Beijing appears to have taken a page out of Myanmar's playbook by blocking some Internet access amid rioting in Tibet that has already seen as many as 80 people killed, according to the Tibetan government in exile.
China has blocked access to Google News and YouTube in an apparent attempt to stop the spread of video footage related the rioting going on in several cities in Tibet, including the capital Lhasa. Demonstrations in the city started on March 10, a day commemorating the anniversary of a 1959 uprising against Chinese rule after which the spiritual leader of the country, the Dalai Lama, fled to India.
China has said the Dalai Lama is to blame for rioting in the country, and puts the civilian death toll at 13, while adding that police and security forces have also suffered casualties.
The Dalai Lama has denied involvement in the rioting, and said he has "no such power to stop it," in a video of a recent news conference posted on his Web site.
"Whether the Chinese government admits it or not, there is a problem," he said "The Tibetan nation, an ancient nation with an ancient cultural heritage, is actually dying."
China's decision to block access to the sites follows similar government censorship of protests by Myanmar. Last September, Myanmar cut off Internet access entirely to block people from viewing pictures and videos or sending them out of the country. Some analysts at the time said the protests likely spread through the help of the Web, in addition to winning global condemnation of the violent crackdown on protesters there.
Two videos about the situations in Tibet posted on YouTube by the user Amdo2007 both appear to show peaceful demonstrations. The first shows a public gathering, including Tibetan monks in their distinctive saffron robes, while the second video shows what appears to be peaceful marching.
Some videos, including one from Amdo2007, have been "flagged by YouTube's user community" so that users have to verify they are 18 or older by logging in or signing up. The video shows bodies on the streets, protesters throwing rocks at Chinese army vehicles and other images. It may have the most hits, over 80,000 so far, on the subject.
Chinese media and international media have shown footage of buildings burning and crowds damaging store-fronts. Some stations, such as the BBC, picked up photos and other contributions from tourists in Tibet.
Foreign media have been banned from Tibet, according to a CNN video, which says the station has not been able to send a team to report the news. China's own press is run by the state.
(With additional reporting by Sumner Lemon in Beijing.)
Monday, March 17, 2008
BMC to buy BladeLogic for $800 million
BMC Software said Monday that it intends to purchase BladeLogic, a maker of data center automation software, for US$28 per share in cash, or about $800 million.
The company characterized BladeLogic as "the fastest growing company in the fastest growing segment of IT management software" in a statement.
BladeLogic's board of directors has unanimously recommended that the company's stockholders accept BMC's offer, which will occur within the next 10 days, according to a statement.
BMC said the pending purchase will fit into its "business service management" portfolio. The two companies have already worked together to integrate their products, according to BMC.
This would be the latest in a string of recent acquisitions by BMC, which include ProActiveNet, maker of an IT "early warning system," and RealOps, a company specializing in runbook automation software.
Bob Beauchamp, BMC's CEO, said during a conference call that the redundancy between the companies' portfolios is "minimal," which "stands in stark contrast to the overlap seen in acquisitions by many of our competitors."
"We will offer day-one, customer-proven product integration," he added.
Dev Ittycheria, CEO of BladeLogic, also described the company's products as complementary, and declared the pending deal will make BMC the "obvious choice for an IT executive when it comes to managing the data center."
Last week, Citigroup named BladeLogic, among other tech firms, as being ripe for acquisition. Beauchamp indicated that BMC had designs on the company for a while. "We have coveted this business for a long time," he said. "All our evaluations of this technology ... showed BladeLogic was the best product of its type, period. Convincing them to sell this was not an easy process."
Ittycheria said BladeLogic had been "very highly focused on executing [its] stand-alone strategy when approached by BMC."
The entreaty prompted BladeLogic to reach out to a "group of alternative potential buyers who had expressed interest in the past ... ultimately BMC proposed the most compelling transaction," he added.
Stephen Elliot, an analyst with IDC, said via e-mail that the pending deal makes sense for BMC, but argued that the integration work would be broad.
BladeLogic has developed a "solid product portfolio through roles-based controls, granular change and configuration visibility, and application release management," he said, but "BMC must now work hard to integrate a group of products across the client, [runbook automation], server, and application stack."
BMC competes with the likes of IBM and Hewlett-Packard, the latter of which announced a set of data center-related products and services on Monday.
The company characterized BladeLogic as "the fastest growing company in the fastest growing segment of IT management software" in a statement.
