The Blog of LBHUB.com

LBHub TechAlert for September 23, 2005

2005-09-22T14:15:00.000+02:00

IM continues steady climb in workplace despite risks
We are just wrapping up our twice-yearly tracking survey of instant messaging in the workplace. The results are not particularly stunning, but they reflect the maturation of the IM market and its continued growth.

Here are some of the results from the research:
- Twenty-six percent of e-mail users in the workplace use IM on a regular basis while at work, up slightly from 24% as we found in the March survey. This figure continues to creep up consistently as new users realize the benefits of using IM in the workplace.
- Fifty-two percent of organizations are using IM for real-world business applications, identical to what we found in our last survey. While this figure is impressive given that consumer IM clients dominate the use of IM in the workplace, we expect this figure to climb significantly as organizations roll out their own enterprise-grade IM systems and/or provide enterprise features to the current base of IM clients, instead of relying solely on the viral nature of IM to expand its use.
- Two-thirds of organizations are concerned or very concerned about the potential for viruses, worms and other threats to enter their networks through IM. This is the highest percentage of respondents that are this concerned since we added this question to the tracking survey last year. I suspect that this concern is due, in large part, to the well-publicized nature of the growing number of IM threats that have affected IM systems - the number of IM threats so far in 2005 is dramatically higher than for all of 2004.
- The three leading consumer IM clients - AOL Instant Messenger, MSN Messenger and Yahoo Messenger - continue to be the three leading workplace IM clients. Lotus Instant Messaging and Web Conferencing (Sametime) continues as the leading enterprise IM system in use, although Microsoft Live Communication Server continues to increase its penetration. Surprisingly, Google Talk is already present in a significant percentage of the organizations we surveyed, despite the fact that it was introduced only recently.

Microsoft Turnover
Microsoft, the largest software maker in the world, said that it had realigned into three divisions and said that James Allchin, the Windows chief, planned to retire at the end of next year. Ray Ozzie, who joined the company this year as chief technical officer, will expand his role, Microsoft said in a statement. Microsoft will divide into a platform products and services unit including Windows for PCs, servers and tools and MSN, run by Kevin Johnson and Allchin. The business division, which will include Office products, will be headed by Jeff Raikes. Robbie Bach will become president of the entertainment & devices unit.

Google tests Wi-Fi
The Internet search leader Google is preparing to release its own wireless Internet service, Google WiFi, according to several pages found on the company's Web site on Tuesday. The Google site refers to a product called "Google Secure Access," which is designed to "establish a more secure connection while using Google WiFi," according to a page of frequently asked questions. Another page, offers a free download of Google Secure Access. Google declined to comment.

Baidu plans appeal
The Chinese search engine Baidu.com plans to appeal a court ruling that it violated copyrights held by a local affiliate of the music company EMI, Baidu's lawyer said. The Haidian District Court in Beijing found Baidu guilty on Monday, saying that it provided access to Web sites offering illegal MP3 files of music belonging to the recording company Shanghai Push, also known as Shanghai Busheng Music Culture Media. Baidu argued that it provided a search function, not downloading services, and therefore was not violating copyrights.

ITunes battles over prices
Steve Jobs, the chief executive of Apple Computer, vowed Tuesday to resist music companies' "greedy" demands for price increases on the iTunes music download site and warned that such a move would encourage piracy. The company also updated its online subscription service, quadrupling the storage space available over the Internet.

DJ ditty’ from Dell
Dell, the largest maker of personal computers, introduced a smaller version of its digital music player to help tap a market dominated by Apple Computer's iPod. The Dell DJ Ditty music player will sell for $99. Separately, Kevin Rollins, the chief executive of Dell, said greater sales to China would help the company meet its goal of making about $80 billion in annual sales within four years.

Outlook improves
Mitsubishi Electric, the Japanese electronics conglomerate, raised its net profit estimate for the business year ending in March by 10.7 percent on strong sales of factory automation equipment and cost cuts.

Browser without Ads
The Norwegian group Opera Software said it would offer its Web browser Opera free and without advertising banners, in a bid to outdo a rival, Firefox, and become the world's second-most-used browser, after Microsoft's Internet Explorer.

Tèlècom France sells shares
France Télécom sold new shares Tuesday for €898 million, or $1.09 billion, to help finance the purchase of 80 percent of the Spanish mobile company Amena.

Cellphones on flights
Two European airlines - TAP Air Portugal and the British carrier BMI - will allow passengers late next year to use their own cellphones on flights within Western Europe, according to OnAir, a Swiss technology company.

Net Phone service
Qwest Communications International and Microsoft said they would offer Internet phone service to small and midsize businesses, starting in 2006.
Time Warner also said that its America Online unit would introduce a Web phone service called TotalTalk early in October.

Telefònica stake grows
Telefónica, the Spanish phone service, bought €917 million worth of shares in Cesky Telecom, raising its stake in the largest Czech phone company to 69 percent from 51 percent as part of an offer for all of Cesky.

Chirac questions H-P plans
President Jacques Chirac of France called on the European Commission to examine plans by Hewlett-Packard to cut 5,900 jobs in Europe. Chirac also asked ministers to ensure that Hewlett-Packard "fully respects" its obligations under French labor law. The French labor minister, Gérard Larcher, said he would meet with the head of Hewlett-Packard's European operations next week to discuss the computer company's plans to cut jobs in the country. Larcher, who met Wednesday with labor union representatives of Hewlett-Packard France, will meet Francesco Serafini on Monday, the Labor Ministry said in a statement. Hewlett-Packard, the largest maker of printers in the world, said on Sept. 12 that it planned to cut 1,240 jobs in France as part of a worldwide plan to shed 10 percent of its work force. Larcher wants a "clarification of its strategy and concrete assurances about the continuity of its operations and its development in France," the statement said.

AOL to Roll Out VoIP in the U.S. in October
AOL will launch TotalTalk, its VoIP service, in the U.S. on October 4. The service, which will not require an AOL subscription, will be offered in multiple calling plans including an unlimited national calling plan for $29.99 per month. AOL plans to have its phone service interoperate with email and its instant messaging client.

Ingenico costs rise
Ingenico, a leading maker of electronic payment systems, reported a first-half loss as costs rose and its chief executive of three months, Amedeo d'Angelo, took charges to reorganize the business. The company, based in a Paris suburb, posted a net loss of €24.6 million, or $30 million, compared with net income of €2.9 million a year earlier. Ingenico took a €24 million charge to cover inventory writedowns and the costs of fixing a faulty product. Operating profit sank 87 percent to €1.1 million. D'Angelo has replaced a third of the top executives and plans to reduce the range of products, cut costs and sell some businesses.

Esmertec posts loss
Esmertec, a Swiss maker of software for mobile phones, posted a loss for the first half on costs from two failed public offerings and a bad debt provision. The company posted a loss attributable to shareholders of $1.9 million, after a loss of $4.1 million a year earlier. It also said its chief financial officer, Arno Waschkau, would step down on Nov. 1 for personal reasons and would be replaced by Deborah Choate, former chief financial officer of Wavecom.

Nokia milestones
Nokia, the biggest cellphone maker in the world, delayed the introduction of its N91 music phone to the first quarter of next year to improve the phone's features. The company, which originally planned to start selling the phone in the fourth quarter, will add features to enable music downloading from services using Microsoft technology, a spokesman said. Nokia also said it was expanding its range with a new cellphone to sell cheaply in emerging markets. The folding 2652 model will have an estimated retail price of €100 and will be sold starting next month in China, the Middle East, Africa and Europe. The company reported selling its one-billionth cellphone and estimated that more than two billion people use mobile phones worldwide. The phone was sold in Nigeria this summer, a Nokia 1100 model that retails for less than €50.

Solar offering
Q-Cells, a German maker of solar cells, and its owners plan to raise as much as €280.3 million in a share sale, one of four planned initial public offerings of solar-power companies in Germany this year. Q-Cells plans to sell as many as 6.66 million shares for €29 to €34 each.

Shares in commerce
Rue de Commerce, the largest French Internet retailer of electronics, plans to raise as much as €69 million in an initial share sale to increase its after-sales services and expand in Italy and Spain. The company, based near Paris, started selling 3.85 million shares on Wednesday at €13.42 to €15.60 each, it said.

Inkjets disappoint
Seiko Epson cut its operating profit forecast by 46 percent for this business year, underscoring a slide in prices and sales of display panels and inkjet printers. Seiko Epson, the second-largest maker of inkjet printers after Hewlett-Packard, forecast a group operating profit for the year ending next March of ¥44 billion, down from the ¥82 billion it estimated in late July.

IBM in Poland
International Business Machines will open a software center in Poland to benefit from Polish government aid for new employers. IBM plans to hire 200 people in the next two years for a new center in Krakow. The government will support it with 800,000 zloty, or $250,000, from a fund for raising employment among people with university degrees.

Anti-pornography in Italy
Police officers conducted raids in Italy, Denmark, France, the Netherlands, Sweden and Britain, detaining up to 30 people and placing 80 under investigation, to crack a child pornography ring that shared abusive images over the Internet, officials said. The Carabinieri paramilitary police of Rome, who led the operation, said in a statement that the suspects had created a secure network that let them use the Internet to anonymously share pornographic images of children 11 and younger.

LBHub TechAlert for September 1, 2005

2005-09-01T15:40:00.000+02:00

A German court ruled that Deutsche Telekom should pay Telegate, a telephone-directory service provider, €65.2 million for overcharging for data since the directory market was opened to competition in 1996.

The regional court in Cologne ordered Deutsche Telekom to repay the equivalent of $80.4 million to Telegate for "excessive data costs" and interest since Telegate filed a complaint last December. Deutsche Telekom said it would appeal.

The decision in Cologne comes after a ruling last November by the European Court of Justice in Luxembourg that KPN, the largest Dutch phone company, may charge alternative directory service providers for the transfer of data only and not for the cost of collecting it.

Logica profits: LogicaCMG, a British computer-services provider, said first-half profit rose 62 percent to £24.1 million, or $43.5 million, as British sales rose and the company's German unit reported a smaller loss. Sales rose 11 percent to £891.7 million.
The company's units in Britain and the Netherlands are compensating for Germany and France, where the company is heading for a third unprofitable year. LogicaCMG won contracts this year from clients including the British Ministry of Defense and the London Metropolitan Police.

Photo fears: South Korea plans to raise its concerns with the U.S. government about a service offered by Google that displays satellite photos of sites around the world, the president's office said. Recent South Korean newspaper reports have pointed out that Google Earth provides images of the presidential Blue House in Seoul and military bases around the country, which remains technically at war with North Korea.
North Korean sites like the nuclear research facility at Yongbyon are also displayed on the service, which was introduced in June.

Digital Disney: Kudelski, a Swiss provider of security for digital pay television, has set up a joint venture with Walt Disney to develop and market a video-on-demand system for digital television operators worldwide.
Kudelski and Walt Disney Television International said their set-top box system would offer a selection of movies and other television content delivered to its hard drive, as well as the capacity for subscribers to record personal content from existing channels. The system is designed to run on satellite, cable, terrestrial and IP digital video recorder hardware platforms, the companies said.

Italian net loss: FastWeb, the only Italian provider of Internet-based TV and video on demand, said its second-quarter loss widened to €79.6 million from a loss of €45.5 million a year earlier as higher operating expenses and commissions outweighed rises in sales and customers. FastWeb added more than 56,000 clients in the quarter, bringing the total to 598,000 at the end of June. Sales rose 27 percent to €227 million.

Paypal pricing: EBay's PayPal online payment service introduced special pricing for payments of digital goods, like music downloads. The new fees will enable merchants to process payments under $2 at a rate of 5 percent plus 5 cents per transaction, PayPal said.

Traffic alert: Traffic.com, a Pennsylvania-based provider of real-time traffic information, plans to offer shares in an initial public offering and said it hoped to bring in as much as $86.3 million. The shares will be listed on the Nasdaq if the offering is approved by regulators.

Flat-panel loss: Quanta Computer, the largest maker of notebook computers in the world, said first-half profit fell 30 percent from a year earlier to 4.15 billion Taiwan dollars, or $126.7 million, because of a loss related to its investment in flat-panel displays.

Mobile India: Bharti Tele-Ventures, Reliance Infocomm and other Indian mobile phone companies are set to increase their subscribers by five times to more than 300 million by the end of 2009, the research firm Gartner estimated. Gartner predicted that revenue from mobile phone services in India would reach $24 billion in 2009.

Fixed-line fall: China Telecom, the largest Chinese fixed-line operator, said its first-half net profit slipped to 14.70 billion yuan, or $1.81 billion, from 14.71 billion yuan a year earlier as costs rose. Revenue rose to 84.02 billion yuan from 80.22 billion yuan.

Google takes aim at Instant Messaging

2005-09-01T11:23:00.000+02:00

Last week, the industry was abuzz about Google introducing its Google Talk application, an instant-messaging system designed to interoperate with Jabber and Trillian right away and possibly with other IM networks down the road.

Google's offering will be similar to several other consumer-oriented IM networks in that it will provide conventional IM capabilities in addition to PC-to-PC telephone capabilities. While several IM systems are today interoperable via federated networks, the primary difference with Google Talk is that it will be an open system that is more natively interoperable than many other IM systems.

Early reviews of Google Talk indicate that its interface and capabilities do not really represent a stellar jump forward in terms of usability, features or functions - there is no video chat in the current iteration of Google Talk, for example.

However, I believe that Google Talk has the potential for making a major impact in the IM world. Google has been very aggressive and successful in the markets it has entered. For example, Google is the dominant search engine in use, accounting for 46.2% of online searches conducted in July, according to Nielsen NetRatings; Google Maps, launched in spring 2005, already has 7.2 million users; Gmail is gaining market share among Webmail systems.

I expect Google Talk will also gain market share fairly rapidly because of its ability to interoperate right away with the millions of Jabber and Trillian users and because of the potential for expanding this interoperability to other platforms - not to mention the fact that Google Talk will likely integrate with Google's other Web, e-mail and desktop-based properties.

The success of an IM system is due largely to its "gravity," since the greater the number of users an IM system has, the more likely it is to attract new users. However, our research has shown that, at least in the workplace, the number of IM clients per organization continues to grow. That means that even if someone is already using AOL Instant Messenger, Yahoo Messenger or MSN Messenger, there is a strong possibility they will adopt a new IM client, particularly if it's free and offers capabilities that they find desirable. I expect Google Talk to be such a product.

Write: by LuisB 09.2005

Google Losing Ground in China

2005-08-31T11:37:00.000+02:00

Though its stock price has settled well below Google's, Baidu has made gains in search engine share on its minority stakeholder.

Google owns 2.6 percent of Baidu, but Baidu owns Google in terms of share of the burgeoning Chinese search market. An AP report notes Beijing's China Internet Network Information Center has Baidu's share at 52 percent of the Beijing market.

Mountain View-based Google held steady at 33 percent market share in Beijing; the study breaks down share by cities. Companies like Google, Baidu, and other search engines have begun to battle over a growing Chinese market of some 103 million Internet users.

The study by the CNNIC agency covers other cities in China, like Shanghai and Guangzhou. Baidu led Google in both of those markets. In contrast, Yahoo's market share was noted as being in single digits, alongside some local search engine companies.

Google has aspirations to increasing its share of the Chinese market. The company has established an office in Shanghai and added a top-level domain for its Chinese language site (google.com.cn).

The most public demonstration of Google's commitment to China has been playing out in courtrooms in California and Washington state. A Microsoft executive, Dr. Kai-Fu Lee, left Redmond to join Google, apparently against the terms of a non-compete clause in his employment contract.

Google wants Dr. Lee to head up its China operations for two years. Microsoft wants him idled for a year before taking up the position with Google as they allege his work for Google in China would directly compete with Microsoft.

For more information’s concerning the Chinese Internet market read “ The 16th Survey Report “

By: LuisB

Holding line on music prices a tough Job

2005-08-29T18:31:00.000+02:00

Two big music publishers won't take part in iTunes Japan, a business strategem that can best be summarized as "gimme."

Apple's iTunes defined the legal music download market. At 99 cents per song, Apple CEO Steve Jobs put a system in place that boosted Apple to record profitability while reviving interest in a gasping music market.

Now a New York Times article suggests music publishers like Sony BMG and Warner Music, which will not license their music to iTunes Japan under the current pricing structure, could try that in the US market. This happened despite Apple using different pricing levels in the Japanese market, considered the second largest in the world.

Looks like the uptick in music interest since iTunes arrived in 2002, the proverbial rising tide lifting all boats, has awakened a bit of greed in music publishing circles. With the industry's legal arm, the RIAA, having had some success in conducting litigation against illegal file swapping, perhaps the publishers feel they have cooled interest enough in illicit downloads to demand greater profits on the backs of those switching to legal services.

Sony BMG, which recently had to settle with New York Attorney General Eliot Spitzer's office for its illegal payola practices, and the other three big music publishers may be ready to start dictating terms to Mr. Jobs. That would definitely see price increases imposed on new music; the Times cites the possibility that iTunes would be allowed to offer lower prices on older music. Call it the modern equivalent of the remainder bin.

Apple reportedly pays as much as 70 cents per single to publishers now; that could be higher in the case of the major publishing houses. With Apple having now sold well over 500 million songs on iTunes, the publishers have made hundreds of millions of dollars in a short span of time.

Apple's iPod media player drives the company's profitability and iTunes figures in that strategy. Mr. Jobs can't afford to have users defect to other services or go back to the brisk file-swapping trade. He'll have to convince the publishers that they can't afford that, either.

Write: by LuisB

Chinese currency move won't affect industry and trade PC costs

2005-07-22T16:24:00.000+02:00

Currency revaluation should not impact end-user prices for IT goods. China's currency revaluation raised the cost of paying worker salaries at the thousands of electronics factories across the nation, but that won't impact end-user prices for IT goods like PCs and servers, analysts say.

On last Thursday (07.22.05), China dropped a decade-old peg to the U.S. dollar and said it will allow its renminbi currency to fluctuate more freely against a group of currencies. Initially, the change amounts to a 2 percent rise to 8.11 renminbi per dollar. Before the revaluation, a dollar bought 8.28 renminbi.

It may seem like a small change, but currency fluctuations can have a huge impact on product prices -- and China makes more notebook computers, PCs and other finished electronics goods than anywhere else.

Even though the majority of this equipment is built in China, (the revaluation) will have a fairly small impact on the cost of making these products.

The majority of PC and laptop parts -- and the most expensive, like central processors and flat screens -- won't be affected by the currency change anyway because they're not made in China. Labor is the main value added at Chinese electronics manufacturing plants, and that's a fairly small part of overall cost.

The stronger renminbi also offers some benefits to companies operating in China that should help offset higher labor costs. Since most global commodities and even computer parts prices like DRAM (dynamic RAM) are quoted in U.S. dollars, Chinese factory owners should be able to get more for their money thanks to the currency change.

For example, Merrill Lynch estimates that Canon will have to pay an additional ¥9 billion ($82 million) for production at its digital camera and other imaging plants in China due to the currency revaluation. But the Japanese company will save money on parts, offsetting about half of the higher production bill.

Over the long term, China's currency will likely rise slowly -- no more than a few percentage points per year over the next several years, said Duncan Wooldridge, an economist at investment banking firm UBS in Hong Kong.

A few points a year could add up over time and start a trickle of offshoring from China to less-expensive developing nations like Vietnam to keep costs down. But in the next few yeas, the electronics industry won't see much impact from China's currency revaluation.

Blasts Rock London Underground and Downtown

2005-07-07T19:59:00.000+02:00

Today 7 July 2006 multiple explosions, at least six, were reported in London's underground subway system during this morning's rush hour. BBC and others medias around the world reporting a coordinated attack:

"Casualties reported as explosions hit the London Underground subway system and at least one bus. Causes of the blasts are not clear."

Police say there are at least two fatalities... Radio stations in London say as many as 37 dead and 700 blessed (two are italian citizens)... Some suggest it may have been an electrical system failure or a power surge; others suspect terrorism because evidence of explosives was found... The Tube is closed... Story is developing minute by minute…

... Tony Blair on TV... says he thinks it was a terrorist attack. He seems shaken... says he is going to London to find out more details..."I'ts particularly barbaric that this has happened on the day that people are meeting to discuss helping Africa... Our determination to defend our values and our way of life is greater than their determination to impose extremism on the world..." He views it as an attack on "civilized" people...

Blair is speaking again... has regained composure...says again terrorists will not succeed, will not weaken our resolve... to combat those who would "impose" their extremism.. he is speaking while flanked by all the leaders of the G8, including Bush and Chirac; the other leaders stand silently, stiffly behind him...

Some british friends living in London city contacted by phone reports convoys of buses taking people to hospital... many still trapped underground... situation is confusing... security stepped up... report 90 casualties in one Tube station... On a personal note, having just been in the Tube in London earlier this week, I know how terrifying this must have been... There are reports that there were warnings....

U.S. terror alert has not been raised... Stay tuned for more all around the world but for the moment the people live in countries like Italy and Denmark starting loosing is peace of mind...
Writte; by LuisB

Website Carries Statement Claiming Credit

"The BBC has located an Islamist website that has published a 200-word statement issued by an organisation saying it carried out the London bombings. The organisation calls itself the Secret Organisation Group of al-Qaeda [literally the base] of Jihad Organisation in Europe. The group not previously been heard of. The website has previously carried statements purporting to be from al-Qaeda. It is not possible to verify such claims published on the web. This is the full text of the statement."

"'In the name of God, the merciful, the compassionate, may peace be upon the cheerful one and undaunted fighter, Prophet Muhammad, God's peace be upon him.
"'Nation of Islam and Arab nation: Rejoice for it is time to take revenge against the British Zionist Crusader government in retaliation for the massacres Britain is committing in Iraq and Afghanistan. The heroic mujahideen have carried out a blessed raid in London. Britain is now burning with fear, terror and panic in its northern, southern, eastern, and western quarters.
"'We have repeatedly warned the British Government and people. We have fulfilled our promise and carried out our blessed military raid in Britain after our mujahideen exerted strenuous efforts over a long period of time to ensure the success of the raid.
"'We continue to warn the governments of Denmark and Italy and all the Crusader governments that they will be punished in the same way if they do not withdraw their troops from Iraq and Afghanistan. He who warns is excused.

"'God says: "You who believe: If ye will aid (the cause of) Allah, He will aid you, and plant your feet firmly."

Technology Industry Week Overview

2005-07-01T18:52:00.000+02:00

Top of the News
• Government Launches Internet Piracy Offensive Washington Post (reg)
• Would Microsoft buy an AdWare firm? Computer Business Review
• Is On-Demand Ready for the Enterprise? CRM Daily
• Internet Users Driving New Services on Web E-Commerce Times
• Errant Politician email calls Constiuents "idiots" JournalNews.com
• Beginning of the End for Dynamic IP Addresses? Register
• The first RSS focused VC fund is announced--$100m SiliconValleyWorld
• Why Mac Users Are Beginning To Seem a Little Less Smug MacNewsWorld
• Tech Firms call for approval of cybercrime reality CNet
• Survey Finds Up to 44 Million in U.S. May Be Victims of ID Crime InformationWeek
• Year After Giant Flop, Online Media Take Hold LA Times
• India's Electronics Industry Will Grow Faster than China's InformationWeek
• Dorms, pizza, books and illegal downloads Seattle Post-Intelligencer
• China nabs 2,600 for piracy Red Herring

Feature Stories
• U.S. Intends to Maintain Role in Overseeing How Internet is Run BBC
• Report: Expect to wait up to a decade for 'On-Demand' world ZDNet
• How To Dig Out From Under Sarbanes-Oxley CIO
• Weakness in the Data Chain New York Times
• Survey: Corporate Web Sites low on Customer Respect ComputerWorld
• P2P: Music Industry Must Look in a Mirror Forbes

Public Policy/Legal News
• Is The BitTorrent whiz a sitting duck? Wired
• SCO versus Novell going all the way Computer Business Review
• Prosecutors revise indictment of ex-CA CEO Kumar ComputerWorld
• Another Class Action Click Fraud Suit Against Google ClickZ
• AMD Expands Suit Against Intel CRN
• Amazon Sued for Copyright Infringement Washington Post (reg.)
• Senators Propose Sweeping Data-security bill CNet
• House Reform Committee Eyes IPv6 Lag Telecomweb

Offshoring News
• Microsoft Bands With Outsourcing Joint Venture in China CRM Buyer
• Outsourcing Is Good for U.S., Says Professor CRM Daily
• Offshoring Drives Up Xansa Profits ComputerWeekly
• Top execs quit Indian offshore outsourcer Wipro silicon.com
• India wants H1B Triples, Dangles Quid Pro Quo TechWeb News
• India faces US-style labor pains ZDNet

Wireless News
• PalmSource Clarifies Linux Roadmap, Signs Big Vendor mobilepipeline
• Report on Wireless Growth Flawed? NWC
• Sun, NTT DoCoMo Team on Java for Mobile Data InformationWeek
• Ericsson Resells Airspan Unstrung

Open Source News
• Linux Gets Black Eye in Chinese Report LinuxInsider
• Red Hat revenue surges 46 percent CNet
• Java hardware start-up wins early allies ZDNet
• Sun reconsiders Linux desktop vnunnet.com
• Sun mulls open-source move for Java Desktop System Computerworld
• Norwegian Government backs Open Source TechWorld

Security News
• Microsoft Confirms Code Execution Hole in IE eWeek
• Rats in the security world SecurityFocus.com
• Weakness in the Data Chain NY Times (reg.)
• Antispam proposals advance ZDNet
• DVD Jack Hosts Google Viewer PCWorld
• Fujitsu to sell Palm vein ID systems outside Japan Reuters
• How to Deal with Pushy Security Vendors Computerworld

Company News
• Is Microsoft Eyeing Claria? ClickZ
• Will SAP sample hosted recipe? CNet
• Microsoft woos world's scientists BBC
• IBM to Apple: We Have the Right Watts eWeek
• Sony Jumps on Legal File-Sharing TechNewsWorld
• Cisco: Paging Dr. Info Tech BusinessWeek
• Microsoft and TCS announce Chinese software venture Computer Business Review
• IBM Global Services Restructures Line56

• Intel CEO fires back at AMD Suit ZDNet
• SAP Offers Safe Passage program to midsize firms CIO
• Google from Space CBR
• Sun Bolsters Java with $387 Million Acquisition eCommerce Times
• AOL Boosts Video Search Internetweek
• Patent spat costs RIM Millions ZDNet

Technology Industry Daily Overview

2005-04-15T17:38:00.000+02:00

FOCUS

Sean "P. Diddy" Combs Signs Deal with Warner
Sean "P. Diddy" Combs reached an agreement to bring his Bad Boy Record label to Warner Music Group in a multiyear joint venture. The deal, estimated at $30 million, gives Warner 50% ownership in Bad Boy's catalog of past releases and allows the company to issue music in digital and wireless formats, such as ringtones.
Source: Wall Street Journal

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Industries Discuss TV on Wireless Phones
At this year's MIPTV/MILIA audiovisual and digital content trade show many questioned the possibility of delivering TV to wireless phones. A main concern is whether or not wireless users will consider TV on wireless phones a must have option and no one knows what people will really want to watch on their handsets. According to Nokia, wireless consumers want to be entertained and informed about everything, everywhere, all the time.
Source: AFP

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Samsung Reports Decline in Profit
Samsung Electronics reported a worse-than-expected 52% decline in first quarter 2005 profit, due to a decline in flat-screen prices, lower profit margins on wireless phones and losses at its credit card affiliate. Net profit fell 52% to 1.49 trillion won in the first quarter 2005, down from 3.14 trillion won in the first quarter 2004. Sales fell to 13.8 trillion won in the first quarter 2005, down from 14.4 trillion won in the first quarter 2004.
Source: Wall Street Journal, Reuters

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Sony Ericsson Reports Decline in Net Profit
Sony Ericsson reported its net profit fell 61% in the first quarter 2005, due to a continuing decline in wireless handset prices. The company reported net profit fell to €32 million in the first quarter 2005, down from €82 million in the first quarter 2004. Sales fell 4% to €1.29 billion in the first quarter 2005. Sony Ericsson sold 9.4 million wireless phones in the first quarter 2005, up 7% from 2004.
Source: Reuters, Dow Jones Newswire 1, Dow Jones Newswire 2

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Rogers Plans to Deliver Live TV to Wireless Phones
Rogers Communications announced it will be the first Canadian telecom company to deliver live TV to wireless phones. The company plans to launch the service in the current quarter with at least eight channels.
Source: Reuters

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Greek Wireless Carriers Target Data Content
Greek wireless service providers are counting on technology-savvy and deep-pocketed users to boost future growth of data content as new users begin to taper off. Latest figures from Greek wireless service providers show the country's wireless penetration rate at nearly 100%, making it one of Europe's most saturated markets.
Source: Reuters

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VimpelCom Posts Net Profit
Russia's second largest wireless service provider, OAO Vimpel Communications, posted a 28% increase in fourth quarter 2004 net profit. Net profit rose to $83.7 million in the fourth quarter 2004, up from $65.6 million in the fourth quarter 2003. The company's revenue increased 56% to $635.7 million in the fourth quarter 2004.
Source: Dow Jones Newswire

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Israeli Wireless Carriers Plan to Launch BlackBerry
Israel's three largest wireless service providers plan to launch Research In Motion's BlackBerry wireless email devices in the country. Wireless carrier Cellcom said it would initially offer the BlackBerry 7290 and 7100g wireless phones on its GSM/GPRS network. Financial terms and timing of the launch were not announced.
Source: Reuters

2005-02-22T15:33:00.000+01:00

TECHNOLOGY MARKET - USA

Bush's '06 budget request boosts IT - for a few
Don't be fooled by the 7 percent increase in IT spending proposed in President Bush's fiscal 2006 budget request. Although the IT budget request of $65.1 billion boosts spending by more than 20 percent each at the departments of Homeland Security, Justice and Veterans Affairs, most agencies received only modest increases, and six had their IT budgets cut.

Additionally, among the 21 agencies slated to receive increases for 2006, five -- the departments of Education, State and Treasury, the Army Corps of Engineers and the Office of Personnel Management -- remain at or below their 2004 IT budgets.

"We will have to manage as we always do, and maximize the money we have to make sure our spending makes sense," said Patrick Pizzella, the Labor Department's chief information officer. The Labor Department's IT budget was cut in 2005, and it faces a cut of $13 million to $409 million in 2006.

In contrast, DHS is slated to receive $6 billion, a $1.2 billion increase that industry officials said compensated for two years of underfunding at the agency. "Officials recognized that some of the programs at Homeland Security, such as U.S. Visitor Immigrant and Status Indicator Technology System, were underfunded, considering the scope of the effort," said Jim Flyzik, a former DHS official and a partner with consulting firm Guerra, Kiviat, Flyzik and Associates of Oak Hill, Va. "Many of these programs were underfunded at the concept stage, but as you put more meat on the bones of the business cases, you can articulate the funding levels better."

U.S. Visit is not the only program that would get a large increase. The Transportation Worker Identification Card, the Integrated Wireless Network and the Coast Guard's Nationwide Automatic Identification System would all get more than a $25 million boost in 2006.

