Faulkner's Cyberscape Digest 11/10/00 (fwd)

[Missy Harvey]

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Date: Friday, November 10, 2000, 4:46 PM -0500
From: Faulkner Information Services <mails...@faulknerinfo.com>
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Subject: Faulkner's Cyberscape Digest 11/10/00

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CyberScape Digest

CyberScape Digest is a weekly roundup of top internet stories. This issue
covers events from Monday 11/06/00 through Friday 11/10/00.

Future of America Online-Time Warner Merger Hangs in the Balance
As many US citizens bite their nails over the outcome of this year's
historically-close presidential election, a rather different matter
involving the US government faces dispute and divided voters. The Federal
Trade Commission continued negotiations with America Online and Time Warner
over their proposed merger. The biggest point of contention involves Time
Warner's cable lines. Some US regulators want the companies to promise that
they will grant other ISPs access to those fat pipes before AOL, so as to
prevent the number one ISP in the US from gaining a first-mover advantage.
AOL and Time Warner already agreed to a number of other conditions on their
merger involving the open access issue. The FTC scheduled a vote for
Thursday on whether to permit the merger, but has delayed the vote for up
to three weeks. Still, the delay is not the worst possible turn of events
for AOL and Time Warner; some FTC officials are prepared to go to court to
block the merger if negotiations fail. Not letting government activity get
in the way of business, America Online made a deal with GetMusic.com, in
which GetMusic became an anchor tenant on AOL's Music Channel and will
offer streaming video programming to members of the "AOL PLUS" multimedia
content program. Shifting from the US to the UK, the ISP expanded its $21 a
month unmetered service offering in Britain to include new users as well as
existing members. The move was prompted by a large shift to the program by
existing subscribers, and an increase in new subscribers who hoped to join
the flat-fee program.

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Presidential Election Not All Smooth Sailing
The democratic process may have run like a Swiss watch once the polls
opened on Tuesday, but chaos reigned mere hours before, as the Web sites
for both the Republican National Committee and the Democratic National
Committee were hacked Monday evening. An unknown hacker posted an anti-Bush
rant and a link to Gore's campaign Web site at the RNC site. The DNC site
was the subject of repeated attacks from an unknown source, prompting its
shutdown. Both sites have been restored and are now up and running, in time
for everyone to vote again, should the need arise. Remember to vote early
and often.

Consolidation Continues as Companies Keep Buying Each Other
If some enterprising dot-com figures out a way to gift wrap an entire
company, it will certainly prosper in the present business climate. In this
week's biggest deal, Broadcom agreed to purchase SiByte for stock valued at
about $2 billion. The high-speed communications semiconductor maker figures
the purchase will cut its profits by $0.03 per share for each quarter next
year--but SiByte's energy efficient chips, geared to networking and
communications applications, are selling like hotcakes. Moving from
hardware to software, CNET reported the acquisition of AppWatch, but not
the terms of the acquisition. AppWatch is a directory of free and
open-source software downloads. In another deal with undisclosed terms,
online job search company Monster.com purchased JOBTRAK, a privately-held
college job listing and resume Web site. The purchase strengthens
Monster.com's position in college recruiting. Meanwhile, Primedia discussed
its financial expectations for its planned merger with About.com. The deal,
which could close as early as January 2001, is expected to make the
combined company profitable in 2002. Sephora.com took advantage of
Eve.com's going bust to buy the beauty company's assets. The purchase, said
to be in the high six figures, included Eve's name, its URL, and access to
its customer base. Sephora said it would use the customer information to
send two e-mails, the second of which will include a discount offer.
Finally, Yahoo! expanded its reach into Asia by purchasing Kimo, a
Chinese-language portal Web site. The terms of the deal value Kimo at more
than $146 million.

They're Not Out of Business, But They're Not Happy Campers, Either
How many ways can one describe a company as "troubled?" Online real estate
listing provider Homestore.com had to stop its festivities for its $1
billion acquisition of Move.com when the Justice Department came knocking
at its door. It seems the DoJ is investigating the antitrust implications
of the acquisition, and is asking for information from Homestore's rivals
about how the merger could affect the online realty business. Microsoft's
HomeAdvisor received a subpoena, among others. No doubt the DoJ will take a
close look at the fact that Homestore's listing site contains about 93
percent of home listings in the US. Belgian voice recognition company
Lernout &Hauspie suffered both financial and legal woes. The NASDAQ halted
trading in its stock when auditors examining the company's books reported
"certain errors and irregularities" requiring that it restate its financial
results for 1998, 1999, and the first half of 2000. The Securities and
Exchange Commission is already investigating Lernout &Hauspie's financial
statements. Separately, the company reported that founders Jo Lernout and
Pol Hauspie will step down from their posts as co-chairmen and managing
directors, and serve instead as vice chairmen of the board and chair the
company's technology advisory committee. At least the company isn't losing
people. Venture capital firm Divine InterVentures laid off 18 of its 41
employees. This follows the resignations in September of its president and
COO. Following last week's departure of CFO Heidi Miller, Priceline
reported that this week it lost Maryann Keller, the head of its auto
services business. Even strong companies began to shudder; number two
domain name registrar Register.com lost chief financial officer Cindy
Horowitz after she served just two months on the job. The company began a
search for a new CFO.

