Desktops Becoming a Less Viable Business

Once at the epicenter of PC makers' profits, desktops are losing their luster as a viable market as companies are hit by thinner profit margins and more emphasis is placed on mobility, analysts said.

Users are increasingly adopting laptops as prices fall, and desktops are being bumped to a niche audience including task workers and gamers. The increased laptop adoption has dropped the average selling price of low-end desktops, which has led to low margins for vendors, especially in the U.S.

On Thursday, Dell reported that its desktop revenue fell 5 percent year-over-year despite a 9 percent increase in shipments in the first quarter of 2009.

"It's important to point out that our notebook growth rate was high and indicative of the trend toward mobility products over the desktop," said David Frink, a Dell spokesman.

Dell's business model was built around desktops in the client and corporate space until a few years ago, and its failure to quickly turn to laptops put its business in trouble, said Roger Kay, president of Endpoint Technologies Associates. The shift to mobile products across the major product lines has put the company back on track, Kay said.

"The trend of switching over to notebooks will continue to rise. I don't think they're going to stop anytime soon," Kay said.

Dell's laptop shipments grew 43 percent during the quarter, with revenue growing 22 percent year-over-year to US$4.9 billion.

Dell's drop in desktop revenue reflects a growing problem with the desktop market in general, said Charles King, president of Pund-IT. "Desktops have traditionally been a market where profit margins are extremely thin to begin with."

Notebook sales overtook desktop sales for most vendors, which are becoming wary about their desktop businesses because of competition and low margins, King said.

"It is a warning flag, not just for Dell. Almost all the PC vendors are going to see ... problems with their desktop sales over time," King said.

While demand for desktops in the U.S. has slowed down, the demand for desktops has shown more life internationally. The world's top PC vendor, Hewlett-Packard, did not record year-over-year growth in desktop shipments in the U.S. in the fourth quarter of 2007, shipping just 2.15 million units, according to IDC. But HP shipped 6.86 million desktops worldwide, a 10.7 percent increase over last year's fourth quarter.

While desktop and laptop prices are close to par in the U.S., low-end desktops are more affordable than laptops in developing countries, which makes them appealing as a first machine for users, Kay said. The trend is changing, with laptops like the XO from One Laptop Per Child and Asus' Eee PC aimed at first-time users.

"When you look at how aggressive vendors have been in pricing those products -- increasingly aggressive I think -- and relying more and more on low-end sales as opposed to high-end gaming and business PCs ... a company can have actual increases in sales but declines in revenue," King said.

Desktops are highly configurable compared to laptops -- which are highly integrated -- so gaming-system builders and niche white-box vendors may flourish on building desktops, Kay said. Theoretically, everything else in desktops could go mobile.

"If the price is the same between notebook and desktops, [users] will go mobile," Kay said.

Newer Technology ESATA Extender Cable

One of the major changes in hard-drive technology in recent years is that most computers now use Serial ATA (SATA) connections, as opposed to the older ATA/IDE connections (also known as PATA, for parallel ATA). All other factors being equal, SATA connections are designed to offer faster data throughput; thinner, more-manageable cables; and better reliability.

While all current Macs except the Mac mini use SATA connections for internal hard drives--the Mac Pro actually has four internal SATA drive bays--Macs lag behind some Windows PCs when it comes to eSATA, a form of SATA used for connecting hard drives in external enclosures. It's an alternative to FireWire and USB 2.0, and one that is, in theory, faster than even FireWire 800; it should offer performance comparable to that of an internal SATA drive. If you've done any shopping for external hard drives lately, you've likely noticed that many inexpensive external hard drives and hard-drive enclosures offer the combination of USB2.0 and eSATA--no FireWire.

(It's worth noting that there are two main drawbacks to eSATA compared to FireWire and USB 2.0. First, the current implementation of eSATA doesn't supply power to external hard drives; you need a separate power adapter. Second, while the SATA interface supports hot-swapping, software and hardware limitations in the host computer mean that few computers currently allow hot-swapping of SATA--and, thus, eSATA--drives. This means that eSATA drives must be connected before your computer starts up, and you must shut down your computer before disconnecting such drives. Still, while I'm partial to FireWire for many uses, especially if I'll be disconnecting and connecting an external drive regularly, eSATA offers great performance at a reasonable price--and yet another option for expanding your storage.)

So how do you add eSATA ports to your Mac? If you've got a Mac Pro, you could buy an eSATA PCI Express card; these cards range in price from US$40 to nearly $200. But it turns out the Mac Pro has six SATA connectors right on the motherboard (in other words, inside the case). Four of those are used for the computer's four internal SATA drive bays, but two are just sitting there, unused.

Taking advantage of these two unused SATA connectors, at a relatively inexpensive price, is the purpose of Newer Technology's $25 eSATA Extender Cable, a nifty accessory that provides two eSATA ports via one of the Mac Pro's PCI Express slot openings. But the Extender isn't a PCI Express card; it just replaces one of the PCI Express card retaining covers--the metal pieces that cover the holes on the back of your Mac Pro left by unused PCI Express slots--with a similar plate that offers two eSATA ports. You connect the two included SATA cables to the unused SATA connectors on the Mac Pro's motherboard and then route the cables to the back of the mounting plate. It's a bit of a hack, but it's a clever one.

Once you've installed the eSATA Extender Cable, the two eSATA ports it provides work well. Using a quad-interface (eSATA, FireWire 800, FireWire 400, USB 2.0) OWC Mercury Elite hard drive, I copied a 1.2GB folder of files from one of my Mac Pro's internal hard drives to the external drive using each interface; I also copied that same folder from one internal hard drive to another. The eSATA connection outperformed FireWire and USB 2.0; for example, it took 1:09 to copy the folder via FireWire 400 but only 0:32 to copy it via eSATA. And the eSATA connection was just as fast as copying the folder between two internal drives.