"DHS clearly is a winner, and they might not get enough," said Robert Atkinson, vice president and director of technology and the new economy project for the Progressive Policy Institute in Washington. "I don't think the question for Homeland Security, as it is for all agencies, is really about overall funding, but it is much more about what the administration is investing in and how well they are doing it."

Veterans Affairs was another budget winner with a $485 million increase to $2.1 billion for its IT budget.

"The increase is reflective of the administration's attitude toward IT as a toolset everyone needs to use, but they need to use it wisely to make government more effective," said CIO Robert McFarland.

McFarland said more than $300 million of the increase is for the Veterans Health Information Systems and Technology Architecture.

Although VA's increase, like many other agencies, is because of a planned big money need for an IT project next year, many of the department's expanded dollars are at the expense of other programs or personnel.

The Defense Department, which has an IT budget that comprises nearly half of the entire federal technology expenditure, saw a 4.9 percent increase to $30.1 billion, its largest increase in four years.

Linton Wells, the Defense Department's CIO, said he was encouraged by the 2006 budget process.

"In the battle over digits versus widgets, widgets always win. This year, digits are winning," he said.

Industry officials said it's not surprising that the departments of Defense and Homeland Security fared well in the budget request. Both departments perform missions that are top administration priorities, and both are in the middle of transformations. The IT budget requests reflect that.

"There are a lot of new capabilities and modes of operational services DOD is looking at dealing with, linking networks and getting soldiers a better picture of what is happening on the battle field," said Steven Kosiak, director of budget studies for Washington think tank the Center for Strategic and Budgetary Assessments. "All of the modernization or transformational efforts rest on, to some degree, putting more money into IT."

Although most agencies are faced with tight budgets, they are successfully meeting the administration's IT goals. The Office of Management and Budget approved more business cases for the 2006 budget process than ever before, according to budget documents.

Seventeen of 25 agencies had all their business cases approved, according to the budget. And just 342 IT business cases of 1,087 made the Management Watch List for lacking in one of three areas: assuring security; meeting cost, schedule and performance goals; or establishing performance measures. Last year, OMB said 621 of 1,130 IT projects made the watch list. The 342 programs are worth $15 billion, down $7 billion from last year.

"We are starting to see the fruits of our labor," said Karen Evans, OMB administrator for IT and e-government. "We've been asking agencies to tell us how they are becoming more efficient and, to their credit, they have demonstrated the effectiveness of their IT programs and the metrics by which they measured it."

Ray Bjorklund, senior vice president at Federal Sources Inc. of McLean, Va., said some of the decreased spending could be attributed to OMB's emphasis on better management.

"Many public IT companies have been reporting sluggish government spending to their investors," he said. "We believe this sluggishness could be due in part to OMB's exercising its oversight of IT programs. OMB may be slowing down the apportionment on major IT programs to ensure proper emphasis on program management due to some major missteps in government IT projects over the last few years."
Written: by Jason Miller is a senior writer with Government Computer News.

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DIGITAL DIVIDE - AFRICA

Local Languages Demand More Space on the Internet
African Woman and Child Feature Service
A bid to have African languages join the likes of English and French in the Internet is being blocked by information experts from the West as lacking in commercial value.

A group of African linguistics and technology experts at a recent African Regional Preparatory Conference for the World Summit on Information Society (WSIS) in Accra, Ghana, say they have already developed special characters that can now help these languages be used on the World Wide Web.

They argue that the use of languages such as English has played a big role in the development of Western countries.

Another reason the Westerners are opposed to African languages being put on the Web, they say is their structure with some having characters and sounds in their alphabet that are not recognisable in the coding system of the Internet.

Therefore, the continent should continue expressing itself through appropriate languages in social and economic development.

According a Prof Mwasoko from the University of Dar-es-Salaam, Africa's political elites are a problem than a solution, as they too oppose, for reason well known to them, the use of these languages on the Internet, Prof Salam Diakite, Director of Research and Documentation, African Academy of Languages said the only way to make African languages accepted in the cyberspace is to transact business in those languages.

In Kenya, for instance, information on tourism and tea products should be in a local language or in Kiswahili, which Microsoft is going to launch officially on the Internet between April and May this year.

Other communities like the Maasai Kikuyu, Luhya, Luo, or Turkana can also use their languages on the Internet when communicating with their family members, relatives or transacting business with the outside world.

If this happens, then those from Europe and America will have no otherwise but to learn how to use these languages. But this can only occur if special characters and sounds like those found in the Gikuyu dialects are accepted by Unicode consortium.

Based in the USA, and with organizations such as Microsoft and International Business Machines (IBM) as members, Unicode Standard defines how characters and sounds of different languages are represented in modern software products and standards.

Language experts think bantu speaking communities will be better placed to put their languages on the Internet because they can adopt the Kiswahili characters and sounds, which Unicode has approved.

Addressing participants at the Accra conference, Mark Lange, senior attorney at Microsoft, said they support the idea of African languages on the internet.

But he was fast to add that African countries need to put in place proper standards for the idea to be supported by other stakeholders in the information society.
Currently, there are plans to put in place an African standardization and certification centre for those who want to use their vernacular languages on the website.

Dr Shem Ochuodho, a computer expert, says any attempt to address over 80 per cent of Africans who live in the rural areas on how to achieve the Millennium Development Goals (MDGs), can, among other things, be achieved by using their languages online.

"The only problem is the existence of a few words from certain African languages whose sounds cannot be accepted by the computer," says Prof Diakite.

African linguistics at the African Academy of Languages have therefore developed special characters for these languages, and now want them accepted by Unicode.
This list of African characters is then to be officially submitted to the committee of ISO standardization so that the characters can be added to their list as pre-composed African characters.

Once this happens, letters in the African language in use will have to be mapped into the keyboards of computers. The type of fonts used will also have to change depending on the language being used.

In addition, a dictionary of the African languages has to be developed to aid those people who are going to have problems in expressing themselves in these languages.

So far, less than one percent of African languages have developed these requirements and gotten access to the cyberspace. In Ethiopia, where the local and national language, Amharic, is in use, attempts have been made to use it on the computer.

Experts there have been struggling since the 1980's to make the computer recognize the Amharic characters. Since they have been accepted by Unicode, Dr Atnafu says they have in place a Content Management System, which allows them to use both Amharic and English on the computer.

In South Africa too, local languages have been put in use on the Internet.
Whereas these two countries have made headway in placing their local languages on websites, other African countries face a double challenge.

Most of them have to find ways of ensuring their people speak and use their own language when communicating economic, social and political issues.
As a first step, the conference has recommended that each African country should introduce the teaching of an African language from the primary school level up to the university as a linguistic bilingual policy.

This language is to be taught alongside English or French and both are to be examinable subjects at both primary and secondary school levels as well as in colleges.

African Union is expected to take up the issue, and impress upon member states to implement the recommendation. Likewise, to accelerate the use of local languages in ICTs, the Union is to declare 2006 as the year of African languages.

As the momentum to use Kenyan and other African languages on the website picks up, linguistics are now warning parents who pride in their children's fluent foreing languages to start a rethink.
They argue that children instructed in their mother tongue are more likely to grasp what they are taught than when the instructiona are in English or French.
Written: by Arthur Okwemba in Nairobi

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TECHNOLOGY – OPEN SOURCE

Government moves into the Open
Perhaps the clearest sign yet that open source has gone mainstream occurred last Thursday when a group of government officials met to discuss the technology and practically nothing was said about the fact that the software is free.

Many interesting points were made Thursday in Waltham, MA, at the National Government CIO Summit on Open Source, but the most important came towards the end of the meeting when Thom Rubel of Meta Group and Debra Anderson, CIO, Novell, both emphasized that open source is a compelling technology for the public sector because of the value it brings to the business needs of government agencies. Anderson pointed out that her budget has shrunk by one-third in the past three years - much like public sector IT budgets - but because of open source her staff is able to deliver the value that Novell's business units need to succeed in a highly competitive market.

Rubel explained that in order for open source to succeed in government, the public sector has to understand it's true worth. "It's not about lower cost, it's about business value and what it takes to achieve political outcomes," he said. Rubel reminded the audience that government first used computers to simply automate existing processes. It then used the Internet to place some of the same automated processes online. Little was done to change the value equation, he argued. But open source can change that if used in the right way. "Just don't over promise and don't make it an either-or proposition between open source and proprietary solutions," he cautioned.

Peter Quinn, CIO, Massachusetts, made the same point, emphasizing that his state's lead in understanding and adopting open source was not in reaction to the dominance of one or two proprietary vendors. Rather, it was an effort to face certain key facts in the world of IT and government. First, "the cost of government is not sustainable in its present form," he said. Second, software has increasingly become a commodity. Open source is accelerating that trend.

As a result, government no longer should be trapped into procuring expensive, customized solutions, he argued. While open source is attractive because of its lower upfront costs, the real value lies in the collaborative principles on which it has been developed. The more agencies and governments share open source applications, the less likely the public sector will end up having to pay for so many different solutions, wasting taxpayer money.

Some have branded the notion of developing and then sharing software for free as some form of communism. But Quinn argued that if one state developed a better electronic licensing system or voter registration system using open source and then shared it with other states, it was an exercise in democracy through the exchange of information in an open society underpinned by reliable technology.

As radical as that sounds, Quinn said the Government Open Source Collaborative he founded isn't out to challenge the commercial software industry but to take advantage of government innovation so that "we as technologists [can] finally break the back of the ineffectiveness, the inefficiency and the stupidity of the silos of information in government."

Legal Thorns
One of the thorniest issues government faces in regards to open source is licensing. Many assume that open source licensing is better than proprietary licensing, but that's not necessarily true, said Linda Hamel, general counsel for the Information Technology Division in Massachusetts. Open and proprietary licenses are different and both have their advantages and disadvantages.

She bemoaned the fact that few in government are familiar with open source licensing. For example, Hamel pointed out the common misconception that the general public license or GPL is the open source license. Not so. "The GPL is the most common license for all open source software, but it is not the most common license for the most commonly used open source software," she explained.

While the differences between GPL and other types of open source licenses are complex, she urged the audience to spend time familiarizing themselves with the issues and risks that can occur should a government enter the field as an open source software developer. As just one example, she pointed out that states, unlike commercial software firms, cannot give 3rd party intellectual property infringement indemnification. Bottom line: make sure your jurisdiction's general counsel is well grounded in the nuances of open source licensing and its impact on proprietary software licenses.

Growing Market Share
The summit, which was presented by the Center for Digital Government and Government Technology magazine and sponsored by Novell, attracted dozens of government officials from around the country and from Canada. They learned that open source is no longer just about Linux, the well-known operating system, but it is also about databases and other applications as well. It's even about Internet browsers. Firefox, released last year, gained market share from Microsoft's Explorer at the rate of one percent per month for the first five months of its availability, according to Matt Asay, Novell's director of Linux Business Office. Just about every popular open source product also showed significant growth curves. Meanwhile, IBM is pouring $2 billion into its marketing campaign for Linux.

Leon Shiman, president of Shiman Associates Inc., software architect for Linux and Unix and a founding member of X.Org, one of the oldest open source consortiums, pointed out that Europe and, in particular, the European public sector, has strongly embraced open source. He said the interest was partly due to Europe's desire to thwart America's sizeable lead in the technology market. It also has to do with Europe's willingness to embrace collaborative projects and support them with public money rather than let the marketplace decide which products will survive and prosper.

But Shiman sees a darker side to this trend. First, Europe's strong support for open source means that innovation is taking place overseas, not here in America. Second, the entire open source movement has been sustained by volunteers, but Shiman said many open source developers in America could no longer afford to continue to participate. As a result, they were either migrating to Europe, where the public sector is willing to pay for their work, or they were taking jobs in other fields.

Ready, willing & able?
The Center for Digital Government has polled the nation's state, city and county governments and found that less than 50 percent have set their IT standards and architectures across the enterprise. That lack of readiness will hold back adoption of open source, according to Paul Taylor, the Center's chief strategy officer. But he reminded the audience that open source isn't cool because it's free, "but because it's open." More importantly, "collaboration is the DNA of open source software." Collaboration enhances the quality of the software, he added.

But if free accessibility makes open source cool and collaboration is the genius behind it's rise, a number of government officials wondered if they had developers on staff who were ready, willing and able to participate in writing and sharing open source code on a volunteer basis. On one hand, Novell's Anderson said she was pleasantly surprised by the number of people on her staff who were contributing to open source initiatives during their off hours. But on the other hand, a government CIO pointed out that he had very few workers on staff who had the capability, let alone time, to contribute to open source development. Others agreed with that less than optimistic assessment

Quinn best summed up the attitude government needs to take when it considers realm of open source by quoting from John F. Kennedy: "There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction."
Written: by Tod Newcombe

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E-GOVERNANCE/E-GOVERNMENT

Controlling Cyber Dissidents?
Blogging is not only a well-established element of pop culture, it has become a tremendously influential communications mechanism. As early as March 2002, an article in Wired discussed the blogging "revolution" and declared that blogging "could be to words what Napster was to music - except this time, it'll really work."

Although in America blogging is an essential component of political discourse, in some countries it is a crime. For example, the most recent Internet Under Surveillance report by Reporters Without Borders notes that two Internet users in the Maldives "have been sentenced to life imprisonment for criticizing a dictatorship...that has been in power for the past 40 years."

Reporters Without Borders is holding a press event to highlight their concerns "that the countries that least respect free expression are playing a dominant role in the preparation..." of the United Nations World Summit on the Information Society (WSIS) conference.
To call much needed attention to the role of various dictatorships in helping set global internet policies, Reporters Without Borders will be represented at a preparatory conference being held in Geneva February 18-25 by "by a delegation of Chinese, Iranian, Tunisian and Maldivian cyber-dissidents and bloggers so that they can describe the violations of online free expression that take place in their countries."

As a Reporters Without Borders official explained, "We would like to put a face to the repression against Internet users in some of the countries that will be parading at the WSIS."

The Reporters Without Borders press conference will be held on February 17th at 2:00 pm at Charly's Multimedia Check Point in Geneva. The press conference is being held at an internet café "so the cyber- dissidents can support their presentations with concrete examples of censorship."

All internet stakeholders who value freedom of expression, including corporations, governments NGOs, and individuals, should pay close attention to both the press conference and the WSIS process and not take their freedom for granted.
Written: by LuisB

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GENDER ISSUES – TECHNOLOGY MARKET

Of Gadgets and Gender
With women buying half of all consumer electronics, retailers and manufacturers are tailoring their products and marketing accordingly.
Five years ago, Samsung Electronics wanted to test how its phones, TVs, and home-theater systems would be received by consumers. So it showed them to focus groups comprised of its target consumer: Adult males aged 25 to 50.

The makeup of these groups has changed since then -- they're now 50% women. "We now recognize that the female consumer is influencing, if not controlling, 50% of all consumer-electronic purchasing today," says Jonas Tanenbaum, senior marketing manager of flat-panel displays for Samsung Electronics America in Ridgefield Park, N.J.

Sharper on prices
Samsung isn't the only consumer-electronics company to recognize the growing power of the female consumer. In November, retailer Tweeter Home Entertainment started using female voices in its radio and TV advertising. It also changed its catalogue covers to show a woman in a home-theater setting after internal research showed that females were twice as likely to buy a flat-panel TV as males.

Indeed, companies across America that make and sell flat-panel TVs, digital cameras, and computers are rapidly rethinking how they design, produce, and market to their consumers.

Recent research from the Consumer Electronics Assn. shows that women spend $50 billion and buy almost half of all electronic goods sold in the U.S. At the same time, they're on par with men in their ability to understand gadgets and are also early adopters, according to the CEA. However, the difference is that they're more likely than men to shop around for better prices and demand reliability, ease of use, and style.

Tailored information
This has led Best Buy to adopt the "Jill Initiative," a program to target its typical female customer. "Jill" is a trend-savvy working suburban mom with a fair amount of disposable income, who's likely to shop at Target as opposed to Wal-Mart.

The consumer-electronics retailer found that women read Target's newspaper inserts for ideas about how to better design their homes and use Best Buy's inserts for research and price comparison. So, Best Buy is using scenes that depict family life in its inserts and peppering them with gift ideas for children and friends.

As Best Buy discovers more of women's wants and needs, it's rolling out newer programs and advertising in magazines like Real Simple and Better Homes & Gardens. Last year, it launched 68 concept stores in California and Nevada, where personal assistants whisk female shoppers into their domain and provide them with information tailored to their needs.

The lure of faux croc
Rather than throw numbers at the shoppers about the size of a hard drive or the number of pixels on a camera, these representatives walk them through the uses of a computer or a camera and how it meets their needs. "We're enabling her transformation into a big-time electronics buyer by talking her language," says Nancy Brooks, vice-president and segment leader for the women's initiative at Best Buy.

Some companies are catering to the female shopper even earlier in the process -- during the design phase. X2, a computer manufacturer in Irvine, Calif., observed that notebooks were often designed with a male user in mind. "Women are asking for a lighter notebook, with a better keyboard that has all the cool features and reflects their style," says Rex Wong, president of X2.

So the outfit came up with a $1,299 notebook that weighs 4 pounds, has the latest Intel processor, a CD burner, and a built-in memory card. Starting in late February, buyers will have four colors to choose from -- pink, powder blue, pale green, and silver -- and can match the computers with stylish totes that come in suede, faux croc, or leather.

Style and substance
With women in mind, Dell has jacked up the number of accessories on its site. "We started offering stylish jackets in different colors for the Pocket DJ at the direct request of our women customers," says Gretchen Miller, a director of product marketing for the PC maker in Austin, Texas.

Other products designed to meet the demands of female buyers include: Vision Art, a framed piece of art that rolls up to reveal a plasma TV at the touch of a button ($3,500), from Solar Shading Systems, and GlamCam, a high-resolution Web camera ($99.99) from General Electric that flips open to reveal a mirror on one side and a color LCD screen on the other.

"It's a top-of-the line camera that comes in a stylish red and fits into a woman's purse," says Jason Trice, director of product development at Jasco, which makes consumer-electronic products for GE.

Women clearly place a premium on the combination of style and substance, function and fashion. And companies are increasingly finding that it's a winning combination.
Written: by Pallavi Gogoi

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ENVIRONMENT - AID

Lessons from the Tsunami
There are many lessons that emerge from the tsunami that brought such devastation and loss of life to Asia. It demonstrated the power of globalization, as television brought vivid pictures of the destruction to homes around the world. Indeed, it is at times like this that the world truly does seem like a global village.
Of course, it seemed to take somewhat longer for news of the extent of the disaster to reach the Crawford, Texas, ranch of President Bush. But, in the end, he decided to interrupt his vacation and offer amounts of aid that were successively revised upwards, in a global competition which promised to benefit those who were desperate for help.

America’s aid still appeared niggardly when compared with the amounts offered by countries with a fraction of America’s economic wealth. Lightly populated Australia offered more than twice America’s assistance, Japan promised almost 50% more, and Europe pledged more than five times as much. This led many observers to reflect on the fact that the world’s richest country was in general the most miserly in foreign assistance – all the more so in comparison to the amount it spends on war and defense.

The disaster was international, so it was appropriate that the United Nations take the lead in coordinating the relief effort. Unfortunately, in an effort that was widely seen as another attempt to undermine multilateralism, the US tried to lead a “core group” driving the assistance program, ignoring ongoing efforts within the region and at the UN. Whatever America’s motive, it later wisely decided to join the UN effort. The Bush administration’s face-saving rhetoric that it had rushed to push together the core group in the absence of other efforts was quietly let to pass.

The response of some countries within the region was truly impressive, showing how far they had come in establishing efficient and effective governments. Myriad details were addressed: Thailand flew ambassadors to the affected part of the country to help attend to the needs of their citizens, helped those who lost their money and passports return home, provided health care for the injured, set up systems to identify bodies, and dealt with the difficulties posed by shortages of body bags and the lack of cold storage facilities.

Countries, like Thailand, that felt that they could handle the finances on their own asked that assistance be directed to others. They did ask one thing: a reduction of tariff barriers and greater access to markets abroad. They didn’t want a handout, only a chance to earn income. The response, at least at the time of this column’s writing, has mostly been deafening silence.

On the other hand, the G-7 made a truly important contribution in offering debt relief. This is especially important for Indonesia, which must service a debt of $132 billion (of which $70 billion is owed to public creditors or guaranteed by government agencies). Even without the tsunami, this debt burden would have been an enormous hindrance to the country’s development as it finally recovers from the aftermath of the 1997 financial crisis.

Indeed, there is a compelling case to be made for Indonesian debt relief in any case, given that much of the debt was incurred in loans to the corrupt Suharto government. Lenders knew, or should have known, that not all of the money was going to help Indonesian development. Moreover, some of the debt was incurred as part of the 1997-1998 crisis, which was aggravated and deepened by IMF-imposed policies.

No one pretends that we can prevent or alter the forces of nature. Rather, we have to learn to cope with them. There are now calls for improved tsunami early warning systems. But in one area, global warming, we have already received an early warning. Most countries have recognized this, coming together in Rio and Kyoto to do something about it - not enough, but the Kyoto protocol was intended only as a start. Sadly, global warming will likely destroy some of the same countries ravaged by the tsunami. Low lying islands like the Maldives will become submerged.

We are, however, still not a global village. After first disputing that there was scientific evidence of the problem, the largest polluter in the world, the US, is now simply refusing to do anything about it (other than preaching voluntary restraint - of which there is little evidence, at least in America). The international community has yet to figure out what to do with an aberrant member who fails to live up to its responsibilities as a global citizen.

Optimists say that technology will solve the problem. Realists observe that in the long race between the environment and technology, it appears that technology has so far been losing. Nature, as we have learned from the tsunami, has its own timetable. Unless we learn how to respect it, we will all miss the boat.
Written: by Joseph E. Stiglitz.
Note: Joseph E. Stiglitz, a Nobel laureate in economics, is Professor of Economics at Columbia University and was Chairman of the Council of Economic Advisers to President Clinton and Chief Economist and Senior Vice President at the World Bank. His most recent book is The Roaring Nineties: A New History of the World’s Most Prosperous Decade.

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OIL MARKET - EUROPE

European Reliance on Oil Imports to Grow
By the middle of the next decade, only Norway will remain a net oil exporter from among European countries, Exxon Mobil Corp. Chief Executive Lee Raymond said during a conference late Wednesday in London.

The U.K., Denmark and the Netherlands, which are currently net exporters, will cease to be so by the middle of the next decade, Raymond said.

As the ExxonMobil executive prepared to begin his speech, some Greenpeace protesters were led away from the hotel banquet room by security guards. Outside, amid very tight security and heavy police presence, activists protested against what they said were ExxonMobil's role in global warming.

ExxonMobil later issued a statement addressing the protests. The company said, 'We take the issue of climate change seriously and are taking many real and positive actions to address the risk it causes.'

Leading off his speech, Raymond also addressed oil companies' role in communities and the environment.
'Oil companies have many responsibilities, and we affect societies in a large number of ways,' he said. 'We employ people, we help local communities, and we earn money for our shareholders, and our operations and products affect the natural environment.'

Returning to his outlook for the world oil industry and U.K. markets, Raymond said the U.K. already has among the highest costs in the world for production.

Raymond opposed tax increases on the U.K. oil industry.
Raymond projected that the U.K.'s gas production would 'go from 10 billion cubic feet a day to 7 billion cubic feet a day at the end of the decade and less than 3 billion cubic feet a day in 2020.'
By 2030, he said, four-fifths of the world's energy needs will be met by fossil fuels.
The combination of economic growth and population increases can be expected to lead to a rise in primary energy demand of about 50% over the next 25 years, Raymond said.
'This means that by 2030, overall global energy demand will be the equivalent of about 335 million barrels a day oil equivalent,' the ExxonMobil chief executive said. 'This is a rise from today of more than 100 million barrels a day (oil equivalent) - a huge figure.'
Written: by Benoit Faucon

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TECHNOLOGY – CHIP INDUSTRY

Intel brings 64 bit to desktop
Intel has rolled out its last full slate of single core Pentium 4s for the desktop as it gears up for the debut of its dual core line sometime in the second half.

Monday’s launch saw updates to the Pentium Extreme Edition line, aimed at gamers and power users, and the Pentium 4 6xx range aimed at the volume business and consumer markets.

Both lines are built on a 90 nanometre process and feature 2MB of level two cache and Execute Disable Bit technology, which should protect against buffer overruns. The Extreme Edition’s front side bus remains at 1066MHz, while volume business and consumer buyers will have to continue scraping by with an 800MHz bus.

Monday's launch finally brings Intel’s EM64T technology to the desktop, putting it on a par with AMD's hybrid platform.

Clock speed on the Extreme Edition has been cranked up to 3.73GHz from the current 3.46GHz. The 6xx line features five models, ranging from 3GHz to 3.8GHz.

Enhanced Intel SpeedStep Technology - the power management used in the vendor’s mobile line - has also been incorporated into the Extreme and 6xx lines. Power consumption, and associated problems of heating and cooling, has been one of Intel’s bugbears as it jacked up the clockspeed of its chips.

The 6xx products will co-exist alongside the existing 5xx sequence for the first half of this year. Sometime in the second half Intel’s dual core products are scheduled to appear at the top end of the business market, along with new chipsets for the 6xx product range. Dual core will also appear in both the high-end and mainstream consumer markets in the second half, according to the roadmaps Intel showed yesterday.
Intel executives yesterday were reluctant to set a date for the demise of mainstream single core parts, saying that the single core products would be available for “some time”.

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2004-11-19T15:08:00.000+01:00

ENERGY - USA

In the United States of America energy remains the driver of prices
In October, price indices markedly increased. The CPI (consumer price index) gained 0.6% over the month, the monthly gain of the PPI (producer price index) was 1.7% while import prices jumped by 1.5%. On a year-on-year basis, the CPI accelerated to 3.2% (after +2.5% in September), the PPI to +4.4% (after +3.3% in September) and import prices to +9.7% (after +8.1% in September).

However, energy was the main source of this marked acceleration. Excluding this component, the monthly gain was limited to +0.3% for the CPI, +0.7%, while non-petroleum import prices declined by 0.2% in October. On a year - on - year basis, the non-energy CPI was up by 2.2% (same as in September), the non-energy PPI by +1.9 % (after +2.1 % in September) and non-petroleum import prices by +2.7 % (after +2.8 % in September).

In short, there is currently just one source of inflation: oil prices. In October, they gained 16.2% m/m (as measured by the monthly average in the West Texas Intermediate), driving their year-on-year rate of growth to almost 76%.

Recently, oil prices dramatically calmed down. After fluctuating above USD 50 per barrel in October, they were "just" USD 46 per barrel yesterday. If they were to remain at that level until the end of the month, it would be translated into 11% drop in November.

All in all, I still think inflationary pressures remain limited in the US, with the volatility in oil prices being the main story behind monthly developments
Write: by LuisB. November 2004

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ECONOMY - EUROPE

Euro zone: Inflation surged in October, industrial output softened in Q3
In spite of a slight downward revision, inflation markedly accelerated in October. It reached 2.4% after 2.1% in September. This surge is linked to the energy component (+9.8% y/y). Core inflation remained moderate, stable at 1.8%. As long as households’ inflation expectations remain contained, the increase in headline inflation will not be a sufficient motive for the European central bank to change its monetary policy stance.

In spite of a 0.5% m/m increase in September, industrial output lost ground during the third quarter (0.2% q/q against 1.0% in the previous quarter). Output in investment goods was quite dynamic. This tends to confirm my hypothesis that the slowdown in GDP growth during the third quarter was, in part, attributable to an increase in imports, itself generated by a nascent recovery in investment.

Even if the different leading indicators for the industrial sector (orders, PMI and European Commission surveys, OECD leading indicator) are currently depicting a mixed picture, we believe that the sector should pursue its expansion next year, but on a more moderate pace.

Inflation at 2.4% in October following the surge in energy prices
Eurostat’s initial “flash” estimate was slightly revised downwards (by 0.1 percentage point). Nevertheless, the increase in inflation remains quite significant. In fact, inflation jumped from 2.1% in September to 2.4% in October. The surge in oil prices which, in September and in October was only marginally alleviated by the appreciation of the euro, pushed consumer prices upwards.
The energy component accelerated by 9.8% y/y, the highest since the end of 2000. Transport fuels contributed by 0.45 percentage point to the inflation rate.
On the other hand, core inflation, excluding energy, alcohol, tobacco and food products, remained stable at 1.8%, reflecting the absence of fundamental inflationary tensions. As long as households’ inflation expectations – and thus their wage demands – remain contained, the increase in headline inflation – due to an exogenous energy shock – will not be a sufficient motive for the European central bank to change its monetary policy stance.

As expected, industrial output softened in Q3 2004
Industrial output rose 0.5% m/m in September, which corrected its previous 0.6% m/m decline. Still, during the third quarter, industrial output markedly lost ground, with a gain limited to 0.2% q/q compared with 1.0% during the previous quarter.
The analysis of the components reveals that output in investment good was quite dynamic: +5.3% y/y in September, the third consecutive acceleration. This tends to confirm my hypothesis that the slowdown in GDP growth during the third quarter was, in part, attributable to an increase in imports, itself generated by a nascent recovery in investment. Moreover, output of non-durable consumer goods continued to improve, with a third consecutive increase in September.

Yet, perspectives for industrial output do not seem to favour strong growth in the sector during the coming quarters. Industrial orders have been declining since June. Their year-on-year growth rate, expressed in terms of a 3-months moving average, was limited to 8.6% in August, whereas it had reached a 12.2% high in July. According to the Reuters purchasing managers index, this softening should, to a large extent, be attributed to weaker foreign orders. The “Euro zone” export orders index, obtained by a weighted average of the indexes for the four major Euro zone economies, dropped to 52.0 in October against 53.7 in September and a 56.5 high-point in May 2004. The strengthening of the euro against the dollar should, in the medium term, even further contribute to a softening in extra-EU exports.

