April 12 – 18, 1998

from the Up-To-Date dept

Proudly unaffected by AT&T’s network outage

The not always serious, 
not always weekly update
on the Hi-Tech Industry
April 11th - April 18th, 1998
Proudly unaffected by AT&T's network outage
Say that again... 
"I am terrified of water, and death by drowning is my greatest fear.  Unfortunately I set them off accidentally while looking for a boiled sweet on a rush hour train. They were crushing everybody in the carriage until a passenger stabbed them with a pencil." 
- Katsuo Katugoru, a commuter in Tokyo explaining why his "inflatable underpants" went off on a crowded train. 

"Digital information lasts forever, or five years -- whichever comes first." 
- A senior computer scientist at RAND Corp, explaining that digital data can deteriorate, in Business Week 

"It's just a total non-issue. It has a market share of zero. It has one figurehead customer so far that doesn't seem too fired up with Java to begin with. I don't worry about it, quite honestly." 
- Scott McNealy, CEO of Sun, on HP's home-brewed Java Virtual Machine, in TechWeb 

That Cendant thing 
Okay, not totally a technology company, but close enough for my purposes.  I've felt for a long time now that they were very strategically placed to do well in the retail e-commerce market.  The only problem was that no one knew who they were.  So, when the stock blew up this week, I thought this might be one of those cases where bad publicity really turns out to be good publicity.  Not many people are still going to be saying "Cendant who?" anymore.  Then, of course, come the reports of just how bad the accounting fraud really was *and* the reports that six of the top execs sold stock in the days before the announcement.  Perhaps things are even worse than they seem... It's a sticky situation, but I still think they're well positioned.  The question now is can they recover, and how much effort (and resources) are they going to have to put into rebuilding (or more accurately, how much of that will come out of their Internet efforts)? 

The SWAP standard for Workflow protocol from Sun, HP, and Netscape among others received entirely too much press early in the week (before there was any real news to report)... Blah blah blah Internet 2 blah blah Al Gore blah blah millions of dollars blah (about the only interesting thing on this topic was Qwest's decision to donate $500 million worth of services to Internet 2)... 

Earnings Reports, IPOs and the like 
Busy week:  MicroStrategy has decided to go public (seems like they're just crying out for Microsoft to destroy them)... Cyberian Outpost raised $22 million in private equity this week, which they will throw away in an online storefront... GTE beat analysts' expectations by a long shot... Intel reported earnings that were better than expected (*after* last month's warning, which made everyone lower their expectations) but were well short of last year's.  They also announced plans to get rid of 3,000 employees, mostly through attrition (though the press really liked to use the word layoff)... Seagate reports a bigger loss than expected... Read-Rite reported a huge loss this quarter... SAP's sales this quarter nearly doubled from last year... Rambus beats expectations and the stock goes down?... While SportsLine USA's revenue jumped, their losses grew to over $9 million... Compaq announced low earnings for the quarter, but said things should turn around "later" (in response, shareholders have filed a lawsuit against them for "misleading statements about inventory")... Unisys actually made some money (even more than was expected)... Apple made money *again* this quarter due to strong sales of its G3 boxes... Global Village warned that it expects to report a loss, and places the blame totally on Apple (yes, but didn't they see?  Apple is making money)... Veritas reported better than expected earnings... Inktomi files to go public... DEC surprised everyone with its earnings... Preview Travel is still losing lots and lots of money... Sun reported third quarter earnings that barely beat analysts' estimates... Bay Networks missed earnings estimates by a long shot... 3Dfx more than doubled earnings estimates... Excite is still losing money, just not as much as was expected...  Iomega losing a bit more money that expected... Broadcom's IPO prices at $24 (well above the range) and trades as high as $69 within 20 minutes of opening... @Home reported strong first quarter sales... 

Rumors, Conspiracies etc. of the week... 
Microsoft to buy CyberCash... The "Sun to buy Netscape" rumors came back with a vengeance... Psion Dacom is likely to make a "deal" with a "major" OEM very soon... 