The downside to the Extender Cable itself is the installation process. You see, Apple didn't mean for the Average Joe to be plugging things into the two unused eSATA connectors on the Mac Pro's motherboard; the connectors are hidden behind many other components. So installing the Extender Cable involves removing a good number of parts, including several Things You Normally Wouldn't Touch. For example, on my 2006 Mac Pro, I had to remove the two memory riser cards, the memory bay itself, all four internal hard-drive brackets, the video card, the processor cover, and the front fan assembly. Whew!

Thankfully, Newer Technology provides a pretty good installation manual that includes clear instructions and lots of images. (Note that although the product's Web page claims the installation guide is "full color," the guide included with our unit was grayscale. There's a full-color PDF version of the manual; unfortunately, it's missing several pages.) Overall, it took me only about 20 minutes to install the Extender Cable. Still, I don't recommend the procedure to those who aren't comfortable taking (expensive) things apart and putting them back together again. And keep in mind that if your Mac Pro is still under warranty and you break anything while installing the Extender Cable, there's a very good chance Apple will refuse to cover the repair.

I suspect that Apple will eventually add eSATA ports to, or make them available as an option for, new versions of the Mac Pro. But for those of us who already have a Mac Pro and would like to have a couple eSATA ports for connecting external drives, the eSATA Extender Cable gives you the option. And it's tough to argue with the price. As someone who's comfortable with the insides of a computer, it's the route I'd take right now. If the installation process was easier, I'd be more comfortable recommending it to everyone.

IPod Case Roundup: Nano Mishmash

As much as I'd like to treat readers to another "theme weeks" for iPod cases, I'm running a bit short on cases of any particular style. So this week please enjoy a delectable multi-case assortment. The four cases we look at share at least one common element: they're all designed for the third-generation iPod nano. But within this diverse hodgepodge, we've got something for everyone: a couple silicone skins, a leather slipcase, and a neoprene sleeve.

Incase Protective Cover for iPod nano

Silicone skins are already about the simplest kind of case you can get for your iPod; Incase's US$25 Protective Cover for iPod nano is simple even by those regards. This piece of molded silicone wraps around your case, covering the back and outside edges. The large front opening leaves pretty much the entire face of the iPod nano visible and an opening along the bottom edge gives you access to the hold switch, dock-connector port, and headphone jack.

Although the open front means you have unrestricted access to all of the iPod's controls, from a protective standpoint, it isn't going to do much to keep your iPod safe and secure. The raised edge of silicone might provide a little shock protection if you drop your iPod on the floor, but if you're worried about sticking your iPod into your pocket or purse along with keys, change, etc., then the Protective Cover probably isn't going to allay those fears.

The silicone itself is fairly thick and durable and the back features a wavy pattern that makes it easy to grip, but that's about all that this case has going for it. The price tag is also pretty steep for a skin that leaves this much real estate unprotected; if you're in the market for a silicone case, you're probably best off looking elsewhere.

Uniea U-Suit for iPod nano

Uniea bills its U-Suit for iPod nano as a "leather hard case" since it features a leather exterior with a reinforced ABS plastic interior. In form, it's basically a sleeve; you slip the nano in at the top, which is open, and the case covers the back, the edge around the screen, and the face on either side of the Click Wheel. The controls and screen are left exposed, though recessed, but Uniea also includes a thin adhesive film to protect the screen.

All of the iPod's controls remain easily accessible when it's in the sleeve; the open bottom lets you get at the hold switch, dock-connector port, and headphone jack. I found the edges on either side of the Click Wheel a little annoying when scrolling (my thumb kept hitting them), but it didn't seem to adversely affect the nano's operation. The leather exterior is pleasant to the touch and the case is robust enough to keep the nano pretty well-protected; the interior features a soft lining that won't scratch the iPod.

The one major downside to the U-Suit is that the case is rather on the bulky side. The third-generation nano is the thinnest that Apple has ever made and although the reinforced leather doesn't make it particularly heavy, it does substantially increase the iPod's profile. If it's svelte lines you're after, the U-Suit probably won't meet your needs, but if you're in the market for a decent leather sleeve, it ought to be fine.

Bone Collection Nano3 Cube

Don't be deceived by the name: the $18 Nano3 Cube from Bone is not a cube. Rather, the front features a distinctive chessboard pattern. The case's design leaves the screen exposed, though Bone also includes a thin adhesive film that you can affix; the Click Wheel is covered by the case and even features raised markings over each of the wheel's buttons. The back of the case has raised bumps that make it easy to grip and also has a small hole for hosting a lanyard (not included). The bottom edge of the case leaves an opening for getting at all of the ports and controls there: the hold switch, dock-connector port, and headphone jack.

Overall, the case itself is thin, not adding a lot of bulk or weight to the nano. It's enough to keep the nano pretty well protected too, though I would have preferred a hard plastic screen protector over the adhesive film. Otherwise, however, the Nano3 Cube is a solid silicone skin at a pretty reasonable price.

Incase Neoprene Sleeve for iPod nano

Our second entry from case vendor Incase is the company's $25 Neoprene Sleeve for the iPod nano. The case is made mainly of neoprene, though the front and back feature heavier plastic panels stitched to the stretchy sleeve material. An opening lets you access the Click Wheel, but Incase thoughtfully protects the screen with a flexible plastic window. The back of the case has a fixed belt clip, oriented upside down from the nano.