Moreover, latest market survey’s results have been painting a somewhat mixed picture. The manufacturing PMI, for instance, has not ceased to decline since July (but it still remains in expansion zone). On the other hand, the picture depicted by the European
Commission’s industrial confidence survey, is much more favourable, with an index increasing since the summer. At –2 in October, it reached its highest level since February 2001. In addition, if the current conditions index indeed softened, output expectations rebounded. The OECD leading indicator, which had badly fallen in August, marginally increased in September. Overall, I believe that the sector should pursue its expansion next year, but at a more moderate pace.
Write: by LuisB. November 2004

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E-LITERACY - UNITED KINGDOM

British Library goes Wi-Fi
The British Library has launched wireless Internet connectivity in the public areas of its building at St Pancras.
The new service offers Wi-Fi access throughout the 11 reading rooms, the 225-seat conference auditorium, the café and restaurant and the outdoor Piazza area.
It will enable readers, researchers and business-people to connect to the internet and access email using either their existing service provider or by using the Library’s own pay-as-you-go service.
The Library, which receives around 3,000 visitors a day, commissioned consultants Building Zones to undertake a user study to gauge demand for the new service.
The study revealed that Laptop ownership amongst visitors was 86%, and users were leaving the library to go to a nearby Internet café to access their email
Building Zones partnered with The Cloud and Hewlett Packard (HP) to roll out the building infrastructure, network and user support services. The trial service went live on the 31 May this year and by the end of that period the service was registering 1,200 sessions per week.
Source: Netimperative. November 2004

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ENERGY - FINANCE

EnCana Confirms Plans to Sell Ecuador Assets Archived Story
EnCana Corp. (ECA) said it plans to sell its Ecuador and U.S. Gulf of Mexico assets in order to focus on its North American onshore natural gas and oil sands businesses, confirming what has long been rumored.
At an investor presentation here Tuesday, EnCana president and chief executive Gwyn Morgan said he expects to have deals in place within a year to sell the Ecuador and Gulf of Mexico assets. He later declined to disclose specifics of the proposed transactions.
Morgan indicated that the proposed asset sales could together be valued at around $1.8 billion. He projected that the combined value of EnCana's asset sales since 2002 will reach $8 billion by the end of next year, up from an expected $6.2 billion following the closure of the company's recently announced deal to sell its North Sea assets to Nexen Inc. (NXY) for $2.1 billion. He said the company has no immediate plans for further substantial sales of Canadian assets.
Morgan also predicted that, by the end of next year, EnCana's oil and natural gas production will return to levels reached prior to the expected sale of its North Sea assets.
He said the company doesn't plan any further acquisitions of oil and gas properties to replace the North Sea production, but will instead add production by developing its remaining properties.
During the presentation, Morgan predicted that EnCana's natural gas production next year will increase by about 14% compared with 2004, offsetting a decline in conventional oil production due to the North Sea asset sale.
Afterwards, he told reporters EnCana also expects to add 30,000 barrels a day of oil production from its Alberta oil sands projects in 2005, almost doubling output from about 38,000 b/d in 2004.
Morgan told reporters that EnCana's oil sands production in the short-term may increase more rapidly than its natural gas production "because it is growing from a smaller base." Long-term, he predicted that oil sands could account for up to 15% of EnCana's total output.
Morgan told investors EnCana plans to buy back up to 10% of its oustanding shares over the next year.
Beyond 2005, EnCana is aiming for steady but more moderate growth in oil and natural gas output, and to strike a balance between investing its cash flow in drilling, futher share buybacks and debt repayment, Morgan said.
EnCana is an oil and natural gas producer.
Write: by Tamsin Carlisle. November 2004

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DEFENSE INDUSTRY - ISRAEL

Israel to export $255 million worth of military equipment to Poland
An agreement for military industrial collaboration between Israel and Poland is to be signed Wednesday during a meeting in Warsaw between Israel's Defense Minister Shaul Mofaz and the Polish Economy Minister, Jerzy Hausner.
According to the plan, Poland's ground forces will be equipped with 2,765 Israeli missile and 264 personal launchers over the next 10 years, at a total cost of about $255 million.
The missiles will be sold in two models: personal launcher and a vehicle-mounted one, Haaretz reported. In addition, the Polish army intends to mount the launchers on armored cars manufactured in Finland.
Mofaz signed an agreement for strategic dialogue between Israel and Poland in his meeting in Warsaw Monday with Poland's Defense Ministry, Jerzy Szmadjdzinksi.
Mofaz and Szmadjdzinksi signed the agreement at the end of the meeting, and Mofaz invited his colleague to visit Israel. Mofaz later visited the landed forces headquarters, and delivered the first Israeli produced LR Spike anti-tank missiles, which were purchased by the Polish army, through an industrial collaboration with the Mesko Company of the Bumar group.
Source: MenaR. November 2004

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TOURISM - IRAN

Tourism revenues amount to US$ 500 million per year
Head of Iran Cultural Heritage and Tourism Organization (ICHTO) Hossein Marashi said on Monday that Iran's revenues from tourism amounts to some US$ 500 million per year. Speaking to reporters, he added that it is estimated that the figure will stand at US$ 2 billion by the end of the fourth five-year development plan (March 20005-2010). According to IRIB, he added that currently, Iran's share in the world tourism revenues is a merger 0.0001 percent. Marashi said the average growth of the tourism in the third five year development plan (March 2000-2005) stood at 6.5 percent.
Source: IRIB. November 2004

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ENERGY - ITALY

Eni Denies Report of Talks To Buy YUKOS Assets
Italian oil and gas giant Eni S.p.A (E) Wednesday denied a report that it is close to clinching a deal to acquire a key asset from troubled Russian oil titan OAO YUKOS (YUKO.RS).
"No talks are under way, and Eni hasn't submitted any bid" for YUKOS' assets, a spokeswoman for Eni said.
News agency Adnkronos reported that Italian Industry Minister Antonio Marzano has met Russian counterparts in Moscow to get approval for a transaction between the two companies.
Under the terms of such an agreement between Rome and Moscow, Eni would acquire YUKOS' unit Yukosneftegaz, the agency said, citing sources close to the deal.
Eni Chief Executive Vittorio Mincato could fly to Moscow before Christmas to ink the deal, the agency reported.
The Russian government has said in the past it plans to sell off all or part of Yuganskneftegaz, which pumps 1 million barrels of oil a day, or 60% of Yukos' oil, to pay a multi-billion dollar tax bill.
Eni had denied an interest for Yuganskneftegaz in October, but speculation about a move by the Italian state-controlled energy company persisted.
Write: by Vittorio Alessio. November 2004

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INFORMATION TECHNOLOGY - CHINA

China vs Taiwan on IT
China is developing the means to electronically blockade rival Taiwan with attacks to the country's vital utilities, the Internet and other communications networks, a high-ranking US defense official has said.

The stern warning was issued by Richard Lawless - deputy undersecretary of defense - during a closed-door meeting with business leaders last month in the US. A copy of Lawless' speech was obtained by The Associated Press yesterday under the US Freedom of Information Act.

Lawless cautioned that if a war broke out between Taiwan and China, the first casualties might not be "brave men and women in uniform." He said China might first target things that keep Taiwan's high-tech society running.

"China is actively developing options to create chaos on the island, to compromise components of Taiwan's critical infrastructure:
Telecommunications, utilities, broadcast media, cellular, Internet and computer networks," Lawless said on Oct. 4 to the US-Taiwan Business Council.

``Taiwan could be electronically blockaded, isolated from the world, creating a kind of perfect storm in which the US could not communicate with Taiwan or Taiwan with the world,'' Lawless said during the council's meeting in the south-western city of Scottsdale, Arizona.

Lawless said such a strategy could be called an "acupuncture" attack aimed at "the destruction of a national will" with "the insertion of a hundred needles."

Beijing insists that self-ruled, democratic Taiwan is part of China and has repeatedly threatened to attack if the Taiwanese seek a permanent split or delay too long on unification.

Much of the debate over whether China will invade has focused on China's growing arsenal of destroyers, jets, submarines and hundreds of missiles aimed at Taiwan, just 160km off China's southern coast.

But in recent years, analysts have touted the possibility that China could be developing new high-tech weapons that could give the Chinese an edge over US forces -which are widely expected to help defend Taiwan.

Lawless said that several recent incidents have exposed vulnerabilities in Taiwan's critical infrastructure and communication systems and that China is aware of these weak spots.

In 1999, the loss of a single transformer station on Taiwan "left thousands without power for weeks," while a massive earthquake the same year "left Taiwan dependent on satellite communications to the outside world for more than a month."

"Many feared China would attempt to take advantage of Taiwan's ill fortune," Lawless said.

Taiwan must do more to safeguard telecommunications, fiber optics, energy supplies and major transportation arteries, and should consider allowing private agencies to assist in national defense, he said.

"Taiwan is one of the most technologically advanced societies in the world, but the expertise and wealth of experience that exists in the private sector remains largely untapped," he said.
Source:AP. November 2004

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SOFTWARE - LINUX

Four Linux Vendors Band Together
Conectiva, Mandrakesoft, Turbolinux, Progeny Form Group
Four Linux vendors have joined together to develop technology that would potentially make it easier for software makers to build products for multiple distributions of the open-source operating system.
The Linux Core Consortium, announced Wednesday, plans to develop a runtime environment and software development kit that would standardize programming of software to the interfaces of the Linux kernel. The LCC's founding members are Linux distributors Conectiva S.A., Mandrakesoft S.A. and Turbolinux Inc., and Linux services provider Progeny.

The LCC software layer would ensure that applications built for certified Linux distributions would be compatibly programmed for the Linux Standard Base 2.0 interfaces defined by the Free Standards Group.
A business application built today targets Linux distributions supported by the independent software vendor. While the software may work on other distributions, the ISV may not provide support for those products, Ian Murdock, chairman and chief strategist for Progeny, said.

A Linux distribution is the operating system's kernel, plus the open-source software a vendor will add on top. As a result, distributions differ considerably.
Rather than a software maker supporting just a couple of distributions, the LCC project looks to expand that support to any certified distributor, which would potentially give customers more flexibility in choosing and swapping vendors.
"We increase the choices that customers have in which distributor they use without sacrificing compatibility," Murdock said.

The LCC plans to release its technology and reference implementation in the first quarter of next year. The software will be incorporated in the founders' following product lines: Conectiva Enterprise Server, Mandrakesoft Corporate Server, Progeny Componentized Linux and Turbolinux Enterprise Server.

The group plans to eventually expand its work to encompass Linux standards developed by the Open Source Development Labs.

Organizations that have announced support for LCC include Computer Associates International Inc., Free Standards Group, Hewlett-Packard Co., Novell Inc., the OSDL, Red Hat Inc., the leading Linux distributor; and Sun Microsystems Inc. Despite the support, it's unclear how active the organizations will be in the effort.
Despite its inclusion as a supporter, Red Hat has not decided whether it would dedicate development resources to the LCC effort, or whether the group's technology would be integrated into Red Hat products.

"Our participation in the press release was mainly around our support of LSB," Day said.

Two of the founding members of the LCC were members of UnitedLinux, a consortium of second-tier Linux vendors that sought to pool resources around a single distribution to better compete against market leader Red Hat. The group, which included SuSE, the SCO Group, Turbolinux and Conectiva, is no longer active.
Missing from the LCC announcement is tech giant IBM, which has invested more than a $1 billion in research and products related to Linux. IBM did not respond to a request for comment.
Source: Techweb News. November 2004
Write: by Antone Gonsalves

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INFORMATION TECHNOLOGY - MANAGEMENT

Cisco to buy mgmt. start-up, with eye toward network unity
Cisco this week announced plans to acquire Jahi Networks, a start-up that makes network management appliances for enterprise firms.
The $16 million deal would give Cisco products and technology designed to tie together various network devices and manage them as a single system.
Closely held Jahi Networks, based in San Jose and Hyderabad, India, makes products aimed at tying together disparate network gear and providing a common management interface for switches, routers, security products and other hardware, Cisco says. Whereas enterprise network administrators commonly write custom scripts, or even whole applications, to manage different devices, the Jahi technology lets users view network gear as “virtual devices” and configure these devices through one application.

The acquisition is expected to close in the first quarter of 2005. Jahi Networks’ 20 employees will become part of Cisco’s Network Management Technology Group, which develops CiscoWorks network management software and other management technologies.
Making various boxes on a network behave more like a unified system has been a focus for Cisco in the last few years. Cisco says such networks would be less expensive to manage for enterprise customers, and provide greater reliability and security.
This has been the focus of Cisco Chief Development Officer Mario Mazzola, who has previously stated that Cisco is taking more of a system approach to building products, as opposed to concentrating on just feeds and speeds in network devices. "This will be necessary in the shift from [product-level] resiliency to system resiliency," he said at the company's analyst meeting late last year.
Of course, no other vendor is in a better position to do this, as Cisco owns more than two-thirds of the LAN switch and WAN router markets, according to the Dell’Oro Group. Observers say Cisco’s systems approach to network gear is aimed squeezing more revenue out of the low-growth router and switch markets by selling premium services - such as its NAC security architecture, or AVVID convergence technology - that ride on top of an end-to-end Cisco infrastructure.

And customers are buying it, analysts say. A survey in August of 100 CIOs by Goldman Sachs showed that more than 53% plan to increase their spending on Cisco gear in the next 12 months; 35% said they would spend the same, and only 12% said they would buy less Cisco gear.
Write: by Phil Hochmuth. November 2004

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LOGISTICS - FRANCE

French problems grow for TNT Logistics
According to reports in the French press, TNT Logistics has not ruled out leaving France due to the continuing poor performance of its business unit in the country. The previous country manager, Reynald Huck, has been replaced by Georges Ruiz from TNT Express in another attempt to turn around the struggling division. The decision to sack the manager had been made due to continuing problems at the unit.

Management has stated that many of the problems for TNT in France have stemmed from difficulties in integrating the three acquisitions it had made in the country, one of the biggest being Transport Nicolas. It has been indicated that TNT Logistics revenues in France are between €200-250m, of which Transport Nicolas, focused on the weak retail and consumer goods sector, accounts for around half. Whereas TNT Logistics operations throughout the rest of the world are based on higher value supply chain management, France’s operations are largely oriented around commoditised transport provision, and therefore have been particularly vulnerable to the weak economy and falling volumes.

The French operation was one of the primary reasons why the company initiated its Transformation through Standardisation turnaround strategy. However whilst the other problem units it identified (Germany, Italy non-automotive) have apparently responded well to the initiatives, the French operation has remained a challenge. At its latest third quarter presentation, management of TPG went so far as to say that France would be responsible for the division missing its profit margin targets for the year.
Write: by LuisB. November 2004

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E-BUSINESS - TRAVEL

AOL, Yahoo and MSN expanding travel offerings
AOL, Yahoo and MSN have all announced their plans to offer travel shopping comparison and booking tools on their web sites.
This is a major reversal from their prior policy not to compete with Travelocity.com and Expedia who pay each tens of millions yearly for exclusive travel bookings on AOL, Yahoo and MSN sites.
AOL is making a minority investment in interactive services company Kayak Software to get the travel search site off the ground.
"Travel is a sizable and growing area and a primary category of focus for AOL Media Networks, especially as we build out our suite of travel products both on the AOL service and the Web," said David Lebow, executive vice president of AOL Media Networks, in a statement.
The deal also further validates the travel search engine model and puts AOL on an equal footing with Yahoo, which recently launched its own travel search site, reports Dow Jones Newswire. Travel search engines allow users to type in travel destinations and dates, and then scour multiple travel Web sites for the cheapest prices. The engines then direct users to those sites to make the actual bookings. Travel vendors, like airlines or hotels, pay the search engines a marketing fee to be included in the searches.
Travel search tools differ from online travel agents, such as Travelocity and Expedia because a few popular, low-cost airlines - such as JetBlue and Southwest Airlines are available through search engines, but not travel agents.
Travelocity spokesman states that they are not overly concerned with these events and they doubt travel search engines are good for vendors or customers. And, believe that the search engines are commoditizing travel at a time when they are working hard to go in the opposite direction.
AOL says they are in close touch with Travelocity, exploring new opportunities.
Source: Media
Write: by LuisB. November 2004

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AUTOMOTIVE INDUSTRY - CHINA

Hyundai on target to double sales
Hyundai Motor should double its sales to $US2.2 billion from a car-making venture in China this year, despite a downturn in the world's fourth-largest vehicle market.
Xu Heyi, chairman of Beijing Hyundai Automotive Corp., a 50-50 venture set up in 2002, told Reuters the company should earn revenue of 18 billion yuan ($2.2 billion) in 2004 and remains on track to move 150,000 vehicles.
It will also next year start making Mercedes sedans in China with DaimlerChrysler AG, the report noted.
Reuters said Hyundai, currently fourth in the market, has said previously it wanted to sell 200,000 vehicles in China in 2005 but Xu declined to elaborate on that target.
Hyundai and its partner sold 110,862 vehicles in China in the first 10 months of this year and the car maker has said it hoped to sell 60,000 Sonata sedans and 90,000 Avantes in China in 2004, the report said.
"We haven't any unsold inventory. In fact, sales are so strong that our dealers are clamouring for product and paying for it up-front," Xu told Reuters. "We'll certainly hit our sales target for the year."
Source: Reuters. November 2004

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2004-10-06T22:25:00.000+02:00

DIGITAL DIVIDE - ICT

UN task force reviews adequacy of global funding for information technologies
A United Nations task force today began examining the adequacy of funding worldwide for information and communication technologies (ICT), particularly in developing countries.
Chaired by the Administrator of the UN Development Programme, Mark Malloch Brown, the Task Force on Financial Mechanisms was born out of the first phase of the World Summit on the Information Society (WSIS) last December in Geneva.
At the event, financing of ICT for development was one of two key issues left unresolved, the other relating to Internet governance. President Abdoulaye Wade of Senegal had proposed the creation of a Digital Solidarity Fund to bolster ICT in developing countries, while numerous western countries favoured using existing funding mechanisms instead.
The task force was set up to probe the matter further with a view to making a recommendation to the Summit's second phase, to be held from 16 to 19 November 2005 in Tunis, Tunisia.
Consultations during the one-day meeting in New York will involve representatives from the private sector, civil society, regional banks and commissions as well as individual experts. Inputs will also be mobilized through virtual discussions on WSIS-online.
Write: LuisB. October 2004

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E-GOVERNANCE/E-GOVERNMENT - COMMUNITY

Towards a Neo-Apartheid System of Governance in Latin America – Implications for the Community Informatics Guild
Governance today is being reconfigured by the evolving global demand for unskilled labor in the North and elite intransigence linked to limited capital inflows in the South. The emerging profile is one of dual economies wherein the wealthy dominate decision-making systems and strategic sectors while struggling to sustain a return on their investments, and the poor either emigrate or administer meager resources in the informal sector of their respective national economies. Remittance transfers now sustain this growing corpus of diaspora communities throughout the region.

This grim scenario is now widespread in the context of States under reconfiguration, moving toward a “ritual and virtual fiction” of e-governance orchestrated by shrewd and skilled elites who have responded adaptively to the challenges that information technologies represent to their historical leadership and hegemony while astutely orchestrating an “apertura democratica” that is more form than substance. Latin America with its pronounced income distribution inequities is the region where this process is quite visible. And its current intensification should belie illusions about enhancing democracy via top down, “government as online citizen administrative chores and tax payment systems” and kindred supply side information technology initiatives. E-government programs in this context may only exacerbate the current class and ethnic polarities.

Students and practitioners of “community informatics” need take this scenario into account when either designing research protocols or consulting with activist ICT non-governmental organizations who are committed to a rustic, ingenuous “better connectivity=enhanced democratic culture” strategy. The latter today too often ignores the power of national elites who have configured their regulatory regimes to favor quasi-monopolistic market dominance in cahoots with foreign IT hardware and software interests. At the same time, this innocence fails to lead to a critical perspective on the design and impact of official connectivity programs too often tailored without critical, public input in the Ministries’ chambers and much attuned to the interests of corporate hardware and proprietary software suppliers.

Today, many government subsidized connectivity projects languish in schools, libraries and public health centers where community “buy-in” is scarce, training limited, maintenance infrequent and content often irrelevant to the needs and aspirations of the local, young IT consumers. This growing population has already been weaned at the town or village cyber cafe, a regional network of mom and pop connectivity shops whose self-sustaining human and technical resources are largely ignored by the State programs. This profile of the Latin American connectivity and ineffective use pattern, suggests community informatics in this region of the South requires distinctions and caveats in any general arguments meant to apply globally, an urgent priority for forthcoming conferences on the topic.

As we slouch toward the second World Summit on the Information Society (Tunis, November 2005), Latin American States emerge from a lengthy and costly reconfiguration of public assets. Now largely privatized, these resources allow national and regional elites and capital groups (plus their foreign allies) to sustain their historical controls via modern IT-anchored mechanisms, whereby partnerships with “privatized” public entities and foreign capital partners effectively concentrate power in the key media, telecommunications and energy sectors of the respective national economies; such societies already being dramatically polarized between rich and poor. As a result, the emerging privatized Latin American State may be a ritualized fiction that sustains a democratic drama while power is increasingly concentrated and constrains any radical democratizing process (recent events in Venezuela are indicative).

In these States there is no civil service, little or no due process, limited transparency re public contracts and government budget disbursements, an elite-controlled media and telecommunications sectors, and the remittance economy has become the social safety net for the poor. The scale of the latter today permits these same elites to applaud the growing remittance flows while attenuating pressures on national social service budgets whereby “the poor appear to be able to pay their own way”. Add to this the discourse about decentralized municipal authority and it is not difficult to perceive the ruse that camouflages the concentration of effective power in these countries. Plans for the delivery of key government services via online portals may portend a “virtual State” where the programming protocols of the servers remain in the discretionary hands of a few. This is not the model of e-governance some of us may have in mind.
Write: By Scott S. Robinson. Universidad Metropolitana, México, D.F. October 2004
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E-GOVERNANCE/E-GOVERNMENT - ACTIONS

Hackers re-invent political protests
The fashionable city of Milan has become the staging area for a new breed of online social protests. Via della Pergola is only a 15 minute walk from the centre of Milan. But in a sense the street could not be farther away from the glitz that you find downtown. Here, you can find Pergola Move. It is a rambling old set of buildings that is part cafe, part restaurant, and part youth hostel. But it serves mainly as a meeting point for a loose collection of Milan's social activist groups.
Activists have been squatting in these buildings since 1990. Now, they pay rent and use the facilities for their work. Among those working here is Blicero, a computer hacker with a group called Reload. He says the members of Reload decided early on what they meant by hacking.

"For us it meant basically dismantling stuff, reducing them to components, and trying to put them back together in a way that looked like something we liked more.
"We thought that this was perfectly parallel, perfectly integrated with the idea of people who were involved with social struggle," said Blicero.

"We felt that social struggle was about taking apart social reality and building it up again in a way that is socially more interesting, or socially more right for what we think."

Social points
Reload calls it Reality Hacking. The group uses the internet, for example, to stream its own radio content.
It used the online station to get people to participate in this year's May Day marches.
Reload then teamed up with another hacker group named Molleindustria, which means soft industry.
Together, they created an online May Day march. Virtual activists could march by choosing their own character complete with different hair colours and outfits.
But predictably, many had their characters march naked.
Molleindustria also supplies simple computer games for Reload's activist projects.

The games are politically and socially charged
In Tamatipico, you try to keep your assembly line worker happy by making sure he gets enough rest, enough food, and enough time in front of the television. If your workers not satisfied, he will go on strike.
Blicero says that games like Tamatipico are first and foremost, fun.

"If you have fun, it tends to drive your attention to the thing that you're doing, and maybe stop and think about a couple of things that are happening," he said.

"I think the whole point is to make people aware of what they're actually living.

"And to have this, you have to create images, fantasies, idea, fun, things people can recognise easily and interact with easily and get near to you, talk to you, and then decide whether you're talking bullshit, or things that make sense.

Growing up
For some, like computer game expert Matteo Bittanti sips, what Reload and Molleindustria are doing is a new way of thinking about games.
Mr Bittanti is the driving force behind a series of books on video games currently being published in Italy.
To him, Molleindustria games work like a great film - you're entertained, but you come away with something more.

"I got a feeling the video game industry doesn't want to grow up," he said.

"They keep making very lame games. I mean the medium is so powerful, you can do so many things with it.

"And yet, you always end up with the same games, shooting people. I think you can do smart games that actually sell well, you have a whole generation of new game designers that have great ideas.

"And the technology's cheap, you can do very easy games that have a global view and can actually influence people."

Cyber-hippies
Others, like Noah Wardrip-Fruin, co-editor of the computer game book First Person, say these games are just that, games.
He argues that people who march in a virtual May Day parade are not involved in serious political activism.

"They aren't actually putting their physical bodies online. In a way, it's just a more dramatic way of them signing an online petition.

"And the same with people who are doing things like cyber-hippie work or things like that where they do these sort of minor attacks on military computers and things like that.

"But I think there's definitely more potential than that."

And the Reload collective is thinking ahead. It is offering workshops, and courses on hacking and on creating online radio stations that need just one microphone and one computer.
It is also exploring ways to use the internet to link up with other social activist groups, not just in Italy, but across the globe.
Source: BBC News. October 2004
Write: Clark Boyd is technology correspondent for The World, a BBC World Service and WGBH-Boston co-production

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INTELLECTUAL PROPERTY - EVOLUTION

South Gains Ground in Intellectual Property Debate
Countries of the developing South successfully lobbied the World Intellectual Property Organisation (WIPO) to incorporate development goals and consumer rights, to counterbalance the interests of powerful nations and corporations, in a resolution adopted Tuesday.
The decision by the WIPO general assembly”is a breakthrough move by the U.N. body, which has been often accused of caring more for the rights of intellectual property owners than of users, especially those in developing countries,” said a statement by Consumers International, the worldwide federation of consumer organisations.

The proposal that was approved with a few modifications was introduced by Brazil and Argentina with the backing of Bolivia, Cuba, the Dominican Republic, Ecuador, Iran, Kenya, Sierra Leone, South Africa, Tanzania and Venezuela.

The resolution by the general assembly not only represents a victory for the developing South, but also ”a change in culture and direction for WIPO...(which) will never be the same,” said U.S. activist James Love with the Consumer Project on Technology.

WIPO, which did not become part of the U.N. system until 1974, administers the international treaties on intellectual property and copyrights. It is unique in that it is made up of representatives of the private sector as well as the member states.
”For generations WIPO has responded primarily to the narrow concerns of powerful publishers, pharmaceutical manufacturers, plant breeders and other commercial interests,” more than 500 prominent scientists and intellectuals from around the world stated two weeks ago in a document titled ”The Geneva Declaration on the Future of the World Intellectual Property Organisation”.

Consumers International observed that the resolution that was approved by the WIPO general assembly contains many of the ideas expressed by the Geneva Declaration.

The member states cannot ignore certain complaints that have been made public, said Argentine representative Alfredo Chiaradía, who called for WIPO to become a more receptive, transparent and inclusive forum for all of its members and all sectors of civil society.

The final resolution adopted by WIPO includes the developing nations' proposal to establish a ”development agenda”.

The organisation also decided to set up a working group to examine how the new guidelines can be applied, which will hold meetings open to observers from inter-governmental and non-governmental organisations, and is to present a report on Jul. 30, 2005, to be submitted to the next general assembly, scheduled for September 2005.

WIPO also committed itself to organising a joint international seminar on intellectual property and development with other multilateral organisations like the U.N. Trade and Development Conference (UNCTAD), the World Health Organisation (WHO) and the U.N. Industrial Development Organisation (UNIDO).

In the final version approved by the general assembly, the World Trade Organisation (WTO) was also included in the list of international bodies that will help organise the seminar, although it did not figure in the original proposal set forth by Argentina and Brazil.

Industrialised countries were initially hesitant in their reaction to the proposal, arguing that WIPO already deals with development issues through cooperation programmes with specific countries or regions, to which it has earmarked around 500 million dollars for the 2004-2005 period, 85 percent of which is covered by revenues from patent registration and copyright systems.

But Uruguayan representative Guillermo Valles underlined that the development focus advocated by the countries that backed the initiative is not limited to technical assistance or cooperation.

”A WIPO development agenda would obviously need to take into account any possible negative impact on the users of intellectual property, on consumers at large, or on public policy in general, not just the promotion of the interest of intellectual property owners,” said a delegate from India.

The group of developing nations argued that it is essential to reform the existing intellectual property treaties to ensure that they favour real transfer of technology to developing countries, and especially to those defined by the U.N. as ”least developed countries”.

Anna Fielder, Director of the Consumers International Office for Developed and Transitional Economies, said”The WIPO decision to move on this resolution is good for creators and consumers alike. We particularly welcome the willingness to look at increasing access to knowledge and technology in developing countries.”

The resolution also proposes an evaluation of the possibility of suspending negotiations on new treaties that would strengthen protection of intellectual property and place a burden on the fragile bureaucracies of developing countries.

James Love said that”For years, WIPO has pushed to expand the scope and level of intellectual property rights, and told developing countries that this would help their development.”

But ”Today WIPO supported an entirely different approach, which emphasised free and open source software, public domain goods like the human genome, patent exceptions for access to medicine, the control of anti-competitive practices, and other measures that have been ignored by WIPO for years,” he added.
Write: By Gustavo Capdevila. October 2004
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TELECOMM/INFRASTRUCTURE - AFRICA

African countries ‘denied ICT investment'
Half-hearted attempts at ICT liberalisation have denied African countries investment dollars from within and outside the continent, says Ernest Ndukwe, chief executive of the Nigerian Communication Commission.
Speaking today at the Telecoms World Africa Conference in Cape Town, Ndukwe, along with other delegates, said Africa needs to deregulate the ICT sector and called for a uniform plan to ensure a common regulatory regime and to set standards.

“Governments should never be protective of the incumbent operators to the detriment of new entrants that will establish a more competitive environment,” he noted.

Akossi Akossi, secretary general of the African Telecommunications Union, said several attempts at drafting a master plan have been made in the past, but they “came to nothing”.

“In the mobile arena, we already have one standard across Africa, namely GSM. However, this has not been emulated in other ICT areas. We need to improve infrastructure, particularly supplying broadband for Internet access and interconnection of telephone systems.”

Akossi said there needs to be a policy forum whereby regulators, governments and the private sector can come together on a continental basis to create the mechanisms that will allow a standardised telecommunications framework to be put in place.

“One obstacle has been the arbitrary changing of communications ministers and their departments in many countries. Often when these staff changes take place there is little in the way of continuity to ensure that policies worked on will be completed,” he said.

“Technology knows no geographic or political boundaries,” said Yvonne Muthien, MTN's executive director for corporate affairs. “Base stations in SA can be used for making phone calls in Botswana and those in Rwanda can be used in the Democratic Republic of the Congo, Uganda and parts of the Sudan.”
Muthien said a common policy framework for Africa would help to alleviate some of the confusion around using services that are based in another country.

Yasmin Carrim, MTN's group executive legal affairs, said an efficient regulatory framework helps attract foreign and domestic investors as it allows them to predict the future value of their investments.
“An inefficient framework leads to court cases and other forms of legal action that are costly and this is a big deterrent to investors. The regulator must also be perceived to be fair and that perception is vitally important,” she said.
Write: By Paul Vecchiatto. October 2004
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POVERTY ALLEVIATION - INTERNATIONAL

Battle between cultural diversity and 'Free Trade' takes shape at UNESCO
The intergovernmental conference finished early, at noon on Friday 24 September, with the rapporteur's summary of the debate. Governments are invited to submit their formal comments by 15 November. It is not fully clear whether NGO comments will also be accepted and included in the Secretariat report. The next intergovernmental will be two weeks long, commencing 31 January 2005. Clearly this will be the critical meeting for negotiation on the text and the one around which CRIS should mobilise.

