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MICROSOFT DOUBTS RIVAL'S TESTIMONY WASHINGTON (AP) - Microsoft used newly disclosed evidence Thursday to raise questions at its antitrust trial about how a rival executive described under oath the dwindling health of his company because of its battle with Microsoft. James Barksdale, the chief executive officer of Netscape Communications Corp., testified in federal court in October that Microsoft had crippled his ability to distribute Internet software. But weeks later, in a far healthier assessment, Netscape told its investment bankers its software was included on more than one-fifth the machines sold by the nation's computer makers and given away by almost one-fourth of the 20 largest Internet providers. BELLSOUTH TESTING ATLANTA (AP) - BellSouth is wiring 400 homes with a direct optic link, testing a super-fast, but costly "fiber-to-the-curb" connection that may one day replace copper phone wires. The new Internet and video service uses a new technology called passive optical networking developed by Lucent Technologies and Oki Electric Industry Co. of Japan. The trial will begin this fall in an Atlanta suburb and may be expanded to other BellSouth markets later, the regional phone company said Thursday. In theory, the new link can carry data at 100 megabits per second - up to 150 times faster than the copper phone-wire technology called DSL, or digital subscriber line, that BellSouth and other companies have been introducing around the country. WIN98 Y2K BUG
NAILED REDMOND (STR) - Microsoft spokesperson Erin Cox made it known that certain Y2K incompatibilities had already been discovered in Windows 98 and a patch has been available for download from the Microsoft Website at http://www.microsoft.com Additionally, she stated that in April two more potential Y2K bugs were discovered in the operating system and that fixes will be posted on the site to coincide with the release of Windows 98 Second Edition this summer. Information posted on the Microsoft Website informs visitors that "A March Gallup telephone survey of 1,021 adults found that 28 percent of Americans plan to prepare for the Y2K issue by stockpiling household supplies such as food and water, and 20 percent plan to have more cash on hand or to closely monitor their financial records. By comparison, only four percent plan to update their home computers." "Most consumers are aware of the
issue, but they have not really awakened to what they need
to do to update their personal computers," says Mark
Light, Microsoft's Year 2000 product manager. Microsoft
recently launched a new Y2K Website specifically aimed at
consumers. The site is intended to provide home-PC users
with information needed to assess the Y2K readiness of their
home PCs. The site is located at http://computingcentral.msn.com/guide/year2000/ It includes a product guide that describes how most Microsoft software applications handle dates, as well as information regarding what action, if any, consumers need to take to prepare their applications for the Year 2000. The site also allows users to download the "Microsoft Year 2000 Product Analyzer," which automatically scans a user's hard drive and determines what Microsoft products are on the computer. The product analyzer then generates a report telling users the compliance status of their system. It also provides online access to Year 2000 software updates, if needed. Microsoft has also put up two phone lines for updates and Y2K information: For Windows 95 call 1-888-673-8925 For Windows 98 call 1-888-219-1302 And a Website containing general Y2K info can be reached at http://www.microsoft.com/year2000 Microsoft advises consumers to take a three-step approach to ensure that their home PCs will function properly beyond Dec. 31. The process involves assessing their PCs and possibly updating their hardware, software and data.