To insert the nano into the case, you insert it from bottom, then fasten a Velcro strip to keep the nano from slipping out. The fastener covers the dock-connector port, but lets you get at the hold switch and headphone jack. You can, however, sync or charge the nano without taking it out of the case by simply unfastening the Velcro.

I like the addition of the sturdy belt clip, but it does add a decent amount of bulk to the case, as does the external stitching on the neoprene around the case's edges. However, the sleeve does a good job of both protecting the nano and leaving its controls accessible. For those in search of a sporty, resilient case, the Neoprene Sleeve is a very respectable option.

A Year After ITunes Plus, Competition Heats up

A year ago, if you wanted to purchase and download music without digital rights management--aka DRM, the protection scheme that controls what you can do with your digital media--your choices were few and far between. Some small outfits, such as eMusic, sold DRM-free music, though not usually from the major labels. And while other services, such as Yahoo Music, had toyed with DRM-free releases, it was only for limited promotions. But the vast majority of digital music available online, from vendors like Apple, Microsoft, and Napster, used some form of DRM to protect its content.

Then, in February 2007, Apple CEO Steve Jobs wrote a lengthy and seemingly unprovoked essay on the subject of DRM, entitled "Thoughts on Music." In the piece, Jobs said that Apple would adopt an entirely DRM-free catalog "in a heartbeat," presuming the four major record labels--Universal, Warner Music, Sony BMG, and EMI--would let Apple do so.

Jobs argued that DRM had never been effective at combatting piracy, given the fact that all music sold on CDs was essentially unprotected, and even those digital schemes that did exist had loopholes: Apple itself had for years allowed its iTunes customers to strip the DRM from their purchased music by burning files to CD and then re-importing them.

The world Jobs laid out, where all music sold by online stores would be completely interoperable and DRM-free, seemed to many to be a future seen through rose-colored glasses. Six weeks later, however, it went from fiction to fact when Apple announced a deal with EMI to distribute DRM-free tracks on the iTunes Store.

The initiative, dubbed iTunes Plus, would see EMI's entire catalog made available on the iTunes Store without DRM, in a higher-quality audio format for a premium of 30 cents more than the usual 99-cent track price. The ever-ambitious Jobs predicted that by the end of 2007, half of iTunes' catalog would be available without DRM, a move that would necessitate deals with the other major record labels.

Apple never reached that milestone, however. So what happened?

Share and share alike

In order for Apple to pass that vaunted halfway point, it would have needed to get one of the other big music companies on the DRM-free train. The labels, however, had long been uncomfortable with the amount of power Apple wielded, such as insisting on the flat 99-cent price per song. And with Apple as the runaway leader in the digital download market--and increasingly in the music market as a whole--the labels had little in the way to use as leverage.

"Steve Jobs was getting pushback from the labels," says Phil Leigh, president of Inside Digital Media, which analyzes the digital-media industry. "The labels really have had a rocky relationship with Apple, particularly because they are concerned that Apple has too much power."

In late 2006, Universal had maneuvered a deal with Microsoft to take a cut of sales on its Zune music player, with the rationale that the devices would likely be full of pirated content. Getting a slice of iPod sales would have been the holy grail for the labels, but that was a term that Apple was never going to agree to. So when Universal's contract expired in July of last year, the music company announced that it would not renew its long-term blanket deal, and would instead market its music "at will."

Meanwhile, competing music stores had been engaged in an uphill battle against iTunes. Much of that success can be attributed to iTunes's close ties to the iPod, which remains to date the most popular digital music player on the market; as of December 2007, it held a 67 percent market share. Of course, iPod owners have never been limited to getting their music from the iTunes Store--CD ripping has always been possible--but all of iTunes' rivals used DRM schemes that were incompatible with Apple's portable player.

The labels saw an opportunity with DRM-free music, which they thought would allow them to tip the balance of power back into their favor by freeing them from Apple's stranglehold on the digital download market. Since DRM-free music can be played on the iPod without any sort of technological tomfoolery, providing those tracks to other providers would open up Apple to competition--and the record labels were in a position to make that happen. In August 2007, Wal-Mart and Real Networks announced support for DRM-free music, both prominently featuring DRM-free tracks from Universal Music Group.

"The reality is there are some out there who would like to see more competition for Apple, and DRM-free is one potential lever to create that," says Russ Crupnick, vice president and senior industry analyst for the market-research firm NPD Group. "The record labels feel that DRM-free is in their interest."

Inside Digital Media's Leigh agrees, saying that while Jobs "correctly inferred that the labels were going to have to shift to a DRM-free format, he miscalculated that they would shift towards his competitors."

Amazon MP3 offers DRM-free tracks from all the major labels.

The cannonball into the pool of the digital music download market came in September 2007 when retail giant Amazon launched its own long-awaited music download service, featuring an entire DRM-free music catalog from both EMI and Universal Music Group, as well as a number of smaller independent labels. By leveraging its enormous existing customer database, distributing a free program that tied into Apple's iTunes music software, and undercutting the pricing on iTunes's DRM-free offerings, Amazon positioned itself as the first major competitor to iTunes.

Apple responded the next month by dropping the 30-cent premium on its DRM-free tracks--they would cost 99 cents just like protected songs--and announcing that it had struck deals with independent labels to bring an additional two million tracks of DRM-free music to iTunes. That brought iTunes' total of DRM-free tracks close to half of its 6 million song catalog. (It's impossible to know for sure since Apple has not released exact numbers and declined to offer more detail.)