Governments have appointed a bureau and a drafting committee; the latter will be an important focus for lobbying. It includes USA, France, Switzerland, Finland, Japan, South Africa, India and others. The oral report of the rapporteur was a rather bland summary and seemed to ignore all of the NGO interventions. Main points were that the draft formed a good basis for discussion that the preamble and the principles need to be fine tuned, the definitions section is rather wordy and there were differences of opinion on how this should be approached included the definitions of culture. Some delegations wanted greater attention to language and/or religion. In the main issues of the draft there were different views on Options A and B and an aspiration to find a "third way" that would achieve greater consensus. The relevance of Annexes A and B were questioned; these could well be dropped entirely. There was a tension between countries that see the convention as primarily asserting a right to defend their national culture in the face of globalisation and those that see the convention as significantly about cultural diversity within countries. Many delegations spoke positively about the importance of involving civil society. There were several reservations about creating new institutions such as the proposed observatory however others noted that the absence of any dedicated monitoring mechanism would substantially reduce the effectiveness of the treaty.

A final list of participants was distributed and should be available electronically shortly. It has full contact details, including emails, for most delegates including government representatives. This will be important for lobbying. 132 governments were represented at the meeting. International organisations listed as present were UNESCO, WIPO, UNCTAD, WTO and UN Permanent Forum on Indigenous Peoples, plus 4 regional bodies. 20 NGOs were listed although a smaller number took part in the daily NGO meetings convened by the UNESCO-NGO Liaison Committee.

The UNESCO-NGO Liaison Committee took the lead role in convening NGO meetings. In addition to focusing on issues of procedure the Liaison Committee see itself as having a role in developing substantive common position statements. It issued two sets of amendments during the week and will revise and refine these before submitting formally to the UNESCO Secretariat. The UNESCO-NGO Liaison Committee is elected from the 300 or so NGOs with consultative status at UNESCO although it seems to have consulted with a smaller selected list in developing its pre-conference position. Its position was rather closely based on INCD drafting.

At the final meeting of the NGOs we agreed a number of issues around process and tactics. NGOs are strongly encouraged to submit their own proposals to the UNESCO Secretariat by 15 November (although they should be published earlier if they are to influence government positions). The Secretariat will be asked to include NGO responses as an Annex to the compilation document for the next conference. There is a need for an open list for NGOs to share papers and proposals. I offered to assist with getting this set up. Decision to be taken by the Liaison Committee next week, it was also agreed to call on the sponsoring governments (Canada is sponsoring the January/February 2005 meeting) to provide financial support for south participation.

As a general conclusion I would say civil society participation was rather weak and rather narrow - few participants, lack of experience among many, predominance of artist/producer groups, and almost complete absence of south participation. Even INCD were not sure they would get into the meeting since they don't have formal consultative status with UNESCO. The UNESCO-NGO Liaison Committee has a very broad constituency including business perspectives such as that of the Independent Publishers Association. INCD is also trying to bridge civil society interests with the small producer end of the private sector. There is certainly an opening for CRIS to play at least an equal role with groups like INCD and the Coalitions and I am sure a communication rights perspective will broaden the basis of debate.

On the substance of the convention it seems to me the outcome will be significant but it could as easily be negative as positive. A weak convention, subsidiary to other treaties, with no powers of sanction and no monitoring and enforcement bodies could still provide the diplomatic fig leaf to bring culture into GATS. This, as the International League on Human Rights state, would be worse than no convention.
Write: by LuisB. October 2004
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TECHNOLOGY - MARKET

PalmOne licenses Microsoft Exchange for mobile e-mail
PalmOne Inc. has licensed technology from Microsoft Corp. to make its devices work directly with Microsoft's Exchange e-mail server, the companies said Tuesday.
With the support for Microsoft's Exchange Server ActiveSync protocol, users of PalmOne devices will no longer need to install third-party client and server software to be able to access e-mail, calendar and contact information on a server running Microsoft's Exchange Server 2003 software, said Steve Janiak, a senior product manager at PalmOne.

The first PalmOne device to include the Microsoft technology will be a new Treo smart phone, scheduled to be available before the end of the year, Janiak said. PalmOne's license is not specific to one device or type of device, and the company may include the technology in other future products aimed at business users, he said.

Janiak does not expect PalmOne's support of Exchange Server ActiveSync to drive the vendors who currently link PalmOne devices with Exchange servers out of business.
"We think that Exchange ActiveSync is going to expand the market more than that it is going to shake other people out," he said. Users of Good Technology Inc. and Seven Networks Inc. products will probably continue to use those products because of the additional management, security and other features, he said.

The agreement with PalmOne marks the first such licensing deal for Microsoft. Support for mobile devices, previously a separate product, was included in Exchange Server for the first time with the release of Exchange Server 2003 in October last year. PalmOne and Microsoft are rivals in the handheld operating system (OS) space: PalmOne sells devices running Palm OS while Microsoft backs its own Windows Mobile software. For Microsoft, PalmOne is just another company with which it both competes and partners, albeit through different parts of the giant software company, said Chuck Sabin, a senior technical product manager at Microsoft.

"Even though PalmOne may compete with some of the manufacturers that are delivering Windows Mobile devices, from an Exchange Server perspective we have the need to support a broader range of devices," he said. Terms of the licensing agreement were not disclosed.
Source: IDG News Service. October 2004
Write: by Joris Evers

2004-09-24T18:28:00.000+02:00

DIGITAL DIVIDE - ONLINE

Development Gateway: biased, unaccountable and overpriced?
A study prepared for the Bretton Woods Project has found that the Development Gateway, an internet portal on development issues initiated by the World Bank, presents a biased picture of development debates, lacks independence and is inefficient when compared with other similar initiatives.

The Gateway seeks to promote sustainable development and poverty reduction through knowledge and resource sharing. Initially conceived and designed by the World Bank, it commenced operations as an independent not-for-profit organisation in July 2001. However, its launch and operations have been dogged by controversy as civil society organisations have objected to the Gateway's links with the World Bank and its potential for disseminating the World Bank's vision of development at the expense of more diverse and pluralistic views. They have suggested the initiative is ill-conceived and biased, leading to the further marginalisation of southern knowledge, and the crowding out of other knowledge aggregators.

Two evaluations of the Gateway have been published. The first was a broad evaluation of the World Bank's overall knowledge sharing policies and practices conducted by the Bank's internal Operations Evaluation Department (OED) in 2003. The evaluation claims that the Gateway has delivered "credible and high quality content" without providing any basis for this conclusion. It ignores the numerous criticisms by civil society organisations, saying that "the controversy that accompanied early plans for the Development Gateway has declined". The second evaluation was commissioned to a private consultant, Louise Walker Consulting, by the OED the same year. While this is specific to the Gateway it is based on a three week limited desk review during which 14 Bank staff and external individuals were interviewed and "a range of documents from the Development Gateway and the Development Gateway Foundation" were examined.

Given the limited scope and questionable independence of these evaluations, the current investigation was undertaken in light of both the initial criticisms and generally accepted knowledge sharing principles. The study is based on a review of existing documentation (from both the Gateway and external sources) coupled with analysis of the Gateway website and consultations with development professionals.

The focus is on the governance of the Gateway, the relevance and role of the Gateway, and the quality of content in terms of its comprehensiveness, uniqueness, diversity, organisation, usability, and cost-effectiveness. It is limited to the topic pages and, to a lesser degree, the country-specific sections known as 'Country Gateways'; it does not address the sections on consulting opportunities (dgMarket) or donor activities (AiDA). Three other development portals are studied as comparators: civil society portals OneWorld and Choike and research portal Eldis.

Lack of independence
Out of the 35 current topic areas, 24 are managed by World Bank or Gateway staff. Six of the twenty board members are current Bank employees, while another two are former employees. A $6 million a year service agreement for providing operating staff and services to the Gateway was won by the World Bank - apparently without competitive bidding. Clearly, the Gateway has a long way to go before it could be considered independent of the World Bank.

There has been a lack of accountability and responsiveness to civil society, and as a result a lack of trust among the Gateway's intended users and 'beneficiaries'. Key documents regarding the establishment of the Gateway are no longer available on the website, nor are the two existing evaluations. For two months, there was no response to requests for such documentation. Furthermore, despite the limited evaluation of the Gateway so far, there are no plans to commission an independent examination.

Many of the criticisms leveled at the Gateway echo those made of the World Bank as a whole. In particular, the tendency to ignore local circumstances and alternative viewpoints in favour of 'best practice' solutions is a common criticism of the Bank that manifests itself in the Gateway. It is unlikely that these criticisms will be addressed if the Gateway continues to be linked to the Bank.

Biased knowledge
The editorial policy, under which designated 'topic guides' select relevant content that demonstrates methodological rigour, severely disadvantages information from southern sources. A detailed analysis of the privatisation and trade topics showed that more than 80 per cent of the resources were from northern sources, and 96 per cent were in English. Telecommunications liberalisation was the single most popular theme, which brings into question whose interests are reflected in the choice of content. Under privatisation, 41 per cent of all resources were sourced by the World Bank or its affiliates. Both internal evaluations pointed to inadequate attention to local circumstances as a key concern. This was supposedly addressed by the Gateway through expanding the pool of topic guides and partners. However, only three out of 35 'topic guides' are from the south.

Encouragingly, there is no evidence that the Gateway has cannibalised other independent development portals. However, Roberto Bissio, director of Instituto Tercer Mundo, believes that this is "not because the Gateway has not tried to position itself as the major portal, but because they have not succeeded!". Bissio expresses concern that the Gateway may however have "diverted an enormous amount of funds intended to support development-related internet activities from the content providers in the South to a highly centralised operation in Washington DC."

An unclear definition of stakeholders and beneficiaries has been acknowledged by both internal evaluations of the Gateway. This is identified as a major problem in the context of customising the content for actual users. This is in conflict with the knowledge sharing principles espoused by the World Bank, that state clearly that the point of knowledge sharing programmes lies in the application of knowledge, not the mechanics of sharing. The Gateway has built a de-contextualised repository of development knowledge, without any clear idea of how this knowledge will be used. This is also reflected in the fact that the goals of the Gateway are framed in mechanistic terms such as achieving five million page views a month, rather than in terms of outcomes. Both existing evaluations found that the Gateway does not provide any strategic uniqueness.

Questioning content
Despite the expenditure of vast sums, the Gateway is not the most comprehensive web portal for development knowledge. The global civil society portal OneWorld and research portal Eldis provide as much or more content than the Gateway for social, political, and environmental topics, while the Gateway tends to be strongest in economic topics, and more specifically information technology related topics. This technological bias is also reflected in the categorisation of topics, with five out of the 35 Gateway topics allocated to information technology, and none dedicated to health, education, rural development, debt, labour, or conflict.

Other development websites can provide broader coverage by serving as true portals - pointing to the relevant information regardless of where it is located. This was clearly demonstrated by searching for specific information across all the portals. Out of forty search terms, the Gateway returned the highest number of hits for just four - broadband, ICT, internet and microfinance. Choike, by far the smallest portal, provided access to more resources than the Gateway for as many as 21 out of the 40 selected search terms. OneWorld and Eldis also provided more resources than the Gateway for 21 and 29 search terms respectively.

Access to country-specific information is chaotic, with different portions of the Gateway website giving access to wildly different numbers of Country Gateways. The OED may claim that the Gateway's content is credible and of high quality, but this analysis suggests that it is poorly organised and lacks comprehensiveness.

Who pays the bill?
The Gateway is significantly less cost-effective than the other portals. Total Gateway expenditures up to mid-2003 were $23.4 million. In contrast, total costs incurred up to mid-2003 were $4.6 million for OneWorld, $0.9 million for Eldis, and $0.4 million for Choike.
Dividing these costs by the number of resources created by each portal provides a measure of total costs incurred per resource provided. This was found to vary between a low of $57.50 for Eldis to a high of $407.88 for the Development Gateway. An alternative view of cost-effectiveness was obtained by looking at usage of each website. Dividing monthly costs by the monthly number of visits gives the cost incurred per website visit. This ranges from $0.26 for Choike to $4.85 for the Gateway.

Ways forward
The Gateway has consumed more than $30 million of mostly public funding since its inception and is currently raising another $40 million. This without having achieved many of the goals it set itself and with major question marks over its ability to deliver. We urge a full, properly independent evaluation, expanding on the work in this study, before any more money is spent.

Some of the steps needed to resolve the problems identified in this study include:

- Re-open the dialogue with civil society and official development partners to redefine the mission and priorities for the Gateway, clearly identifying the distinct categories and needs of users;
- Establish an ongoing monitoring and evaluation system;
- Undertake immediate action to diversify the board and staff to reduce the influence of the Bank and better reflect the needs of users;
- Terminate the World Bank service contract and develop alternative service partnerships;
- Launch an initiative to increase content from the South, through increased partnerships with southern civil society organisations, universities, media, or web portals;
- Improve transparency to all stakeholders in development, through provision of key documents, performance statistics, and consultation results on the website. Provide a forum on the website for an open discussion of the Gateway itself; and
- Restructure existing content by rationalising the taxonomy and rectifying the bias towards technology at the expense of important social and political issues.

Postscript
The study was sent to the Development Gateway for feedback at both the draft and final stages. Their response to the draft simply disagreed with the report overall without addressing any of its specific findings. Karen Lynch, the Gateway's Communications Director now suggests that they are "in the advanced stages of addressing the recommendations of the report". Accordingly, they plan to end the World Bank service contract by June 2005. Diversification of partners is an "ongoing goal" (though Gateway staff take issue with the basis for the study's statistics on usage and content). They concede problems with the organisation of the content and are working to improve it.
Date: September 2004

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OPEN SOURCE - SOFTWARE

Free software, Internet gives a voice to African activists
Proper management and planning can give lobby groups and campaigner’s cheap, rapid communications and information.
African lobby groups, as well as community and independent media, are using free software and the internet to fight a lack of money and skills.
The internet had also helped overcome the problems associated with widely dispersed audiences and, in some countries, government crackdowns on freedom of expression, speakers told the Highway Africa 2004 conference in Grahamstown last week.

Lynne Muthoni Wanyeki, a director of Femnet, a pan-African organisation based in Kenya, said the group had used the internet to campaign for and protect women's rights. It began by sending information via e-mail and SMS to women's groups across the continent and posting information on its website about the regional debates on the formation of the African Union. It had also lobbied its network to make nominations for the posts available for women in the PanAfrican Parliament.
Wanyeki said Femnet's experience showed there was a need to plan internet-based campaigns carefully, determining who needed to be reached, what needed to be achieved and how, and to understand better the technologies available.

John Lannon of the Praxis Centre at Leeds University said the internet had helped human rights movements because it was cost-efficient, suited non-hierarchical structures and could be used to skirt government controls. It was used to disseminate information to a wide audience rapidly and could encourage effective action. It was also a useful research tool and provided educational material. One organisation to use the internet well was religious group Falun Gong, harassed by China's government.

Some well-known South African examples of using the internet for lobbying are websites such as "hellkom", "telkomsucks" and "neverflysaa", which were begun by dissatisfied Telkom and South African Airways customers.

Telkom's senior manager of corporate communications, Hans van de Groenendaal, said there was a difference between lobbying and activism on the web. A ctivism went further than lobbying for example, by encouraging supporters to send e-mails, which Telkom considered an infringement on people's right to privacy.

Customers should have a right to express an opinion, and although companies might not like it, they should listen and respond by changing or correcting wrong perceptions, if that was the case, Van de Groenendaal said. Companies should be allowed to protect their brands and trademarks, and the media should take into account that opinions expressed on lobby sites might emanate from a minority.

Open-source software can also help cash-strapped media organisations. The Centre for Advanced Media Prague (Camp), a Czech-based subsidiary of the Media Development Loan Fund, gives technology assistance to independent news media in emerging countries.
In SA, Noseweek ran on Campware, MD Sava Tatic said, and the organisation had also assisted community radio stations in Indonesia and Nepal.
Campware, which was free, was available in multiple languages and included content management, customer relationship management and print distribution tracking software.
Another solution was using refurbished computers. Alan Finlay of Open Research said it was estimated that about 50% of Africa's computers were refurbished. These cost less than new ones and last at least five years.

But there were limitations to using the internet, Lannon said. Skills were often lacking, and human rights websites and e-mails were competing for attention with a lot of other noise in cyberspace. The internet was only a tool and could not "change the disengaged to the engaged".
Source; BusinessDay
Data; September 2004

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E-BUSINESS - E-PUBLISHING

Do-it-yourself book publishing takes off on the Web
When Ross Yockey and his daughter, Beth, wanted to write a book parodying the national No Child Left Behind educational standards, they had no time or interest in the traditional book publishing route.
Instead, the Seattle residents - who wanted their book in readers' hands before the November presidential vote - uploaded their completed manuscript to a North Carolina-based Internet company called Lulu.com.
Within minutes, the book was available for sale online. Each time a purchase is made, a printer in Rochester, N.Y., makes an individual copy that is shipped to the buyer, typically in 24 hours or less. The royalties are split automatically among the Yockeys, Lulu and the printer, ColorCentric.
"I'm a longtime author, with 15 books published," said Ross, who has also written biographies on former Bank of America CEO Hugh McColl and composer-conductor Andre Previn. "This is the first one that hasn't gone those usual channels," which he said can be lucrative but lengthy.

The book, Strictly for the Birds, hasn't gone blockbuster yet, Ross said, although that's wasn't the goal. He and his daughter wanted to make a point — and fast. "It was super, mega, totally crazy fast," said Beth, 26.
Such on-demand printing is still a small fraction of the overall book industry. But it is quickly opening avenues for authors to bring their books to market directly, quickly and sometimes cost-free.

"There were a lot of early abortive efforts to try this," said Jim Hamilton, an analyst with InfoTrends/CAP Ventures in Weymouth, Mass. "There was a concept that there would be instant book kiosks in bookstores, and that did not work. ... But we are in a very creative phase now and it's very exciting."

What's more, this kind of publishing might just foster a market for book-writing in the same way Kodak first opened up photography to amateur picture takers nearly a century ago, said Frank Cost, a printing professor at the Rochester Institute of Technology.
"Everyone is starting to realize this works, and it's fantastic," Cost said.
A string of on-demand book publishers has cropped up in the last few years, including iUniverse.com, AuthorHouse.com, Xlibris.com, CafePress.com, uPublish.com and Lulu.com. While prices vary widely depending on the level of services offered, most work in similar ways.

Authors write their texts, sometimes including photos and illustrations, then upload the book via the Internet to the publisher. Some list the books directly with Internet retailers such as Amazon.com, BarnesandNoble.com and Borders.com.
IUniverse.com, for example, is partly owned by Barnes & Noble and has positioned itself much like a traditional publishing house, requiring the author to go through copy editing and review. It also offers layout and cover design for a flat fee.
"We're focusing on being a farm team for people who want to get into the publishing industry," said Lynette Petersen, spokeswoman for iUniverse, based in Lincoln, Neb.

"We will always produce the books meant for friends and families. But we're designing books also so they have more appeal to the traditional channels in the publishing industry."

Other publishers, such as Lulu.com, opt for a more direct approach: Authors upload their text, which printers produce as is.
"If we are wildly successful, it's not that we're going to steal 5% of sales from Random House or other publishers," said Bob Young, Lulu.com's founder as well as the founder of open-source software company Red Hat. "It's because we're creating a whole new industry and bringing a whole new category of content to the market."
Printing experts say the entire concept of on-demand or instant books has reached a new level — publishers and printers can now produce one copy of a book profitably.
"A number of titles can be successful if run in quantities of 10 or 20 books, or even one copy," said Thomas F. Wetjen, vice president of Xerox Graphic Communications Industry, Production Systems Group. "We've been able to lay out a case to publishers to show them where there is value and where they can make money on that."

For example, a traditional publisher that expects a book could sell 1 million copies might decide on a print run of 800,000, then assign any remaining sales to an on-demand printer. It may also mean a book never actually goes out of print, since publishers could print small batches of books as needed.

"Maybe there's not a huge market for individual books," said Stephen Fraser, Lulu's director of communications. "But they are very meaningful to those who write them, for people who want to put their family history on the shelf, to create something special."
Source; USA Today. September 2004
Write; by Richard Mullins, Rochester (N.Y.) Democrat and Chronicle

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TECHNOLOGY - R&D

Last gasp of the fax machine
Office technology: That most exasperating piece of equipment, the fax machine, is on its way out. But it will take a very long time to die.
Who hasn't felt the urge to smash up the office fax with a hammer at least once? The machines are slow, testy and prone to breaking - usually at the worst possible moment. They became indispensable items of office life in the 1980s and 1990s, when huge rolls of paper curled from out-trays as lengthy documents arrived. (More advanced machines cut the paper, but then the individual pages ended up on the floor in random order.) Such clunkiness was nonetheless a major advance from 150 years earlier, when Alexander Bain, a Scottish inventor, patented the first fax - a device that connected two styluses using a pendulum and a telegraph wire.

Thank goodness, then, that faxes are now going the way of the typewriter and carbon paper. E-mail is mostly responsible: it is easier, cheaper (especially for communicating abroad) and paperless. Whereas fax machines must be checked constantly to see whether something has come in, e-mail simply pops up on screen. Stand-alone fax machines have been especially hard-hit, though multi-function machines - which combine the fax machine with a copier, printer and scanner - have also struggled. Peter Davidson, a fax consultant, says that sales of fax machines worldwide fell from 15m in 2000 to 13m in 2001 and are still falling. He estimates that faxes now account for just 4% of companies' phone bills, down from 13% ten years ago. Americans especially are shedding them fast: by 2006, Mr Davidson predicts, their spending on fax machines will be less than half what it was in 2002.

Junk faxing has helped to keep the machines whirring. But it too is fading as governments crack down. In January, for example, America's telecoms regulator, the Federal Communications Commission, fined Fax.com, a marketing company based in California, $5.4m (the biggest such penalty ever) for mass-faxing unsolicited advertisements in violation of a law passed in 1991. Fax.com had defended itself on the grounds of free speech, an argument echoed by telemarketers, who are also under fire as people rebel against intrusive salesmanship.

As well as fining six companies in the last five years, the FCC has issued more than 200 warnings. Stronger limits on fax marketing, requiring anyone sending an advertising fax to have written permission from the recipient, are due to come into force in January 2005, though Congress may yet soften this to allow businesses and charities demonstrating an “established business relationship” with customers to send them faxes without prior permission.

Even so, new technologies and regulations will not kill off faxes just yet. The machines are still helpful for communicating with people in rural areas or poor countries where internet access is spotty. They also transmit signatures: although electronic signatures have been legally binding in America since 2000, hardly anyone actually uses them. Besides, some companies are only just adopting e-mail. Abbey, a British bank, used to rely heavily on faxes to transmit information between its headquarters and branches. Personal e-mail for branch employees was only installed this year as part of a technological overhaul.

Publishers, among the first to embrace fax machines because they sped up the editing process, may be the last to bid them goodbye. Stephen Brough of Profile Books, a London publisher affiliated with The Economist, says that faxes are still useful in transmitting orders to distributors, and in allowing authors to indicate changes on page proofs easily. (Electronic editing, in which multiple versions of the same file swiftly proliferate, can be a nightmare.) Publishing contracts, which involve lots of crossing-outs and additions, can also be edited by fax. At Lonely Planet, a travel-guide company, a publishing assistant says she is sometimes asked to fax pages of company stationery to other publishers as proof of identity.

The persistence of the fax has much to do with the perils of e-mail. Because it is such a pain to operate, the fax is generally used with discretion (a relief after e-mail overload). Faxes also allow lawyers, among others, to have exchanges that they can later shred, without leaving an electronic record. The biggest gripe about document transmission via e-mail, however, is attachments: unless you have the right software, they are meaningless.

“One of the most common academic experiences is the failed attachment: a person sends you an attachment with incomprehensible formatting of immense length that crashes your system,” says Gillian Evans, a history professor at Cambridge University. “Then there is an irascible exchange of often quite stylish e-mails - at the end of which one of the parties says, ‘For goodness' sake, send me a fax!'” This is especially true, she says, during summers, when professors are often at home using slow, dial-up internet connections. Unless e-mail improves drastically, in other words, the fax machine seems likely to retain a devoted, if shrinking, following.
Source; The Economist. September 2004

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PRIVACY - SECURITY

Google omits controversial news stories in China
The internet's most popular search engine Google has been accused of supporting Chinese internet controls by omitting contentious news stories from search results in China.
State-sponsored internet providers in China routinely block access to internet sites deemed inappropriate by the government. These include both Chinese and foreign news sites carrying reports that criticise the Chinese government.
Researchers at Dynamic Internet Technology (DIT), a US company that provides technology for circumventing internet restrictions in China, have discovered that the recently-launched Chinese version of Google News omits blocked news sources from its results.
The origin of a computer sending a search request can be identified using its internet protocol (IP) address.

World view
Google admits to omitting some news sources within China but says this is meant to improve the quality of the service.
"In order to create the best possible news search experience for our users, we sometimes decide not to include some sites, for a variety of reasons," says a statement issued by the company. "These sources were not included because their sites are inaccessible."
Bill Xia, chief executive of DIT, however, accuses Google of reinforcing Chinese internet restrictions by leaving some sites off its list. "When people do a search they will get the wrong impression that the whole world is saying the same thing," he told New Scientist.
DIT enables Chinese internet users to get around government restrictions by connecting to computers located outside of the country.

Inside out
Some users recently reported that Google's Chinese news search returned different results depending when they searched using a computer based outside of China. The claims were substantiated by researchers who connected to computers inside the country.

In the past, other search companies have also been accused of supporting Chinese internet controls. In 2002, for instance, Yahoo's Chinese search engine was modified to provide only limited results for queries related to the banned religious group, Falun Gong.

And Xia notes that Google recently acquired a stake in a Chinese search company called Baidu.com.

Ben Edelman, of the Berkman Center for Internet & Society, part of Harvard University in the US, says Google will face increasing pressure from the Chinese government to adhere to its restrictions as it extends its reach.
"As Google gains more interest in China and even comes to have financial interests in China, it's hard to imagine Google won't do so," he told New Scientist.
Source; New Scientist. September 2004
Write; by Will Knight

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TELECOMMUNICATIONS - MOBILE

Turkcell to become Iran’s second mobile operator
Turkcell, a Turkey-based mobile operator, has signed a license agreement with Iran to set up the first Iranian private mobile phone network, conditional on paying a EUR 300 million license fee
Date; September 2004
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2004-06-29T18:50:00.000+02:00

HIGHLIGHTS

ECONOMY – EU-CHINA

EU Rejects China's Bid For Market Economy Status
The European Union has refused China's bid to be recognized as a market economy after an investigation by the E.U. Commission concluded the Chinese government still micro-manages the economy, an E.U. spokeswoman said Monday.
'To arrive at that position we need to establish there is no state interference,' said Arancha Gonzalez, spokeswoman for the Commission's trade department.
In the past year, China has been lobbying hard for the so-called market economy status, which would make it harder for other countries to accuse it of flooding the market with cheap exports and level penalties against it.
In a report submitted to the Chinese authorities, the E.U. has also requested that China install and abide by corporate governance practices and accounting rules in order that accounting information be reliable enough to be consulted when China is accused of violating trade agreements. Laws governing bankruptcy and property rights will have to be imposed and implemented. Finally, China's banking sector must be freed of government control.
Until it fulfils these criteria, China will remain a non-market economy. That official label means its local prices and costs won't be used to determine whether it is dumping cheap exports. Instead, the E.U. will use prices and costs in a third country that is a market economy to determine whether China is guilty of dumping and calculate anti-dumping penalties accordingly.
The E.U. currently has 32 anti-dumping measures in force and 22 anti-dumping investigations going on against China, which is considered a non-market economy. Last year, 0.5% of Chinese exports to the E.U. were subject to anti-dumping charges.
The most important products by import volume subject to measures are bicycles and bicycle parts, fluorescent lamps, dead-burned magnesium and fluorspar, a commission statement said.
The U.S. has imposed anti-dumping duties on textiles, televisions, and wooden bedroom furniture - buoyant sectors that accounted for nearly one-fifth of Chinese exports last year.
Write; by LuisB, June 04

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AIRLINE INDUSTRY – TAIWAN

China Air Interested In Airbus A380 Planes
Taiwan's China Airlines Ltd may buy Airbus's super-jumbo A380 planes for medium to long-haul passenger and cargo services, the Economic Daily News reports, citing China Air Chairman Y.L. Lee.
Lee made the remark during a visit to Airbus headquarters in Toulouse, the report says.
While China Airlines may consider introducing A380s to its fleet, the company has set no timetable for such a plan, the report adds.
Source; ROC media, June 04
Write; by LuisB

Picture; Airbus A380

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DIGITAL DIVIDE – SOUTH PACIFIC

InternetNZ to aid Pacific ICT growth
InternetNZ and Unesco have launched an initiative to boost the use of information and communication technology in the Cook Islands, Niue, Samoa and Tokelau.
The New Zealand National Commission for Unesco, the United Nations Development Programme's (UNDP) Apia office and InternetNZ have drafted a memorandum of understanding to form the Pacific Internet Partners initiative.
The partner countries were chosen because of their strong links to New Zealand.
Laurence Zwimpfer, the National Commission deputy chairman, said the development of ICT skills in the Pacific was regionally important, and would be aided by the collaboration.
The initiative will see support this year for a Vanuatu conference, fostering of the establishment of national ICT professional organisations, and the establishment of internship and mentoring exchange programmes between New Zealand and the nations involved.
InternetNZ president Keith Davidson said members had wanted to get such an initiative off the ground for some time.
"By combining forces with UNDP, who are on the ground in these countries, and with Unesco's influence, we'll be getting significantly more bang for our buck."
Joyce Yu, of UNDP's Apia office, said the collaborative effort would allow better use of resources for meeting the UN's Millennium goals.
Don Hollander, chairman of Wellington's 20/20 Trust, who recently returned to New Zealand after two years working in Samoa on UNDP projects, said the agreement had been structured to let other interested parties join.
Hollander said Unesco New Zealand wanted to be involved in developing ICT skills in the Pacific.
Source; New Zealand Herald, June 04
Write; by Richard Pamatatau
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FOCUS

INTERNET – MARKET PERSPECTIVE

Examining the Twists and Turns of the Internet Bubble
Roger Lowenstein begins his book, Origins of the Crash: The Great Bubble and Its Undoing with the quote, “Set our course by the stars, not by the lights of every passing ship.” If only Wall Street could have appreciated a good metaphor as much as it appreciated earnings statements. Instead, the real life characters in Lowenstein’s cautionary tale spend the 1990s chasing passing ship after passing ship and disregarding the stars. The outcome would prove disastrous.

The author of two best-selling books, Buffett: The Making of An American Capitalist and When Genius Failed: The Rise and Fall of Long-Term Capital Management and current SmartMoney columnist, Lowenstein takes readers on the fateful journey through the stock market’s late century rise and subsequent slide into the new millennium. The author crafts an easy-to-read, well-researched tale that unfolds like a horror story. The villains - corporate America’s executives and their posse - get bolder at every turn and the main character - the stockholder - falls prey to the inevitable outcome.

Early in the book, Lowenstein lays out the ingredients that create this fateful cocktail. For more than half a century following the Great Depression, the stock market had fallen out of favor. But a recession took hold in the 1970s and stock prices fell. The “cheap” public companies were then taken over - many times by rivals in the same industry - by corporate raiders who purchased a majority share from company stockholders. By the mid-1980s, takeovers had morphed into leveraged buyouts (LBOs), or buyouts financed by debt. No publicly traded company was safe, and the groundwork for what Lowenstein calls “the great bubble” began to take shape.