VOTE ON PLAN PACBELL BACKS DELAYED SAN FRANCISCO (AP) - State regulators postponed for a week a vote on a rate shift in Internet telephone charges, a proposal that could lead to higher fees for some Internet users in California. A plan pushed by Pacific Bell to shift connection fees for such calls to a smaller phone company, which could pass them along to Internet service providers, had been scheduled for a vote at Thursday's Public Utilities Commission meeting. But the sponsor, Josiah Neeper, changed his proposal before the meeting so that it would require a full review and public comment before final PUC action, said Pacific Bell spokesman Bill Mashek. Some legislators had urged the commission to postpone action and allow more time for a full debate on the effects on Internet charges and access. AOL BUYS
SPINNER, NULLSOFT DULLES (STR) - America Online has become the latest to get into the online music business, with acquisitions today of Net radio firm Spinner.com and music technology company Nullsoft. The stock-for-stock transactions are valued at about $400 million and will be accounted for as pooling of interests, according to AOL. AOL's moves are designed to give it a leg up in the online music space, which has seen tremendous activity of late. The acquisitions will make "next-generation music features available to consumers of all its brands, providing a wide range of new audio and other applications and functionality to its partners, and [will help] to develop key music capabilities for AOL Anywhere devices and broadband initiatives in the future," AOL said in a statement. In addition, AOL said it is planning to build custom branded music features for its proprietary service as well as for AOL.com, CompuServe, Netcenter, and ICQ. It also will add live events, Net radio, and music downloading to its services, the company said. "Both [companies] are solid acquisitions," said Mark Mooradian, analyst with Jupiter Communications. "If you look at AOL's acquisitions, first and foremost they look at them as a customer acquisition play. In the big picture, AOL is acquiring Internet radio and online audio listeners. "Spinner has been a leader in Internet radio," he added, noting that with Nullsoft and other acquisitions, "you see AOL moving aggressively into the technology space. It remains to be seen what they'll do with that technology." The acquisitions come as the online music space is undergoing tremendous changes on a number of fronts. Along with gaining popularity among Internet users, Net radio has become a must-have feature on portals and music hub sites. Moreover, with Nullsoft, AOL is getting entrenched in the music download space in terms of adopting a technology. Although the MP3 (MPEG 1, Audio Layer 3) format is controversial among mainstream record companies because of its use by music pirates, its ease of use has made it a de facto standard for music downloads by early adopters. According to Nullsoft, 1.2 million of its Winamp MP3 players are downloaded monthly. San Francisco-based Spinner.com offers more than 100 different music channels online via streaming technology. It also offers downloads of some songs via the MP3 format. The company will remain in its new San Francisco location, AOL said. Spinner chief executive Dave Samuel last month said the company planned an initial public offering by the end of September. The company earlier this year was a potential acquisition target for MTV, but the two companies couldn't agree on a price. Spinner competitor Imagine Radio was later bought by MTV's parent, Viacom. Spinner executives said at the time that the company was waiting for the right moment to go public. Spinner also received $12 million in financing from Sony Music Entertainment, Intel, and Amerindo Investment Advisors earlier this year. Nullsoft, based in Sedona, Arizona, will move to San Francisco, AOL said. Nullsoft developed the Winamp MP3 player as well as the Shoutcast MP3 streaming audio system. It also is the subject of a $20 million lawsuit filed in March by PlayMedia, which develops digital content distribution and management software and hardware including the AMP MP3 playback engine. PlayMedia accuses Nullsoft of infringing on its copyright-protected AMP code. "Combining these leading Internet music brands with the audience reach of our brands will lift music online to the next level of popularity. We plan to build downloadable music, Internet radio, and overall music features into each of our brands, as well as customize them for the audience and partners of each of our brands," Bob Pittman, president of AOL, said in a statement. Ted Leonsis, president of AOL Interactive Properties, added in a statement: "These acquisitions establish our leadership in Internet music, and we expect to extend this leadership through additional partnerships in the future. As faster speeds through broadband emerge, high-quality music will become an increasingly attractive application that will help drive the further growth of broadband. "We believe that Internet music will grow new communities and help consumers fully embrace the convenience of buying music online as we move into a more connected society," he added. TIANANMEN VICTIMS SUE RED CHINA NEW YORK (AP) - Survivors of the Tiananmen Square massacre and relatives of victims said Tuesday they had filed a lawsuit in China demanding an investigation and an apology from the government. "Ten years after the Tiananmen massacre, the perpetrators have still not been brought to justice," said Xiao Qiang, executive director of Human Rights in China, a group based in New York. The lawsuit filed last month in Beijing also seeks the release of political prisoners arrested in the protest and the return of people who went into exile afterward. Announcement of the lawsuit was timed to coincide with the 10th anniversary of the June 4, 1989, massacre in Beijing's central square. Hundreds of people were killed when the government sent tanks and soldiers to crush seven weeks of pro-democracy protests. JFK'S CASKET WAS