Meanwhile, iTunes rivals have picked up momentum on the DRM-free front. Earlier this year, Amazon picked up the other two big record companies, Sony BMG and Warner Music Group, making it the first digital music site to boast DRM-free tracks from all the major labels and boosting its total catalog to 5.2 million songs. Just this past week, former music-sharing site Napster reinvented itself by launching an all DRM-free service and claiming the crown of largest MP3 catalog around with over six million songs. And in April 2008, Sony, Universal, and Warner also announced deals to distribute DRM-free tracks on News Corp.'s popular social-networking site, MySpace.

But for all that they appear to have embraced DRM-free music, Sony, Universal, and Warner continue to withhold the unencumbered tracks from Apple, choosing instead to back iTunes's rivals. It would seem that Steve Jobs's proposed future of DRM-free music has quickly become a reality--if not in quite the way he envisioned.

Does DRM matter?

But for all of the noise about Digital Rights Management, the broad availability of DRM-free music has done little to change the overall digital downloads market; people clamoring for it appear to be a vocal minority. Despite iTunes' meager selection of DRM-free music compared to Amazon and Napster, customers are still buying tracks from iTunes in droves. According to NPD's Crupnick, Apple continues to hold around three-quarters of the digital download market, with Amazon in second place, trailing at "a huge gap." Apple's even risen to become the top seller of music in the U.S., beating out brick-and-mortar stores Wal-Mart and Best Buy.

"There's been no real substantive change in market share for iTunes and for the iPod," says Crupnick. "If you're in that environment, DRM-free doesn't impact you."

Phil Leigh agrees: "The amount that it hurts Apple is almost unnoticeable. Most people that have MP3 players have iPods. And the vast majority of iPod owners are unaware or [disinclined] to use other services."

And the number of those services on the market is narrowing, too. In the past year, several download sites backed by prominent companies have closed their doors, including Sony's Connect store and Yahoo Music.

Music services shutting down may let DRM finally shows its teeth. If a brick-and-mortar music retailer goes out of business, all of the CDs you bought there continue to work just fine. But the matter is not so straightforward in the online music world. While many of the closing services operated on a subscription basis that offered unlimited music as long as you paid a regular fee, some also let users download songs to their computer for an additional fee. What happens to those tracks when the service closes?

Phil Leigh thinks issues like this could prompt more awareness of DRM in the future, as digital media becomes even more a part of our lives. "When people buy new computers and try to move their libraries, it's not straightforward. There's going to be some foul-ups, disillusioned consumers."

Microsoft is one company that's recently had to deal with just this sort of problem. The company's MSN Music venture stopped selling music in 2006, but only recently announced its intention to shut down the servers that let users continue to play purchased music at the end of this summer. Past that point, those users will only be able to play their music as long as they keep using the same computer and operating system. But if they upgrade either hardware or software, they're out of luck.

For all of that, though, most users haven't yet found themselves on the business end of DRM. "It's not an issue for the average consumer," says Crupnick. "The average consumer is an Apple consumer and they don't run into DRM issues except for very rarely." It seems that as far as most people are concerned DRM is not a major factor when buying media online. At least, not yet.

The future

In the long run, music isn't the only form of media DRM is concerned with either. In the five years since its inception, the iTunes Store has steadily expanded, adding audiobooks, podcasts, TV shows, movies, and even games for the iPod. In June 2008, Apple will also launch its AppStore, which will let iPhone and iPod touch users download software directly to their devices. And nearly all of this media is or will be protected by DRM too.

As the former CEO of Pixar and now a board member at Disney, Steve Jobs clearly has a vested interest in video. When asked about the topic at Apple's joint press conference with EMI first announcing the DRM-free initiative, Jobs said that video was different from music: you can't go out and buy DRM-free video, even on a physical medium like a DVD. To some that might seem like a rationalization, but if nothing else it's an indication that the movie and television industry are eager to avoid the mistakes of their cousins, the record labels.

"You'll continue to see DRM on video," says Russ Crupnick."The video people look at the way music is acquired and go 'we don't want to wind up like that.' It's killing the business."

Inside Digital Media's Phil Leigh concurs: "The natural instincts of the people that control the studios is to try and control [the media] as much as possible."

Leigh foresees a two-prong model for video, where companies will offer their content in both ad-supported and for-pay formats. But he thinks consumers will be more forgiving of DRM on video, too, because it's consumed differently. "The problem with music is you want to move it one from device to the next; with movies you just want to watch it once."

But both Crupnick and Leigh agree that the march toward DRM-free music will continue. "In the long term, the reality is we are going to a situation where we're going to be DRM-free for individual downloads," says Crupnick. Leigh points out that the record industry's sales have been in decline over the last several years, and says that he would be unsurprised to see them drop even more.

"It puts more pressure on the labels than on Apple." The relationship between Apple and the labels will change over time, Leigh says. "The question is: who has more time?"

Sorting Through the Mac OS X 10.5.3 Update

Eight months into the Leopard era, Apple unleashed the third update to Leopard, with Wednesday's release of OS X 10.5.3. By way of comparison, the 10.3.3 and 10.4.3 updates both came within five months of the release dates for Panther and Tiger, respectively.

As with most of Apple's recent OS X updates, the 10.5.3 version just screams for a broadband connection, weighing in at more than 400MB, depending on which Mac you have and which version your machine deems you to require. So what do you get in exchange for your download time investment? Apple details many--but not all--of the changes in this Knowledge Base document. I won't bother repeating everything listed there, but here are a few of the more important highlights:

Spotlight searching on mounted AFP volumes has been improved.

Wireless connectivity has been improved, both for AirPort in general and when using Time Capsule.

A number of Automator bugs have been fixed, which is great news for many people, myself included. One in particular--a bug wherein a Finder plug-in wouldn't work if the first step was "Get Selected Finder Items"--had affected a number of plug-ins that I use regularly. These now all work in 10.5.3.

