Thursday, 10 March 2005 18:00

News Roundup 10 Mar 2005


High-Tech Leaders: US risks losing edge

Leaders of high-tech companies have cautioned that the United States risks losing its competitive edge without significant new investments in education, research and development and the spread of broadband technology.

The New York Times/AP report (8 Mar.) that Rick White, president and chief executive of high-tech lobby TechNet, said that "the world is changing a little bit, and frankly there is a significant amount of concern that if we don't make some adjustments, follow the right public policies, do some things that are important, we could find ourselves very quickly losing the advantage we've had for so long."

The Californian group represents about 200 high-tech leaders, including Microsoft, Intel, Cisco Systems and Hewlett Packard. TechNet made its annual lobbying trip to Capitol Hill on Tuesday to meet with Cabinet members and congressional leaders, says the paper.

The NYT says that White and other TechNet officials cited some troubling indications that the United States is falling behind in high-tech development:

- Some 7 percent of US households have broadband access, compared with 30 percent in Korea, 20 percent in Japan and over 10 percent in France.

- US investment in research and development has stayed flat for the last three decades, while it has grown significantly in competitors such as Brazil, India, China and Israel.

- Students in the United States are behind their counterparts in other countries in math and science, and some Asian countries are graduating five times as many engineers.

The NYT says the officials announced formation of a CEO Education Task Force to try to come up with solutions.

Oracle countering SAP's bid for software maker

Oracle has announced on that it is planning to make a cash offer immediately to purchase the software maker Retek, spurring a possible bidding war with SAP, its main rival in the corporate software market.

The New York Times reports (9 Mar.) that Oracle's bid of US$9 a share, or US$525 million, bests SAP's bid of US$496 million, made on 28 February.

Retek, which is based in Minneapolis and specialises in software packages that large retail chains like Best Buy and Gap use to run their businesses, had already agreed to be acquired by SAP.

Oracle's chief executive told analysts his company bought 5.5 million shares of Retek common stock this week, representing nearly 10 percent of the total shares outstanding.

The NYT says that, as is, SAP's bid of US$8.50 a share was a 42 percent premium over the company's closing price of US$6 on 25 February.

A spokesman for SAP said the company would have no comment until executives had a chance to review Oracle's offer.

The NYT says Oracle's bid to snatch Retek from SAP comes just two months after the company completed its contentious takeover of PeopleSoft for US$10.3 billion. Oracle, the undisputed leader in the corporate database market, purchased PeopleSoft to gain a larger presence in the multibillion-dollar industry of software that companies use to manage their finances, inventory and procurement needs. SAP is the No. 1 vendor in that market.

According to the paper, Oracle starting talking with Retek about an acquisition in October, Mr. Ellison said.

New Microsoft products aimed at phones market

Microsoft has this week introduced three software products that are intended to blur the lines between traditional phones and computer networks within corporations.

The New York Times reports (8 Mar.) that the company is searching for ways to bring new life to the increasingly mature market for its Office programs.

It has set its sights on what it calls real-time collaboration software as its next big area of growth.Bill Gates, the company's co-founder and chief software architect, introduced an updated version of Microsoft's Live Meeting service for Web conferencing and document sharing; Microsoft Office Live Communications

Server 2005 for corporate instant messaging; and a new instant messaging program, Microsoft Office Communicator 2005, reports the paper.

The NYT says Microsoft hopes the new tools will change the way businesspeople meet and interact with each other, as they have at its offices. "Microsoft is a large-scale customer of these" applications, he said during a question-and-answer session for customers and partners held here. "We're saving over US$40 million in travel costs this year.", the paper reported.

But the NYT says that in a later interview, he said it was difficult to measure directly the productivity increases from such software, and he had been pushing Microsoft executives for better measures of productivity savings.

The paper reports that Mr. Gates also said that the market for internet telephony, or voice calls over internet connections, was "exploding," and that the new Office Communicator was intended to move telephone calls from the telephone handset to the PC.

The NYT says Microsoft has designed software to connect its programs to traditional corporate telephone exchanges and has signed up several telecommunications companies as partners, so that calls dialed on a PC can reach traditional phones.

