Friday, June 25, 2004



Sales of Health and Beauty Products to Ethnic Men Surpass $1.4 Billion
Increased knowledge and acceptance of grooming practices by male consumers plays key role.
African American, Hispanic and Asian American men spend more than $1.4 billion on personal care items, including both general-use and ethnic-specific health and grooming products, by 2008, sales in the category are expected to climb to $1.7 billion, experiencing a healthy gain of nearly 20 percent.
Increased magazine and television coverage of men’s grooming issues, from the application of skin creams to proper shaving techniques, have helped grow sales in the ethnic male category and in the men’s grooming category overall. The estimates are currently 84 million African American, Asian, and Hispanic men in the United States.
Men in general tend to be overlooked in the personal care industry – and ethnic males are no exception. But the truth is that ethnic men present a lucrative audience to marketers, and, with the explosive growth of the Hispanic population, can offer opportunities in the overall men’s grooming industry, which of late has been stagnant.
Source; Market Research, June 04
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Munich confirms plan to replace Windows with Linux
When Microsoft's UK marketing director Nick Barley opened his company's "Get the Facts Roadshow" in London last week, designed to dispel some of the 'myths' about the Linux operating system, he remarked that supporters of the open source operating system are waging a "Jihad" against his company and its Windows product line.
The metaphor suggests that the software giant is facing a long and bitter struggle against irrational fanatics who are passionately anti-Microsoft.

But there was nothing extreme or irrational about the way in which Munich City Council this week calmly and democratically dealt Microsoft one of the biggest blows it has suffered in its short corporate history. After a year's trial, the City's burghers voted 50-29, in a closed door meeting, to migrate all of its 14,000 Microsoft based desktop computers over to Linux, the Open Office desktop suite, and the open source Mozilla browser.

The contract is not huge - with the initial training and implementation, it is believed to be worth less than €20million - but it is very high profile, with key suppliers on both sides viewing this a key battle in a long war. Microsoft's CEO Steve Ballmer famously broke off a skiing trip to travel to Munich and offer huge discounts if the City stuck with Microsoft, while IBM and Novell, owner of the Linux operating system supplier Suse, both gave thousands of hours of expertise to help run the pilot. (Even then, Munich admitted to Information Age in January 2004 that the trial had suffered "technical difficulties".)

The end of the trial now means that the contract to supply the systems will now be put out to tender – following the rigorous rules set out for public purchasing by the European Commission. HP, Dell and IBM are expected to be among the bidders.
Throughout Europe this year, a succession of public sector authorities have announced plans to migrate to Linux, but in most cases this has meant moving from Unix servers to Linux servers, often staying with the same hardware supplier. Very few organisations have migrated their desktops to Linux. Many of those evaluated Linux are worried about possible instability, the potential loss of key features in Microsoft's Office Suite, possible file incompatibilities, especially when exchanging documents with trading partners, a lack of skills, and staff resistance.

Microsoft executives dismissed the Munich decision, saying that there are peculiar factors involved and that IBM had helped to drive the decision. Even so, Microsoft is becoming worried – as its Roadshow demonstrates.

