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| | | June 1, 2003
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Sunday, June 1, 2003 |
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Microsoft, AOL Time Warner settle grudges, offer hands of cooperation
In a surprising announcement this week, the world's biggest software maker, Microsoft Corporation, and media conglomerate AOL Time Warner said they will begin active cooperation on several fronts of mutual interest and settle pending antitrust litigation.
Under the agreement, Microsoft will pay $750 million for AOL to end the lawsuit filed by its Netscape Communications unit in January 2002, alleging the Redmond, Washington-based software giant used its monopoly in the OS market to subvert competition in Internet browsing. The deal is widely seen as a positive outcome for both sides. AOL will likely use the payout to reduce its debt of $26.3 billion, while Microsoft will leave another time-consuming antitrust case behind.
In addition to settling legal challenges, AOL and Microsoft announced collaboration on several fronts. Microsoft has given seven-year royalty-free license to AOL to use the Internet Explorer browser in its flagship Internet service. Microsoft, on its part, will gain market share in the areas of media formats and digital rights management by providing America Online with a long-term, yet nonexclusive license for Windows Media Series 9 technology. The two companies have also agreed to explore additional ways to offer protected digital content on the Internet.
Microsoft is going to provide AOL software engineers with opportunities to test upcoming Windows versions on equal terms, as other Independent Software Vendors (ISVs). In return, AOL has agreed to look into the possibility of allowing interoperability between MSN Messenger and AOL Instant Messenger, two of the most popular IM services available today. In the past, America Online was a staunch opponent of such a move.
Even though the pact between Microsoft and AOL Time Warner seems generally conciliatory for the two rivals, the agreement will surely have widespread ramifications for other players. AOL has declared it will not discontinue its current relationships with other partners, but some companies like RealNetworks, may feel the brunt of Microsoft's expansion in the digital content market. Also, the software giant's $750 million payment is expected to finally put an end to the bitter rivalry between Redmond and Netscape, effectively proclaiming the winner of the browser war and further isolating smaller companies, like Norway-based Opera.
More from: CNET News.com | InternetNews.com | Reuters 1 2 | VNUNET.com | The Washington Post
UNIX vortex draws in a slew of big players
Novell is the latest major IT corporation to enter the uproar surrounding the controversial claims of the SCO Group over its UNIX intellectual property (IP). Earlier this year, Utah-based SCO claimed its technology had been illegally incorporated into the Linux operating system and backed up its accusations by filing a billion-dollar lawsuit against IBM and sending threatening letters to thousands of Linux-using companies around the globe.
But earlier this week, software maker Novell totally rejected SCO's claims by declaring the case's foundation, the possession of UNIX IP, invalid. In a letter to SCO Chief Executive Officer (CEO), Darl McBride, Novell's Chairman and CEO, Jack Messman, challenged the allegations put up by SCO and pointed out that when Novell sold UNIX System V in 1995 to Caldera (SCO's former name) the agreement did not include the applicable UNIX copyrights and patents.
The SCO Group was swift to refute Novell's claims and said questions over its authority to license UNIX technology should be resolved in court. In addition, the company announced it will begin proving its claims by showing hundreds of lines of illicitly used UNIX code to a team of independent monitors.
The open source community, however, remains skeptic and infuriated. In Germany, one of the countries with most developed Linux ties, LinuxTag, a lobbyist association, and several other organizations sued SCO for threatening legal action against individual customers without providing proof of its claims. A German court issued on Friday preliminary injunction against the company and a €250,000 fine, if the order is ignored.
Still, if not winning friends, SCO's anti-Linux campaign is bringing money to the company. On Wednesday, the group reported second-quarter net income of $4.5 million on revenue of $21.4 million. According to the filing, $8.3 million, or over a third of SCO's cash flow, came from its disputatious licensing program.