Analysts said, however, that what was at stake more broadly was a collision between traditional telecommunications networks with centralised switches, and the modern internet, where more control rests with the PC's at the edge of the network, says the paper.

Mr. Gates said that the main competitor for the company's Live Communications server was the Lotus Sametime server from IBM., and that Live Meeting competes against Webex, a web-based conferencing service, the paper reports.

The Microsoft boss said the new Office Communicator, available in a few months, has no direct competitor yet, the NYT further reported.

Instant messenger Worms attack web

New worms that use Microsoft's instant-messaging software to spread are tunneling their way across the web.

The New York Times reports (9 Mar.) that Aantivirus companies have just flagged a variation of an existing threat and a new worm, both targeting MSN Messenger.

According to the paper, researchers at both Aladdin Knowledge Systems and F-Secure discovered the appearance of Win32.Kelvir.a, a new twist on the previously identified Kelvir threat. Each company also identified a new worm in the wild; Aladdin is calling it Win32.Serflog.a., while F-Secure is calling the same threat Sumom. Aladdin is rating both Win32.Kelvir.a and Win32.Serflog.a as medium-to-high risks.

The NYT says the appearance of the new worms underscores the growing popularity of malicious software that relies on instant messaging, or IM, to spread. It follows a similar attack last month by another program meant to use Messenger to spread itself, says the paper, and in early February, researchers at Trend Micro detailed a variant of the Bropia worm that used Messenger. The Bropia.f worm was packaged with a second, more damaging worm that tried to exploit computers with improperly patched software.

The NT says that while Microsoft spokesmen were quick to point out that the Messenger attacks do not take advantage of any flaw in the software, the company said it recommends that customers exercise "extreme caution" when accepting file transfers from both known and unknown sources on IM.

The paper reports that according to Aladdin, Win32.Kelvir.a spreads via a URL sent in an IM that contains an infected file. After clicking on the link, a person's computer becomes infected by the worm. When the program is executed it attempts to drop multiple copies of itself onto the person's PC.

The worm also executes itself with every subsequent startup of the IM software by modifying registry entries, and it forwards itself to all of an individual's IM contacts. The threat presents itself hidden in a message that reads "omg this is funny!", followed by the URL.

The NYT also reports that Aladdin also said that Win32.Serflog.a, or Sumom, presents itself as an attachment in an instant message. The worm attempts to spread by dropping copies of itself into folders typically shared by peer-to-peer software clients. The infected message reads "????omg click this!", followed by an attachment that harbors the worm. The company said Win32.Serflog.a also drops several hidden files into infected machines and attempts to cancel security functions of Messenger, while blocking access to several related web sites.

According to the NYT., in the first six weeks of 2005, 10 instant-messaging worms and their variants spread over America Online, ICQ and MSN networks, according to researchers at Akonix Systems. That's more than three times the number of worms that spread over public IM networks over the same period last year, and Akonix expects the trend to continue to climb.

The latest round of worms targeting Messenger, reports the paper, also bear some signs that the individuals writing the malicious programs have begun to use the threats to communicate with one another, possibly in a manner similar to street gangs' use of graffiti tags to mark their territory.

Japan: Intel violated antimonopoly law

The Fair Trade Commission in Japan has just ruled that the Intel Corporation violated the country's antimonopoly law in the way it sold semiconductors and ordered the company to stop some of its sales practices.

The New York Times reports (9 Mar.) that Intel took issue with the finding and said it was considering how to respond.

The paper reports that the commission said Intel used unfair business practices to persuade five Japanese personal computer makers, including Sony and Toshiba, to stop or limit their purchases of microprocessors from two Intel rivals, Advanced Micro Devices and the Transmeta Corporation.

The action against Intel came 11 months after the commission began its investigation with a raid on the company's Japanese offices, says the NYT., adding that Fair trade authorities said that since May 2002, Intel offered discounts and incentives to computer makers that were contingent on promises that those companies either cease, or strictly limit, purchases from other chip makers.