BladeLogic's board of directors has unanimously recommended that the company's stockholders accept BMC's offer, which will occur within the next 10 days, according to a statement.
BMC said the pending purchase will fit into its "business service management" portfolio. The two companies have already worked together to integrate their products, according to BMC.
This would be the latest in a string of recent acquisitions by BMC, which include ProActiveNet, maker of an IT "early warning system," and RealOps, a company specializing in runbook automation software.
Bob Beauchamp, BMC's CEO, said during a conference call that the redundancy between the companies' portfolios is "minimal," which "stands in stark contrast to the overlap seen in acquisitions by many of our competitors."
"We will offer day-one, customer-proven product integration," he added.
Dev Ittycheria, CEO of BladeLogic, also described the company's products as complementary, and declared the pending deal will make BMC the "obvious choice for an IT executive when it comes to managing the data center."
Last week, Citigroup named BladeLogic, among other tech firms, as being ripe for acquisition. Beauchamp indicated that BMC had designs on the company for a while. "We have coveted this business for a long time," he said. "All our evaluations of this technology ... showed BladeLogic was the best product of its type, period. Convincing them to sell this was not an easy process."
Ittycheria said BladeLogic had been "very highly focused on executing [its] stand-alone strategy when approached by BMC."
The entreaty prompted BladeLogic to reach out to a "group of alternative potential buyers who had expressed interest in the past ... ultimately BMC proposed the most compelling transaction," he added.
Stephen Elliot, an analyst with IDC, said via e-mail that the pending deal makes sense for BMC, but argued that the integration work would be broad.
BladeLogic has developed a "solid product portfolio through roles-based controls, granular change and configuration visibility, and application release management," he said, but "BMC must now work hard to integrate a group of products across the client, [runbook automation], server, and application stack."
BMC competes with the likes of IBM and Hewlett-Packard, the latter of which announced a set of data center-related products and services on Monday.
Windows Mobile to get Flash, PDF support
In addition to its own Silverlight multimedia technology, Microsoft will support Adobe's competing Flash technology on Windows Mobile phones, the companies planned to announce on Monday.
Microsoft has licensed Adobe Flash Lite, the Flash Player runtime for mobile devices, so that Windows Mobile phone users can view Flash content in the Internet Explorer Mobile browser. Microsoft has also licensed the Adobe Reader LE software, so that Windows Mobile users will be able to view PDF documents.
The announcement means Windows Mobile phones will support both Flash and Silverlight, Microsoft's own fledgling technology that lets developers build multimedia Internet applications that run in browsers.
Microsoft hasn't yet said when it will add the support for Silverlight to Windows Mobile, and nor is it saying when it plans to support the Adobe programs, said Scott Rockfeld, group product manager at Microsoft's Windows Mobile group.
The companies have some integration work ahead of them. "The engineers have to work together to integrate the technology, and then the platforms have to be distributed to OEMs," said Anup Murarka, director of technical marketing for mobile and devices at Adobe. Adobe hopes that the capabilities will be found in phones by the end of the year, "but that's something Microsoft would have to comment on," he said.
Having both Silverlight and Adobe Flash on Windows Mobile is a natural, Rockfeld said. "From a Windows Mobile perspective it comes down to choice," he said. "Flash and Silverlight can provide similar experiences, just like we see in other areas." For example, Microsoft's Live Search and Google Maps, which offer similar services, are both accessible from Windows Mobile phones, he said.
Regardless of which technology users are most drawn to -- Silverlight or Flash -- the technologies both enable the types of multimedia content that phone users are interested in, said Julie Ask, an analyst with Jupiter Research. Her research shows that consumers who have phones that support rich browsing experiences, like the iPhone and some Nokia phones, generate more page views and are more likely to sign up for a data plan with their operator, she said.
"Adding Flash into the user experience on the phone will make it a better one, a richer media experience," Ask said.
Microsoft said last year that it would develop Silverlight for Windows Mobile. Earlier this month, Microsoft announced that Nokia will use Silverlight. Nokia said it planned to ship phones running its Series 60 software that support Silverlight by the end of the year, with Series 40 and its Internet Tablet to follow.
Nokia, Samsung, Motorola, Sony Ericsson and LG are all shipping Flash-enabled devices today, Murarka said. In addition to supporting Flash-based content on Web sites, mobile-phone makers and operators can also use Flash in content like screen savers, wallpapers and animated ring tones. Flash is also used in mobile-phone user interfaces.