News you could do without 
GTE to offer ADSL (jump on the bandwagon, why don't you?)... Singapore wants to be an international hub for electronic commerce... Excite and Lycos announced they are going to continue to copy Yahoo! (not in those words, exactly, but that's what they meant)... IBM gets a CFO from MCI... Koreans blame Micron for flooding the DRAM market (oddly enough, Micron is blaming the Koreans for the same thing)... Intel poster-company-turned-evil-enemy, Intergraph, has won its federal lawsuit against Intel for anti-competitive behavior.  The judge claimed that Intel's CPU's and technical information are "essential facilities" to compete effectively... Intel plans to appeal... Meanwhile Dell has made a licensing deal with Intergraph for their workstations... SGI files a lawsuit against Nvidia and its Riva processors for texture mapping patent infringement (the "well, if *we're* not going to make any money, then *you're* not going to make any money, either" strategy)... Of course, the "big" news from SGI was what we knew all along anyway: they're going to focus their strategy on Intel (with whom they now have a cross-licensing agreement) and they're going to spin off MIPS... AT&T's network this week had "serious problems" (as opposed to the other kind?) that seemed to have worldwide implications.  The biggest problems (and the loudest screams) came from credit card companies, travel agencies, insurance companies, and banks (oh, is that all?)... GSM digital phone technology really *is* clonable (though, it's not particularly easy)... The U.S. is ahead of every other country in Y2K preparedness (does this mean we have an extra week or so before civilization ends?)... What if Intel launched a chip and no one bought it?  Intel officially launched its Celeron chip and, while plenty of OEMs dutifully announced plans to build machines with it, most folks expect dismal failure... On Microsoft's page talking about NT server 5.0 they admit that it will fix "tens of thousands of bugs" found in 4.0 (doesn't it occur to them that when they release a product that has *tens* of thousands of bugs, *perhaps* it wasn't ready to be released?)... Saudi Prince Alwaleed Bin Talal Bin Abdul Aziz Alsaud coughs up $200 million for 14% of Teledesic... K-tel to sell music online... Windows 98 will cost you $109 (and possibly your soul, if you believe Lawrence Lessig)... Privacy experts don't believe the FBI's claim that computer break-ins have increased 250% in the past two years... Infoseek bought WebChat... Netscape source code downloaded over 100,000 times (yes, but how many times was it compiled?)... WSJ interactive has over 200,000 subscribers... MSNBC adds a local traffic section... NY Daily News to redo web-site... IBM announces it will launch an e-commerce-enabled web-site (shouldn't they have done this *before* their big "e-business" advertising campaign?)... Someone is trying to use the Mozilla open source code to create a 1MB version of Netscape... Microsoft admits that, well, not all of its products are really Y2K compliant, but it shouldn't be a "big" problem - just expect some "minor inconveniences" if you don't upgrade (wait, that's not a confession, that's a sales pitch)... AOL hits 12 million users, as they continue on their quest to destroy the Internet... Apple more-or-less admits it's not "looking very hard" for a CEO to replace Steve Jobs... N2K to change its name to Music Boulevard... The Pentagon warns (again) that the US is facing a huge threat from computer terrorism that could shut down "vital systems"... The guy who bought a bunch of domain names of famous companies or products and attempted to sell them to the companies for upwards of $10,000 is found guilty of trademark infringement... "Spam strike" on Usenet ends, without causing the downfall of Usenet, as the strikers predicted... Apple is now accusing Exponential of illegally selling its 45 technology patents in an auction last year to S3 (quite amusing, considering Apple was the company that cancelled its deal with Exponential, caused them to go bankrupt and forced the sale of those patents)... Microsoft, Compaq, and the Computer Curriculum Corporation are going to offer workshops for teachers in Washington D.C. on how to use computers and the Internet in the classroom (sounds more like how to use Microsoft in the class room, to me)... 