DROPPED WASHINGTON (AP) - A bronze casket used to carry President Kennedy's body from Dallas to Washington is in a watery grave - 9,000 feet down in the Atlantic Ocean, according to assassination documents. Materials to be released Tuesday at the National Archives will show that in early 1965 the casket was dropped from a military plane into an area where unstable and outdated weapons and ammunition are dumped, Kermit Hall, a member of the now-defunct Assassination Records Review Board, told The Associated Press. The revelation, on the eve of what would have been President Kennedy's 82nd birthday, that the casket was sunk resolves a lingering mystery about its whereabouts. But it also fuels speculation among assassination researchers that it was discarded to hide foul play. Which appears to be misguided as the Family requested the Kennedy Casket be disposed of in the Ocean. OFFICIALS FEAR HANTAVIRUS OUTBREAK SANTA FE (AP) - Four New Mexicans have died this year of hantavirus and experts are worried this could be the beginning of an especially bad year for the mouse-borne disease. New Mexico has had five cases altogether this year: the four deaths, plus a 10-year-old who survived a hantavirus infection. In all of last year, the state had a total of six cases, compared with two cases in 1997 and one in 1996. There were four deaths in all of 1998 and none in the two previous years. All of this year's cases have been from the northwestern part of the state, where the strain of hantavirus labeled "Sin Nombre" or "No Name" was first recognized in 1993. WASHINGTON (AP) - When Microsoft Corp.'s trial resumed for the final phase of testimony, the government urged the judge to focus on the software company's aggressive behavior toward competitors earlier this decade and on its dominance today. But Microsoft wants Judge Thomas Penfield Jackson to look to the future, when Microsoft believes its Windows software will face unprecedented competition from fledgling technologies. The antitrust trial was scheduled to resume Tuesday after a 13-week recess and despite secret efforts to settle the case. Key differences remain, such as how Microsoft can continue adding new technology to its the Windows operating system without undercutting rivals offering similar software products. RIO DE JANEIRO, Brazil (AP) - With the year 2000 just seven months away, airlines said Monday they're stepping up efforts to ensure that planes from poor countries aren't grounded by the so-called Y2K millennium bug. The International Air Transport Association, an airline industry group, voted Monday to commit $8.5 million to helping airlines in poor countries prepare. IATA opened its 55th annual meeting here Monday. The concern is over how airlines and airports will react Jan. 1, 2000, when computers that were programmed to recognize years by their last two digits could think it's 1900 and get confused. While a massive campaign to rid computers of the bug has reduced concern in the U.S. and other rich nations, doubts remain whether airlines in developing countries also will be ready. SUN MICROSYSTEMS
TESTS PALO ALTO (AP) - Volume production of Sun Microsystems Inc.'s UltraSparc-III microprocessor is expected to begin by the end of this year. New computer servers and workstations based on the high-speed chip are planned for next spring, according to last Friday's edition of The Wall Street Journal. Engineers have already tested the chips to boot up Sun's Solaris operating system, The Journal said. Next, the chips will undergo a series of tests designed to exercise as many of its operating modes as possible. The UltraSparc-III, with 23 million transistors and operating speeds of 600 megahertz, is the latest entry from Sun in the race to deliver high-end computing systems used by big networks and Internet businesses. INTERNET RULE GROUP HITS SNAGS BERLIN (AP) - An international group crafting rules to manage the Internet is stuck over how to give individuals a say in key debates such as how Web addresses are assigned. The nonprofit Internet Corporation for Assigned Names and Numbers said Friday it has drawn resistance from Internet denizens leery that any topdown decision-making process will crimp the collegial nature of the Web. ICANN, which hopes to draft formal policies by Sept. 2000, was set up in October when the U.S. government said it no longer wants to manage the nuts and bolts of the Internet. At a meeting this week in Berlin, the ICANN board appointed the Domain Names Supporting Organization to advise it on oversight of the domain name system. FTC ENDS PROBE INTO WASHINGTON (AP) - The Federal Trade Commission has closed its investigation into whether Cisco Systems Inc. illegally tried to divide the market for Internet hardware. The FTC confirmed Tuesday that it has ended the investigation, disclosed last October, but declined further comment. "There was no settlement or anything like that, no quid pro quo," said Cisco's general counsel, Dan Scheinman. "They just closed the inquiry."