Intel said in a statement that it regarded its practices as fair and lawful.

The company has 10 days to decide whether to appeal. If it does, the case would go through the commission's judicial review process, says the paper.

The ruling, which does not carry a fine, was the second action by Japanese competition regulators against a major American high-technology company in the last year. In July, the commission ordered Microsoft to remove a clause in its licensing contracts that was intended to protect it from patent suits.

The NYT says that Intel has about 90 percent of the Japanese market for microprocessors, with the remainder split between Advanced Micro and Transmeta. That compares with an 80 percent market share for Intel worldwide.

The paper adds that in the ruling, regulators did not ask Intel to stop offering volume discounts or other incentives to computer makers, but it did order the company to stop tying those discounts to promises to stop buying rival brands.

In one case, Intel forced a computer maker to buy all of its semiconductors from Intel or lose rebates that had been offered, the commission said without identifying the manufacturer, reported the NYT.

The commission determined that Intel's practice limited competition and thus was likely to drive up the cost of computers for consumers, said Hiroshi Yamada, a commission official who briefed reporters on the decision, reports the paper.

The NYT says that the combined Japanese market share of AMD and Transmeta dropped by more than half from 24 percent in 2002 to 11 percent in 2003, the commission said. Intel accounted for the remainder of the market, so its share rose to 89 percent from 76 percent in the period.

AMD has cited Intel's sales practices for its dwindling market share in Japan and applauded the ruling.

EBay opens classified - ad web sites

Online auction company eBay has said it has launched free classified-ad web sites in six countries, after recently acquiring a number of other such sites in the United States and abroad.

The New York Times/Reuters report (8 Mar.) that EBay said it opened sites in Canada, China, France, Germany, Italy and Japan under the brand Kijiji, which means "village" in Swahili.

The paper says the move comes as eBay deals with pressure to keep up its astronomical growth rate as its main market matures and amid vocal complaints about the rising cost of running businesses on the massive auction and retail site.

As part of its diversification efforts, eBay in August took a 25 percent stake in San Francisco-based, a free service for people seeking roommates and selling items. Craigslist makes money charging employers for help-wanted listings. Executives have said numerous times that the company is not for sale, reports the NYT.

EBay also recently has bought stakes in classified advertising-related companies in other countries, says the paper.

The Kijiji sites, which were launched 28 February and are available now in more than 50 cities, aim to help people in a city meet, find information and trade ideas and goods. Individuals can list and find items on Kijiji free of charge.

The paper also reports that EBay in November bought, the biggest Dutch classified-ad web site, for about US$290 million in cash. In February, it closed its acquisition of US apartment and rental housing web site for about US$415 million in cash plus acquisition costs, net of's cash on hand.

And, reports the paper, EBay closed its US$149 million acquisition of, an online site for automobile ads in Germany, in April 2004.

Newspapers, says the NYT., meanwhile, have been trying to come up with their own ways of improving online classifieds.

Knight Ridder, the second-largest US newspaper publisher, has revamped its online classified-ad offerings throughout its stable of newspapers.

The company, which publishes the Miami Herald, Charlotte Observer and Silicon Valley's San Jose Mercury News, launched a program in November that allows people to buy online ads only -- bypassing the print version if they choose, reports the NYT.

Nokia launches handset tv project

Nokia this week launched a pilot project enabling cell phone users to watch television broadcasts on their handsets in the Helsinki region.

The New York Times/AP report (9 Mar.) that in the first venture of its kind in Finland, Nokia is working with the country's largest broadcaster, the Finnish Broadcasting Company, YLE, and leading commercial TV channels and major mobile service providers, including TeliaSonera and Elisa, the world's largest cell phone maker said.

The paper says that besides Finnish TV programming, 500 test users in the capital region can also watch international television broadcasts, such as BBC World and CNN, and tune into radio programs.

Nokia tested the system last year before launching Tuesday's pilot project, scheduled to continue until June, the Finnish company said.

The NYT says that the company's research found people like to watch mobile TV in cars and public places, such as cafes. Watching mobile TV at home and in workplaces was also common.