Analysts believe Munich is a crucial milestone that will accelerate adoption of Linux on the desktop. IDC has forecast that Linux desktop market share will grow from 3% to 6% from 2004 to 2007. Although Microsoft's share is currently a massive 95%, the loss of 3%-4% share amounts to hundreds of millions of dollars lost in Windows and Office licences. If that share were to fall faster, as Linux proponents believe is likely, then Microsoft would begin to suffer serious financial consequences.
Meanwhile, some journalists have been questioning Microsoft's marketing tactics, suggesting that the Roadshow shows "fear" that businesses will pick up on. But Microsoft believes that in a war like this, it has to take the offensive.
Source: Infoconomy Ltd, June 04
Author: Andrew Lawrence
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AOL employee sold email addresses to spammer
24 June 2004 An employee of America Online (AOL), the world's largest Internet service provider, has been arrested and charged with stealing all 92 million e-mail addresses of AOL customers and selling them on to spammers for an alleged $52,000.
The engineer, Jason Smathers, 24, apparently used the identity of another AOL employee to gain access to the company's list of customer email addresses on a supposedly highly secure database. He also took their telephone numbers, postal codes and the type of credit card they use. Fortunately, credit card numbers are kept on a separate database.
He sold the information to the owner of an Internet gambling site, Sean Dunaway, 21, who wanted to spam the addresses to promote his site. Smathers is also said to have sold the list to others although no details have been disclosed.
The two men are the first to be prosecuted under the new US 'CAN-SPAM' law. It requires a business relationship to exist between the sender and recipient of a commercial email and in this way, aims to make certain types of spam illegal. It also mandates working unsubscribe links in any email.
Under the law, each defendant faces a maximum sentence of five years in prison and a fine of $250,000.
Smathers was caught out when AOL was pursuing a lawsuit against a group of spammers in early 2004. During an interview, it emerged that someone had bought addresses from an AOL employee in order to send spam promoting penis enlargement pills.
Source: Infoconomy Ltd, June 04
Author: Caroline Berdon
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Iraqis get a taste for Linux
A group of Iraqi computer enthusiasts are advocating the use of the operating system Linux to rebuild their country.
Ashraf Hasson and Hasanen Nawfal are both natives of Baghdad.
Like many 20-somethings, Hasson and Nawfal grew up nurturing passions for computers and for programming.
Both of them are firm believers in open source software. Unlike expensive proprietary software, open-source software can be freely distributed and modified, as long as the modifications are shared with other users.
They are particularly fans of Linux operating system.
These two Linux enthusiasts, though, did not even know one another before the ousting of Saddam Hussein.
But they found each other online, in a Linux forum hosted by Iraqi expatriates, soon after Saddam fell and started thinking about what they could do.
"Every country has a Linux users group except Iraq, so I thought, maybe Iraq deserves to have a Linux users group," said Ashraf Hasson.
"We started sending e-mails, and trying to figure out how to help Iraqi people here to know about Linux, educate them, spread the word. And so we did."

Cost savings
The Iraqi Linux User Group has now been up and running for a little more than a year.
"I wanted to find people to share knowledge with," explained Hasanen Nawfal, "to learn from them, to speak with guys who share my thoughts."
The Iraqi Linux User Group website lists more than 200 members, most of whom are Iraqi expatriates.
They are united in their belief that open-source software like Linux could help their nation.
Its chief advantage is that Linux code is free to use and modify.
To Nabil Suleiman, a member of the Iraqi Linux User Group living in Canada, Linux could mean significant cost savings.
"There is a shortage in power and water supplies, and sewage systems, so the last thing Iraq needs is spending billions of dollars on very expensive and overpriced products, especially software products," he said.
"We believe that Linux can save us lots of money in this field."

Illegal software
But it is about more than just cost for the Iraqi Linux User Group.
The open source enthusiasts believe it could allow Iraqis to build their own home-grown technologies.
"This enables the country to build its own infrastructure based on open source, on open ideas," Ashraf Hasson.
"That might help establish a solid base for Iraqi technology, and help not constrain the country with proprietary software and prevent monopolisation over Iraq by such major companies."
But getting Iraqis to think about Linux is an uphill battle. Most have never touched a computer, let alone thought about what operating system they want to use.
Computer software is now more widely available in Iraq, but little of it open-source.
"Currently, most software in use in Iraq is illegal copies of proprietary software," explained Don Marti editor of the US-based Linux Journal.
Software giants like Microsoft, he said, are happy to hook Iraqis on their software.
"Proprietary software companies are using these illegal copies as a free sample program, and a marketing tool, as they have in other countries."
"When the crackdown comes, and the people in Iraq start having to comply with the licenses for this software, then they're going to be in trouble."
It means Iraqis are going to have to start paying companies like Microsoft, who declined to be interviewed.