“To escape a buyout, CEOs felt they had to raise their share price. This was a significant departure. Previously, stock prices had been seen as a long-term barometer,” writes Lowenstein. “A new phrase crept into the argot: ‘shareholder value.’”

Unfortunately, CEOs, whose job it was to maximize shareholder value, began to distance themselves from the phrase’s true meaning. According to Lowenstein, the culprit was the stock option. Although stock options existed prior to World War II, they entered the scene in a reenergized way in the early 1990s.

By giving company leaders a substantial amount of company stock, so went the reasoning, CEOs would become shareholders in their own firms, and would then behave like owner-managers. Hindsight proved this thought process incorrect. Since CEOs were not investing their own money, they assumed no risk. Writes Lowenstein: “A poker player will be aggressive when he is playing with ‘house money.’

“Execs intent on ‘managing’ their stocks became hypersensitive to a single number: quarterly earnings per share. From an economic perspective, quarterly numbers are virtually irrelevant because it typically takes years - not months - for businesses to bear fruit…. The game was to keep earnings rising, but never by too much, so as to save more for the next quarter,” Lowenstein writes.

Accounting statements became less and less transparent. And as financiers got more and more clever - and as they walked the line between creative accounting and illegalities - they found themselves rewarded, notes Lowenstein. In 1999, Andrew Fastow, Enron’s CFO, was awarded one of CFO Magazine’s prized Excellence awards for pioneering “unique financing techniques.” A year before, Scott Sullivan, WorldCom’s CFO, had garnered an “Excellence award.” A year later, in 2000, Tyco International’s Mark Swartz joined Fastow and Sullivan as Excellence award winners.

“That all three winners were eventually indicted testifies to Wall Street’s weakness for (too-) clever financiers. And it hints at a serious problem with creative accounting: it can lead to outright violations and fraud,” writes Lowenstein.

Making a quarterly number isn’t exactly the formula for long-term or enduring shareholder value, but Lowenstein argues that investors - especially professional investors - wanted to be mislead. “Fund families such as Janus, Van Wagoner, and Putman would stuff their portfolios with Cisco, Qualcomm, JDS Uniphase - the hottest stocks - which purchases would drive up the stocks and thus the fund prices higher,” Lowenstein says.

Lowenstein dots his historical narrative with juicy behind-the-scenes details from memos, meetings, and events. They lend a third dimension to Origins of the Crash. One such detail comes from a 1998 speech SEC chairman Arthur Levitt gave at the Stern School of Business at New York University. Levitt told students that “trickery is employed to obscure actual financial volatility.”

If Levitt knew this in 1998, why didn’t the SEC do something? Because the SEC was understaffed and it couldn’t catch up with “corporate miscreants” until many quarters later if at all, explains Lowenstein. “The lack of an effective deterrent, combined with the perverse structure of options, meant that, the rhetoric of pay-for-performance notwithstanding, many executives had an incentive to cheat,” he notes.

Although Lowenstein spends an entire chapter chronicling Enron (which he calls the “single corporation [that] could represent the corruptions of shareholder value”) and much of the following chapter deconstructing WorldCom, he is quick to point out that these companies were not alone in their misdeeds. He offers readers several synopses of other questionable dealings, including General Electric and its star CEO, Jack Welch; Tyco and its acquisition-crazy CEO, Dennis Kozlowski; Xerox; Webvan; CMGI, an Internet incubator; and AOL’s merger with Time Warner.

Along the way, Lowenstein takes issue with analysts, bankers, auditors, lawyers, politicians, venture capitalists, the financial press and investors. In many ways, they all conspired to look the other way. Groupthink prevailed. Lowenstein uses the case of Priceline to make this point: “By 1999, Priceline, which resold airline tickets but owned neither gates nor planes, was worth almost as much as the entire, tangible airline industry…. The bizarre yet inescapable conclusion was that according to the mathematics extant at the turn of the millennium, a dotcom stock was worth more than an actual, cash-generating business.”

Although the stories in Lowenstein’s books are not new, his ability to flesh them out with firsthand accounts and research leaves the reader with an undeniable feeling: what happened to the market at the dawn of the new millennium was years in the making and the manic “virus” of the times spread far and wide.

In the aftermath of the great bubble, what is left is a savvier public, beefed up government regulations and an SEC with as much bite as bark. For example, the Sarbanes-Oxley Act of 2002 aims to reign in the accounting profession. CEO compensation packages are becoming more realistic. Those who sit on boards of directors are now held accountable. According to Lowenstein, ten underwriting firms were fined $1.4 billion for their part in the corruption and analysts are now barred from promoting their firms’ IPO’s. Many of the corporate executives who created glowing quarterly earnings face jail time.

Yet, has anything been learned from these events? Perhaps Lowenstein’s notes on the last page of his book, say it best: “It is a chief lesson of the scandals that the culture of a community, more than any laws, provides the moral determinant for its behavior.”
Source; University of Pennsylvania, June 04

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MEDIA – INTERNET

Forget Radio, Tune In to Net
Web music broadcasting is the best thing to happen to radio since FM.
The concept has many names: Web radio, webcasting, streaming jukeboxes, Internet broadcasts. But the idea is much the same. Music fans "tune in" to various services through their Net-connected PC, where they can hear music from a huge range of genres. And not just the same 20 songs over and over again, like commercial radio. With Internet radio, listeners can tap libraries of millions of songs that would never be broadcast on the airwaves.

MusicMatch music player software, a fine rival to applications like Winamp. A free version of the program offers free streaming - unlike competitors like Napster and Rhapsody. Just keep in mind you have to keep a full-blown application running in the background to use this service.

The stations are fairly basic, with a few nice options: Listeners can skip songs and are alerted to the next artist in the queue. And, like Launchcast, users can create their own station based on their favorite artists. The more you use the service, the better it is at identifying your tastes.
A music store is integrated into the player, making it easy to purchase songs or albums you just heard. You also get an added bonus if you decide to use MusicMatch to store and organize your MP3s - it has some of the best rating and personalization features around. It's just a shame you can't carry the power of that personalization to the online radio features, which would make the whole package the ultimate jukebox.

Radio Free Virgin Lite: Here's a player that lives up to its lite name. It has virtually no features. There's no need to download anything - the Web-based player launches at the click of a button on the homepage. A listener can select from 30-odd channels - some that are very slow to load - and that's it. While the player displays the song title, artist and album cover, there's no countdown, skip button, song history or customization options. While there is a volume adjustment on the player, it didn't work during our test.
Perhaps the only thing going for this service is that it's easy on the ads. There aren't any pop-ups, which is nice. And the audio ads are few and far between, making it easy to listen to a number of songs without interruption.

Winamp Radio: While better known as an MP3 player, Winamp shouldn't be overlooked as an online radio service (in version 5.03c, click the Internet Radio link in the Media Library). It features a diverse collection of free music with superb sound quality.
Listeners can also access several of these stations through the Shoutcast directory. Shoutcast is a Winamp-based streaming audio system. It's also where aspiring DJs can spin their tunes for other listeners.
Scroll through the list of 500 streams and you can find everything from Korean DJs broadcasting blues to Russian pop hits, and find entire symphonies or video-game soundtracks. It's a nice alternative to some of the Net broadcasters that make you join their premium services to access the more obscure music.
You can also see cool information like bit rates and the number of other listeners tuning in. Another cool feature: Right-click on the station and you can bookmark it. No pop-up ads, either.

The drawbacks? Stations are occasionally cut out or are inaccessible, because many of them are run by independent broadcasters. And listeners don't receive much information on each
song beyond artist and title.
Source; Wired, June 04
Write; by Katie Dean

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ECONOMY – US

US: Consumer confidence on the upside
- In June, consumer confidence as measured by the Conference Board index markedly improved, gaining 8.8 points (to 101.9), with current conditions up by 14.3 points (to 104.8) and expectations by 5.2 points (to 100.0).
- Last Friday, the University of Michigan released the final reading of its own index for June, up by 0.4 point versus the preliminary reading. Compared with end May, the headline index was up by 5.4 points, with current conditions gaining 3.9 points over the month and expectations 6.9 points from May to June.
- While the index from the University of Michigan remained in June below the high of January, the index from the Conference Board reached its highest level of 2004, and in fact its highest reading in two years. After a marked rebound in January, both indices lost ground until May. However the fall in the index from the Conference Board index was limited to 4.6 points (from 97.7 in January to 93.1 in May) while the University of Michigan index decreased by 13.6 points (from 103.8 to 90.2).
- Details show that both declines were due to the component for expectations, even if, and contrary to the Conference Board index, the University of Michigan current conditions index also suffered. Regarding the Conference Board, expectations lost 10.5 points from January to May, while the economic outlook index from the University of Michigan declined by 18.5 points.
- Going further into details, it appears that expected business conditions were the main concern. Indeed, the decline recorded by expectations from the University of Michigan was due to an expected deteriorating financial position for just 15%, 85% of the deterioration coming from worse business conditions (especially over next year). Even if more broad-based, the deterioration of expectations according to the Conference Board survey was also mainly caused by business conditions (47%), and to a lesser extent by prospects for labour (31%) and income (22%).
- The University of Michigan provides with deeper details. For instance, it published an index retracing news heard about business conditions. These details show that the main component that drove down the composite index from January to May was "bad news from higher prices". This return of accelerating inflation is also illustrated by the sharp increase in the expected rate of inflation over next year, which is also part of data provided by the University of Michigan. While this expected rate was 2.7% in January, it jumped to 3.3% in June.
- Consumers thus expect inflation to accelerate. The first question to be raised is: Is this bad news? The answer is: No, not at all. When the Fed highlighted the deflation risks (in much softer terms…), one of its goal was to revive inflation expectations. Indeed, deflationary expectations can proved self-fulfilled: if consumers expect prices to go continuously down, this is never time to consume, since products will get cheaper with time; demand is thus contracting, which leads to downward pressure on prices. The marked increase in expected inflation is thus good news since it is an additional illustration that the risk of the deflation is well off the table.
- But does this increased expected inflation could be the sign of inflation actually accelerating? First of all, the sharp rise in oil prices since the beginning of the year surely contributed to the rebound in expected inflation. Second, as shown on the graph on next page, consumers proved particularly bad forecasters for inflation…
- In short, just keep in mind that inflation expectations have risen. In Fed terms, you could say, "the probability, though minor, of a rise in inflation from its low level exceeds that of an unwelcome fall in inflation". In clear, there is currently more risk of inflation accelerating than decelerating. Thus the additional monetary easing bias has to be removed. Something the Fed will start doing as soon as tomorrow, with a "moderate" 25 bp hike.
Source; OECD, June 04

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2004-06-25T18:47:00.000+02:00

HIGHLIGHTS

BUSINESS – HEALTH CARE

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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INTERNET – LINUX

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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INTERNET – SECURITY

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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SOFTWARE – LINUX

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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E-BUSINESS – AFGANISTAN

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 Overstock.com, 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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INTERNET – ISP’S

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 cybercafé 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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TELECOMUNICATIONS – NIGERIAN MARKET

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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GPS – MARKET ISSUES

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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EUROPEAN UNION – ECONOMY

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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FOCUS

TELECOMMUNICATIONS – CORPORATE OVERVIEW

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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2004-06-03T20:38:00.000+02:00

HIGHLIGHTS

TELECOMUNICATIONS – WIFI

T-Mobile, Hyatt ink hotspot deal
T-Mobile signed a deal with Hyatt Hotels & Resorts to launch WiFi hotspots in nearly all of Hyatt's 200 hotels by mid-2005.
The companies have already launched service at the Hyatt in Charlotte, North Carolina, with plans to launch service in the Hyatt Regency at Chicago's O'Hare airport next week. Hyatt aims to have wireless access in nearly all of its hotels and in most of its hotel rooms. Access will be available for $9.99 per day for guests who do not subscribe to T-Mobile's nationwide hotspot service. This deal is T-Mobile's first major hotspot contract with a hotel franchise. No financial details of the deal were released.
The deal is a coup for T-Mobile, which beat out hotspot rival Wayport for one of the last remaining nationwide hotel WiFi contracts. Wayport dominates the paid-access WiFi sector for hotels. Wayport has recently emerged as the defining player in the paid-access hotspot market thanks to the company's growing hotel network and its recent nationwide hotspot deal with McDonald's.
Meanwhile, most investors and financial analysts are down on the paid access hotspot business model. This market pessimism has grown worse since hotspot service provider Cometa Networks closed its doors last month.
Date; May 2004

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TELECOMUNICATIONS – EUROPE - MOBILE VIDEO MARKET

Mobile Video to Generate US$5.4bn by 2008
Europe : In a new report entitled Mobile Video: Worldwide Market Analysis and Strategic Outlook 2003-2008, industry analysts ARC forecast that the mobile video market will generate worldwide revenues of US$5.4bn in 2008.
ARC Senior Analyst Rupert Reid, takes a quick look at recent developments in the mobile video space to ee how they measure up against ARC Group's forecasts and whether there is any substance behind the hype.
As the latest in a line of applications touted to turn around flagging ARPUs and kick-start the dawn of a new mobile multimedia era, mobile video has been much in the spotlight recently. Whereas the adoption and usage levels of 3's much publicised video telephony services have not exactly set the industry alight in the early days of its launch, the underlying trends nevertheless point to a steady ramping up of interest in mobile video.
In the last 6 months, a flurry of activity across all elements of the value chain has witnessed the increasing momentum behind bringing mobile video applications and enabling technologies to market as players from platform vendors to content aggregators all attempt to carve an early lead in this nascent market.
Recent deals between Vodafone and Warner Bros. Entertainment, Mobilkom Austria and CNN and 3 Sweden and Endemol/Kanal highlight the growing focus placed on strategic partnerships between operators and content owners to target mobile video streaming, downloading and messaging services. By building up a rich ecosystem of branded content, 3G operators are clearly positioning their networks primarily as video-capable, and heavily promoting video streaming and video telephony services as a differentiator from 2.5G networks.
It is not just the 3G operators however who are pioneering video services as a number of 2.5G operators have launched video services of their own. For example, a number of European operators including Telefonica, TIM and O2 have launched a range of early video streaming applications through partnership with RealNetworks and its Helix Universal Platform. Likewise, the indications from Sprint PCS are very encouraging with PCS Vision customers having sent more than 100m picture messaging images and 15-second video messaging clips since November 2002.

Despite these promising early trends, there are challenges at every point in the mobile video value chain, which must be resolved before video takes off on a mass-market basis:
- Reducing the price of video-supporting handsets to gain mass
market acceptance
- Developing viable business models for video distribution which
include content protection,
- Resolving the interoperability, interconnect and roaming
issues for such services.

Top of these challenges remains the perennial problem of video-capable handset availability and a lack of well-defined and established standards across the value chain which are essential for operators to build a full service that includes content, servers, applications and handsets.

Nonetheless, ARC is confident that ongoing developments in high-performance, low-power multimedia application processors coupled with continuing improvements in high-resolution CMOS image sensors and high-resolution colour LCD screens, will see the mass market penetration of video-enabled handsets by 2006.
As with any forecast, the purchasing behaviour of end-users remains the key variable in assessing demand and also the hardest to predict. Nevertheless, on the balance of evidence, ARC believes that the widespread availability of video-capable terminals together with high-bandwidth networks supported by a rich distribution network of branded and mobile specific content will result in a steadily growing market for mobile video services over the next 5 years.

Mobile Video, from the ARC Group, forecasts that between 2003 and 2005 there will be a relatively slow rate of adoption, as the market is in its launch phase although from 2005 onwards strong growth is anticipated, and by 2008 it is forecast that close to 250m consumers will use mobile video services.
Mobile Video also predicts that video messaging will remain the biggest application category throughout the forecast period. In 2003, the figure of 5.1m users is mainly made up of the video clip messaging services that have been launched by operators in Japan. In Europe, initial video services have also been focused mostly on video messages, since user-generated content frees the operator from dealing with content copyright issues and content owners' DRM requirements. As MMS starts to enter the mainstream in Europe, it is expected that as camera phones in the European market evolve to support video, there will be a high adoption rate for video messaging services as an enhancement to regular MMS.

Video download is expected to be second to video messaging in terms of users until 2005, when video streaming will take over second spot, based on the higher penetration of 3G networks. After 2003, streaming will be a preferred method of consuming video content, since it has a much more immediate viewing experience than video download, and enables longer video clips and also live TV-like live broadcast services.
As a strictly a 3G service, ARC expect the total number of video telephony users to increase from 1.3 m in 2003 to almost 90m in 2008. Video telephony will continue to differentiate 3G networks from 2.5G networks, and the popularity of this application will rise as more possibilities become available to connect via video calling to enterprise video conferencing systems and consumer video devices in the broadband-connected home. This network effect of home, office and mobile video telephony devices will cause mobile video telephony to overtake video download services by 2007.
Source; ARC; May 2004

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INTERNET – WIRELESS BROADBAND

Wireless Hits WiMax Speeds
Standardized products that are expected to drive down the price of WiMax wireless broadband gear may be as much as a year away, most industry insiders say.
But Alvarion used this week's Wireless Communications Association conference in Washington, D.C. to roll out equipment that it says can be easily upgraded to support the emerging standard.
Alvarion already makes its own proprietary wireless broadband infrastructure, which it sells to carriers that want to provide high-speed Internet access over long distances. The BreezeMax product line introduced Wednesday, based on an Alvarion chip, includes wireless base stations that later will be able to serve WiMax CPE (customer premises equipment). All that carriers will need in order to support the new CPE is a firmware upgrade, according to Patrick Leary, assistant vice president of marketing at Alvarion, which is based in Tel Aviv, Israel.
Vendors including Alvarion and Intel are counting on high-volume production of WiMax silicon to drive down the price of customer gear and make wireless broadband a profitable carrier service. WiMax is designed to deliver data speeds comparable to cable modem and DSL services over a distance of as much as 30 miles. The WiMax Forum industry group expects to begin certifying WiMax products by the end of this year.

Changing the Channel
The group is working toward specifications for three pieces of radio spectrum, around 2.5 GHz, 3.5 GHz, and 5 GHz, Leary says. Alvarion's platform introduced Wednesday, the BreezeMax 3500, will use the 3.5-GHz band. Once an Intel chip set that supports WiMax in the 3.5-GHz band is commercially available it will be integrated into new, standardized versions of Alvarion's CPE and its base stations, he says. Leary expects the chip set to ship around the middle of next year. That standardized, high-volume silicon should drive down costs significantly, Leary says.

The BreezeMax 3500 line will include "macro" base stations for dense urban areas and "micro" base stations for rural deployments, along with three kinds of CPE. One CPE device is for IP data only, one supports both data and voice over IP, and one has an integrated 802.11g wireless LAN access point for wireless hotspots or small businesses. For the CPE, Alvarion will charge carriers between $200 and $500 depending on volume, capacity and configuration. The micro base stations will range from $10,000 to $15,000 and the macro versions from $50,000 to $60,000.
Though much attention has been focused on the licensed 2.5-GHz and unlicensed 5-GHz bands, Alvarion is aiming at the initial sweet spot with a 3.5-GHz product, according to Leary. That band has already been licensed for wireless carrier services in many countries outside North America, he says. The 3.5-GHz BreezeMax products have been in trials at carriers in Europe and Asia.

The 3.5-GHz band is "the most stable environment in a regulatory sense, and it's where we believe mass deployment can be achieved most rapidly," Leary says.
Yankee Group analyst Lindsay Schroth agrees. Outside the Western Hemisphere, many major carriers already hold spectrum in that range, she says. By contrast, WiMax deployment in the 2.5-GHz range probably will have to wait for decisions by two big U.S. carriers, Sprint and Nextel Communications, Schroth says. Unlicensed 5-GHz services probably will remain the realm of enterprises and small rural providers, she adds.
"The U.S. market in general is kind of up in the air in terms of how quickly people will deploy stuff," Schroth says.
Source; IDG News Service, May 2004
Write; by Stephen Lawson

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TECHNOLOGY – MOBILE DEVICES

Motorola to promote first megapixel phone with online film
Motorola said it will sell its first megapixel camera phone in the United States starting this summer.
The company also said it has teamed with Hollywood director Scott Sanders to develop an online “advertainment” film promoting the phone.

“By finding innovative ways to showcase Motorola's dynamic phone technology, we are serving the consumer in two ways. First, we are highlighting the important benefits of the V710, which include seamless mobility, creative expression and personal freedom,” said Jason Few, vice president of marketing for Motorola. “Second, we are demonstrating the role technology plays in opening doors for the development of creative content and platforms in the arts. The V710 truly is the gold standard in mobile phones."

Motorola’s CDMA V710 features a 1.2-megapixel camera, video capture and playback, an MP3 player and 10 megabytes of internal memory. Motorola did not name a carrier to sell the phone, although Verizon Wireless in the past has said it is testing the device.

Under Motorola’s promotion with Sanders, the filmmaker wrote and directed a short film “starring” the V710, which is available at hellomoto.com/producer. Motorola said the cliffhanger ending to the film will be released online when the V710 becomes available this summer.

In other phone news, Japanese carrier NTT DoCoMo Inc. released three new third-generation wireless phones, which feature 2-megapixel cameras and video capabilities.
Source;RCR; May 2004
Write; by Mike Dano

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SCIENCE – ASTRONOMY

Cassini will unlock Saturn’s secrets
The international Cassini-Huygens mission is poised to begin an extensive tour of Saturn, its majestic rings and 31 known moons. After nearly a seven-year journey, Cassini is scheduled to enter orbit around Saturn at 10:30 p.m. EDT, June 30, 2004.

"The Saturn system represents an unsurpassed laboratory, where we can look for answers to many fundamental questions about the physics, chemistry, evolution of the planets and the conditions that give rise to life," said Dr. Ed Weiler, NASA's Associate Administrator for Space Science, Washington.

Cassini was launched Oct. 15, 1997 on a journey covering 3.5 billion kilometers (2.2 billion miles), Cassini is the most instrumented and scientifically capable planetary spacecraft ever flown. There are 12 instruments on the Cassini orbiter and six on the Huygens probe. The mission represents the best technical efforts of 260 scientists from the United States and 17 European nations. The Cassini mission cost approximately $3 billion.

The Cassini/Huygens mission is a four-year study of Saturn. The 18 highly sophisticated science instruments will study Saturn's rings, icy satellites, magnetosphere, and Titan, the planet's largest moon.

The spacecraft will fire its main engine for 96 minutes during the critical Saturn Orbit Insertion (SOI) maneuver. The maneuver will reduce Cassini's speed, so Saturn can capture it as an orbiting satellite. Cassini will pass through a gap between the planet's F and G rings, swing close to the planet, and begin the first of 76 orbits around Saturn's system. During the mission, it will have 52 close encounters with seven of Saturn's 31 moons.

There are risks involved with orbit insertion, but mission planners have prepared for them. There is a backup in case the main engine fails, and the path through the ring plane was searched for hazards with the best Earth and space-based telescopes. Particles too small to be seen from Earth could be fatal to the spacecraft, so Cassini will turn to use its high gain antenna as a shield against small objects.

Saturn is the sixth planet from the sun, and it is the second largest in the solar system, after Jupiter. Saturn and its ring system serve as a miniature model for the disc of gas and dust that surrounded the early sun, which formed the planets. Detailed knowledge of the dynamics of interactions among Saturn's elaborate rings and many different moons will provide valuable data for understanding how the solar system's planets evolved.

The study of Titan, Saturn's largest moon, is one of the major goals of the mission. Titan may preserve, in deep-freeze, many of the chemical compounds that preceded life on Earth. Cassini will execute 45 flybys of Titan within approximately 950 kilometers (590 miles) of the surface. This will permit high-resolution mapping of the moon with the Titan radar-imaging instrument. The radar can see through the opaque haze of Titan's upper atmosphere.

"Titan is like a time machine taking us to the past to see what Earth might have been like," said Dr. Dennis Matson, Cassini project scientist at NASA's Jet Propulsion Laboratory (JPL), Pasadena, Calif. "The hazy moon may hold clues to how the primitive Earth evolved into a life-bearing planet," he said.

On Dec. 24, 2004, Cassini will release the wok-shaped Huygens probe for its journey to Titan. Huygens is the first probe designed to descend to the surface of the moon of another planet, and the most distant descent of a robotic probe attempted on another object in the solar system. On Jan. 14, 2005, after a three-week ballistic freefall, Huygens will enter Titan's atmosphere. It will deploy parachutes and begin 2.5 hours of intensive scientific observations. The Huygens probe will transmit data to the Cassini spacecraft, which will relay the information back to Earth.

JPL designed, developed and assembled the Cassini orbiter. A team at the European Space Technology and Research Center in Noordwijk, the Netherlands, managed the development of the Huygens probe. The Italian Space Agency provided the high-gain antenna, much of the radio system and elements of several of Cassini's science instruments. JPL manages the overall program for NASA's Office of Space Science.
Source; NASA, May 2004

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FOCUS

INTERNET – SOFTWARE MARKET

The Changing Face of E-Mail
Information overload will drive e-mail into the ground unless software vendors act now and make major changes to the 30-year-old technology, warned a leading Internet expert Wednesday.

During his keynote speech at the Inbox e-mail technology conference, Eric Hahn, CEO of antispam firm Proofpoint, called on software developers to stop treating e-mail inboxes as places to dump memos and start thinking of them as control centers that combine e-mail, instant messaging, voicemail and other communications.

Gmail service features a similar option.
Advanced e-mail search is also gaining in popularity. The feature allows users to leave all their e-mails in a single folder, where individual messages can be found later using fast searches. Both Gmail and Stata Laboratories' Bloomba software now offer advanced search.
Still, it's unclear when more popular e-mail products will adopt similar features. Yahoo's antispam product manager Miles Libbey said his company is working on a summer face lift for its Yahoo Mail service, but he declined to say whether it would include any major interface changes.

He did say, however, that the upgrade would likely include the addition of some sort of indicator next to messages in the inbox that would let users know if their e-mails came from authenticated senders. Authenticating senders is a goal of Yahoo's DomainKeys antispam technology, which is currently in its testing phase. The indicator would make it easier for users to detect so-called phishing scams that some spammers send out in an attempt to trick people into revealing their personal information.

Speakers at the Inbox conference will continue to present more ideas for making e-mail more useful and manageable through Friday. Inbox is the first of two major e-mail-related conferences taking place this month. The second event, aptly named the Email Technology Conference, takes place June 16-18 in San Francisco.
Source; Wired magazine, May 2004
Write; by Amit Asaravala

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2004-05-19T18:31:00.000+02:00

HIGHLIGHTS

INTERNET – ENGINE SEARCH

Google Desktop Search Tool Rumored & Software Principles Released
The New York Times is reporting that Google plans to release a desktop search tool in the near future. The rumor comes on the heels of a new "Software Principles" page the company posted yesterday.
Google already has a desktop presence in the form of its long-standing Google Toolbar and the Google Deskbar search applet released last year. But a full-blown desktop searching application is seen by some as a move Microsoft might make to lock-in users. The Google project appears designed to counter this threat, according to the report.
Among the major search engines, AltaVista offered its AltaVista Discovery desktop search tool back in 1998, but it was never widely used. More recently, Lycos introduced a desktop search tool in March.
Coincidental with the rumor - or perhaps not - Google released a new Software Principles page yesterday. It's a call to the software industry to be more transparent and clear with users about what exactly their applications will do.
Among the principles, Google suggests that software should
· Not trick people into installing it
· Provide clear disclosure of its functions
· Be easy to remove
· Be clear in responsibility for when it changes default behaviors
· Be upfront about personal data and other information gathered
· Not be bundled with other software that doesn't follow principles of good behavior
In other news, the Google Gmail email system that sparked amazement by offering 1 gigabyte of storage space in April appears to have increased that amount by 1,000 times to 1 terabyte, for some users.
Aaron Schwartz and Dave Winer are just to reporting this has happened to them. Checking my own Gmail account, I don't see this happening. Gmail still tells me that I have 1000 MB of space in total, with 17 percent of it currently used. Personally, I suspect a bug.
Google's move came after Lycos recently offered 1 GB of space to its email users and Yahoo declared it would greatly increase the free space offered to those using its email service.
Write; by Danny Sullivan

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TELECOMUNIATIONS – MOBILE

Bank Espirito Santo launches 3G mobile banking
Portuguese bank, Bank Espirito Santo, has announced the launch of its bank services specially designed for the recent Portuguese UMTS platform.
Their wish is not only to maintain their domestic leadership of the mobile banking sector, but also to immediately assess the impact of the 3G mobile telephony in banking activities.
In order to help the spread of the use of this new service, the bank also announced its intention to help the costumers to purchase 3G handsets with special prices and credit conditions. The first available service will be based on the BES Internet Banking on the I9 TMN Portal. It will be possible to check accounts, transfer funds, and recharge mobile accounts.
At some point in the future, customers will also be possible to perform other transactions normally available via Internet banking such as stock exchange orders, and services payments.

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INTERNET – WI-FI

Tin.it launches wi-fi ‘virtual tokens’
Tin.it, Telecom Italia Media’s Internet service provider, has announced that it is to launch "virtual tokens" for for its wi-fi Internet service.
The tokens offer a temporary access code that may be purchased online via credit card from locations that host Tin.it hot spots, such as hotels, shopping centres, bars and yacht clubs. The token is available in three different denominations. One-hour, five-hour and twenty-four-hour tokens cost €2.95, €4.94 and €14.95, respectively. The twenty-four-hour tokens are on special offer throughout 2004 for €9.95.
Launching on 15 May, the service is aimed at business travellers and tourists who need to access the Internet.
Tin.it has 364 hot spots in the country, 245 of which 245 are up and running.
Source; TIN.it, May 2004

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FOCUS

INTERNET – MARKETING

Reciprocal Linking: A Disturbing Trend
In the world of Internet Marketing, and Web site promotion, nothing changes faster than the parameters that rule good Search Engine rankings and placement.
This has led to a developed new science in the last few years, SEM (Search Engine Marketing). This new science, SEM, has been a boon to both Web Masters and the merchants that maintain Web sites as a way to increase exposure and revenue for their products and/or services.
SEM has become a much sought after entity, with SEM specialists, who focus on optimization of a site, routinely adding linking campaign management to their overall repertoire of services. This has resulted in a large influx of Web sites focusing on linking campaigns and reciprocal linking as it has been established that good, solid reciprocal linking campaigns increased traffic and visitors to a site exponentially.

However, like with everything else online, the idea of SEM and linking campaigns has spread like "wildfire", with sites seeking links seemingly endlessly. This has led to what can only be termed, "linking explosions", with many sites posting links to everything and anything in an effort to increase their Search Engine rankings and placements.

The actual attainment of effective linking campaigns, is a work oriented, tedious undertaking, with literally months spent developing a good campaign. While a good linking campaign does increase rankings overall, with the Search Engines, the question remains, "does it increase sales"? After all, consumers are the ingredient that facilitates the sale of a product/service in the long run, not the rankings or placement of a site. Questions about whether linking campaigns increase revenue for a site are coming into play now.