Some bugs with Spaces have been fixed, including one where switching to another application via the Dock takes you to another Space, even if that program had an active window in the current space.

A number of Time Machine bugs have been fixed, and Time Machine backups can now be run when your Mac is running on its battery. Previously, you had to connect to a power supply before Time Machine would run.

There are fixes in other programs as well, covering programs such as iCal, iChat, Parental Controls, Voice Over, and the Finder, all of which are detailed in the linked Knowledge Base document.

But what else has changed in OS X 10.5 that Apple hasn't told us about? I've been digging through the new release, looking for any areas that have received updates beyond what's been disclosed. The only substantive visible change I found is in iCal, where there's a new setting in the General section of the calendar app's preferences for controlling how scrolling works in Week View mode. You can now choose between scrolling by weeks (the way OS X 10.5.2 worked) or by days.

It would've been nice if Apple gave us a hidden key override to toggle the settings in real time while scrolling (i.e. holding Option would scroll by weeks if you had the pref set to days), but if the update offers that, I can't find it.

Beyond that visible change, there are many behind-the-scenes changes in 10.5.3, including both major and minor alterations. Here's what I've discovered--and this is by no means a comprehensive list, so feel free to add your own observations as you use this latest update.

Something that's not mentioned at all in Apple's note, but is clearly quite important, are the revised graphics drivers for ATI and Nvidia graphics cards. The 10.5.3 update supposedly delivers improved graphics performance--something that was hinted at in this week's news on Delicious Library 2.0, which shipped with a warning that those not running 10.5.3 will experience graphics slowdowns. Digging through the installer file, I can see that there are updated extensions for a large number of ATI and Nvidia cards (including on-board video in the mini and MacBooks) in the 10.5.3 update.

Other system extensions have also received updates--everything from AirPort to the keyboard backlight to fan management to power management to RAID to storage management. The Multitouch gesture capabilities get an update, as do USB, FireWire, and Bluetooth. Networking technologies are updated, as are file systems such as NTFS, SMB, UDF, and WebDav.

There are a ton of modified files in the CoreServices folder, where many critical features of OS X reside. Changes here include the Dock, the Finder, file synchronization, the installer, various menu extras, and the process that manages Time Machine, among others.

A number of Dashboard Widgets have been updated. Dictionary, Stocks, Weather, and iCal widgets all have new code (though I'm not sure if they have any new functionality), and Unit Converter and Web Clip contain changes only to non-English files.

There are quite a few updates to Macromedia's Shockwave plug-in, but unfortunately, it's still a PowerPC plug-in that's not compatible with Intel Macs (unless you run your browser in Rosetta mode).

iSync added support for some new phones from Samsung.

A number of other applications received updates of some kind, but the changes were either minor (noted in parentheses below), or I can't find any detail on what's changed. Items on this list include DVD Player, Dictionary (something to do with Wikipedia support), Exposè, Photo Booth, Preview (related to PDFs and images), Safari (some language changes on preference panels; help files), Activity Monitor (changes in some phrases), Bluetooth File Exchange, ColorSync Utility (changes in filters and profiles), Directory, Disk Utility (changes in many plug-ins, including those that handle disk first aid, info windows, partitioning, and RAID), Keychain Access, Migration Assistant (lots of changes and a new version number, 1.2.1), RAID Utility (changes in the main window and menu), Remote Install OS X, and X11.

Whew. That's a heck of a lot of stuff to update, and it's nowhere near complete--these are only the things that seemed worthy of highlighting, out of more than 35,000 changed files in this update.

As an aside, if you're curious as to how you can see what's been installed by the 10.5.3 update yourself, the key is reading the "bom" file that's created when you run the installer. You'll have to use Terminal to read the file, but here's how you can dump its contents to a text file in one command. Open Terminal and type the following, then press Return:

You can then open the 1053changes.txt file (which will be on your Desktop) in any text editor, and see each and every file that was modified by the installer. Keep in mind that just because a given file was changed, that doesn't mean you'll see new features in that program--the changes could have been behind-the-scene bug fixes, or minor changes in language that only appear on certain screens. Still, scanning this file gives you a good sense of the breadth of this update.

In my limited time with 10.5.3, I haven't found any new bugs that this update has introduced. That doesn't mean Apple has fixed all the bugs in Leopard, of course--I'm still waiting for the ability to view more than three columns in Spotlight's search results, as but one example. But Apple's focus on continual improvements in OS X 10.5 is good news for all of us consumers.

Google Highlights OpenSocial, Gears at I/O Event

Google has upgraded its OpenSocial platform with a new REST (representational state transfer) API for applications that need to tap back-end servers for data and functionality.

This capability had been eagerly awaited by developers creating OpenSocial applications, particularly because having the REST API (application programming interface) is considered key for mobile applications.

Version 0.8 of OpenSocial also enhances the platform's JavaScript API, Google announced Wednesday at its I/O developer conference.

"This represents the next evolution of the OpenSocial API, which was scoped, specified and built via an open process run by the community," wrote Google product manager Dan Peterson in the OpenSocial blog.

OpenSocial is a project that provides a set of basic APIs so developers don't have to fully re-write an application to have it run on each social-networking site. The JavaScript API modifications are detailed in version 0.8's release notes.

In a related I/O announcement, Google said that MySpace is adopting its Gears technology for storing data from Web applications locally in a browser for offline access.

Specifically, MySpace will use Gears in the e-mail service it provides to its social-networking site members. To date, this is the largest implementation of Gears outside of Google and the first time MySpace has made available functionality for its users to search and sort mail.