Obstacles in the way
Ashraf Hasson of the Iraqi Linux User Group said he would actually welcome tech giants like Microsoft coming into the Iraqi market.
He grudgingly even admitted that the Windows operating system may be OK for "people who want to do basic stuff".
But he is pushing small and medium-sized businesses, and the Iraqi government, to consider running open-source software on their servers.
He is also leading Linux seminars at a couple of Iraq's larger universities.
And Nabil Suleiman in Canada says that some expatriate members of the user group want to open a Linux training centre in Baghdad.
"But it all depends on how the political issues and all the other issues are resolved there," he said.
"I think it will take between two years and five years to stabilise the whole system, and then we can start building on a more stable foundation."
Inside the country, the Iraqi Linux User Group is thinking big. Their ambitious goal is to see every server in the country running Linux a year from now.
Getting there, they face numerous obstacles.
"Security, electricity shortage, poor communications, blurred view of the future, money, bad response from government, lack of resources," explained Hasanen Nawfal, "too many to mention."
Source: BBC News, June 04
Author: by Clark Boyd, is technology correspondent for The World, a BBC World Service and WGBH-Boston co-production

Picture; The US is running various computer-training projects in Iraq

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Overstocking in Afghanistan
When Neelab Kanishka fled Afghanistan for Pakistan with her family in 1989 at the age of 11, the idea of ever returning to her war-torn native land seemed far-fetched.

She could not have conceived in her wildest imagination, Kanishka said, that 15 years later she'd not only be coming back, but also directing one of the nation's largest employers. Nor would she have envisioned her role as envoy of a discount Internet retailer located in, of all places, Salt Lake City.

"I can't say it's a dream come true, because I don't think I could have had a dream like this 17 years ago," said Kanishka, who moved to the United States from Pakistan in 1997 with her husband, a former childhood friend who had been working in the States.
The couple settled in Salt Lake City, where Kanishka later took a job as a customer service rep for, a site specializing in product liquidations. After little more than a year on the job, she took over management of the website's Worldstock division, which sells handmade goods.

These days, Worldstock employs more than 1,500 Afghan artisans among a worldwide network of craft workers. It's an accomplishment that Overstock's CEO, Patrick Byrne, attributes to both an upswing in online retail spending and reliable demand for inexpensive handmade rugs.

That confluence of factors culminated this week in a confirmation by the Afghan Ministry of Commerce that Overstock is currently the largest provider of private employment in Afghanistan. According to Mariam Nawabi, commercial attaché for the Afghan Embassy in the United States, Overstock is currently believed to provide employment, directly or indirectly, for about 1,700 people living in Afghanistan.

Prior to Overstock's arrival, Byrne was told that the country's largest employer was a brick factory in the Western city of Herat, which had about 400 workers.
"That was the (General Electric) of Afghanistan before we got there," said Byrne, who traveled to Afghanistan in March. "Now we're the GE."

Byrne's operation in Afghanistan is strictly low-tech. The company's suppliers largely work from home. Their chief products are rugs, embroidery, jewelry and fur-lined clothing.
Afghanistan is one of more than 30 countries that sell handmade goods for Overstock, and it is currently the site's largest foreign supplier. Rugs, according to Kanishka, are the top-selling item, ranging in price from around $200 to $1,700.

Overstock isn't the only one attempting to profit online by selling handmade goods from exotic locations. Competitors include retailers specializing in single-product categories as well as sites like Novica, an online venture backed by the National Geographic Society that sells crafts from a network of more than 2,000 artists around the globe.

The principle behind the business, said Roberto Milk, Novica's co-founder and chief executive, is to give people who traditionally sold their wares only at markets near their homes a chance to reach a much bigger group of potential buyers.

"For people who work with us, their economic situation changes because they have an ongoing way to sell to the world market," Milk said.

But Novica isn't a nonprofit venture. Milk estimates that the site's revenues are growing at a rate of 30 percent annually and he expects it to become profitable in the second half of the year.

