professor with the University of Washington, who co-authored a paper looking into the security of ICDs and pacemakers.
"We conducted some experiments that show that although there is a very remote risk of someone tampering [with] or accessing someone's implantable device, there is a risk," he said.
Part of the problem is that some pacemakers and ICD devices, including the Medtronic Maximo studied by the researchers, are designed to be remotely controlled over an unencrypted wireless protocol. That means that, given a "fair bit of time" to figure out the wireless protocol, a technically savvy hacker can start reading data and controlling the defibrillator.
The kind of shock that these devices can deliver at their most powerful settings can be intense, feeling like a kick to the chest.
The research shows that medical regulators now need to think about new issues as computerized and networked equipment is being implanted into humans, said Gadi Evron, a networking security expert based in Israel. "What I would like to see are security standards being put into place alongside with the regulations," he said.
Device manufacturers need to think more about security, said Evron, who discussed the idea of viruses in human implants at the Chaos Computer Camp hacking conference last year.
Although the results of Wednesday's study may seem scary at first glance, Kohno says the odds of someone actually carrying out this attack are low, because the hacker would have to somehow get all of this equipment within 4 inches (10 centimeters) of a target ICD.
And while Kohno is by no means advising heart patients to stay away from these life-saving devices, he believes that the research should help the medical industry take security more seriously as it develops the next generation of these products, some of which may have a much greater wireless range. "Future devices need to incorporate a strong security mechanism," he said.
Kohno has already seen first-hand what happens when insecure technology becomes widely adopted. He was one of the authors of an influential 2003 paper on the security of electronic voting machines that helped push many states to re-evaluate their use of these devices.
"One of the lessons… we learned from electronic voting, [is] it's important to understand the risks of new technologies before they're widely deployed," Kohno said. "I really wish that someone had done a similar type of public analysis five or 10 years before we did the analysis that we did."
Published on Wednesday, the paper was written by researchers at the University of Washington, the University of Massachusetts, Amherst, and Harvard Medical School. They will publicly present their findings in May at a security symposium in Oakland, California.
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