Nokia, based in Espoo just outside the Finnish capital, has sales in 130 countries with some 55,500 employees.

Doctors' journal: computing no panacea

The New York Times reports (9 Mar.) that the Bush administration and many health experts have declared that the US health care system needs to move quickly from paper records and prescriptions into the computer age, and have said that modern information technology can deliver a huge payoff: fewer medical errors, lower costs and better care.

However, the NYT says that research papers and an editorial just published in The Journal of the American Medical Association cast doubt on the wisdom of betting heavily that information technology can transform health care anytime soon.

One paper, based on a lengthy study at a large teaching hospital, found 22 ways that a computer system for physicians could increase the risk of medication errors. Most of these problems, the authors said, were created by poorly designed software that too often ignored how doctors and nurses actually work in a hospital setting, reports the NYT.

The NYT says the likelihood of errors was increased, the paper stated, because information on patients' medications was scattered in different places in the computer system. To find a single patient's medications, the researchers found, a doctor might have to browse through up to 20 screens of information.

Among the potential causes of errors they listed were patient names' being grouped together confusingly in tiny print, drug dosages that seem arbitrary and computer crashes, reports the NYT.

The paper says the research focused on ways that computer systems can unintentionally increase the risk of medical errors. The study did not try to assess whether the risks of computer systems outweigh the benefits, like the elimination of errors that had been caused by paper records and prescriptions.

Another article in the journal looked at 100 trials of computer systems intended to assist physicians in diagnosing and treating patients. It found that most of the glowing assessments of those clinical decision support systems came from technologists who often had a hand in designing the systems.

The NYT reports that the principal author of the editorial, Dr. Robert L. Wears, a professor in the department of emergency medicine at the University of Florida College of Medicine in Jacksonville, said the message from the research studies was that computer systems for patient records, the ordering of treatments and clinical decision support have not yet shown themselves to be mature enough to be useful in most hospitals and doctors' offices.

World's biggest travel guide in pocket

Technology companies and information providers have been teaming up to make electronic "to go" versions of popular travel tools, betting on a developing market for content and services designed for hand-held devices and mobile phones, reports the New York Times (8 Mar.).

The paper says that so far, that market is dominated by revenue from e-mail, text messaging, games and ringtones - together, about 85 percent of the US$2.8 billion consumers spent on mobile data last year, according to the Yankee Group. But other niche applications are increasingly making the leap from the desktop to the jacket pocket - many aiming at the mobile workers who carry the phones and hand-held gadgets that are most suited to handle advanced applications.

The NYT says that for instance, OAG, a publisher of airline flight schedules, introduced a digital version of that data in December, OAG Flight-Finder, which works on Palm or Pocket PC devices. For US$99 for a one-year subscription, travelers can download the North American version of the product, which includes schedules for nearly 300 airlines flying within the region and to major cities worldwide. Versions for Latin America, Europe and Asia sell for the same price.

The paper reports that Flight-Finder cannot tell you whether your plane is going to be late, but if your meeting ends early, you can look up the next scheduled flight. The data for each version, which is updated when the device is plugged into a computer that is online, takes up about three megabytes of memory, a threshold that makes it more suited to PDA's than phones.

The paper says the WorldMate Professional edition, which has the most features, is available for Palm and Pocket PC devices for US$69.95 a year; stripped-down versions are available for other devices, like the BlackBerry and various Nokia, Motorola and Sony Ericsson phones. Prices vary depending on the product, but typically involve an annual subscription, as do many of these mobile applications.

The NYT says that WorldMate was one of the top sellers last year on Handango, a web site that offers more than 50,000 software downloads for a range of hand-held devices and smart phones. Customers can browse by product to see what is available for the device they carry; for Pocket PC devices, another source for software is

Gates promotes 'virtual meeting' software

Microsoft Chairman Bill Gates promoted new business software this week that is designed to improve virtual meetings, a move he said can boost office productivity and reduce corporate travel expenses.

The New York Times/AP report (8 Mar.) that the company will debut three products over the next several months as part of its emphasis on "real-time collaboration." The growing business niche includes instant messenger services, web conferencing and Voice over Internet Protocol devices, which allow users to make telephone calls using the Internet at lower costs than with normal phone companies.