Spam, the Other Pink Meat
A UK-based anti-spam group, the Spamhaus Project, revealed this week that
Internet infrastructure firm PSINet signed a "pink contract" with Cajunnet,
a Louisiana marketing firm that the organization claims functions as a
channel for unsolicted e-mail. Pink contracts contain language that
expressly permits customers to send unsolicited commercial e-mail via an
ISP's network. In light of the allegations, PSINet terminated service to
Cajunnet and said that it would modify its policy regarding spam. The
Spamhaus Project last week published at its site a copy of an earlier,
now-cancelled AT&T/NevadaHosting.com contract, the terms of which allegedly
had side-stepped AT&T's own anti-spam policy to enable NevadaHosting to
resell Web hosting space on the AT&T network to third-party spammers.

What New Things Can You Do With the Internet? We're Glad You Asked...
The universe of domain names changed Thursday night as VeriSign Global
Registry Services began accepting .com, .net, and .org domain names with
Chinese, Japanese, and Korean characters. The move was hailed by some as a
step toward making the Internet a truly global medium. Others said that,
since the Internet lacks standards for non-English characters, Internet
users could find themselves blocked from many sites. Dotster, an
ICANN-accredited reigstrar, is one of more than a score of registrars
authorized to offer this service. For those who prefer a more vocal medium,
the ubiquitous online butler/search engine Ask Jeeves now has a voice of
his own. The company teamed up with Nuance Communications and General
Magic to create a service that allows users to make Web searches by phone
and receive answers from a computer-generated voice. Ask Jeeves will offer
the service to corporations to supplement their customer support call
centers. Many Internet users think its wonders are out of this world. In a
few years, that may become literally true. Later this month, the first
satellite belonging to a solar system wide communications network will
launch, according to TCP/IP creator Vinton Cerf. By 2004, if all goes well,
there will be six satellites orbiting Mars. Those concerned with more
earthy matters might be glad to hear that Playboy.com formed a joint
venture with FOCUS Digital to launch Playboy.de, a German version of the
company's offering. The German site will carry original content created by
an editorial staff based in Munich, as well as content from the German
Playboy magazine and content translated from Playboy.com.

Dot-com Death Roll Gains Five
The ubiquitous sock puppet from Pets.com must now hunt for a new doghouse;
the online pet supply story closed its doors this week and laid off 80
percent of its staff. Since the company ran out of funding and was
unsuccessful at raising more money or locating a buyer, everything is up
for sale: its inventory, equipment, URL, and even, yes, the Sock Puppet
brand icon. Joining Pets.com in the online graveyard is Furniture.com.
After not managing to collect "sufficient capital to fund operations going
forward," the online furniture retailer laid off 76 of its 88 workers and
discontinued operations. In a rare show of foresight for this industry, the
company placed customer payments in an escrow account starting in late May;
customers who are eligible for refunds will be contacted by an escrow agent
who will explain how to claim the money. Laid-off employees even received
severance packages. HalfthePlanet.com went bankrupt and laid off all its
employees. The disability resource network suffered from the same problem
as the others; despite a promising start, it could not attract enough money
to keep its virtual doors open. Never fear, though; some of the same people
who worked for the online venture will work in high-level positions at an
offline not-for-profit which also goes by the name HalfthePlanet, and
serves the same cause. Mother Nature can't be fooled, but MotherNature.com
can go broke--and did. More precisely, if shareholders approve the plan
unanimously agreed to by the health company's board of directors, they will
receive up to $1 per share from a distribution of the company's assets. The
shareholder's vote will take place November 30. MotherNature's distress
will leave 100 people without jobs. Finally, online invitation site
Mambo.com prepared to dance off into the sunset, telling users that it will
discontinue its service on November 20.