Like Worldstock, Novica's wares span several continents. Suppliers include leatherworkers from the Andes, carvers from West Africa, basket weavers from Bali and Java, and painters from all locations.
Other online retailers are venturing even farther off the beaten path to seek out handmade goods.

Pete Burris, president and namesake of Alpaca Pete's, a retail chain and website that sells rugs and clothes made from the woolly South American alpaca, buys finished products almost exclusively from a group of about 4,000 Peruvians from the island of Amantani, located in the middle of Lake Titicaca, the highest-elevation lake in the world. Aside from a small tourism business, Burris says, his Alpaca exports constitute one of the only local sources of employment.

In Afghanistan, Kaniskha's network of suppliers consists largely of women who were prevented from working outside their homes under the Taliban regime. These days, many of these women make substantially more money than men.
Given the disparity between prevailing wages in developed and developing nations, both Overstock's Byrne and Novica's Milk say their goal is not to get the lowest possible price for handmade goods.

At Novica, Milk said, artists themselves set wholesale prices for the retailer, which are usually at least slightly higher than local prices.

On its website, Overstock says that it will not make a profit of more than 1 percent on goods sold through its Worldstock division. In practice, Byrne said, this translates into artisans receiving about $70 from every $100 customers spend on their wares.

By American standards, earnings for suppliers of handmade goods don't seem like much to rejoice about. Kanishka cites the example of one mother and six daughters who make about $400 a month embroidering shawls. In Afghanistan, where government workers commonly earn less than $40 a month, Kanishka insists, "that's big money."
Source; Wired; June 04
Author: by Joanna Glasner