The paper says that companies such as Time Warner's America Online unit and broadband phone company Vonage Holdings Corp. have moved into the burgeoning category. Gates said the Microsoft Office unit -- which can leverage the dominance of the Windows operating system -- won't lag rivals.

The NYT reports that the gathering included more than 1,000 virtual participants from Los Angeles to London. Gates said Microsoft has saved roughly US$40 million in travel expenses through collaboration software.

The software allows users to write messages in chat groups, watch real-time videos at their computer terminals, get phone messages delivered by e-mail, edit Word documents, present PowerPoint displays, examine spreadsheets and conduct online polls in real time with more than 1,000 other people around the world, says the NYT.

Microsoft Office Live Meeting is web conferencing software that allows users to conduct meetings from any PC connected to the internet. Pricing and licensing will be announced when the product is available today.

The NYT says that Microsoft Office Communicator 2005 integrates the personal computer and the desktop telephone. It also supports Voice over Internet Protocol and makes it easier to conduct multiparty telephone conferences.

The paper says that Microsoft Office Live Communications Server 2005 promises to have better compatibility with non-Microsoft instant-messaging clients and block junk messages from marketers, known as "spim." It allows corporate IM networks to connect with clients or partners' networks throughstandard firewall ports, adds the paper, revealiong that it will be released as a free download in the second quarter of 2005.

Guilty plea to copyright charges

In the US., three men prosecutors dubbed the "Robin Hoods of cyberspace" pleaded guilty Tuesday to putting millions of dollars worth of copyrighted computer games, movies and software on the Internet so that people around the world could make copies for free.

The New York Times/Reuters reports (8 Mar.) that all three said they made no money on the scheme, and did it just for the sport of it.

Seth Kleinberg, 26, of Los Angeles, Jeffrey Lerman, 20, of New York, and Albert Bryndza, 32, of New York, pleaded guilty to federal copyright charges. They are the first Americans convicted in what the Justice Department said was the largest-ever investigation of software piracy, reports the paper.

The NYT says that investigators said that software valued at millions of dollars was copied and sold for pennies in foreign countries.

The investigation was aimed at an underground network known as the "warez scene", says the NYT.

The three men were released without bail for sentencing in July. They reached plea bargains calling for sentences of about three to six years.

Taiwan nanotechnology output to soar: research

Backed by strong government funding, Taiwan's output of a wide range of products using nanotechnology will jump 10 fold by 2008 to T$300 billion (US$10 billion), a top researcher said on Tuesday.

The New York Times/Reuters report (9 Mar.) that nanotechnology deals with manipulating particles one-billionth of a meter in size, and promises benefits from a coating of paint that lasts decades, to faster-acting and more effective medicines, to golf balls that go further and straighter.

"The government has targeted nanotechnology as the most important strategic industry for Taiwan's future economic growth," Su Tsung-tsan, the general director of the NanoTechnology Research Center (NTRC), told Reuters.

The paper and Reuters report that Su said Taiwan will produce T$1 trillion of goods using nanotechnology by the year 2012, accounting for nearly 10 percent of the island's US$350 billion economy.

The NTRC, which gets about half of its budget from the Taiwan government, is home to about 150 researchers who cooperate with private companies and academic institutions to find commercial applications for their research, says the paper and Reuters.

According to data from research company Venture Analytics, Taiwan nanotechnology research funding ranked number eight in the world in 2003 at US$115 million,ahead of France and India, but far behind regional competitors like China and South Korea, say the NYT/Reuters

The NYT says Taiwan has seen thousands of its factories migrate to lower-cost China since the late 1980s, so the island is positioning itself as a centre for research and development, while allowing low-tech manufacturing to move to China.


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Stan Beer


Stan Beer co-founded iTWire in 2005. With 30 plus years of experience working in IT and Australian technology media, Beer has published articles in most of the IT publications that have mattered, including the AFR, The Australian, SMH, The Age, as well as a multitude of trade publications.



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