Recent data has shown that consumers, now more than ever, are arriving at Web sites via "search features", not by direction to a Web site via another Web site link. The use of "search features" to arrive at a site has increased by almost six percent in the past year. In addition, direct navigation by visitors to a Web site, has also increased from a year ago, by almost ten percent. In direct contrast, Web link "arrivals" of visitors has dropped in the past year, by a somewhat staggering, twenty percent!

The World Wide Web quite obviously has now become more utilitarian to consumers, and linking campaigns, as a result, may become more ineffective as time goes on. Linking campaigns, by their very nature, promote "browsing" and the consumer finds time-consuming “visiting” of many sites, before the product/item/service. As the Web progresses and consumers become increasingly discerning in their overall approach to the Web, they are now going right to the source, more often, via "search features" and direct navigation.

Accordingly, then, the "digging around" on other sites, has diminished over the past twelve months, and in all likelihood, will continue as a trend well into the future, hampering the effectiveness of linking campaigns overall. This trend reflects an international shift towards this method of finding information on the Web, and is not localized whatsoever, crossing many demographic and geographic barriers.

It's really difficult to effectively pinpoint the cause in this shift for consumers. However, the sheer magnitude of the linking campaign craze that is so prominent now, may account, at least in part, for the shift in the attitudes of consumers. Because of the popularity of linking campaigns as a method of increasing rankings and placement, attaining "quality" links (those with a Page Rank of 5 or higher) has become more difficult for Web masters. In addition, the sheer volume of linking requests to pages with a high ranking, has also increased, to the point where higher ranked Web sites are inundated daily with linking requests, interfering with their ability to attend to their own business.

Web masters have now oftentimes taken to using any links whatsoever; as long as the links added have the appropriate Page Rank. Little thought seems to be given at times, to the theme of a links page or the relevance of links that have been added, leaving visitors to some sites confused and frustrated. This will in all probability lead consumers to turn to the Search Engines and direct navigation even more in the future, not less.

This could have dire consequences for many Web sites down the road, as those at the bottom of search listings could conceivably be forced out of business.
There are methods however that can aid in the retention of top rankings and listings with the Search Engines, in and above linking campaigns.

These methods would also hold greater appeal for consumers in general, as they would add quality to a Web site, as well as content, something that will add "longevity of appeal" to a Web site:
1. The writing of good, content oriented copy, which imparts value to a Web site. Good copy has always been utilized to establish good overall traffic and conversion patterns. Even Search Engines seem to understand this and routinely rank Web sites with good pertinent content, higher than other Web sites.
2. The placement of ads on high traffic sites. Just one good ad, placed on another Web site with good overall traffic, will significantly increase rankings and placement by the Search Engines.
3. The submitting of a Web site to all possible, pertinent directories. Directories were always a good method of increasing rankings and placement, and they still, to this day, are a good choice.
4. The optimization of all other aspects of a Web site, from the meta-tags to the design. Meta-tag optimization, like directory listings, continues to be a good overall optimization technique. The design of a Web site can also enhance rankings and placement, as the site needs to be "readable" to the Search Engines, and some flash and other enhancements, can prevent "readability", thus hampering rankings and placement.
5. The enhancement of traffic by offline marketing campaigns. This is one facet of Web site traffic management that many individuals neglect, but that can successfully increase rankings significantly.
6. The use of PPC (Pay Per Click) campaigns. While these can be expensive, if care is not given to the bidding, they can also enhance traffic to a Web site, as "traffic begets more traffic", establishing a ranking pattern for the Search Engines.
7. The addition of keywords that are relevant to a site, throughout the copy, the title, and the meta-tags and any other text, such as articles and reports. Keywords are the "guides" that the Search Engines use to find a site and rank it. The addition of good relevant keywords always enhances rankings and placement.
Linking campaigns, as you can see, while having their overall place in effective rankings and placement within the Search Engines, are not the "be all and end all" of optimization or rankings. Many various fundamentally sound methods of optimization still exist, and should be utilized in any well-rounded Search Engine Marketing campaign.

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INTERNET – WEB PORTALS

Search Engines & Web Portals Going 1GB Email Crazy
Making news yesterday, Lycos Europe introed a paid 1GB email service which beat the slow paced Google GMaillaunch. However, GMail’s functionality may make it stand out to users and web emailers more so than its added storage size. Besides, other established mail servers have already or are starting to offer 1GB mail accounts. Here’s a comparison of search related email account offerings from Pras at Cinematic Rain
Yahoo! Mail:
- Upgraded their free accounts to 100MB 1GB mail coming soon
Lycos Mail:
- 1GB available for about $6 a month
Google GMail:
- Still in beta testing
- No news of when it will officially be launched to the public
SpyMac:
- 1GB email accounts
- 350MB combined storage

The “All-You-Can-Eat Buffet” Effect
Finally the mailbox providers are realizing its not about how much storage people are really going to use, but instead of actually offering a whole lot of space. Its like a buffet, you offer tons of food and unlimited servings. But out of the potential diners, only a few will gorge themselves till they’re racing to the restroom.
All that aside, one must ask, where is Hotmail nowadays? Are they happy to be stuck with 2-4MB storage? What does MSN have up their sleeve, if anything?
Yahoo and Hotmail don’t change their ways, their advertising cluttered email pages will send mass pilgrimages over to Google GMail and other similar offerings, about two of the best-known e-mail services, MSN Hotmail and Yahoo Mail (my least favorites), I visualize their ad-laden, cluttered screens.

GMail knocks Hotmail and Yahoo! Mail hard. Speed is extra ordinary. It simply is too fast that you fear if it’s indeed a secure service.” Mittal adds his opinion on GMail’s controversial email content targeted Google Adwords advertising, I did not see many ads. In fact most pages did not have any. One big mail with some good content showed the adsense ads, which are creating furors in the market. They are not intrusive, irritating. They just are present at one side. It’s not something that’s in your face. And that is something wonderful. Compare that to Yahoo’s big flash ads and Microsoft’s heavy pages.
Just when things were starting to heat up in the big search engine version of King of the Hill, Google came out with their 1GB GMail, stirring the pot and starting a new battle trying to get registered mail users to their search friendly email systems. It should be interesting to see how MSN, Yahoo and others fully respond.

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2004-05-18T17:31:00.000+02:00
HIGHLIGHTS

IT – Software Tech

Citrix tests Web conferencing service
Citrix Online hopes to build on its popular GoToMyPC service for remote computer access with a new Web conferencing program.

The company, a division of networking software seller Citrix Systems, plans to begin offering a free preview version of GoToMeeting on Monday. The service enables customers to present PowerPoint slides, run applications and handle basic collaboration tasks over the Web.

The service will compete in an increasingly crowded market dominated by Web conferencing specialist WebEx. The niche has drawn attention from major software makers such as Microsoft and Macromedia.

Citrix Online will distinguish its service partly through simplicity, said Klaus Schauser, chief technical officer for the Santa Barbara, Calif., and company. Instead of loading the service up with complex interactivity and polling features, GoToMeeting will focus on what actually happens in meetings: talking and looking at PowerPoint slides.

"We're focusing on everyday meetings--this is not a Webinar product; this is not a training product," Schauser said, making the comparison with online seminar products. "Our motto has always been that 'simpler is better,' even though there are some pretty sophisticated capabilities in the product. We can very quickly go from something that's presentation-only to something that's more interactive."

The simplicity goal will also extend to pricing. Citrix Online will charge a flat monthly fee based on the number of simultaneous users, rather than the per-minute pricing typical of the market.

Matt Reid, a senior vice president for product marketing at Citrix Online, said the goal is to make online meetings an everyday choice to improve productivity and cut down on travel and other expenses.

"People like the technology around Web conferencing--they just aren't using it as much as they could," Reid said. "And the product needs to actually get used to generate the savings. That's why we really want to make sure it's affordable for the masses to use."

The paid version of GoToMeeting is set to launch in July. The basic service will cost $49 per month, or $468 per year.

Citrix Online is mainly known for GoToMyPC, a product it acquired from specialist Expertcity that allows any PC to be accessed remotely over the Web.
Source; CNET News.com, May 2004
Write; by David Becker

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Telecommunications – Mobile

Kejian launches GSM phones in India
China Kejian Corporation has launched several GSM phone models in India; the prices range from Rs 4,905 to Rs 16,650. All phones come with a lifetime warranty against manufacturing defects.
Kejian has entered into an exclusive relationship with the Rajgarhia group, under which Trust Telecom Technologies, a new entity floated by the Rajgarhias, will represent, sell and service Kejian handsets in India and the SAARC region.
India is the first foreign market where Kejian has launched its products, and the company is aiming to invest heavily in positioning and branding here.
Source; Express Computer, May 2004

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Telecommunications – VoIP

Hanoi Telecom Interconnects with T-Systems in Vietnam
Hanoi Telecom has interconnected its network with T-Systems, allowing Hanoi to have its international calls routed over T-Systems' IP network.
T-Systems established nine PoPs within the country. T-Systems is using VocalTec's packet tandem switching solution for the deployment.
Source; Hanoi Telecom

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Internet – Legislation

FCC Plan Would Use Vacant TV Channels For Internet Connections
Lengthy Rulemaking Process Under Way
Washington - Federal regulators have endorsed a plan to use vacant TV channels for high-speed Internet connections. Federal Communications Commission Chairman Michael Powell says it would "dramatically increase" the availability and quality of wireless Internet connections - especially for people in rural areas. Powell says it would be like "doubling the number of lanes on a congested highway."
But TV broadcasters oppose the proposal. They argue that it would interfere with over-the-air television signals for millions of people. The FCC commissioners voted unanimously to begin the lengthy rulemaking process for the plan.
Source; Copyright 2004 by The Associated Press. All rights reserved. May 2004

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IT - Law

Lebanon still the pirates haven
Music piracy levels in Lebanon are still over 70 per cent, way ahead of the next worst Egypt at 50 per cent, according to the International Federation for the Phonographic Industry. Piracy is reckoned to cost the global music industry some USD4bn annually.

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Internet – Airlines

Connexion and Lufthansa Launch World’s First Airborne Internet
Connexion by Boeing and Lufthansa German Airlines made history today on flight LH 452 from Munich to Los Angeles by giving passengers the opportunity to be the first in the world to experience real-time, WiFi-based, high-speed Internet connectivity on a commercial flight route. The successful launch of Connexion by Boeing’s commercial airline service was confirmed by e-mail at 3:18 a.m. Pacific time when David Friedman, vice president of Marketing and Direct Sales, sent the following message to his team on the ground: “Hello from 33,000 feet above Germany. The system is on and everything is A-OK. Lots of buzz on board, as this is the start of a new era of communications and aviation history.”
Source; Lufthansa Airlines, May 2004

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FOCUS

Telecommunications – UMTS

Russia Preps for 3G
The huge boom in Russia’s cellular industry has led carriers to plow investment into regional W-CDMA (Wideband Code Division Multiple Access) network trials, with analysts touting the country as a potential hotbed of 3G activities.
By the end of April 2004 wireless penetration in Russia had reached 30.8 percent, taking the total to 44.7 million subscribers, according to analysts at Moscow-based J'son & Partners.
With GSM (Global System for Mobile communications) technology dominating 95 percent of the market’s current cellular services, Russia is expected to adopt the European W-CDMA standard as its 3G technology of choice.
The W-CDMA air interface is part of the Universal Mobile Telecommunications Standard (UMTS). Used with existing GSM core networks, the theory goes, W-CDMA-compliant handsets and base stations can increase wireless data transfer rates to a potential maximum of 2 Mbit/s.
In its latest report, J'Son & Partners states that Russian carriers have conducted extensive trials of W-CDMA networks over the past three years.
Mobile TeleSystems OJSC (MTS) the country’s largest carrier (16.1 million subscribers), has trialed kit from NEC Corp.; Tokyo: 6701), Siemens AG; and Huawei Technologies Co. Ltd. Number two, JSC Vimpel-Communications (VimpelCom) (13.9 million) has tested equipment from Alcatel SA; Third-place MegaFon (8.1 million subscribers) is testing kit from LM Ericsson NEC, Nokia Corp. and Siemens.
J’Son claims that 3G licenses are likely to be awarded in the fourth quarter of 2004 and the first quarter of 2005, with network deployment slated for the second or third quarter of 2005. Commercial 3G-service launch “in major Russian cities” is expected in the first and second quarters of 2006.
The Russian 3G market has a great potential to develop through a combination of positive circumstances. The government has a key role... by limiting the influence of market inhibitors and ensuring success through a timely and intelligent development of 3G.
The attraction of Russia’s cellular industry has already led a number of Europe’s Tier 1 carriers to take significant stakes in the market’s three main players. T-Mobile International AG has a 25 percent stake in MTS, and Telenor ASA, which is keen to build a growing presence in the region, holds a 29 percent stake in VimpelCom. Scandinavian powerhouse TeliaSonera AB that is also amassing mobile assets in Northern and Eastern Europe owns 43.8 percent of MegaFon.
Vodafone Group plc is also rumoured to be making a move on the market following its failed bid to take over AT&T Wireless Services Inc. (NYSE: AWE - message board).
Strategically, Russia is a very important market for carriers, there is the potential for huge growth, and many global carriers will be gauging the opportunity for 3G. The fact that licenses are set for award in the next twelve months is another reason why Vodafone may be eyeing up the market.
Source; market sources and corporate data, May 2004-05-18
Write; by LuisB

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2004-05-07T20:45:00.000+02:00
HIGHLIGHTS

e-Business – Asean

Piecing together a Chinese software giant
Hong Kong-based chinadotcom, considered a "pioneer of China’s Internet," is reinventing itself as a provider of enterprise software to Chinese manufacturers. The company rose to prominence as a major player in the Chinese Internet portal market, but has now embarked on a series of acquisitions and partnership agreements in the USA, Canada and India to beef up its presence in the enterprise software market. Also on tap: plans to turn the company into a "software outsourcing shop." While most tech analysts are bullish on the company’s prospects, the article points out that chinadotcom "will face plenty of competition" from enterprise software rivals in China such as SAP and Oracle.
Source; Business Week, May 2004

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Business – Technology

Sun Microsystems opens smart-tag plant
Sun Microsystems plans to open a 17,000-square-foot RFID test facility in Dallas as part of a strategy to help manufacturers meet a January 2005 deadline imposed by Wal-Mart for using RFID tags. According to Sun, Wal-Mart suppliers will be able to load pallets of actual products in their original packaging and "run them through mock-ups of loading docks," enabling them to test whether RFID-tagged products can be read by Wal-Mart systems. Three other tech firms - Nortel Networks, Texas Instruments and i2 - will join Sun Microsystems in the RFID initiative. If all goes according to plan, Sun will open a similar RFID facility in Scotland by the end of the summer.
Source; AP, May 2004

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Business – Corporate

SCO cuts jobs to reach product profit
In an effort to restore its core business to profitability by the end of July, the SCO Group has made an across-the-board reduction in its workforce. The company did disclose the exact size of the layoffs, noting only that less than 10% of the workforce would be affected. SCO also noted that the move to shore up financial performance was not the result of pressure applied by BayStar Capital, which earlier threatened to pull its $20 million investment. In its most recent quarter, SCO posted a net loss of $2.25 million on revenue of $11.4 million.
Source; News.com, May 2004

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Internet – Entertainment

Sony launches online music service
Sony Connect, the latest entrant in the increasingly crowded digital music market, will offer more than 500,000 songs from artists on major and independent labels at the standard price of 99 cents each. In addition, Sony Connect will offer full album downloads starting at $9.99. Sony - like its competitor Apple iTunes - hopes that its online music service will lead to additional sales of its audio devices. But, as critics point out, the company’s late start in the market may be difficult or impossible to overcome: "They're behind the curve already and they have to play catch-up on two fronts, on selling their audio players and getting people to use their music service. There's roughly three to four million people that have already placed that bet."
Source; AP, May 2004

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Internet – Business

E-biz strikes again!
The disruptive power of the Internet means, "big companies are again under assault" in a number of very different industries. As during the late 1990s, the Internet is "threatening to force down the prices charged by traditional players, squeeze their margins, and even put some out of business. New technology, new ways of doing business and new approaches to cutting out the middleman mean the old pricing power is collapsing in a series of industries…" Business Week trains its eye on six industries that are about to be disrupted: jewelry, bill payments, telecom, hotels, real estate, and software. While nobody is claiming that this is "1996 redux," the fact remains that the online players that survived the brutal Internet shakeout are stronger, savvier and leaner than their boomtown brethren.
Source; Business Week, May 2004

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e-Activities – Internet

Blogs counter political plottings
Political activists are embracing the power of the Web – especially online community networks and blogs - in order to "re-engage people" in grass-roots political movements, according to panelists at a recent journalism conference at UC-Berkeley. According to one social networking expert at the conference, the Howard Dean campaign has been a key catalyst: "We'll look back and see (the Howard Dean presidential campaign) as the beginning of the change." The key, say political activists, is to understand the "traditional ways campaign work" - and then use new Internet-based tools to counteract these tactics. Included: a few tips for motivating blog audiences and re-energizing social networks.
Source; Wired News, May 2004

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FOCUS

Telecommunications – Canada

Canada's phone giants face Internet threat
Examines the impact the emergence of VoIP service geared is having on the Canadian communications industry and the regulations that govern it. At issue is the same debate that rages in the U.S.: whether VoIP service will be taxed or regulated at all. The article notes that the Canadian Radio-Television and Telecommunications Commission (CRTC) recently began a review of existing regulations as well as relays the comments of some of Canada's fixed-line providers who say existing rules discriminate against them. The CEO of Bell Canada Enterprises, for instance, said in recent remarks that regulators must recognize that "once-separate industries have become one common industry, that needs common public policy treatment."
Source; New York Times, May 2004

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Government – India

Pension contest looms in India
Government plans to open up retirement-investment market
New Delhi - Sanjay Sachdev visited six Indian ministries over eight years to push for an overhaul of the country's pension system. He says it was time well spent.
"India has the potential to be one of the largest pension markets in the world," said Sachdev, managing director of Principal Mutual Fund, the Indian subsidiary of Principal Financial Group, the biggest provider of retirement plans to U.S. companies.
After more than a decade of debate, the Indian government this year plans to license private fund managers to invest the savings of India's 400 million public and private workers - about 90 percent of whom have no retirement security, according to a government-commissioned report.
Principal, ING Groep, Merrill Lynch, Aviva and about 20 other asset managers are vying for access to a market that India's Finance Ministry forecasts will be worth $100 billion within a decade. The number of licenses has not been decided.

"The pension business in India has the potential to grow up to $350 billion during the lifetime of a generation," said Yvo Metzelaar, managing director and chief executive of the Bangalore- based ING Vysya Life Insurance, a subsidiary of the largest Dutch financial services company. "Pensions have become a top priority for us."

Metzelaar has concerns, too.

India has no social benefits system and most workers earn less than $1,000 a year, meaning they will struggle to build pension assets.

"The presence of a social security system in India is very important for a thriving pension system," Metzelaar said. "A social security system provided by the government will cover the basic minimum level of pensions these people need."

The pension process is unlikely to be straightforward in any case. Last year, the Indian government set up an interim Pension Fund Regulatory and Development Authority to frame rules that will be enforced by a new, independent authority. Parliament must still approve that new watchdog - a move that is on hold until after a five-phase general election ends on Monday.

License applicants may face further delays because the current pension plan does not provide any government guarantee, said Mukesh Anand, an economist at the New Delhi-based National Institute of Public Finance and Policy.

The Finance Ministry says details about the number of pension licenses, the method by which they will be awarded and rules governing both funds and contributors will be published by the end of the year.

License holders then must overcome the challenges of distribution in a country with 1 billion people.

Uncertainties have not cooled the enthusiasm of companies. Indians, about half of whom are under 25, deposit $78 billion a year into fixed and savings accounts in commercial banks, according to a government survey. Their savings make up 14 percent of the economy.

"The challenge is to channel these savings into long-term investments to finance infrastructure that India needs," said Sachdev at Principal. "That's where pension fund companies come in."

HSBC Holdings, ABN AMRO Holding and Deutsche Bank are among banks to set up asset management companies during the past three years in anticipation of pension reform.

Insurers such as American International Group, the Munich-based Allianz and Standard Life Assurance, based in Edinburgh, Scotland, have established joint ventures with Indian partners in line with a rule limiting foreign investment for insurers to 26 percent.

"When we entered the insurance business in India, the understanding was that the pensions market would also be opened up," said Stuart Purdy, chief executive of the New Delhi-based Aviva Life Insurance, a subsidiary of Aviva, Britain's largest insurer by premiums.

Aviva, which started selling Indians life insurance in 2002, will apply for a pension license. "It's such an under-provisioned market and the savings rate is huge," Purdy said.

The prize license will cover India's 3.2 million federal government workers. Since Jan. 1, about 50,000 new employees a year have had to contribute 10 percent of their wages to a fund still to be set up.

The government is matching that contribution, with all funds held by India's controller-general of accounts until licenses are awarded.

Previously, the government paid all contributions for its current workers and 7 million retirees, or their surviving dependents, from its revenue. Its pension bill quadrupled to $3.5 billion in the decade to March 31, 2003, Finance Ministry figures show, or 3.2 percent of total spending.

"Reforms are overdue - people are living longer and they need security," said K. C. Mishra, director of the National Insurance Institute. "The government's own pensions bill is becoming unmanageable."

Whoever wins the government-fund license also will have access to voluntary contributions by about 350 million self-employed workers and seasonal contractors, from rickshaw drivers to doctors.

Workers in India's 28 state governments and its state-run companies, such as Indian Railways, the world's biggest employer with 1.5 million workers, are expected to join as well.

"The numbers will grow," said Mukul Asher, a public policy professor at the National University of Singapore who advised the Indian government on pension changes. "Overseas investors are right to get excited."
Source; Bloomberg News, May 2004
Write; Cherian Thomas

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POLICY NEWS

e-Democracy – Political

Electronic voting still in infancy, critics say
The Election Assistance Commission established by Congress to guide the transition to electronic voting is having its first meeting today. With only six months until the presidential election, no policy is in place to govern the development and supervision of e-voting machines, reports the piece, and "the federal research intended as the basis of the standards has not been financed, much less begun." Most pressing is the widespread desire for e-voting machines to leave a paper trail due to security concerns. Doug Chapin of www.electionline.org: "If you think of election problems as being like a forest fire, the woods aren't any drier than they were in 2000, but more people have matches."
Source; Washington Post. May 2004

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Internet – Intellectual propriety

Report: Other nations doing more to combat piracy
The Office of the U.S. Trade Representative (USTR) Monday released the Special 301 report, its annual report on intellectual property rights, praising countries like Poland and the Phillipines for passing anti-piracy legislation. The article reports that the European Union made USTR's "Priority Watch List" for countries or unions slacking on intellectual property protection or enforcement. According to the International Intellectual Property Alliance, the U.S. economy lost ""about $10 billion to intellectual property theft in the 52 nations listed in the report in 2003, not including Internet piracy."
Source; InfoWorld, May 2004

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BioTech – Research

Sea of dreams
A good overview of the growing field of industrial biotechnology with discussion of the efforts of Craig Venter's Institute for Biological Energy Alternatives and companies such as Diversa that are prospecting for genes that could be used in chemical and industrial processes. The article says the industry's in its "infant" stage but is "rapidly developing" as researchers search for ways in which to make "useful chemicals via genetically modified organisms." As an example the piece presents the case of Diversa and its search for genes that can be exploited for such purposes in locales such as hot springs, ocean beds, and the Arctic tundra. A prediction worth noting: McKinsey says that about 5% (by value) of the world's chemical output is bioetch-based, a number that's expected to grow to 10% over the next six years.
Source; The Economist, May 2004

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DIGITAL DIVIDE

Humanitarian - Korea

Korea crash stirs South's hearts, hopes
South Korea, Seoul - The images of the burned faces of semiconscious children have tugged at South Koreans' deepest sensitivities, as well as their purse strings, following the North Korean train explosion that killed at least 169 people and injured more than 1,300 others.
Source; The Christian Science Monitor, May 2004
Write; by Donald Kirk

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2004-04-02T17:49:00.000+02:00
FOCUS

Technology – Security

Identity crisis
From hospital wards to the boardrooms of oil companies, biometric technologies are being used increasingly to authenticate access to IT systems. But does this all spell the end of the password?

There can be few less likely places to find the application of seriously cutting-edge technology than the boardroom of a staid oil giant. But one such organisation has kitted out its independent directors with the latest in biometrics - technologies that analyse physical characteristics for identity and authentication purposes. When this venerable collection of ex-politicians, lawyers and business leaders gather for board meetings, they bring with them custom-made handheld computers that can only be accessed by placing a fingerprint over a scanner built into the device.

For this ageing group of men, the selling point appears to be that they no longer have to remember PINs and passwords. For the company, the upside comes from faster decision-making, assured security and lower support costs.

The same benefits are being seen elsewhere. Intensive care doctors and nurses at the Royal National Orthopaedic Hospital (RNOH) in London are using a combination of smartcards and fingerprint readers on keyboards to access patient records at the bedside. The hospital's head of IT and networks, Steve Pickup, says there have been some teething problems - the readers may not function properly if fingertips are too dry or too greasy - but generally the project has been a success: records are more secure, and they can be accessed quicker, saving valuable time. "It's our ambition to put a fingerprint access terminal on every bedside in the hospital," he says.

There are further flavours of biometrics. Rather than roll out fingerprint-based systems, the EHS Brann advertising agency chose to install iris readers on every door when it moved into new premises in London's fashionable Clerkenwell area. "We wanted to make it a groovy, high-tech office," says Kathy Gruzas, the agency's IT manager. But there was a more serious consideration - the vulnerability of non-biometric security. "In our last office we had swipecards, which caused endless hassle - people kept losing or sharing them, and it was expensive to administer. The biometrics system works very well."

Early adopters they may be, but the positive experiences of these organisations are likely to persuade others to take a closer look. Indeed, according to some observers, biometrics is finally about to make the long-talked-of crossover from expensive, futuristic toy to fundamental enterprise security technology.

One big difference is that increasing numbers of people are about to become a lot more familiar with biometrics. Defying privacy campaigners, David Blunkett, the UK's home secretary, wants to put biometric identifiers on national ID cards, while the European Commission is exploring the possibility of making fingerprints mandatory on all European
Union passports. Already visa holders entering the US are being electronically fingerprinted as they enter the country and that data matched against their machine-readable passport information.

"We're starting to see government organisations using biometrics," says Carl Gohringer, head of new business development at NEC Security Systems, which is providing biometric systems to an ongoing UK passport trial. "They are the first to take it up for their internal employee management too."

New post-Enron corporate regulations, such as the Sarbanes-Oxley Act, have also fuelled demand. Biometric systems are helping to fulfil the need laid down by such new rules for a full audit trail of users' document access and transaction execution.
Traders at Dutch bank ABN Amro, for example, are using fingerprint authentication on every desktop terminal to speed up the authorise transactions - a critical business advantage over passwords when price fluctuations can determine the difference between a profit or loss on the deal. The system also plays another key role: it identifies exactly who authorised the deal.
As well as improving security, biometric systems are sold on the basis that once installed, they save money. There are few major costs after installation, say suppliers, and IT staff are largely freed from time-consuming administration that results from lost or forgotten passwords. In the first year, the costs of implementation are usually equivalent to the annual costs of administering a password-based system, say analysts; payback is generally obtained after about 18 months.

Companies with high staff turnover can particularly benefit. NEC Security Systems says that a major UK retailer, prior to adopting one of its biometric systems, found the job of managing passwords for its large and constantly-changing workforce so big that it felt compelled to employ six IT staff to do nothing else.

Steve Barnett, chairman of ISL Biometrics, the software specialist behind the Royal National Orthopaedic Hospital project, outlines the cost savings his fingerprint authentication systems brought for a customer that had outsourced its IT department. The customer's IT services supplier charged $70 each time it had to reset a password, which tended to generate big fees: the customer had about 4,000 employees, each using around six passwords. According to ISL figures, password management generally costs about $120 a year per employee, while a fingerprint access system has one-off costs of around $100 per user plus ongoing software support.

The eyes have it
Different biometric methods have their proponents. Some say that fingerprint-based systems are the most cost-effective solution. Others, such as Professor John Daugman of Cambridge University, who holds the patents for all iris scanning processes currently used, sees iris scanning technology as more foolproof. "The great strength of iris recognition is that it never makes false matches," points out Daugman.

But when choosing between different biometric methods, businesses should not base their decision only on the upfront cost, says Anthony Allan, an analyst at IT market consultancy Gartner. "With biometrics, you get what you pay for," he says. "Security for under $100 per user is very attractive but the characteristics are not good enough for enterprise use." Companies should budget for at least $200 per user, he suggests.

One problem that cheaper iris scanning systems encounter, for example, is that they can be fooled if a photograph of an authenticated user is held up to the reader. Daugman says this risk is eliminated by more sophisticated systems that check for signs of movement in the pupil or eyelid. Equally, the Japanese mathematician who managed to fool an older biometrics system by building moulds of fingerprints from the type of gelatin typically used to make confectionary might not have been successful if he had been testing costlier silicon sensors. Still, the Japanese test has alarmed experts. "If he could do this, then any semi-professional can almost certainly do much, much more," says security guru Bruce Schneier.

Professor Brian Collins of Cranfield University, a former director of technology at the government's signals intelligence agency, GCHQ, notes that there are other ways of abusing biometrics. By knocking out the database that holds biometrics information, 'denial of service' hacker attacks could be just as harmful on a large scale as the compromising of the data itself.

He warns that organisations must take seriously the process of enrolling new users. "Screening someone on the basis of only one credential [such as a birth certificate] is a very dangerous thing to do," he says. "Proof of originality, as opposed to identity, starts to become the main problem." Birth certificates really need DNA-based biometrics verifying them, he says.

There are other security issues. Samir Kapuria, director of strategic solutions at digital security services company @stake, says most of his corporate customers see biometrics as "an art form, not a science". Just because the technology works well in trials, it does not necessarily mean it will scale well or prove resilient to as-yet-undiscovered threats, he says. As that underscores, the technology is still maturing. Errors from some fingerprint and iris scanning systems tend to be as high as around one in every 100 people tested, say experts. Cases in which unauthorised users gain entry to a system are extremely rare, but when they occur they pose a bigger risk than when, say, a single password is hacked.

These are not insurmountable problems, but even some suppliers accept that they must be resolved before biometrics will appeal to the mainstream corporate market. "Interest is still outstripping implementation by quite a long way," admits Jackie Groves, UK managing director of Utimaco, which develops biometrics hardware and software products as well as other security products.

More of a lead bullet
As an example of a business that has so far failed to convert interest in biometrics into a widespread implementation, the case of Nationwide Building Society is instructive. In recent years, it has tested just about every available biometrics system imaginable, from iris recognition to speech verification. Although the trials were deemed successful - in that users were not unduly fazed and the installations went smoothly - executives remain reluctant to roll out biometrics. "We continue to take an active interest," says David Followell, the head of Nationwide's business futures and usability unit, "but we will only progress with it once we are convinced of the customer and business benefits of doing so." Amid the hype, it is easy to forget that biometrics is only another arm of IT security. General security principles apply; given the degree of faith that users tend to place in biometrics, it is important to follow them.
David Porter, head of operational risk at specialist IT consultancy Detica, accepts that biometrics is not the security sector's 'silver bullet'. "I don't think any technology will ever be 100% reliable, because you will always have people and sloppy processes involved. A seemingly foolproof biometric system can still be scuppered by employees using it in the wrong way."