Notably absent from the list of handsets using either technology is the iPhone. "We'd love to see Flash come to the iPhone," said Murarka. But just like any other phone maker, Apple would have to work with Adobe to license Flash for the iPhone. "Hopefully when we have the opportunity to review the SDK, and if it's a vehicle to deliver a solution, we would look forward to working with Apple," he said. Apple recently released an SDK that will allow third parties to build applications for the iPhone.
Microsoft has licensed Adobe Flash Lite, the Flash Player runtime for mobile devices, so that Windows Mobile phone users can view Flash content in the Internet Explorer Mobile browser. Microsoft has also licensed the Adobe Reader LE software, so that Windows Mobile users will be able to view PDF documents.
The announcement means Windows Mobile phones will support both Flash and Silverlight, Microsoft's own fledgling technology that lets developers build multimedia Internet applications that run in browsers.
Microsoft hasn't yet said when it will add the support for Silverlight to Windows Mobile, and nor is it saying when it plans to support the Adobe programs, said Scott Rockfeld, group product manager at Microsoft's Windows Mobile group.
The companies have some integration work ahead of them. "The engineers have to work together to integrate the technology, and then the platforms have to be distributed to OEMs," said Anup Murarka, director of technical marketing for mobile and devices at Adobe. Adobe hopes that the capabilities will be found in phones by the end of the year, "but that's something Microsoft would have to comment on," he said.
Having both Silverlight and Adobe Flash on Windows Mobile is a natural, Rockfeld said. "From a Windows Mobile perspective it comes down to choice," he said. "Flash and Silverlight can provide similar experiences, just like we see in other areas." For example, Microsoft's Live Search and Google Maps, which offer similar services, are both accessible from Windows Mobile phones, he said.
Regardless of which technology users are most drawn to -- Silverlight or Flash -- the technologies both enable the types of multimedia content that phone users are interested in, said Julie Ask, an analyst with Jupiter Research. Her research shows that consumers who have phones that support rich browsing experiences, like the iPhone and some Nokia phones, generate more page views and are more likely to sign up for a data plan with their operator, she said.
"Adding Flash into the user experience on the phone will make it a better one, a richer media experience," Ask said.
Microsoft said last year that it would develop Silverlight for Windows Mobile. Earlier this month, Microsoft announced that Nokia will use Silverlight. Nokia said it planned to ship phones running its Series 60 software that support Silverlight by the end of the year, with Series 40 and its Internet Tablet to follow.
Nokia, Samsung, Motorola, Sony Ericsson and LG are all shipping Flash-enabled devices today, Murarka said. In addition to supporting Flash-based content on Web sites, mobile-phone makers and operators can also use Flash in content like screen savers, wallpapers and animated ring tones. Flash is also used in mobile-phone user interfaces.
Notably absent from the list of handsets using either technology is the iPhone. "We'd love to see Flash come to the iPhone," said Murarka. But just like any other phone maker, Apple would have to work with Adobe to license Flash for the iPhone. "Hopefully when we have the opportunity to review the SDK, and if it's a vehicle to deliver a solution, we would look forward to working with Apple," he said. Apple recently released an SDK that will allow third parties to build applications for the iPhone.
King of Spam pleads guilty; faces 26 years in prison
The notorious spammer authorities dubbed "the King of Spam" is facing a possible 26-year jail sentence after pleading guilty in Seattle on Friday to charges of fraud and tax evasion.
Robert Soloway, 28, had already been found guilty of spam charges in several civil cases -- Microsoft won a US$7.8 million judgment against him in 2005 -- but had avoided paying fines in those cases. The criminal charges to which he pleaded guilty on Friday followed his arrest in 2007 by the U.S. Justice Department.
He was arrested on criminal charges brought by the U.S. Department of Justice in May 2007.
In a 2005 discussion group post, Soloway bragged, "I've been sued for hundreds of millions of dollars and have had my business running for over 10 years without ever paying a dime regardless to the outcome of any lawsuits."
That year, Soloway raked in more than $300,000 from his spam operations, according to his plea agreement.
Soloway has avoided fines in the past, but this time around he may not be so lucky. In addition to the jail time he now faces, he has also agreed to discuss his financial assets while being monitored by a lie detector.