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AUTHOR OF HOLOCAUST DENIAL BOOK IS CHARGED WARSAW (AP) _ Prosecutors in southwestern Poland charged a history professor Monday for writing a book that denies that the Nazis killed millions of Jews in death camps. The book "Dangerous Themes" by Dariusz Ratajczak violates a Polish law banning the public denial of Nazi and communist crimes, prosecutor spokesman Roman Wawrzynek told the PAP state news agency. If convicted, Ratajczak faces up to three years in prison. Ratajczak claims in his book that the gas chambers at Nazi death camps were used to kill lice on prisoners. It calls testimony from eyewitnesses "useless" and describes researchers of Nazi crimes as "followers of the religion of Holocaust" who impose on others "a false image of the past," media reports said. The book was sold in university bookstores. Ratajczak was suspended from his job at the Historical Institute of the University of Opole after a commission investigating Nazi crimes in Poland complained to prosecutors about the book in April. GATES, LAWYERS TELL WASHINGTON (AP) - As the government's antitrust case against Microsoft Corp. winds toward an end, it seems at times company chairman Bill Gates and lawyers representing the software giant are reading from different scripts. This week, for the second time during the trial, comments made by Gates have undercut the company's legal arguments. In the latest instance, while Microsoft argued in court that new devices might cut deeply into its business, Gates wrote in Newsweek that personal computers - which depend almost exclusively on the company's Windows operating system - would remain the industry standard for years. The mixed message - saying one thing to the judge and another to potential investors - was immediately noted by the government's lead lawyer and a witness this week, when the trial resumed after a three-month recess. TAIWAN SHOWS ITS COMPUTER SKILLS TAIPEI (AP) - Open any personal computer and chances are most of its insides were made in Taiwan - even though the companies that produce this technology are relative unknowns. This week, however, they're strutting their stuff and trying to make a name for themselves at the annual Computex trade show in Taipei, one of the top three computer shows in the world. With output forecast to rise nearly 15% to more than $45 billion this year, Taiwan is firmly entrenched as the world's third largest producer of information technology products, behind Japan and the U.S. MICROSOFT TARGETS SYMBIAN SUPPORTERS Jacksonville, FL. (STR) - Microsoft president Steve Ballmer has stepped up pressure on mobile phone manufacturers to back Windows CE as their operating system (OS) of choice. Nokia confirmed that Ballmer is personally lobbying senior executives to abandon their stake in Symbian, it's rival OS. Ballmer claims the manufacturers will rethink their strategy once they see Windows CE's next-generation features, according to recent reports. Motorola, Ericsson and Matsushita - all Symbian shareholders - are also being wooed. INTERNET STARTUPS SEEK BACKERS LAGUNA NIGUEL, Calif. (AP) - Like any good fisherman, investment banker Robert Kibble remembers the big one that got away. A few years ago Kibble's company, Mission Ventures of San Diego, had a chance to invest in a tiny Internet commerce company called eToys that was trying to raise about $30 million. At the time, the notion that a company that sold on the Internet could challenge big retailers like Toys R Us seemed farfetched. "They were losing money; they had strong competition from Toys R Us. Unfortunately, we passed," Kibble said Wednesday. That eToys is now a toy industry leader worth about $7 billion wasn't lost on Kibble as he attended VentureNet 99, a conference that attracted more than 200 venture capitalists and other investors hoping to discover the next eToys or Amazon.com. CALIF. REVIEWS INTERNET SAN FRANCISCO (AP) - State regulators may want more time to decide on a rate shift in Internet telephone charges, a proposal that could lead to higher fees for some Internet users in California. A plan pushed by Pacific Bell to shift connection fees for such calls to a smaller phone company, which could pass them along to Internet service providers, had been scheduled for a vote at Wednesday's Public Utilities Commission meeting. But the sponsor, Josiah Neeper, changed his proposal before the meeting so that it would require a full review and public comment before final PUC action, said Pacific Bell spokesman Bill Mashek. Jacksonville, FL (STR) - Compaq has reiterated its support for Linux, saying it won't abandon the free operating system simply because of pressure from Microsoft. The comments came Friday from Jon "Mad Dog" Hall, senior leader of Compaq's Unix software group. Hall said senior people at Compaq "had a word or two" with Microsoft about the company's work with Linux, but that Compaq could not ignore customer demand. "If we didn't sell Linux then somebody else would and Microsoft just has to understand that," Hall said.. Hall was working for Digital in 1994 when he first met Linus Torvalds. He said he was so impressed with Linux he offered to port it to the Alphaserver. He recommended Linux over Unix and NT for some uses, including Internet service provider (ISP) use, firewalls, DNS servers and point-of-sale terminals. HP ONLINE PUSH