According to MySpace, its members send an average of 170 million mail messages every day using the site's mail system. Through its local storage capability, Gears will allow them to search and sort their mail rather than having to manually scroll through their messages.

In addition, Google announced that popular blog-publishing service WordPress is also using Gears to let its users manage their blogs offline, and that Gears now also supports Apple's Safari browser and version 3 of the Firefox browser.

Also at I/O on Wednesday, the company released an API and a browser plug-in for its Google Earth mapping application. "[Developers] can now use the Earth as their canvas and apply their creative vision to a geographically rich, 3D environment, leveraging the same technologies we use in the desktop Google Earth client. For consumers, this means that they will soon see Google Earth in many more places around the Web -- perhaps even their favorite Web site," Google said in a statement.

Mozilla Shooting for Record Books With Firefox 3 Release

Mozilla is aiming to create what may be the geekiest world record ever with its upcoming Firefox 3 browser release.

The company on Wednesday started a campaign asking users to pledge to download the next full release of its browser on the day it is available so the release can set a Guinness World Record for the largest number of software downloads in 24 hours.

Mozilla has not yet unveiled exactly when Firefox 3 will be available, but expects it could be as soon as mid-June. A test release of Firefox 3 is currently available online.

The company is deeming the day of its release "Download Day" and is asking fans to not only pledge to download Firefox 3, but to host parties to encourage friends to download with them, and place "Download Day" buttons on their Web sites as reminders of the big day.

Currently there is no world record for software downloads; Mozilla is trying to create one with Firefox 3 and its Download Day festivities.

According to the campaign's Web site, once Download Day is over, Mozilla plans to provide the Guinness Book of World Records a signed statement of authentication from its judges showing that it followed rules for breaking records; the company also will confirm download numbers. Mozilla also plans to send video footage and photographs of Mozilla users hosting download parties as well as download logs for a sample size of Firefox 3 downloads to prove it has set a world record.

While the fanfare may seem a bit geeky, Firefox -- released in November 2004 -- has inspired a significant and rather fervent fan base. This is in part because it was the first browser in years to give Microsoft's Internet Explorer viable competition. The browser even has its own fan page (sign-in required) on the Facebook social-networking site, with 79,174 fans signed up and counting.

According to Mozilla, there are more than 175 million users of Firefox, which is available in more than 45 languages and used in more than 230 countries.

More information about how users can participate in Download Day is available on the campaign's Web site.

Leech 1.1.2

For some people, downloading files is something that happens only occasionally--for example, when a new version of a program they use is available. But for others, file downloading is a frequent task. I'm definitely in the latter group; for my Mac Gems work alone, I download 10 to 20 software titles each day.

Safari, Firefox, and other Web browsers handle downloads adequately, but if you're a frequent downloader, a dedicated download manager can be quite handy. The latest such tool is Many Tricks' Leech 1.1.2 (€9.95 [US$19.69]; cross-upgrade from any other download-managing utility, €6.95), and in the time I've been testing it, it's improved my workflow noticeably.

Leech provides several options for initiating a download. One is to drag or paste a download's URL into the Leech window; the file will begin downloading immediately. (When you paste a URL or link, using the Command+V keyboard shortcut or Leech's Edit: Paste menu command, you won't actually see the URL in a text field; Leech will just start downloading from the pasted URL.) You can also drag a URL onto Leech's icon in the Dock or switch to Leech and enter a URL manually using the File: Open URLs command. (All these methods also work with multiple URLs. For example, you can copy several URLs at once and then paste them into Leech's window.) You don't even have to use raw URLs; you can even use text with embedded links. So, for example, you can drag or paste a paragraph of text from a Web site into Leech; Leech will extract all the download URLs from that paragraph.

But the easiest approach--though it comes with a caveat, noted below--is to let Leech integrate with your browser. When you first launch Leech, it will ask you if you want to install the necessary support files. If you agree, Leech can take over all download links in Safari, Camino, OmniWeb, and Firefox; it essentially displaces each browser's own Downloads window. All you have to do is activate Leech from within your browser; for example, in Safari, you just choose Safari: Download via Leech. Once you do this, clicking on a download link in your browser sends the URL directly to Leech, where it then downloads.

The caveat I mentioned about this direct browser integration is that it requires you to install an Input Manager module; specifically, the SIMBL Input Manager manager. Input Managers like SIMBL use unsupported methods to add functionality to programs, so it's possible they can cause problems, especially when new versions of affected programs, or the OS itself, are released. I use the occasional Input Manager hack on my own Macs without problems, but if you start experiencing issues with your Mac, especially after upgrading OS X or your Web browser, Input Managers are a good place to start troubleshooting. And I give Many Tricks much credit for being up front about Leech's use of an Input Manager: before installing it, Leech provides you with detailed information about the risks. (Note that integration with Firefox requires that you also install the FlashGot extension and then choose Leech as your download manager in FlashGot's preferences.)

However you choose to use Leech, you monitor your downloads using its main window, which looks very much like Safari's Downloads window, complete with progress bars showing you how much of each file has been downloaded.

Of course, if all Leech did was to take over downloads from your browser, it wouldn't be very compelling. What makes Leech so useful is that it gives you many options for customizing how downloads are handled.