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ISP’s in Ghana’s region of Tamale call for review licence fees
ISPs in Tamale, in the northern region of Ghana, have called on the regulator, the National Communication Authority (NCA) to review its licensing regime.
The ISP’s claim that the USD30,000 ISP license fee required by the NCA is a big impediment to them rolling out services more widely locally. The ISP’s say the huge fees is a major reason for the slow pace of Internet growth in northern Ghana, as not many businesses would like to invest in Internet services in the North where the market is relatively small.
The ISPs made the appeal during a Technical Update Seminar organised by the International Institute of Communication and Development, IICD, Centre for Information Technology Research and Development (CITRED) and Ghana information Network for Knowledge Sharing (GINKS). The aim of the seminar was to share information with the residents of the Northern region on connectivity options available in the world today and how best as a community they can develop and promote the region into the knowledge based economy using Information and Communication Technology tools.
Ernest Kofie, Director of GrasRut, a cybercaf√© and ISP operator in Tamale, said considering the high cost of Internet usage to most of the people of Tamale, his ISP has adopted a community approach to the deployment of Internet in Tamale. He was therefore very agitated by the requirement of NCA to pay USD 30, 000 license fees as paid by all ISPs in Ghana. He pleaded to the NCA to have some waivers for ISP’s who decide to operate outside of Accra.
Jonnie Akakpo of CITRED introduced new technologies to the participants and said it was important that the government take the new ICT4AD policy seriously and implement its recommendations to the letter.
Denise Clarke of IICD introduced the Bgan Mobile IP Satellite Technology as one of the possible connectivity options for rural areas. She was of the view that such connectivity tools where relatively cheap and afforded people in the rural areas to also have access to the benefits of Internet.
Kofi Mangesi of GINKS encouraged the community to continue to dialogue on how best they can influence policy in the area of connectivity.
Source: Ginks, June 04
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Nigerian Telecom firm Reltel raising funds on the Indian market
elTel, a Nigeria-based telecom company, is looking to raise funds and find a strategic partner from India. The company has appointed the Mumbai-based investment-banking firm Strategic Capital Ventures Ltd as its exclusive financial advisor. RelTel hopes to raise about USD120 million from the Indian markets and tie up with an Indian telecom operator with expertise in large scale expansion projects.
Sunil Pathak, director, RelTel, said that the funds will be utilised for expansion and will be a combination of debt and equity, adding that the company is willing to sell its controlling stake if all other criteria fall in place.Pathak said, "The similarities between Indian and Nigerian telecom services have prompted us to come to India as the expertise here can be very well utilised to shore up operations in a small but growing Nigerian market."He said talks are on with some big telecom players in India but declined to disclose names.
Source; Nigeria Telecom, June 04
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EU-US summit
As US President George W Bush jets in to the EU-US summit in Ireland on Saturday, the aim will be to revitalise transatlantic relations. A key sign of improvement will be the signing, after years of haggling, of a final accord on the compatibility and inter-operability of the two blocs' rival GPS and Galileo satellite navigation systems.
For a long time, the US was not overly keen on what it saw as an unnecessary rival to its own GPS system. However, Europe went ahead, is building Galileo's first satellites, signing international agreements with Russia, India, Brazil, Mexico and China, and is set to be operational by 2008.
The EU-US agreement should reap benefits for both the US and Europe in a highly competitive satellite positioning market forecast to reach EUR 300 billion globally by 2020. Galileo is expected not only to create some 150,000 jobs in Europe, but also to herald a technological revolution comparable to that of the mobile phone.
Author: LuisB, June 04
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EU grants new EU members EUR 24 billion in aid
The European Commission said Wednesday it had formally granted the 10 new members of the European Union 24 billion euros in economic and social development aid, with the largest single amount earmarked for Poland.
European Commissioner for regional policy Jacques Barrot said in a statement that the programmes "will help to bridge the significant gaps in the enlarged European Union and contribute to integration and to territorial cohesion".
When the European Union grew to 25 members on May 1, its population increased by 20 percent but its gross national product rose only five percent, highlighting the development gap between the previous 15 members and the 10 new members.
The European Commission, the EU's executive arm, said that efforts would in particular be made so that countries benefitting from the aid would have the administrative capacity to manage the funds.
About 15 billion euros were targeted at the poorest regions, defined as areas having gross domestic product equivalent to 75 percent of the EU average.
Poland, the biggest new EU member, would receive 8.2 billion euros, the biggest share of the aid, followed by Hungary with 1.9 billion euros, the Czech Republic with 1.45 billion euros, Slovakia with 1.041 billion euros, Lithuania with 895 million euros, Latvia with 626 million euros, Estonia with 371 million euros, Slovenia with 237 million euros, Malta with 63 million euros and Cyprus with 53 million euros
Source; EU sources, June 04
Author; LuisB

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SA’s Telkom continues to make high profits
Telkom last week announced strong group annual results for the year ended March 31, 2004, with healthy increases in operating revenue and operating profit, positive cash flow growth, and excellent growth in both headline and basic earnings per share. The group financial highlights for 2004 include:- 8,8% group revenue growth to R40, 795bn;
- 39,5% growth in operating profit to R9,088bn;
- 40% group Ebitda margin;
- Group return on assets of 18%;
- Net debt to equity of 61%;
- Total dividend of 200 cents per share paid for the year.
Commenting on the results, Group CEO of Telkom, Sizwe Nxasana, says: "The management of the Telkom Group is pleased to report strong results in our first full year as a listed company that has seen us execute well on strategy and deliver growing returns to our shareholders.
"Group operational highlights include the Telkom Group achieving robust operational performance across all levels of the business, with delivery against its three strategic pillars of customer growth and retention, operational efficiencies and innovation and sustaining the development of the marketplace."

Key achievements include:
- 14% growth of data revenue, 44% growth in Internet subscribers, 17% growth in ISDN channels and 661% growth in ADSL subscribers;
- The launch of VPN Supreme;
- Growth of voicemail accounts to nearly one million. Value-added fixed-line voice packages penetrate 64% of residential customer base;
- The introduction of new fixed-line calling plans, like Xtratime;
- The winning of 14 international call centre customers;
- The introduction of on-line ordering, payments and billing;
- Re-branded TelkomDirect retail outlets;
- The distribution deal with Vodashop;
- Property development deals to ensure upfront communications availability;
- Mobile customer growth of 30% to 11,2m customers with contract customer growth of 20%;
- Mobile gross connections of 6m, compared to 4m in the prior year;
- African mobile customer growth of 93%;
- Mobile data revenue growth of 59%.