TARGETS Jacksonville, FL (STR) - Hewlett-Packard has launched the second phase of its online PC sales strategy. It has created an online store, called Bstore, to sell Brio and Vectra PCs to small businesses, along with servers, notebooks and printers. The move follows last week's launch of HP's Shopping Village site, which sells Pavilion PCs to home users. To keep its resellers happy, HP has also launched a Web site informing customers of the reasons why resellers are valuable, as well as an advice column for small firms looking to buy IT. INTERNET FUTURES INVESTING LAUNCHED CHICAGO (AP) - Amazon.com? America Online? Yahoo? With more and more "dot.coms" being offered to investors, how do you differentiate a darling from a dumpling? Why bother when you can bet the 'Net, the Kansas City Board of Trade suggested Tuesday as it launched the first-ever futures contract based on an index of 50 companies that derive most of their revenue from the Internet industry, including America Online Inc. and eBay Inc. "The Internet sector is very volatile. That's the attractiveness of having an index like this - providing a basket of companies to invest in," said Steve Harmon, senior investment analyst for internet.com LLC, the oldest Internet stock index in the marketplace. MERRILL LYNCH TO
OFFER NEW YORK (AP) - Merrill Lynch & Co., the nation's largest stock brokerage, shook the securities industry Tuesday by announcing it will let customers trade stocks over the Internet for $29.95 a pop. The decision marks a grudging and dramatic change for Merrill Lynch, which has spent decades forging a nationwide network of 14,000 brokers who give investment advice and who earn commissions of hundreds of dollars for placing stock trades. Merrill debated for months whether online trading would undermine its traditional brokerage services. The firm was finally swayed by the rapid loss of business to a growing number of online brokers such as Charles Schwab, ETrade and Ameritrade. TI TO BUY INTERNET DALLAS (Dow Jones) - Texas Instruments Inc. plans to purchase Telogy Networks, an Internet telephony company, for $435 million in stock. In a press release Wednesday, Texas Instruments said the acquisition positions the company to be the engine of the communications market as it makes a transition to packet-switched from circuit-switched networks. Texas Instruments said the transaction will merge providers of programmable digital signal processors and embedded communications software, which in combination enable digital voice and data packets to be sent over the Internet. Texas Instrument said the combined services of the company will provide the technology for communications equipment manufacturers to make a transition to digital voice communications. SOLAR STORM CLOUDS DARKEN Y2K HORIZON Jacksonville, FL (STR) - Year 2000 problems could be made worse by solar storms at the millennium, scientists told the American Astronomical Association's annual convention Tuesday. Experts from the National Oceanic and Atmospheric Administration said businesses should expect disruption to satellites and energy grids. The sun will be in the most violent part of its 11-year cycle between January and April 2000. A spokesman said any technology developed this decade will be at risk, as it will never have experienced such high levels of magnetic radiation. MARKET SOFTENS
FOR NEW YORK (AP) - GeoCities Inc. shareholders said yes Friday to merging their company with Yahoo! Inc., but they're getting a lot less than they once thought. Yahoo!, a leading Internet search and directory service, is acquiring GeoCities, a company that helps consumers create their own Web pages, by issuing 27.4 million shares of stock. However, since the deal was announced in January, Internet stocks have plunged. That means the Yahoo! shares that were once worth $5.04 billion are now valued at $4.06 billion, a 19% drop. The bear market in Internet shares has sharply reduced the value of a handful of mergers in the works. Web companies have fallen 29% since mid-April, causing many investors and executives to re-think their options. MERGER