At the most basic level, Leech lets you pause and resume downloads for individual files or for all downloads; paused downloads remain queued even if you quit Leech or shut down your Mac, so you can resume at some other time. (Note that some servers don't support resumed downloads; downloads from such servers will start over when you resume.) Leech also lets you choose how many downloads can occur simultaneously; how and when downloads are cleared from the Leech window; and what kind of notifications you get when each download finishes (Leech includes Growl support). But it's also got a number of unique features that make it especially useful for heavy downloaders:

You can set up multiple download locations and then quickly switch between them. For example, during the normal course of my work day, most of the stuff I download ends up in work-related folders. But once a day I get an email from VersionTracker listing all the new programs added to VersionTracker that day; I go through this email and download new programs I want to try and updates to programs I've already installed. With Leech, I can easily choose to download such files to a folder dedicated to software downloads. (Such a change applies to future downloads; currently-downloading files will be saved to the location that had been chosen at the time they started downloading.) You can also choose to download a specific file to a different location by holding down the Shift key as you drag the download URL into Leech.

You can configure rules for handling downloads of specific types or from specific domains--or both. For example, you can set up a rule so that any disk image downloaded from Apple's servers is saved to a folder called "Apple Updates." To do so, you choose File: Define Rule; enter apple.com and appldnld.apple.com.edgesuite.net in the Host box and dmg in the Extensions box; and then choose the desired folder--Apple Updates, in this example--from the Download To pop-up menu. (I included appldnld.apple.com.edgesuite.net in the Hosts box because some Apple updates actually come from that domain; note that you need to omit the . from any file extension.) If a rule contains a file-extension condition, you can optionally have Leech open matching files with a particular program. You can create as many rules as you need, and you can preview your rules in Leech's File menu.

Leech offers a number of post-download options. Right-click on a completed download in Leech and you're presented with a number of choices, including revealing or opening the file, copying the URL of the original download, or copying the path to the file on your Mac's hard drive.

If you're not online, you can choose to download files later. For example, if you're browsing email on a plane, or surfing pre-loaded or archived Web pages away from a network, Leech can queue downloads; you can then start the queue the next time you've got a 'net connection.

Leech's downloads window also serves as a history listing, storing as many past downloads as you choose--up to the 500 most-recent, or, instead of a set number, the complete list of every file you've downloaded using Leech. What makes this feature useful is that you can sort the download history chronologically or by name or progress, and you can quickly search for any past download using the Filter field at the top of the window. Leech's History menu also displays completed downloads and offers many of the same options you get by right-clicking on an item in the queue; the menu also adds an option to download a file again.

You can set Leech to automatically shut down your Mac when all downloads have completed. If you're downloading a huge file late at night, just right-click anywhere in Leech's file list and choose Shut Down When Done; you can go to sleep knowing that your Mac will turn off by itself. (Of course, as with any shut-down command, make sure you don't have any unsaved changes in other programs, which can prevent a shutdown from occurring.) Unfortunately, there's no Sleep When Done option.

Leech's Dock icon lets you track your downloads at a glance by showing the number of items in the queue and the overall progress of pending downloads.

There are also a few other interesting features, such as private downloading, which obfuscates file names in the download window, and keychain support, so you can re-download a file from a password-protected server without having to enter the password again.

One issue I found while testing Leech is that it doesn't appear to support HTTP-redirect URLs. For example, all download URLs on VersionTracker are HTTP links such as http://tc.versiontracker.com/product/redir/lid/1369259/ScriptLight%20Install.dmg.zipScriptLight that redirect to the actual download URLs on software vendors' servers (in this example, http://www.hamsoftengineering.com/assets/ScriptLight%20Install.dmg.zip). When Leech is integrated with your Web browser, such URLs present no problems, as your browser handles the redirect and passes the actual download URL to Leech. But if you try to paste such a URL into Leech, or drag it into Leech, nothing will happen, because Leech doesn't see it as a valid download URL. That said, if you take advantage of Leech's browser integration, which I suspect most people will, this issue won't affect you.

Leech isn't for everyone; if you don't download files frequently, you won't be able to appreciate its attributes. But for heavy downloaders, it's the "Downloads window" I wish Safari and other browser had.

Leech 1.1.2 requires Mac OS X 10.5 or later.

First Look: Dreamweaver CS4 Beta

The public beta of Dreamweaver released by Adobe Tuesday delivers significant changes to the 10-year old Web design and development tool. Not only does Dreamweaver CS4 offer a complete overhaul of the user interface, it adds many new features aimed at the "professional" Web developer. In addition, the beta expands on the powerful (and easy-to-use) Spry toolset introduced in last year's Dreamweaver CS3 release.

Integration with the Creative Suite

The most obvious change to the program is Dreamweaver CS4's new user interface. The old Macromedia look-and-feel has finally been replaced with an interface that matches the other applications in Adobe's Creative Suite. (Dreamweaver was among the Macromedia products absorbed by Adobe when it bought its one-time rival three years ago.)

While this change will take a while for long-time Dreamweaver users to get used to, the new interface significantly improves the usability of the program. Panels and windows mesh together well, are easier to organize, move and hide, and the new interface provides the flexibility to create a working environment that's comfortable whether you're working on a 17-inch monitor or a 30-inch Cinema Display.

In addition, the program has taken its first step toward supporting a feature that's been in the other Creative Suite programs for years--SmartObjects. Dreamweaver CS4 now offers support for PhotoShop SmartObjects--you can drag a PSD file into a Web page within Dreamweaver, optimize the image for the Web, and even resize it. If you later update the original PSD file, a red arrow will appear on the image inside Dreamweaver indicating that the source file has changed. You can then click an "update from original" button in the Property inspector, and a new version of the image is created.

A professional Web developer tool

Dreamweaver has always been a powerful tool that has attracted both Web novices and Web veterans. This latest version offers a slew of new features aimed directly at those that feel at home working in raw HTML, CSS and JavaScript as much as they do working with Dreamweaver's visual, dialog-driven tools. In fact, many of the new features promote a workflow that involves working in code view alongside the visual design view.