While there have been hundreds of spam prosecutions in the U.S., it is extremely rare for spammers to face criminal charges, and those involved in the matter say that Soloway's case could serve as a deterrent to other spammers.
In an interview last month, Microsoft Senior Attorney Aaron Kornblum said he thought the prosecution would make other spammers think twice. "There have not been a large number of criminal CAN-SPAM prosecutions in the U.S.," he said. "This is significant."
Soloway is set to be sentenced on June 20. The prosecution had been seeking $700,000 in damages when Soloway was first charged nearly a year ago.
Robert Soloway, 28, had already been found guilty of spam charges in several civil cases -- Microsoft won a US$7.8 million judgment against him in 2005 -- but had avoided paying fines in those cases. The criminal charges to which he pleaded guilty on Friday followed his arrest in 2007 by the U.S. Justice Department.
He was arrested on criminal charges brought by the U.S. Department of Justice in May 2007.
In a 2005 discussion group post, Soloway bragged, "I've been sued for hundreds of millions of dollars and have had my business running for over 10 years without ever paying a dime regardless to the outcome of any lawsuits."
That year, Soloway raked in more than $300,000 from his spam operations, according to his plea agreement.
Soloway has avoided fines in the past, but this time around he may not be so lucky. In addition to the jail time he now faces, he has also agreed to discuss his financial assets while being monitored by a lie detector.
While there have been hundreds of spam prosecutions in the U.S., it is extremely rare for spammers to face criminal charges, and those involved in the matter say that Soloway's case could serve as a deterrent to other spammers.
In an interview last month, Microsoft Senior Attorney Aaron Kornblum said he thought the prosecution would make other spammers think twice. "There have not been a large number of criminal CAN-SPAM prosecutions in the U.S.," he said. "This is significant."
Soloway is set to be sentenced on June 20. The prosecution had been seeking $700,000 in damages when Soloway was first charged nearly a year ago.
Study: Enterprises warm up to SAAS, but concerns remain
Adoption of hosted applications among large companies jumped last year, but many CIOs and IT managers will not consider these software-as-a-service (SAAS) products due to concerns about security, cost and integration, according to a Forrester Research study.
In a 2007 survey of just over 1,000 IT decision makers, 16 percent said their companies were either already using or piloting SAAS products, a 33 percent increase from 2006.
Those who said they were either interested in or planning to pilot hosted applications remained the same at 46 percent, while those who aren't interested dropped from 41 percent to 37 percent, Forrester said in the report, issued Wednesday.
Respondents who are favorable to SAAS products cite shorter implementation, lower up-front costs and pay-as-you-go pricing as reasons, wrote analyst Liz Herbert, the report's author.
Interest in SAAS isn't consistent across application categories. Popular applications include those for human resources, collaboration and customer relationship management. SAAS is less used for enterprise resource planning, supply chain management and Web 2.0 tools like wikis, blogs and RSS.
Respondents who aren't considering SAAS products cited limitations in the ability for hosted applications to be integrated with software they have installed in-house and to be customized. These IT executives also believe that hosted applications that are leased and paid for under a subscription model cost more in the long run than software that is bought and installed on the company's servers. They also mentioned a variety of security concerns, including fear about having the software and data hosted in a third party's data center and concerns about application performance and availability.
In a 2007 survey of just over 1,000 IT decision makers, 16 percent said their companies were either already using or piloting SAAS products, a 33 percent increase from 2006.
Those who said they were either interested in or planning to pilot hosted applications remained the same at 46 percent, while those who aren't interested dropped from 41 percent to 37 percent, Forrester said in the report, issued Wednesday.
Respondents who are favorable to SAAS products cite shorter implementation, lower up-front costs and pay-as-you-go pricing as reasons, wrote analyst Liz Herbert, the report's author.
Interest in SAAS isn't consistent across application categories. Popular applications include those for human resources, collaboration and customer relationship management. SAAS is less used for enterprise resource planning, supply chain management and Web 2.0 tools like wikis, blogs and RSS.
Respondents who aren't considering SAAS products cited limitations in the ability for hosted applications to be integrated with software they have installed in-house and to be customized. These IT executives also believe that hosted applications that are leased and paid for under a subscription model cost more in the long run than software that is bought and installed on the company's servers. They also mentioned a variety of security concerns, including fear about having the software and data hosted in a third party's data center and concerns about application performance and availability.
Sunday, March 16, 2008
Bill would double cap on H-1B visas
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."
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."
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.
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