Street Greets Chip, Flips, Burst Cursed
Fearing a flop on its hands, online advertising network Burst! Media left
its planned initial public offering on the cutting room floor this week,
citing "volatile market conditions." The company had hoped to raise $50
million through the IPO, for which it had filed in May. Bucking the IPO
withdrawal trend, Transmeta, maker of the Crusoe microprocessor, the laptop
market starlet renowned for significantly lower power consumption than
rival Intel and AMD chips, saw boffo box office numbers in its glittery
Wall Street premiere. Transmeta saw its $21 per share initial stock price
more than double in heavy trading, finishing at $45.25 per share by the
day's closing credits and adding a little Busby Berkeley to an otherwise
Ingmar Bergman IPO atmosphere.

Microsoft: Win Some, Lose Some
In the government's ongoing antitrust case against the software giant,
Microsoft was viewed by observers as having scored a procedural victory,
when the US Court of Appeals issued a schedule ordering Microsoft opponents
America Online, the Project to Promote Competition and Innovation in the
Digital Age, the Software and Digital Industry Association, and the
Computer and Communications Industry Association to file a single joint
brief by January 12, 2001. Microsoft had questioned the fairness of its
being strafed by multiple opposition briefs. The court action effectively
precludes the ability of Microsoft's adversaries to launch separate attacks
against the monolith. On the other hand, groups expected to be in
Microsoft's corner will be filing two briefs by November 27, 2000. The
Center for the Moral Defense of Capitalism and the Association for
Objective Law will file a joint brief, as will the Computing Technology
Industry Association and the Association for Competitive Technology.
Microsoft did not emerge triumphant on all legal fronts, however. The
software giant lost a lower profile court skirmish this week, when a
federal judge in Connecticut ordered it to pay $3.7 million to Bristol
Technology as reimbursement for legal fee incurred in antitrust litigation.
In its suit, Bristol claimed that Microsoft had tried to put the squeeze on
it by refusing to broker a licensing deal under reasonable terms. Microsoft
was found to have violated the state's unfair trade practices act in July
1999, but Bristol was only awarded $1 in damages at the time. The award was
upped to $1 million in August of this year. Bristol had sought $6 million
to cover legal bills, but expressed some satisfaction that the increase in
award amount validated its position.

New Productivity Initiative Hopes to Create Distributed Computing Standard
Hewlett-Packard, Compaq, SGI, Platform Computing, and a number of other
companies joined together to form a coalition dedicated to creating a
standard for harnessing computers together for the purposes of distributed
computing. Though SETI@home is perhaps the best-known distributed computing
project, the methodology, which harnesses together many computers and uses
their idle CPU cycles for various purposes, has many other applications.
The coalition, dubbed the New Productivity Initiative, plans to create a
standard that will make it easier for disparate systems to be used for
distributed computing. The organization will seek the approval of an
independent standards group. Eventually, the companies hope that
distributed computing will become an ordinary part of every operating
system.

Outage Ticker: Nearly Any News Site Reporting Election Results
At the risk of sounding smug, one of the advantages of not reporting "the
story of the century" except in passing is not facing the kind of traffic
that could bring even the biggest of big iron to its knees. Web sites
experiencing prolonged outages due to people desperate for news of the US
presidential election included MSNBC.com, Voter.com, and Drudgereport.com.
Sites taking prolonged periods of time to download included Democrats.org
and VoteNader.com. As the race proved it would only be settled by a recount
of votes in the Sunshine State, people began to check out the Florida
Department of State Division of Election site for the most up-to-date
results--which began showing "server too busy" messages to political news
junkies attempting to surf the site starting around 3:30 AM Wednesday. A
spokeswoman for the division observed that they weren't expecting so much
traffic because "we're usually not exactly the most exciting place on the
Web to visit."

Cyberscape Delight
Would-be Edisons hoping to cash in on the next great idea like the
incandescent light bulb or the phonograph, (or Velcro or Post-It Notes) can
find inspiration for brainstorms from the US Patent and Trademark Office's
Web data base, which currently houses all US patents registered from 1790
to present, 6.5 million in all. The USPTO site also features a historical
account of science and technology in the US. Speaking of ideas, the
impossible-to-buy-for person on the holiday shopping list might be
intrigued by the gift of his/her very own domain name, courtesy of
dotcomsforchristmas. This could be the answer for the jobless mooch on the
couch, who might even be prodded to take a stab at e-commerce, especially
if the domain name comes wrapped in a pre-paid SEC filing for an IPO
suitable for pulling at the last minute.

*** Terri Wells and Adrienne Edwards, Faulkner Information Services ***

CyberScape Digest, Copyright 2000, Faulkner Information Services. All
rights reserved.

Should you have any questions, concerns or problems with your flash, please
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