More from: CNET News.com 1 2 3 4 | eWeek | InternetNews.com 1 2 | Reuters 1 2 | VNUNET.com 1 2
Online tunes lure known names
As iTunes Music Store continues to enjoy never before seen success, other companies with interests in online digital content distribution are eyeing Apple's business model. RealNetworks made clear it is up to the challenge and integrated the service of recently acquired Listen.com into RealOne Rhapsody. The new music system continues to rely on a subscription plan that allows its users to access 300,000 tracks for $9.95 a month, but saps Apple in CD-burning by offering customers to put purchased songs on compact disks for only 79 cents per download.
RealNetworks commented its service is not competing with iTunes Music Store since Rhapsody runs on Windows platforms, while Apple works for Macintosh consumers only. Most analysts, however, predict a major clash is set to occur, when Apple extends its service to Windows users, a moved planned for later this year.
Meanwhile, Microsoft ain't watching from the sidelines, either. The software giant is stepping up efforts to develop technology that will allow tracks purchased online to be transferred to portable devices, while assuring appropriate protection of intellectual property. Apple is also struggling with copyright protection. The Macintosh maker released an updated version of the iTunes software, which curbs use of a file-sharing feature to local area networks only. Earlier in May, a group of Mac enthusiasts discovered a way to make the capability work on the Internet, offering free access to songs bought from iTunes Music Store.
Finally, industry watchers are speculating Amazon.com will be the next major e-company to dip into online music streaming sales. Recent comments from Amazon.com CEO, Jeff Bezos, indicate the Internet retailer is considering ways to launch a similar service without hurting the mainstream CD sales of the store.
More from: CNET News.com 1 2 3 4 | InternetNews.com | Reuters | VNUNET.com | The Washington Post
Security watch
 Microsoft Corp. withdrew a Windows XP patch, originally issued on May 21, after customer complaints that the update is blocking Internet connectivity. According to a Reuters report, the Internet connections of over 600,000 PCs were affected. Microsoft advises users to uninstall the patch, while a new fix is being prepared.
More from: eSecurityPlanet | InfoWorld | Reuters | VNUNET.com
The Apache Software Foundation released a critical security update to Internet's most popular web server, plugging a Denial of Service (DoS) hole in the software. Apache 2.0.46 prevents attackers from exploiting the vulnerability and causing servers to crash and go offline.
More from: CNET News.com | InfoWorld | InternetNews.com
A newly uncovered serious flaw in the Kazaa and iMesh file-sharing applications was fixed and users of the two networks are advised to install updated versions of their software. The hole could reportedly allow an attacker to crash supernodes, hubs to which file-swappers connect to.
More from: CNET News.com
In Other News...
The German city of Munich took a decision to install the Linux operating system on 14,000 state-owned computers. The move dealt a blow to Microsoft, whose CEO, Steve Ballmer, personally solicited city officials to choose Windows XP over the open source alternative.
Adobe Systems rolled out version 6.0 of its popular Acrobat software. As expected, the latest upgrade splits the product into several, specifically-targeted packages for users of the company's Portable Document Format (PDF) technology.
A U.S. federal jury in the state of Virginia ruled that eBay, the biggest Internet auction company, has infringed patents owned by Thomas Woolston, a 39-year old electrical engineer and entrepreneur, and his company MercExchange. The court found eBay's automated payment system and several other features vital for the site's performance were illegally employed and ordered the California-based company to pay $35 million in damages.
Bonzi Software settled a class-action lawsuit instituted against the company's deceptive ads mimicking dialog boxes with messages like "security alert" and "warning!" The advertiser is now obliged to mark its banners with the word "Advertisement" and cease using fake interfaces, like phony 'X' buttons that do not close the ads.
The University of Calgary drew ire and criticism after its Computer Science Department announced plans to offer a virus writing course. Several anti-virus companies denounced the move as detrimental to computer security, but university officials said they are unrelenting in their belief that developing such skills will allow for a better understanding of the problems of computer and network security.
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