Given that, biometrics should form only one part of a wider ID management system, he says. "I'm afraid you'd be crazy to use biometrics on its own. This nirvana of 'the end of password' is not true." He advises combining biometrics with another system - 'second factor authentication' in the jargon - such as smart cards. John Madeline, director of corporate and business development at RSA Security, agrees. "We are just beginning to see second factor authentication moving mainstream. Most people are still only taking the initial steps towards understanding that just a password is not good enough and a second factor is going to be key," he says.

Indeed, it may be several years, at least, before the corporate use of biometrics becomes commonplace. One day, all PCs and wireless devices may come with some form of biometric reader; already, one of the world's biggest computer makers, Hewlett-Packard, is issuing staff with PDAs that are activated through built-in fingerprint readers. The hope is that such identity systems will be a key part of a single sign-on system that will automatically grant pre-defined privileges to the user, perhaps removing the need to tap in PINs and passwords to access different systems.

Even then, however, biometrics are still likely to form only one part of a much wider identity and authentication system. But when the technology matures, its use could go from the niche to the universal. Fingerprint readers or voice authentication could be indispensable to the use of wireless commerce through mobile phones, while fingerprint-activated smart cards could soon replace credit cards and loyalty cards.

Biometrics may not necessarily spell the end of the humble password, but it ought to herald a new wave of security applications. It should also one day remove many of the costs and the vulnerabilities of the current generation of security systems.
Author: Tim Bradshaw

Technology – Software

Gates presses ahead with 'Longhorn' despite EC ruling
Bill Gates appeared to brush off the European Commission (EC) ruling against his company and its alleged market abuses by insisting that test copies of the next major update of Windows will be shipped as planned by the end of 2004.
Gates, appearing at analyst firm Gartner's conference in San Diego, also said it was "valid speculation" that the commercial versions of the 'Longhorn'-codenamed operating system would appear some time in 2006.

He added, however, that it was not a "date-driven release", unlike some Microsoft products.
'Longhorn' has been subject to delays in the past, but an informal timetable of late-2004 for the 'alpha' version and late-2006 for the commercial version is believed to have been in place for some time. Significantly, its release does not appear to have been affected by the EC ruling.

Speculation that Microsoft might feel compelled to alter the make-up of 'Longhorn' – perhaps by selling some components separately – has been rife since the EC judged that its practice of 'bundling' new features, such as video applications with the Windows operating system, amounted to an abuse of market power.

By sticking to Longhorn's informal schedule, Microsoft is indicating that its plans for the release have been unaffected by the developments in Brussels.
Leaked copies of initial versions of 'Longhorn' suggest the operating system will be bundled with new security features, an updated file server and an embedded search engine product.
While some Microsoft executives and legal advisers have expressed barely disguised dismay at the EC's judgement, Gates gave little away when pressed about his reaction.

He acknowledged that there were issues still to be resolved, although there "will be several more years of process in Europe" to get to that point. He added: "People want more capability in Windows. There are some legal issues about how we package that up, how we license it, how we engineer it."

The EC imposed a record fine of $615 million on Microsoft last week. It also ordered it to open up key product interfaces to competitors and told it to unbundle its Media Player package from Windows.

Importantly, the ruling is designed to set guidelines for Microsoft's future actions as well as punish it for alleged past transgressions. Although it is a matter of conjecture, legal experts argue that Microsoft might face fresh legal challenges if it continues to bundle new features already available from other suppliers in future versions of Windows.

The ruling has provoked anger among many US politicians and the EC has reportedly come under intense pressure to reach a settlement with the software giant.
Author: Dominic Tonner

e-Business – Shopping online

BA considers options for Opodo stake
British Airways is reportedly planning to offload its stake in travel website Opodo to travel technology firm Amadeus.
A report in the Mail on Sunday said that Amadeus is planning to take full control of Opodo by buying BA's 20% share and adding it to its current EU33m or 17% stake.
Opodo issued a statement today saying that it would not comment on speculative matters. It did however say: "We can confirm that the executive board and shareholders of the company are looking at ways of growing the business. This may take the form of acquisitions, moving into new markets, additional investment, or changes to shareholder structure."
Opodo added that its shareholders were all still 'fully committed to Opodo', which was launched with the backing of nine European airlines in 2001 to compete in the fast-growing online travel sector.
BA followed up with a supporting statement: "British Airways and the shareholders of Opodo are currently looking at ways of how to grow the Opodo business. This may or may not lead to a change of shareholding structure, however, as no decisions have been taken, any reports are premature and speculative."
The airline added that it would continue to use use Opodo as a distribution channel.

HIGHLIGHTS

Internet – ISP

Wanadoo To Stop Using Freeserve Brand Name
Wanadoo, a European ISP, will replace the name of its Freeserve provider this summer with its own, the Guardian said, without saying where it got the information.
Source; The Guardian, March 04

2004-04-01T12:32:00.000+02:00
FOCUS

Technology – IT Services

IT Services in Germany: 6.3% Decline in 2003
A recently conducted survey among IT services providers in Germany showed on average that the employee number declined by 6.3%. Less than 20% of service providers could increase the number of employees. Marketing and PR have been hit the most, sales the least. In detail, the numbers are as follows (2002 vs. 2003): marketing -9.8%, PR -8.7%, sales -0.3%. PR and marketing are used as "breathing space." The strategic sales force - a species with the rare skill to sell services engagement - was left intact.

Information technology – Market

Government Spending
When compared to private industry, the public sector is investing similarly in IT (4.1%, with some organizations spending as much as 20% of their budgets on IT and as little as 1%). The private sector is investing, on average, 4.4% of its total annual operational expenses on IT. However, not surprisingly, government organizations tend to spend less on business transformation and growth than the private sector (which invests on average 61% on "lights on" activities). This implies that government spends more on basic, run-the-business IT, as a percentage of total operational expenses, compared to the private sector - nearly 20% more. As government budgets continue to tighten, these organizations will be pressured to focus on nothing other than keeping lights on. These organizations will need to optimise IT in order to get the credibility to obtain funding for growth and transformation.

Technology – Security

Five Ways to Fight ID Theft
What's more valuable than your own good name? Identity theft is the fastest growing white-collar crime in the country. What's a CSO to do?

When John N. Stewart tried to buy his wife a motorcycle, things did not go well. He had trouble getting credit and, to be honest, he had expected to, since he himself had issued a fraud alert with the credit bureaus warning creditors to be leery of anyone claiming to be John N. Stewart. He had no choice. Someone had forged a California driver's license in his name and used it to take out $3,500 of instant credit at an automotive repair shop in which he, the real John N. Stewart, had never set foot.

The motorcycle shop that his real feet eventually walked into needed to confirm that John N. Stewart was indeed creditworthy.
But they couldn't.

"When you say to a person from whom you're buying something, 'When you call to check, they might deny my credit,' cynicism sets in at the other side of the desk," says Stewart, director of corporate security programs for Cisco and former CSO for the Cable & Wireless subsidiary Digital Island. "They look at you like you're just a deadbeat that can't manage your credit."

For 16 months, Stewart worked to prove he wasn't a deadbeat. He pored over copies of his credit report, made explanatory phone calls and filled out legal documents. Still, when he walked down the street, he had the strange feeling that everyone he saw thought he had bad credit. It didn't matter that eventually he got the motorcycle. He felt angry and on edge all the time. "It becomes a very personal experience," he says, "and it's almost embarrassing. OK, it is very embarrassing."
What's more valuable than your own good name? Hardly anything, if the millions of dollars' worth of preapproved credit offers that litter Americans' mailboxes annually are any measure. That's why tales such as Stewart's strike fear in the hearts of the bill-paying populace. Identity theft is, after all, the fastest growing white-collar crime in the country.
A recent Federal Trade Commission study suggests that nearly 10 million Americans discovered in the past year that they had been the victim of some kind of identity fraud, ranging from simple credit card fraud to complicated cases of identity takeover. This type of crime costs individual victims an average of $500 each and businesses an estimated $48 billion a year. The problem is so acute that, in December, President Bush signed the Fair and Accurate Credit Transactions (FACT) Act of 2003, which is intended to help consumers control and monitor their credit ratings.
Identity theft is difficult enough to prevent that even someone as security-savvy as a CSO can himself fall victim, as Stewart learned the hard way. But even if you don't work in the financial services industry, which is on the front line of preventing financial fraud, your customers and fellow employees are counting on you, the CSO, to keep it from happening to them.

The More Perfect Crime
People's identities, not pocket money, were the target of one sophisticated pickpocket ring busted by the New York City Police Department. Organizers quickly forged New York state driver's licenses using the names of women whose wallets had been stolen. Within hours of the purse-snatchings - before the victims had canceled their credit cards - women dressed in mink coats and high heels were flashing fake photo IDs as they charged expensive items in stores.
"If I go and rob somebody, how much am I going to get? Maybe $100, $200," says Lt. John Otero, commanding officer of the NYPD's Computer Crime Squad, who worked on the case. "If I steal someone's identity, I can get from $4,000 to $10,000."
In the simplest instances of identity theft (which are more accurately described as identity fraud), criminals use a stolen credit card number, or perhaps a stolen PayPal or eBay account name and password, to purchase expensive items for personal use or resale. In more complicated cases of identity theft, thieves open new lines of credit or access bank accounts. And in the most serious cases of identity takeover, they use forged or even government-issued driver's licenses or passports to do all that and more—renting apartments, obtaining medical care, even identifying themselves as the identity theft victim when charged with a crime.
The weapon? Personal information, including the victim's name, address, mother's maiden name, date and place of birth, and the most coveted number of all—the Social Security number, which cannot be changed even after it's been stolen. "Once they have this information, they own you—they are you," Otero says.
The Internet makes this type of crime even more efficient. With "phishing" scams, criminals send out bogus e-mails telling recipients that they need to confirm certain account details to reactivate their accounts or claim prizes. The messages appear to come from a reputable business and often include logos and text lifted from company e-mails and websites. But the links actually go to phony but convincing websites set up solely to gather information, whether it's ISP passwords or Social Security numbers.
"It's just so much easier and cheaper than going around to people's mailboxes and stealing credit card applications," says Dave Jevans, chairman of a new industry association called the Anti-Phishing Working Group and a marketing senior vice president at Tumbleweed Communications. "And it can be done long distance."
Consumers can protect themselves by staying informed about the latest Internet scams, by removing their Social Security numbers from their wallets, by shredding sensitive trash and the like.
But there's only so much one person can do. In another case Otero worked on, criminals took out second mortgages on victims' homes to the tune of $8 million. All the victims had purchased cars from the same auto dealership in the previous year, leading police to believe—although they never proved it—that an employee of the car dealership was selling customers' personal information. The victims had done nothing more, it seemed, than apply for auto loans.
"Most of the time, it's beyond the consumer's control," says Mari Frank, an attorney who made a name for herself as a consumer rights advocate after having her identity stolen in 1996. Her imposter ordered her credit report online, then used her good credit to take out new credit.

More than seven years later, there's still an edge to her voice when she speaks of the incident. "People want to put the blame on the bad guy, but the bad guy can only do what he can do when it's facilitated by others," she says. "The companies that have our personal and financial information are the ones who are in the position to prevent this."
More specifically, the CSO is in the position to prevent this. Here are five ways any CSO can make a difference.
1 - Practice good data hygiene. Got employees? Then you have information that could be used for identity theft, and nothing will help as much as just being good at your job in the first place. We're talking data hygiene 101: firewalls, background checks and security policies. "The reason that a CSO should be concerned over identity theft is because it fits in with so many other elements of a good security program," says Richard Lefler, the former vice president of worldwide security for American Express.
For instance, he says, background checks might help keep criminals from infiltrating your human resources department, where they could access employee records. Shredding policies could keep Dumpster divers from getting their mitts on sensitive customer data. And audit trails would help you determine the source of a possible problem if law enforcement spotted a trend that traced back to your company.
Sound paranoid? Perhaps. However, notes Lefler, although "criminal enterprises generally are small and loosely knit, they can be very large and very sophisticated.
"Other forms of white-collar crimes have become more difficult, so many of the criminals have migrated into doing identity takeover because they can increase their returns." In other words: Don't underestimate your enemy.
2 - Limit the use of personal information. The best way for individuals to protect themselves from identity theft is by not carrying their Social Security numbers in their wallets. Yet many insurance cards, student IDs and drivers' licenses still use this unique number as an identifier. (Only California has passed legislation making it illegal.)
And even businesses that aren't guilty of putting Social Security numbers on cards in people's wallets routinely put it on monthly account statements, which travel through the mail, which means that they can theoretically pass through the hands of everyone from envelope stuffers to mail sorters to, eventually, the garbage collector.
The CSO can protect customers and employees—and make everyone's job easier—just by limiting how many places this number appears. That's what Harriet Pearson did when she became chief privacy officer of IBM three years ago.
First, she worked with human resources to try to get Social Security numbers off of internal documents.
Then she turned her attention to the companies that insure IBM's half a million employees and dependents.
In early 2003, IBM asked all its 150 health insurance providers to stop using the Social Security number as an identifier. The 16 companies that did not immediately agree to the request received a letter from Pearson and the vice president in charge of health benefits "making the request a little more formal," Pearson says.
While they stopped short of making it a requirement, they did warn companies that compliance would be considered as part of the annual renewal process. By the deadline of Jan. 1, 2004, only Empire BlueCross BlueShield and two or three small HMOs had to request an extension.
Pearson understands that making the change can be an expensive and time-consuming process, but it's also one that your customers and employees will appreciate. "People notice that the SSN is not gone from the cards" of those carriers who have not yet complied, she says.
3 - Consider address change confirmations. One popular tactic of identity fraudsters is opening a new account with the victim's real address, then immediately changing the address. That way, the victim never gets a single bill or finds out about the account—at least not until she checks her credit report or, worse, gets a call from a collection agency. In response, a growing number of organizations, from the U.S. Postal Service to mutual funds companies, have started sending address change confirmations to both new and old addresses. This simple step alone would solve much of the identity theft problem, but there are still plenty of banks, stores, telephone companies and other groups that don't bother.
It's not free, of course. "You have to measure the expense against the loss," Lefler says, looking at how many of your customers have been victimized in the past year versus how much the additional mailings would cost. But identity theft is growing rapidly enough that the scales might have tipped in the past year.
And don't underestimate customer goodwill, either, says Frank, the consumer advocate. Even helping just a few people spot identity theft early on might be worth more than you think. "People do business with people they trust," she says.
4 - Phight phishing. At first glance, it seems you can't do a lot if your company is targeted by a phishing scam, in which a phisher spoofs your company's identity in an effort to gather personal information about your customers "It's pretty difficult" to deal with, admits the Anti-Phishing Working Group's Jevans. "You can say, we will never send you e-mail, or do not click on a URL in e-mail, but that makes it difficult to do any kind of e-commerce." What's more, when a bogus website is reported to law enforcement, Jevans says, it takes an average of 160 hours to get it shut down if it is hosted outside the United States—which applies to 40 percent of phishing sites. And by then the damage is done.
In this case, a little education can go a long way. Start by letting customers know that your company won't ever ask them by e-mail to divulge personal information, says Howard Schmidt, former vice chairman of President Bush's Critical Infrastructure Protection Board and CISO of eBay. Common targets such as Amazon, AOL and eBay have set up phishing tutorials on their websites to educate their customers about the scams.
At the same time, make sure employees who correspond with customers don't ask for this kind of information. You'll also need a mechanism for consumers to report the spoofed e-mails to you, and for your company to report the scams to law enforcement. Then, Schmidt says, "it becomes a policy issue."
5 - Explore new technical solutions. Schmidt blames the success of such phishing scams on the fact that websites are still using static IDs and passwords for authentication, instead of more sophisticated identity management tools. Schmidt hopes that technical solutions will help strengthen authentication and in the process dramatically reduce identity theft, since thieves won't be able to accomplish so much with so little personal information. "I don't like to make predictions, but I'll be surprised if within the next year, we don't start seeing some commercialization of digital identities as ways to prevent identity theft and online fraud," Schmidt says.
That could work any number of ways. Companies could require customers to download digital certificates that would give them secure access to their account information. Or customers could log on to websites using smart cards or USB thumb drives that hold digital identification. And there's the long-awaited promise of biometric technologies that would let customers log on with a fingertip. Prices are coming down enough that it's possible to imagine a day when every new computer comes with this type of hardware; thumb scanners now cost less than $100.
In the meantime, it might be enough to advocate that your company begin digitally signing all outgoing e-mails. You might be forced to do so: Some security-savvy customers are already trashing all e-mails from businesses that aren't digitally signed.

A Stitch in Time
CSOs who don't protect customers and employees from identity theft may face a more onerous task: damage control. Just ask Bob Brand, security director for Cox Enterprises, who found himself in the unenviable position of trailblazing the role of the CSO in preventing and responding to the crime.
It started four years ago when some of the 80,000 employees of Cox Enterprises, an Atlanta-based media conglomerate, began getting notices from collection agencies about overdue store credit card accounts. The credit had been issued at Best Buy, Circuit City and Federated stores in the Atlanta area, but many employees were based in Ohio and Texas and had never even been to Atlanta. Gradually, through word of mouth, affected employees realized that it must be an internal problem. An investigation revealed that personal information about some employees had leaked through contractors working on a project.
Brand admits that Cox could have prevented the problem. "What happened with us happened with a lot of companies: We grew fast," he says. "You put the system in place and then you have to play catch up with some of the administrative issues."
And if it were partially his fault, the solution was also partially his. As security director, he took charge of helping victims restore their credit. "It wasn't pleasant," he says. Dispatchers didn't understand how to take down a report of identity theft because the issues cross state and even country lines. When the perpetrators were eventually convicted, Brand shared the victims' disappointment at the sentences—probation with no jail time. "We had an expression that unless you used the judge's identity, you weren't going to get punished," he says. Brand was so disturbed by the whole experience that he went on to help form the Georgia Stop Identity Theft Network, which brought together businesses, law enforcement and the attorney general's office, and has resulted in Georgia having some of the toughest identity theft laws in the United States.
Brand discovered at the business level what John N. Stewart had discovered on a personal level: It's still a whole lot easier to keep identity theft from happening in the first place than to repair the damage after the fact.
"This crime can be just devastating," Brand says. "It's bad business not to protect to the best of our ability an individual's personal information. Why would you want to do business with a company that does not protect your information?"

HIGHLIGHTS

e-Business – Linux

For Novell, Linux means new life
Thanks to a "remarkably ambitious" Linux strategy, Novell may finally be on its way to reinventing itself after a 10-year lull, according to a growing number of investors and Wall Street analysts. By March 2003, "the financial community had all but given up on the stock, which then traded at just above $2 with only one analyst covering it" – 12 months later, the company is "winning credibility" as a "play on Linux." In fact, the company’s share price surged to $14 in early February and seven more Wall Street analysts now cover the stock. The article reviews the buzz surrounding the company’s recent BrainShare conference, highlights key. Linux initiatives and takes a look at the company’s ongoing efforts to execute on a focused Linux strategy.
Source; Business Week, March 04

e-Business – RFID

Oracle joins race to bring RFID to retailers
Oracle plans to launch new RFID software offerings in an attempt to give retailers such as Wal-Mart the ability to "handle the deluge of data that RFID systems are expected to produce." According to Oracle executives, "The IT systems most companies use today are not equipped for a world in which billions of objects report their whereabouts in real-time." In addition to building in RFID data-processing capabilities in its databases and application servers, Oracle will release new device drivers in its software as well as "device driver frameworks." Other big-name IT vendors, such as IBM and Microsoft, are also actively exploring new RFID technology offerings.
Source; News.com, March 04

2004-03-31T13:04:00.000+02:00
FOCUS

Telecommunications – Wireless

Latvia Does 3G Wireless Call
The European TLC Latvian operator LMT has made the first public WCDMA 3G call in Latvia, using a Nokia test network.

The demonstration showcased a series of services including streaming, Internet browsing, downloading, and video telephony, at data speeds of up to 380 kilobits/second, the LMT performed the call and data applications at LMT premises using the commercially available Nokia 7600 phone.

Nokia has supplied a full WCDMA 3G test network to LMT, including 3G radio and core network equipment, as well as 3G terminals. The test network and the 3G call demonstrated today enable LMT to completely evaluate the technical advantages of Nokia's 3G technology. The call also accelerates LMT's roadmap to offer Latvia's first commercial WCDMA 3G service by the end of 2004.

This 3G call is a significant milestone in LMT's deployment of advanced mobile services, LMT leading the way with state-of-the-art service in Latvia, and are confident that are firmly on track to be the first here with commercial 3G service. Nokia has been LMT's sole supplier of GSM network equipment since 1992.

LMT is the largest and most experienced mobile communications operator in Latvia. The company operates a nationwide GSM 900/1800 network and is looking forward to implementing commercial 3G services in 2004. LMT leads the market by number of customers, financial indices, network quality and variety of advanced services. LMT was the first telecommunications operator in Eastern Europe to introduce a certified ISO 9001:2000 Quality Management System.

Telecommunications – European market

The Japanese DoCoMo confirms its studying 3G UK options

The future of DoCoMo's involvement with cellphone joint venture 3G UK remains in doubt as the company confirms it has been weighing its options but had yet to decide whether to pull out. NTT DoCoMo has been considering strategic plans with both Hutchison Whampoa and Hutchison 3G UK, and will continue to maintain good relations with both companies. NTT DoCoMo has made no decision about ending its investment in Hutchison 3G.

Speculation concerning DoCoMo's exit from 3G UK has been rampant for more than two weeks as the company considers what to do with its 20% stake in the 3G venture controlled by Hutchison. DoCoMo paid 184.6 billion yen - $1.75 billion at Tuesday's exchange rate - for its stake in 3 UK in December 2000 in a deal it hoped would bring its i-mode Internet phone technology to the key British mobile phone market.

3 UK, which has struggled to win customers and could lose its second investor in around five months, said earlier this month it was testing i-mode. But it has not adopted the service to date; triggering speculation DoCoMo might switch allegiance to independent rival mmO2. DoCoMo also owns a 24.1% stake in Hutchison's Hong Kong business as well as a stake in its British Virgin Islands venture.

Logistics – China market

China boom drives Sinotrans, FedEx revenues

The growth potential of the Chinese logistics market has been demonstrated by the latest results from two of the largest companies present in the market, one Chinese, one American. Sinotrans. One of the largest indigenous operators increased its revenues in 2003 by 28% to Yuan 17.43bn (€1.7bn), whilst at the same time increasing its net profit by 23% to Yuan 705m (€69m). The company has joint ventures in place with a number of foreign owned logistics and some of its major investors include UPS, DHL and Exel.

Meanwhile FedEx has revealed that in its latest operating quarter, revenues generated in China leapt by 40%. FedEx is expanding its network by adding another 100 locations to its network in the country.

International operators have benefited from the strong growth of the Chinese economy and the internationalisation of its manufacturing and retailing industries. However at present they are required by law to work with local players, and can only offer international services. Once the market is de-regulated in line with the commitments which the Chinese government has made to the World Trade Organisation, there is no doubt that the domestic market will offer the greatest growth potential for these companies.

However in the meantime western logistics operators will benefit from the sourcing strategies of many of the multinational manufacturers that are establishing factories in the country. A large proportion of companies investing in the region do so to take advantage of the cheap labour on offer in order to assemble components, which are produced elsewhere. A recent survey has identified that most Japanese manufacturers source 20% or less from local suppliers. This has fuelled the air and sea freight boom for imports as well as for the export of finished goods.

HIGHLIGHTS

Internet – Regulations

The battle over triple 'x'
By the end of this year, Internet users could have an extraordinarily convenient place to find pornography: a new .xxx top-level domain.
Source; News.com, March 04

Technology – Software

The Impact of Offshore IT Software and Services Outsourcing on the U.S. Economy and the IT Industry.
The current rapid increase in offshore IT software and services outsourcing has sparked a debate on the costs and benefits of this trend to the U.S. economy. To help understand the comprehensive economic impact of offshore IT software and services outsourcing, Global Insight has undertaken a thorough analysis on behalf of the Information Technology Association of America (ITAA). The analysis was undertaken in the context of Global Insight's economic models and incorporates information from third-party research reports, members of the IT industry, and primary research surveys.
Source; ITAA, March 04

2004-03-24T12:35:00.000+01:00
FOCUS

Internet – Engine search

Google Launches New Deskbar
Google has released a new beta version of its utility, the Google Deskbar. The version number now stands at 0.5.81.
Google Deskbar gives users the ability to search Google without a browser window being open. Results are now viewable in a smaller inset window.
Deskbar also introduces new short cuts to Windows users. You can access Deskbar by pressing CTRL-ALT-G. Once you start the utility, other keyboard shortcuts become available. CTRL-I activates Google Image Search; CTRL-F brings Froogle up, while CTRL-N accesses Google news.

The system requirements for Google Desktop are: Windows 98/ME/2000/XP and your browser must be Internet Explorer 5.5 or higher.
Source; Google, March 04

Telecommunications – Market

Asset sales by Telecom Italia result in a profit
Telecom Italia, the former Italian telecommunications monopoly, said Tuesday that it swung to a profit of E1.19 billion, or $1.46 billion, in 2003 as the company sold assets to raise funds for debt reduction.

The profit last year followed a loss of E773 million in 2002. Sales fell 1.8 percent to E30.9 billion as Telecom Italia's main business of selling fixed-line phone services stagnated and a strengthening euro pulled down results. Telecom Italia sold assets worth more than E4 billion last year to reduce its debt. Operating profit, which strips out the gains from those asset sales, rose 12 percent to E6.8 billion.

With revenue stagnating from traditional fixed-line services - voice phone calls and Internet access through a conventional dial-up connection - Telecom Italia is concentrating its efforts on increasing the number of clients who pay for the fast Internet service over phone lines, called DSL, for digital subscriber line. While Telecom Italia is expanding in that field, it is still a relatively small part of the company's business.

The company had 2.5 million DSL Internet clients at the end of last year and more than 25 million Italian customers overall. Telecom Italia has been investing heavily to advertise the DSL service as it competes for clients with Tiscali and e.Biscom. Both Tiscali and e.Biscom sell their services in part by renting space on Telecom Italia's network. Telecom Italia's debt fell by E2.5 billion last year to E33.3 billion. Telecom Italia also said it would pay a dividend of 10.41 cents per ordinary share and 11.51 cents per savings share. Both payouts are 10 percent more than the dividends last year.

Telecom Italia Mobile, the mobile unit that is 56 percent-owned by Telecom Italia, reported Monday that 2003 net income more than doubled to E2.3 billion. Excluding onetime items, profit rose 42 percent. Telecom Italia Mobile has 44.5 million customers around the world, more than half of whom are in Italy. An investor group led by Pirelli, the Italian tire and telecommunications cable company, controls telecom Italia.
Source; IHT, March 04

HIGHLIGHTS

Internet – Online AD

MSN Sets July Date For New Search Engine
MSN has announced that they are going to start labeling their paid search-listings more clearly. MSN is attempting make their ads more search term relevant. This comes after years of criticizing from the FCC about the clarity of MSN’s ad designation. Starting on July 1, MSN will change the appearance of their sponsored ads. The top 3 ads will be highlighted with a box as well as marked with a “sponsored” designation. MSN will also replace their Overture listings with a suggested site from the editorial staff. MSN’s listings are powered by Yahoo’s Inktomi algorithm. Karen Redetzki, MSN product manager, said that, “we've found that people spent more minutes with MSN Search, when we had algorithmic search results above the fold, 100 percent of the time.”

She also stated that the changes were made in response to customer requests, not FCC warnings.
Source; CNET News.com, March 04

2004-03-23T22:19:00.000+01:00
FOCUS

Telecommunications – Market

Nokia Pushes Off
Nokia Corporation has caused a stir at the opening day of Europe’s monster trade fair by reneging on a partnership agreement to develop push-to-talk (PTT) technology.
Last August, Nokia, LM Ericsson, Siemens AG and Motorola Inc. announced the completion of a “jointly developed” PTT over cellular (POC) specification, designed to enable interoperability among carriers and handset vendors. PTT-type technology allows people to use their phones as walkie-talkies, merely pushing a button to talk to another user or group of users. The companies submitted this specification to the Open Mobile Alliance (OMA) standards body in an effort to promote it as the de facto standard for POC.

Six months later, and an apparent split in the partnership has emerged. Nokia has this week announced plans to push its own pre-standard protocol, leaving the remaining trio to test their own version. Nokia is pushing its own completely proprietary solution that hasn't yet been proven to be interoperable, in order to gain lead-time in the market. It is not playing by the rules.
The Finnish renegade has already struck a deal with handset vendor Samsung Electronics Co. Ltd., to supply the Korean company with its PTT technology within the next twelve months.

The Finnish corporate say in August the first version was submitted to OMA, but when took a closer look at that specification realized some things were missing and that we couldn’t satisfy existing demand for PTT with that spec. Nokia’s claims offering will be fully compliant with the OMA standard once it is finalized at the end of the year, and will also support “the alternative pre-standard protocol suggested by the other members. The split will do little to placate industry fears that interoperability issues are the biggest stumbling block to PTT growth.

While it is interesting that Nokia appears to promise that it will share details of its proprietary pre-standard protocol, few details of how and when are provided. Industry fragmentation hurt the MMS rollouts - now it looks like fragmentation might cripple the POC rollouts. When will the vendors and operators learn?

Internet - e-Business

12 reasons Andreessen is hot on open source
At the Open Source in Government conference, Marc Andreessen highlighted 12 reasons why "open source will grow in importance over the next five to ten years." According to Andreessen, the Internet is responsible for much of the success of the open source software movement ("The Internet is powered by open source," "The Internet is the carrier for open source," "The Internet is also the platform through which open source is developed"). In addition, Andreessen touches on geopolitical trends ("open source benefits from anti-American sentiments") while making the business case for open source software. Perhaps the most important factor: "It’s free. Enough said."
Source;News.Com, March 04

Internet – Game online

Sun makes server for online gaming
A possible cure for Sun’s financial woes? Sun is developing a new server based on its existing Sun Fire Blade server that can be used by companies such as Sony and Electronic Arts to host sophisticated online games with hundreds of thousands of players. Currently, online gaming companies must divide games into separate playing areas, due to the limitations and constraints of business servers. Also noted: IBM is also attempting to create better "gaming servers."
Source; Mercury News, March 04

HIGHLIGHTS

Internet – Music Industry

Music Group Sues Another Batch
The music industry sues another 500 people, bringing the total number of people it is pursuing to almost 2,000. This time, 89 of the defendants are likely to be students.
Source; Wired, March 04

2004-03-18T10:57:00.000+01:00
FOCUS

Technology – Research

Nasa develops system computerize silent, “Subvocal speech”
NASA scientists have begun to computerize human, silent reading using nerve signals in the throat that control speech.