The FCC is not going to charge IP telephony companies - yet... After only three pump fakes, Businessweek.com *really* is charging... Macromedia has decided to attempt to make its Flash animation product a web standard by making it open to other software developers... The kid who got suspended for saying bad things about a teacher on his web-site to receive a $30,000 settlement from the school (okay, anyone want to help me get suspended for the stuff I say here?)... Media One to offer "cable telephony" in Los Angeles... Intel to invest in digital ink... Deutsche Telekom launched a pilot of its IP telephony services in the US... The Clinton administration expects huge growth in electronic commerce (for some reason, this scares me)... GeoCities names a big name in "old media", Thomas R. Evans, as CEO... US Commerce Secretary William Daley admits that the administration's encryption policy is failing... Merrill Lynch has decided it will not deal with firms that it feels aren't Y2K compliant... Netscape CEO Jim Barksdale waived all but one dollar of his salary and bonus last year...  Meanwhile, Amazon.com CEO Jeff Bezos didn't earn any bonus above his $80,000 salary (though if you count the stock he owns in the company, he's worth nearly a billion)... Peapod, an online grocer, to shift from filling orders by going to a supermarket, to a network of seven regional warehouses... Telecom Italia buys $2 billion worth of Cable & Wireless... 

(Mis)Uses of Technology: 
Webcasting the White House Easter Egg Roll... The FTC has shut down C&H Computing Services, an online auction house that apparently sold computers, accepted payments, but never delivered any actual computers (I'd like to see how they're going to defend *that* one in court)... An ergonomics company has created a smart shoe that will change the shape of your shoe by sensing the swelling of your feet (yes, but is it Y2K compliant?)... Gateway 2000 wants to use AI chatterbots on its web-site to "reduce hold time" to nothing... Speaking of AI applications, University of Colorado Prof. Thomas Landauer, has created the "Intelligent Essay Assessor" which will grade papers "as well as people do"... Willie Nelson to release a song only on the Internet... CNet to rename its television program "Snap! Presents TV.COM" in a desperate effort to get someone (anyone!) to visit Snap!... Intermec has created what appears to be a "Palm-sized PC" on steroids.  It's a handheld that uses a 99MHz AMD 486 processor and runs Windows 95... 

An IDC study shows that IS execs are "confused" about what software companies to go with as an Internet supplier.  Microsoft remains dominant, but many of the execs are less sure they want to go with MS, than in the past... A study by the folks at Vanderbilt University finds that 94% of web users have refused to give personal information to a web-site that requested it, while 40% have given fake info... The top four places to access the net: home, work, school, and the public library, according to the MCI foundation... A study by CNet on good web design found that a web-site costing upwards of $300 million (Disney's) was the "worst designed" whereas one that cost $10,000 was the best.  The point I thought was the most interesting, and which most everyone else ignored, was that the winner, Edmund's Automobile Buyer's Guides, had been *redesigned* by the time the findings were announced... Science reported that there is a huge "digital divide" between whites and blacks in terms of access to computer technology, and it is most evident in high school and college students... Dataquest predicts the PC microprocessor market will slow down this year (that must have been a tough conclusion to reach)... SRI Consulting took a wild stab in the dark to predict that IP telephony quality will "improve"... Deloitte & Touche has released a study in which they recommend that manufacturing companies should use the net... FIND/SVP has released a study showing that more than 11.1 million Americans telecommute... 

The hype behind Inktomi's and GeoCities public offerings will be quite insane... 

Too much free time: 
Right.  A mood ring over the Internet: http://www.chrysalis.org/oeno/testmood.htm 

Up To Date is written by Mike Masnick from whatever news he hears from whatever sources they happen to come from.  It is not intended for any uses other than as one of many possible ways to follow what's going on in the hi-tech industry.  I certainly wouldn't rely on it as your only source of info.  And, of course, my comments may not accurately reflect reality.  

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