WON'T HURT MICROSOFT WASHINGTON (AP) _ Seeking to soothe a judge's concerns about implications of the $10 billion merger of two of Microsoft's biggest rivals, a government witness said Tuesday the deal is too little, too late to pose a credible threat to the software giant. The testimony of Franklin Fisher, an economist, clearly was aimed at easing misgivings that U.S. District Judge Thomas Penfield Jackson had expressed earlier in the Microsoft trial, when he said America Online's purchase of Netscape Communications Corp. "might be a very significant change in the playing field." Final testimony in the trial began Tuesday, with the government using Fisher as a lens to focus the judge's attention on the Microsoft Corp.'s alleged aggression toward rivals and away from the impact on the AOL-Netscape alliance. America Online Inc. currently distributes a version of Microsoft's Internet Explorer browser to its more than 17 million subscribers and is contractually obligated to continue until January 2001. But Fisher said that even if AOL were to distribute Netscape's software, which he described as "very, very unlikely," the move would be insufficient to revive Netscape as a threat to the dominance of Microsoft's Windows. "I think it's too late, and I think Microsoft thinks it's too late," Fisher said. "It's enough for Microsoft to obtain a high share of the browser business, and that they've done." Fisher testified earlier Tuesday that Microsoft's business decisions such as spending millions to create its Internet Explorer software, then giving it away were illogical unless its intent was to protect its lucrative Windows monopoly. Government lawyers contend Microsoft feared that Netscape's browser threatened to evolve into a system that could displace its flagship Windows software by running a new generation of computer programs using the Internet. Microsoft argues that it bundled its Internet Explorer software free into newer versions of Windows because it offered consumers technical benefits, such as the ability to "browse" a computer's storage devices the same way that people browse for information on the Web. "They spent hundreds of millions on development of a product, and they gave it away," Fisher said. "Microsoft documents do not say, `We're doing this to make a lot of money.' ... These are practices that make no economic sense on their own." Microsoft "can't possibly lead to the recoupment of the money that was spent on the development of Internet Explorer," Fisher said. Fisher, a professor at the Massachusetts Institute of Technology, also derided earlier testimony by Richard Schmalensee, the dean of MIT's Sloan School of Management. Schmalensee, appearing as a Microsoft witness, argued forcefully earlier in the trial that Microsoft isn't a monopolist and doesn't behave as one. Schmalensee will take the stand again later this month as one of the final witnesses. Fisher said Schmalensee's focus on the entire software industry, rather than on the narrow slice that sells computer operating systems, presents "a whole series of problems" and "muddled results." But Fisher did offer that exactly how to define the specific market where Microsoft wields its influence is "not a question with a very definitive answer." "It's possible to disagree what the market is," Fisher said. He also mildly criticized Schmalensee's previous testimony that Microsoft's accounting records were kept "by hand on sheets of paper." Fisher wouldn't comment on the claim except to say that Schmalensee, "with his usual good nature, was rather credulous." Much of Tuesday's testimony centered on Fisher's economic analysis of Microsoft's business, which even Fisher conceded grew dry in parts. He prefaced one answer by warning, "I'm not sure this is going to be the most exciting part of this day." "You could always tell me it's a meaningless nuance," joked Justice Department lawyer David Boies. But even as Fisher greeted Boies from the witness stand to open his testimony, Fisher clearly anticipated the aggressive questioning he faces from Microsoft lawyers later this week. "Mr. Boies, it's nice to be here, so far," Fisher said. COMPAQ BEEFS UP EXEC TEAM TO STAUNCH EXODUS HOUSTON (Reuters) - In a bid to stabilize its top management ranks amid continuing defections, Compaq Computer Corp. said Wednesday it had elevated two executives to more senior positions after the manager of a key business unit resigned. The moves followed the resignation of John Rose, head of the Enterprise Computing Group. His departure was the latest in a stream of recent executive resignations. To fill Rose's spot, Compaq said it had named Enrico Pesatori as senior vice president and group general manager of the Enterprise Computing Group, effective June 3. Compaq also said it had named Michael Capellas to the new post of acting chief operating officer, beefing up the top executive ranks. ADOBE 2Q
PROFITS SEEN SAN JOSE, Calif. (Reuters) - Publishing and graphics software maker Adobe Systems Inc. said Wednesday its second quarter operating earnings will narrowly beat its own previous estimates of 62 cents to 66 cents a share, driven by higher revenues of $245-$246 million. Nevertheless, the San Jose, Calif.-based company, maker of popular software packages like PageMaker and Acrobat, said it will cut 250 jobs, or 9% of regular employees, with a large number coming from its international operations.
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