In preliminary experiments, NASA scientists found that small, button-sized sensors, stuck under the chin and on either side of the "Adam's apple," could gather nerve signals, and send them to a processor and then to a computer program that translates them into words. Eventually, such "subvocal speech" systems could be used in spacesuits, in noisy places like airport towers to capture air-traffic controller commands, or even in traditional voice-recognition programs to increase accuracy, according to NASA scientists.

"What is analyzed is silent, or subauditory, speech, such as when a person silently reads or talks to himself," said Chuck Jorgensen, a scientist whose team is developing silent, subvocal speech recognition at NASA's Ames Research Center, Moffett Field, Calif. "Biological signals arise when reading or speaking to oneself with or without actual lip or facial movement," Jorgensen explained.

"A person using the subvocal system thinks of phrases and talks to himself so quietly, it cannot be heard, but the tongue and vocal chords do receive speech signals from the brain," Jorgensen said.

In their first experiment, scientists "trained" special software to recognize six words and 10 digits that the researchers repeated subvocally. Initial word recognition results were an average of 92 percent accurate. The first sub-vocal words the system "learned" were "stop," "go," "left," "right," "alpha" and "omega," and the digits "zero" through "nine." Silently speaking these words, scientists conducted simple searches on the Internet by using a number chart representing the alphabet to control a Web browser program.

"We took the alphabet and put it into a matrix - like a calendar. We numbered the columns and rows, and we could identify each letter with a pair of single-digit numbers," Jorgensen said. "So we silently spelled out 'NASA' and then submitted it to a well-known Web search engine. We electronically numbered the Web pages that came up as search results. We used the numbers again to choose Web pages to examine. This proved we could browse the Web without touching a keyboard," Jorgensen explained.

Scientists are testing new, "noncontact" sensors that can read muscle signals even through a layer of clothing.

A second demonstration will be to control a mechanical device using a simple set of commands, according to Jorgensen. His team is planning tests with a simulated Mars rover. "We can have the model rover go left or right using silently 'spoken' words," Jorgensen said. People in noisy conditions could use the system when privacy is needed, such as during telephone conversations on buses or trains, according to scientists.

"An expanded muscle-control system could help injured astronauts control machines. If an astronaut is suffering from muscle weakness due to a long stint in micro gravity, the astronaut could send signals to software that would assist with landings on Mars or the Earth, for example," Jorgensen explained. "A logical spin-off would be that handicapped persons could use this system for a lot of things." To learn more about what is in the patterns of the nerve signals that
control vocal chords, muscles and tongue position, Ames scientists are studying the complex nerve-signal patterns. "We use an amplifier to strengthen the electrical nerve signals. These are processed to remove noise, and then we process them to see useful parts of the signals to show one word from another," Jorgensen said.

After the signals are amplified, computer software "reads" the signals to recognize each word and sound. "The keys to this system are the sensors, the signal processing and the pattern recognition, and that's where the scientific meat of what we're doing resides," Jorgensen explained. "We will continue to expand the vocabulary with sets of English sounds, usable by a full speech-recognition computer program."

The Computing, Information and Communications Technology Program, part of NASA's Office of Exploration Systems, funds the subvocal word-recognition research. There is a patent pending for the new technology.
Source; NASA
Article; Publication-size images are available on the World Wide Web at: NASA, March 04

HIGHLIGHTS

Technology – Mobile Phones

Sony launches mobile music service
Sony today at the CeBIT tradeshow in Germany said it plans to launch what it claims is the first personalized, streaming music service for mobile phones. The new service will act as a "personalized radio" that will allow users to select the types of music they want to hear. Sony said it is in talks with almost all the major carriers in Europe. The company will launch a version of the mobile music service through the Finnish division of TeliaSonera in April. Sony's new service will go up against RealNetworks mobile media player. RealNetworks has aggressively pushed its media player in the wireless market, signing deals with leading mobile content services, including Vodafone's Live!
Source; Reuters, March 04

Telecommunications – Wireless

Public services upgrade wireless
The end of wireless CDPD service in the U.S. is forcing police departments across the country to update their wireless data service. Most police departments used CDPD service from Verizon Wireless and AT&T Wireless, with most rates around $50 to $70 per month for each license. Between 100,000 and 200,000 public safety customers use CDPD service currently. Most of these subscribers will upgrade to either CDMA2000 1xrtt or GSM/GPRS for wide area data service. Many public service agencies are also eyeing WiFi as a possible solution for building cheaper urban wireless systems.
Source; Investor's Business Daily, March 04

TechTrend – Australia

Australians prefer snail mail to SMS
Source; News Limited, March 04
Article; News.com.au

2004-03-17T12:07:00.000+01:00
FOCUS

Internet – Broadband

China takes broadband crown from Japan
According to a recent market analysts report, China is now top when it comes to DSL - outstripping the broadband-savvy Japanese to reach the top spot.
In terms of subscriber numbers, China overtook Japan at the end of last year with nearly 11 million users, while Japan came a close second with 10.2 million. However, with the largest population in the world - about 1.3 billion in 2003, according to UN figures, But the figures for number of DSL subscribers per 100 phone lines tell a different story, with China managing just 5.1, Japan ahead with 14.4 and broadband flagship South Korea notching up a whopping 27.7. In terms of percentage growth, China lagged again, with Portugal more than doubling its DSL take-up in the second half of 2003.

China's official news agency, Xinhua, put the huge jump in DSL down to a boom in the Chinese entertainment industry, with users hungry for broadband, film and gaming. Tim Johnson, a principal analyst with Point Topic, favours a combination of factors, including China's desire for industrialisation and to be seen as a high-tech player, as well as providing economic incentives for those going online to go straight to broadband rather than first opting for dial-up.

However, while DSL makes gains in China, Wi-Fi may be set to struggle. Intel, one of the biggest manufacturers of wireless chips, has given the two-fingered salute to the Chinese market after refusing to comply with a Chinese encryption standard that is due to come into effect on 1 June.
Some manufacturers regard the standard as prehistoric and insecure, and Intel has threatened to stop selling its Centrino chips - used by China's most popular laptop maker, Legend - after the June deadline. The Chinese government will only release the protocol to Chinese companies, so if Intel wants to stay in the market, it will have to partner with a local firm.

The overall picture for broadband, however, is looking bright, with almost 28 million DSL lines added worldwide last year to create a grand total of 63.8 million.
Source; March 04

Internet – Services

Hotmail back online
Microsoft has blamed an internal problem for leaving millions of Hotmail users unable to access their email on Friday.
The service, along with MSN Messenger, suffered an outage early Friday evening (+1 GMT), although it is now understood that the service is fully up and running again.
A spokesman for MSN told that, along users around the world were hit. He ruled out any notion that the email service was the subject of a malicious attack. He also declined to discuss the nature of the internal problem.
Although he couldn't say how many people were hit by the problem he described it as "extensive", adding that it hit a majority of Hotmail's 140m users, locking them out of their email accounts.
Source; The Register, March 04

Broadband – USA Market

Broadband Internet Grows To 25 Million In The U.S.
According to recent analysis the US cable and DSL providers accumulated over 24.6 million high-speed Internet subscribers by the end of 2003. The twenty largest cable and DSL providers in the US added a combined 7.4 million high-speed Internet subscribers in 2003.
Additional broadband provider results include:
- Cable adding about 4.5 million broadband Internet subscribers compared to close to 3 million added by the major DSL providers over the same time period
- The top cable broadband providers now have a 63% share of the overall broadband market.
And, from a new LRG study, Broadband Internet Access & Services in the Home 2004, based on a survey of 1,600 households nationwide, come some details on the usage and opinions:
- 62% of residential households subscribe to an online service at home, and about one-third of this group subscribes to broadband
- 73% of broadband subscribers are "very satisfied" with their Internet service compared to 49% of narrowband/dial-up subscribers
- About 30% of current narrowband subscribers are interested in getting broadband
Clearly the market for broadband has become more competitive in the past year, and competition will only intensify as the number of broadband subscribers in the US doubles over the next four years. Yet it is premature to proclaim that DSL is catching up to cable.

Broadband Internet Subscribers at end of 2003 Net adds in 2003

Cable
Comcast 5,283,900 1,663,600
Time Warner 3,228,000 802,000
Cox 1,988,527 580,577
Charter 1,565,600 427,500
Cablevision 1,057,020 286,895
Adelphia 951,406 324,236
Bright House Networks 620,000 130,000
Mediacom 280,000 89,000
Insight 230,000 85,200
RCN 195,000 42,669
Cable One 133,800 54,400
Total Top cable
15,533,253 4,486,077

DSL
SBC 3,516,000 1,317,000
Verizon 2,319,000 649,000
Bell South 1,462,000 441,000
Qwest 637,000 127,000
Covad 517,000 136,000
Sprint 304,000 153,000
ALLTEL 153,028 82,846
Cincinnati Bell 99,000 24,400
CenturyTel 83,400 31,100
Total Top DSL 9,090,428 2,961,346
Total Broadband 24,623,681 7,447,423

Sources: The Companies and LRG, Inc. – March 04

Environment – Legislation

E.U. moves to protect dolphins, porpoises ensnared in fishers' nets
European Union nations are close to agreeing on measures designed save the lives of thousands of dolphins and porpoises caught accidentally in fishing nets, officials said Tuesday.
The proposals, which would require fishers to install acoustic "pingers" on their boats to scare away the marine mammals, could be approved next week at a meeting of fisheries ministers in Brussels, E.U. officials said.
The rules could apply to fishers in the Baltic Sea, North Sea, English Channel, and other waters off northern and Western Europe, although some nations are seeking exemptions for some areas and smaller boats, given the high cost of installing the equipment.
According to British estimates, the pingers could cost up to 6,000 euros (US$7,400) per boat and would need renewing every 18 months.

Despite the cost, some fishing organizations backed the proposals.
"It's pretty much a disaster to catch a dolphin or a porpoise; you lose catch and you damage gear," said Hamish Morrison, chief executive of the Scottish Fisherman's Federation, in a telephone interview. "Many fishers have respect and affection for dolphins," he added. "There's an old legend that dolphins are the souls of drowned fishermen."
E.U. funds could be used to help fishing organizations cover the costs of the acoustic equipment.

The new rules would also phase out drift nets in the Baltic Sea. Such nets, often several miles, long have been banned in other waters because of the risk of entangling marine mammals.

However, some Baltic nations want to delay the ban to protect their fishers. Latvia, Lithuania, Poland, and Estonia — which are set to join the E.U. in May — are especially concerned about the impact of a ban on their fleets.

Worldwide more than 300,000 whales, dolphins, and porpoises die unintentionally in fishers' hauls, according to a study released last year by American and Scottish biologists. Before it introduced its own pinger program in 2000, Denmark estimated up to 6,000 porpoises were caught annually in its waters alone.

However, although the acoustic gear has proven effective in protecting dolphins, porpoises, and small whales, Morrison said the ultrasound frequency used to scare them away from nets has the opposite affect on some types of seals.

"There has to be some fine tuning of the technology, literally, because they act like a dinner gong for harp seals," the Scottish fishers' leader said.

The E.U. plans would also place observers on selected boats to ensure that skippers respect the rules. Failure to respect a ban on drift nets in the Mediterranean costs the lives up to 4,000 dolphins every year, the WWF estimates.
Source: Associated Press

HIGHLIGHTS

Telecommunications – Wireless

T-Mobile Takes Wireless PocketCinema
Cinemaelectric, Inc. announces the launch of its PocketCinema™ mobile video content offerings via leading operator T-MOBILE in the UK, Germany, Netherlands, Austria and Czech Republic, a total market of over 40 million mobile subscribers.
Source; CinemaElectric, Inc

2004-03-16T12:22:00.000+01:00
FOCUS

Telecommunications – Mobile

Vodafone publishes guidelines for content publishers
It seems that Vodafone is moving to control parts of the mobile Internet that are not controlled by anyone else - until now. The company has published a set of documents that explain how content will be rated, billed and distributed to the end users.
Source; Vodafone

Telecommunications – Mobile Europe

Despite the Myths, the Reality is that Consumers Will Appreciate 3G's Value
3G should not be targeted at business customers but used to support and improve the wide range of consumer services that are beginning to emerge on today’s GPRS networks
Source; The Yankee Group

Telecommunications – UMTS Germany

3G UMTS Portal launch
O2 Germany is launching their ClixSmart enabled UMTS or 3G (Third Generation) mobile portal. With ClixSmart UMTS, content over the O2 Active UMTS mobile portal is delivered dynamically from all content sources.

Europe: O2 Germany is launching their ClixSmart enabled UMTS or 3G (Third Generation) mobile portal at the leading ICT and Telecoms Tradeshow, CeBIT, in Hanover. With ClixSmart UMTS, O2 Germany offers faster, more sophisticated and dynamic mobile data services than have ever been offered before on its O2 Active mobile portal. The new O2 Active mobile portal offers subscribers rich, personalized, dynamic content more efficiently and with new possibilities.

With ClixSmart UMTS, content over the O2 Active UMTS mobile portal is delivered dynamically from all content sources. This means that content is dynamically refreshed and updated on the portal every few minutes. With ClixSmart, the mobile operator can control how frequently the UMTS portal is updated. For example, with news and sports, this content can be dynamically updated every few minutes, as this is information that is likely to change very frequently. Games and downloads could be updated once a week. As a result, the portal user is presented with constantly refreshed and updated content.

All of the content feeds from different sources and content partners are aggregated by the ClixSmart Aggregation Server to manage the presentation and delivery of the content over the UMTS portal. This merges content from both the operator portal and external portal content to optimise the presentation.

Moreover with ClixSmart UMTS, the portal content can be subdivided and conveniently organized into 'chunks' of information better suited to individual users based on their profiles. This means that the end-user sees units of concise and relevant information on a mobile portal page. These small units of content within the UMTS portal can be personalized as a unit in the same way as a menu link or option i.e. they may move up the page as a user shows a preference for that content unit.

O2 Germany has developed a great variety of information and entertainment services for its O2 Active mobile portal. With ClixSmart UMTS, O2 Germany can now enhance the presentation and delivery of these mobile data services across its UMTS handsets. UMTS mobile portals exhibit significant differences in character and ChangingWorlds ClixSmart Menu Manager and Device Manager cater seamlessly for this. ClixSmart Menu Manager enables an operator to rapidly develop, update and maintain a UMTS mobile portal effectively and efficiently. ClixSmart Device Manager recognizes UMTS enabled handsets and can use enriched style sheets to make the most of the handset capabilities.

Having launched ChangingWorlds industry-leading ClixSmart Intelligent Portal solution on the O2 Active mobile portal over a year ago in January 2003, O2 Germany has since succeeded in achieving and maintaining amongst the highest mobile data usage and revenues in Europe. With the ClixSmart solution, O2 Germany can now also manage its UMTS mobile portal more effectively and provide better overall, personalized mobile data services and enhanced Quality of Service (QoS) to its customers. Moreover, with ClixSmart Intelligent Navigation, O2 Active portal subscribers now enjoy rich and dynamic 3G portal content that is also easier to get to as a result of reduced click-distance.
Source; O2

Telecommunications – CDMA Europe

Nortel deploys CDMA in Latvia
Nortel Networks has been awarded a supply agreement by Latvia's Telekom Baltija to deploy a CDMA2000 1X network. Deployment of the network, which will operate in the 450 MHz radio spectrum, is already underway. Telekom Baltija expects to launch the CDMA network in the second quarter of 2004 and offer commercial service beginning in the third quarter of 2004.

Nortel Networks providing Telekom Baltija with a cost-effective 450 MHz wireless voice and data solution based on its specific business needs, this will help position Telekom Baltija to usher in a new era of wireless services in Latvia.
A/S Telekom Baltija plan to use in Latvia one of the most progressive and advantageous mobile technologies in the world – CDMA.
CDMA 450 is a standard for use in countries transitioning to digital wireless service from Nordic Mobile Telephone (NMT) 450 analogue service and in countries advocating universal access to voice and data. Because of the lower radio spectrum, CDMA 450 has the advantage of covering a significantly larger geographical footprint compared to traditional cellular systems. This means fewer cell sites, lower capital expenditures and no need for licensed operators to acquire additional spectrum.
In October 2003, A/S Telekom Baltija received a public mobile telecommunications operator license, giving the company the rights to establish, develop and maintain the public mobile telecommunications network and to offer public telecommunications services.
Source; Nortel Networks

Health – HIV

HIV experiment shows child welfare system running amok
Reports of improper medical testing by New York City's foster-care bureaucracy could lead to overdue reforms that would make child-welfare agencies more transparent and accountable, according to Wendy McElroy, research fellow at the Independent Institute.

One hundred HIV-infected children -- some as young as three months old - were assigned by the city's Administration for Children's Services to be tested with experimental AIDS treatments. But the agency lacked both the medical expertise and the legal authority to supervise the treatment of children without a parent or foster parent to render consent.

"No one could fault researchers for administering appropriate drugs to sick children and monitoring the results, especially when the children might not otherwise receive treatment," writes McElroy in a column for FoxNews.com. "But questions immediately arise concerning studies that purportedly tested the 'safety,' 'tolerance' and toxicity' of AIDS drugs. Or one that tested the reaction of HIV-positive children, ages six to seven months, to the injection of two doses of meals vaccine."

Medical experts have called the experiments outrageous and potentially fatal, but the data that could confirm or dispel such fears have disappeared from the agency. Furthermore, the former head of the agency - during whose tenure the agency conducted the Experiments - has remained silent.

"Hopes are not enough," McElroy concludes. "For once, a child welfare system must have the courage and decency to open itself to public scrutiny."
Source; See "When 'Mother' is a Bureaucracy," by Wendy McElroy

Democracy – China panoramic

China adopts amendments
Breaking with doctrines laid down by Mao, China's legislative assembly yesterday passed what appear to be the most promising institutional reforms China has seen in more than five decades of oppressive communist rule - constitutional amendments that formally protect property and human rights.

Constitutional safeguards have long been recognized in the West as essential for securing the rights of the people from governmental overreach and thereby enable people to enjoy the prosperity that accompanies liberty. In China, however, the notion of a constitutionally limited government never took hold. Authoritarian rule has been the norm in China for at least two millennia.

But this doesn't mean that China has no liberal traditions to draw upon in its fight to break the chains of oppression. For example, as James Dorn explained last spring in THE INDEPENENT REVIEW, Chinese philosopher Lao Tzu advised political rulers to rule with the lightest touch:

Administer the empire by engaging in no activity.
The more taboos and prohibitions there are in the world,
The poorer the people will be.
The more laws and orders are made prominent,
The more thieves and robbers there will be.
Therefore the sage [ruler] says:
I take no action and the people of themselves are transformed.
I engage in no activity and the people of themselves become prosperous.

It remains to be seen, of course, whether China's government will actually move to protect property rights and human rights. Speaking out against the Tiananmen Square massacre, for example, can still land you an extended stay in the Laogai work prison system. But China's adopt of the new amendments does give one hope that China will take meaningful steps away from the tyranny that has victimized the world's most populous country.
Source; See "China Codifies Property and Human Rights" by Edward Cody. The Washington Post, March 2004

HEADLINES

Economy – USA

Setting the Standard for American Working Families
Wider Opportunities for Women has been working to change the terms of the debate about what it takes to make ends meet in America, providing state-specific budgets and strategies to help low-wage families reach economic self-sufficiency. This report profiles state data and next steps for 32 states and the District of Columbia - with tools for practitioners and advocates.
Source; Wider Opportunities for Women

2004-03-15T23:30:00.000+01:00
FOCUS

Communication – Advertising

Havas’s MPG draws offer by rival
At least one company has made advances to French advertising group Havas concerning a 49% stake in its media-buying arm, Media Planning Group. Although Havas has been struggling of late, the proposal was apparently made as a partnership, rather than a buyout. According to one estimate, the stake could be worth around $150 million.
Source; Market, March 2004

Telecommunications – Wireless

DoCoMo offers FET WCDMA guidance
Japan's NTT DoCoMo and Taiwan's Far EasTone (FET) today announced the signing of a consulting agreement under which FET will launch a WCDMA-based commercial service in Taiwan with technical support from DoCoMo. FET intends to introduce its WCDMA service this year and under the consulting agreement, which will be in effect from March 23 through Sept. 22, 2004, FET will conduct a 3G network field test with the technical assistance of DoCoMo. In October, DoCoMo and FET entered into an MoU to collaborate in the fields of WCDMA and i-mode. Earlier this week, DoCoMo announced the creation of a technical partnership with Thailand's AIS.
Source; DoCoMo, March 2004

Law – Technology

EU moves to block Oracle as well
Add one more stumbling block to Oracle's $9.4 billion hostile takeover bid for PeopleSoft. The European Commission has issued a "statement of objections" to the deal, objections Oracle would need to rectify before the EU approves the deal. The specifics of the EU complaint have not been made public, but anti-competitive issues are undoubtedly at the heart of it, much as they are in the U.S. Department of Justice's case against the merger. Oracle has a chance to respond to the complaints in writing and at a hearing before the EU makes its final ruling on May 11. Now facing the prospect of two government rulings against its proposal, many feel Oracle's chance of succeeding is getting very slim.
Source; AP

ALSO: Institutional Shareholder Services is supporting re-election of PeopleSoft's board members at the company's annual meeting on March 25, but also suggests PeopleSoft should drop its touchy refund program. Story

Technology – IT

Storage software market up 18% in Q4
According to recent market analysis the storage software sales increased 18 percent in the fourth quarter of 2003 to $1.78 billion. For the whole of 2003, the market jumped 8 percent to $6.29 billion. But the strong showing in the final quarter suggests the increasingly important role software is playing in a storage industry trying to meet the needs of companies, which are trying to comply with new regulations and still looking to cut costs. EMC topped the market for storage software with a 31.7 percent share, followed by Veritas Software at 21.9 percent and Computer Associates at 9.8 percent.
Source; CNET, March 2004

HIGHLIGHTS

IT – Enterprise

Server sales in Asia grow 6.7 percent in 2003
According to a new report from Gartner, server sales in the Asia-Pacific region rose 6.7 percent to more than $5 billion in 2003.
Source; AFP, March 2004

e-Learning – Cyber teaching

Sketchy grades for Cyber schools
Dozens of online schools offer instruction in 19 states, and more are getting into the act. But many of the current schools aren't measuring up.
By John Gartner
Source; Wired, March 2004

2004-03-15T11:00:00.000+01:00
FOCUS

Telecommunications – Latin America market

Spain: Telefonica swoons to the Latin beat

Following its recent US$5.8bn purchase of the Latin American assets of Bell South, Spain’s Telefonica is not only the largest mobile operator in Latin America--it now stands alongside Vodafone, China Mobile, China Unicom and Deutsche Telekom as one of the top five mobile operators in the world. In the ultra-competitive mobile sector, however, it is not yet proven that big is best, says Business Latin America
Although the global telecoms market recovered last year, the sector’s biggest players still bear the scars of the downturn of 2001/02. For most companies, balance sheets remain stretched and margins have yet to return to their former strength. Telefonica’s long-term debt, for example, built up during the group’s big expansion during the last boom, is now shrinking. But at E19.2bn, it still tops shareholders’ equity of E16.7bn. And while the company stopped losing money last year, its net profit margin in the last quarter of 2003 was only 2.5%.
Still, it is not difficult to see why the company is betting on its mobile-phone business. As the company itself points out, this part of its business became the biggest contributor in terms of the group’s profits before interest and tax last year and now accounts for nearly a third the company’s total sales of €28bn. However, despite the fast growth in this area of the business, with the number of new subscribers jumping by a factor of five in the fourth quarter alone, Telefonica’s margins were lower in the fourth quarter than for the full year.
In addition to the competitive nature of the mobile-phone market, Telefonica’s latest deal also increases its exposure to Latin America where the political and economic climate are less stable than in Europe. Indeed, although the company enjoys a A/A-1 credit rating from Standard & Poor’s, the ratings agency recently announced it was placing the company on its CreditWatch list with negative implications following its decision to buy BellSouth’s Latin American mobile businesses. The rating agency cited the "economic, financial and political risks of operating in Latin America and the investments necessary for the future developments of these operations" as reasons for issuing the warning.
Learn the limbo?
For Telefonica, however, Latin America offers a great deal of opportunity that is simply unavailable in the developed world. According to recent market statistics the number of mobile subscribers per 100 in Europe is 84, while in Latin America the number is just 27 per 100. And while Latin America’s economic performance has been poor since the beginning of the decade, growth picked up last year and recorded an overall expansion of about 1.6%, according to the Economist Intelligence Unit. The EIU also forecasts annual economic growth for the region should average nearly 3.4% through 2008.
Given these statistics, the company should easily be able to see its mobile phone sales grow by 4.5% a year through 2006, which is a higher growth rate than any other European telecoms company is predicting. The problem, however, is that Telefonica will be winning that growth in countries with high currency risks, high political risk and with non-investment grade markets. Argentina, for example, cost Telefonica more than €3bn by ending the peso’s link to the dollar in 2002.
And even if it does negotiate these risks, longer term it remains unknown whether demand for mobile phones in the region will expand as it has elsewhere in the world. In Venezuela, for example, 80% of the country’s population is living in poverty. And as in other developing countries, pay-as-you-go phones are proving to be the most popular. However, this kind of account is the least lucrative for the phone companies as pre-paid phone customers are less likely to purchase the more profitable add-ons, such as picture and video-phones or Internet-linked services.
Against this, however, remains the fact that the mobile phone can also put even the smallest entrepreneur in touch with customers and clients across the country. Should Latin American entrepreneurs adopt mobile phones as they have been in China, where small, family-owned businesses are the norm, Telefonica’s bet could well pay off. In the meantime, however, the company will need to stay ruthlessly focused on the bottom line if it wants its Latin American gamble to pay off.
Source; Basic data from BLA, March 2004

IT – Wireless

WiMAX, NLOS and Broadband Wireless Access (Sub-11Ghz)

Market Trends
Fixed broadband wireless market (sub-11Ghz) will grow from $430 million in 2003 to more than $1.6 billion by the end of 2008. In 2003, BWA shipments increased 45% over 2002. Vendors have announced both multi-million dollar contracts and hefty growth earnings compared to 2002. Technology news editors are now talking about a BWA come back with the emergence of millions of WiFi access points connected by more flexible and less costly fixed wireless solutions.

Despite the 2001-2002 market slowdown, the steady demand for bandwidth, coupled with wider access to the Internet and data in general, provide sound fundamentals for expecting future growth in both telecom services and equipment sales in the first/last mile. In other words, both residential and business subscribers worldwide are demanding faster connections for their applications and operators are struggling to give them that access. According to the ITU, there were almost a 100 million broadband subscribers worldwide at the end of 2003. Although DSL and Cable are poised to remain the dominant broadband access technologies worldwide, wireless access technologies are becoming a reliable and cost effective complement or alternative to providing data, voice and video services. Governments worldwide are also driving the growth of Broadband through continuing frequency allocation and programs to subsidize broadband deployments in order to reduce the digital divide between regions of high and low density areas.

Some Key Findings include:

- There were over 10,000 PMP BWA (sub 11Ghz) base stations and 1.2 Million CPEs installed worldwide providing 256Kbps+ broadband services to over 1.5 million subscribers.
- Alvarion is the market leader with about 25% market share followed by SRTelecom with 12% and Proxim with 9%; ZTE is the market leader in the fast growing Chinese market with about 30% market share;
- EMEA which represented 32% of the overall market in 2003 continues to represent the largest market opportunity but Asia will outpace it by 2005;
- The carrier and private networks market segments represented respectively 85% and 15% of the total market in 2003;
- The access and backhaul applications represented respectively 84% and 16% of total sales in 2003. However backhaul will represent 30% of equipment sales by 2008;
- 3.5Ghz, the most allocated frequency band for BWA, represents the largest opportunity for BWA representing 40% of total sales followed by the 5.2-5.8Ghz band. We believe the 2.3 and 2.5-2.7Ghz market share will grow to 25% of the market by 2008
Already 12 vendors offer a 3.5Ghz product and 4 more players will offer a 3.5Ghz product in 2004, which will render that band market even more competitive
Among Plug & Play, NLOS, portable systems, IPWireless is the leader in shipments and revenues, followed by a small group of companies, which include Navini, NextNet Wireless, or SRTelecom (Angel). It is however difficult to sub segment the whole market on system capabilities.
Shipments of OFDM based product already represent 39% of all shipments and that proportion will grow with the adoption of 802.16d to close to 60% by 2008 Shipments of 802.16e will grow exponentially after 2007 to 1 million units and will be dominated by Intel deployments.
Source; Data from Maravedis Inc., March 2004

HIGHLIGHTS

IT – M&F

BayStar Confirms Microsoft Connection to SCO Investment

The cat is finally out of the bag: Microsoft Corp. acted as the matchmaker for the $50 million investment led by BayStar Capital into The SCO Group Inc. last October.
Source; eweek.com

Internet – Entertainment

George Michael to offer songs for free online

Singer George Michael plans to quit the music business after his latest album and issue any of his new creations for free on the Internet.
Source; Internet Magazine

2004-03-12T18:55:00.000+01:00
HIGHLIGHTS

Technology - China market

China sets up Windows, Linux labs

China’s software industry continues to attract the attention of Western IT giants: on the same day that HP signed a deal to set up a Linux laboratory in China, Microsoft signed a deal to establish Windows.Net-based technology labs in the country. HP signed a three-year agreement with the Ministry of Information Industry of China to "set up a Linux laboratory that will focus on open-source software development, testing and certification to support small and medium-size Chinese businesses."
Meanwhile, Microsoft plans to work with both Chinese and Western IT companies to "build Windows labs and serve a large number of small and medium-size Chinese software companies and computer users in China." The article includes a brief look at other efforts by HP and Microsoft to crack the Chinese software market.
Source; ZD Net China

Internet - Search engines

Search upstarts storm Google’s gates

Yet another article on the new start-ups vying to displace Google as the leader in online search. Given the public adulation about Google’s upcoming IPO, it is perhaps not surprising that the company "faces Lilliputian threats from a fast-growing group of start-ups that hope to replicate its own meteoric rise from unknown upstart to Internet powerbroker." Jupitermedia CEO Alan Meckler comments: "Search is a hyper-growth area. There will be lots of special smaller players that without going public will be worth between $20 million and $100 million annually." The article includes profiles of five companies competing with Google for parts of its business: Quigo (which recently landed $5 million in VC financing), Industry Brains, Mooter, Eurekster and Dipsie.
Source; News.com

Internet - New media

Net cries out for Madrid

The terrorist attack in Madrid, which killed nearly 200 people and injured another 1,400, has led to a "huge outpouring of sympathy and concern" on the Internet. By some estimates, the terrorist attack led to at least 800 blog posts in just six hours: "There's been a big spike of posts about the bombings. There's been a burst of conversation all over the Internet about this. There's been a hell of a lot of concern." In fact, some analysts see some parallels with the terrorist attacks of 9/11, which also catapulted weblogs and around-the-clock news updates into the limelight. Included: links to weblogs with coverage of the Madrid terrorist attack.
Source; Wired News

2004-03-12T18:46:00.000+01:00