Nxasana adds, "Telkom aggressively promoted data products to the consumer and SMME markets through campaigns in the past financial year, which advanced the group’s strategy of becoming the data provider of choice." The increase in revenue growth was said to be mainly due to higher demand for data services in the medium and small business segment, with leased line revenue growing by 17,7%, which was offset by a 2,2% decrease in mobile leased facilities revenue, due to network optimisation initiatives by the mobile operators.
There has also been a stringent focus on key business imperatives. The execution of group strategy helped Telkom SA to grow headline earnings per share by 175% to 863,6 cents, from 314 cents in its first full year as a listed company.

The group declared a final dividend of 110c per share, thanks to sustained revenue from traditional voice services and market endorsement of value-added data and mobile services. Telkom’s strategy to defend core revenues and enhance operating efficiencies lifted group operating revenue by 8,8% to R40,795bn (2003: R37,507bn).

Basic earnings per share grew by 177,5% to 812 cents (2003: 292,6 cents) through a 39,5% increase in operating profit to R9,088bn (2003: R6,514bn)and a reduction of finance charges, which included net losses of R776m arising from measuring derivates at fair value and currency volatility. Ebitda margins expanded to 40% from 35%, underpinning the generation of strong cash flows.

Telkom advanced on its stated plan to contain net debt to equity within a 50 - 70% range. Net debt decreased by 33,8% to R13,362bn (2003: R20,171bn), bringing the net debt to equity ratio to 60,6%, compared to 109,9% in the previous period.
Group capital expenditure decreased by 7,1%, and represented 13% of group revenue, in line with the group’s guidance of maintaining capital expenditure in the range of 12 to 15% of group revenues.

The mobile segment accounted for 25% of group operating revenue, driven largely by customer growth that is evident in a decrease in contract churn.
"Telkom has also allocated R7,7m in its 2004/05 financial year to programmes designed to control the HIV/Aids pandemic," Nxasana adds.
Telkom’s strategy is to enhance education campaigns and to offer voluntary counselling, testing and treatment for affected staff across the country. Telkom estimates HIV/Aids prevalence at 9,6% within its workplace, which is considerably lower than the country’s estimate of 26,5%.

Nxasana says, "People are Telkom’s most important competitive asset, and are key to it being an efficient and cost-effective group. The group has implemented a strategic human capital management plan, which seeks to protect and nurture its people. Telkom’s people are driving operational efficiencies and innovation within the group, and are the people behind customer retention."

Black Economic Empowerment (BEE) also underpins Telkom’s drive for sustainability. Telkom has advanced its strategy, which elevates BEE as a crucial growth imperative for Telkom, by directing R5bn to BEE suppliers in the 2004 financial year. And, in its efforts to contribute to the development of a broad-based black middle class, Telkom created an estimated R560m in value for over 100 000 retail shareholders, who subscribed to Telkom’s Initial Public Offering (IPO).
Telkom has also proceeded with a socially responsible approach to headcount reductions, which has been boosted by the Agency for Career Opportunities. This is an initiative to help employees, often through re-skilling, to become re-employed either internally or externally.

Telkom reduced its fixed-line headcount by 8,5% (excluding subsidiaries) to 32 358 in the 2004 financial year, with only 3,6% of losses being involuntary retrenchments. Telkom aims to reduce employee numbers on an annual basis by 7 to 10% per annum, including natural attrition. This will be largely enabled through the Operational Support Systems (OSS) initiative, which aims to provide automated solutions to enhance revenue and reduce costs. Already, increased employee productivity has been reflected in growth from 137 to 149 lines per employee.
Author; LuisB, June 04
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