The new related files bar, which appears between the document toolbar and the document itself, lists all CSS and JavaScript files linked to the page. (If you're using a server-side programming language like PHP, you'll see included server-side files listed as well.) By clicking one of the related files in this bar, you immediately jump to the code in that file. In this way, you can open a single Web page and immediately have access to other files the page references: quickly jump to the page's CSS file, make some changes and jump back to the Web page file to see the changes.

The related files bar really shines when combined with another new addition: vertical split view. Now you can see side-by-side, a page's raw HTML code and its visual design. Make a change in the visual view and see the code immediately updated or vice-versa. When viewing a page that has related files (for example, an attached external style sheet), you can see the visual design of the page on one side, and a related file in the other. This lets you edit the CSS code and see the changes take place visually on the Web page.

A new "code navigator" (which is really more like a "CSS navigator") lets you view a list of CSS styles that affect the current selection: you can view all of the properties set for that style and even jump directly to the CSS code for that style. While earlier versions of Dreamweaver provide similar tools through the CSS Styles Panel, this streamlined method makes for a more efficient workflow.

Dreamweaver CS4 offers many new features for HTML, CSS and JavaScript code warriors, including the related files bar, a new vertical split view, and live view to see the page as it actually looks (and works) in a Web browser. In addition, you can view the "live" code (which Dreamweaver displays with a yellow background) to see any HTML produced by JavaScript or server-side programming.If you have ever been dismayed that Dreamweaver doesn't provide a real WYSIWYG view of your Web pages, you'll be happy with the new Live View option. The Dreamweaver CS4 beta embeds the WebKit rendering image (the same as used in Safari), so by clicking a live view button you can actually see the page as it's rendered in a Web browser: you can even interact with the page and view JavaScript effects like rollovers, drop-down menus and tooltip pop-ups without having to switch from Dreamweaver to a Web browser.

The complementary Live Code view shows the HTML--a useful addition for pages that use JavaScript to manipulate the appearance and content of a page, or for dynamic server-side pages that require additional information from a database to display correctly.

Within live view, you can "pause" any JavaScript effects--for example freeze a drop-down navigation menu--then use the code navigator to quickly identify the CSS styles that affect the menu.

More than just code

But not all of the new features in the beta are aimed at those Web professionals who know how to code with one hand tied behind their backs. Several features will be a boon to less-experienced Web designers as well.

The revamped Property inspector reduces the risk of making errors when adding HTML and CSS for text. In earlier versions of Dreamweaver, you would sometimes add HTML to the page and sometimes create CSS styles, depending on which buttons you clicked in the Property inspector. This frequently led to a messy mix of strangely named styles, like Style1, Style2, and so on. Now the two functions--adding HTML and creating styles--are separated into two different views of the Property inspector.

The Dreamweaver CS4 beta also expands on the JavaScript-based Spry Tools introduced in Dreamweaver CS3. Dreamweaver's Spry features make it easy for non-programmers to add sophisticated JavaScript-based user interface elements like drop-down navigation bars, tabbed interfaces, and user-friendly form validation. The new Spry tooltip commands lets you add pop-up information bubbles to links.

Dreamweaver CS4 also includes three new form validation widgets. The password validation widget lets you enforce rules for passwords (such as "this password must be 10 characters long and contain at least 2 numbers"). The password confirm widget forces a user to confirm the password he already entered. The radio group validation widget lets you make sure that a radio button is checked before a form is submitted.

Finally, a new HTML dataset tool lets you treat a regular HTML file like a small database system. For example, you can create a HTML table full of rows and columns of data, and use Dreamweaver to import that table into another Web page (using JavaScript and Spry). There you can present that data in a variety of different ways such as a "Master/Detail" page that lets a user view a master summary of rows from the table, click an item in the list and instantly see all of the details for that table row.

See for yourself

The Dreamweaver CS4 beta is available now from Adobe Labs. It requires either a PowerPC G5- or Intel-based Mac and OS X 10.4.11 or 10.5. The beta expires after two days unless you have an Adobe CS3 serial number. With that serial number, the beta will remain unlocked until the next version of the beta becomes available.

[David Sawyer McFarland is the author of Dreamweaver CS3: The Missing Manual (O'Reilly, 2007).]

FTC Halts Pretexting Operation Connected to Hewlett-Packard

A U.S. judge ordered a Florida business connected to the 2006 Hewlett-Packard spying scandal to halt the sale of personal telephone records and ordered defendants in the case to pay more than US$605,000 after a complaint by the U.S. Federal Trade Commission.

Judge Anne Conway of the U.S. District Court for the Middle District of Florida, Orlando Division, ordered Action Research Group and people connected with the company to stop obtaining consumers' telephone records without their consent, the FTC announced Wednesday.

A contractor hired by HP through Action Research Group was at the heart of a scandal revealed in late 2006 in which HP officials authorized private investigators to trace the source of boardroom leaks to the media by obtaining the call records of board members and journalists. The contractor and other investigators allegedly used false pretenses to trick phone companies into providing those records, a practice called pretexting.

In February 2007, the FTC filed a lawsuit against Action Research Group, owners Joseph and Matthew DePantes, and contractors Eye in the Sky Investigations, its owner Cassandra Selvage, and Bryan Wagner. In January 2007, Wagner pleaded guilty to federal charges of conspiracy and aggravated identity theft for his part in the HP pretexting scandal.

In March 2007, a California judge dismissed charges against Action Research Group's Matthew DePantes, former HP chairwoman Patricia Dunn and two other men connected to the HP case.

The Telecommunications Act of 1996 provides that a customer's phone records may only be disclosed "upon affirmative written request by the customer," according to the FTC complaint. Since at least 2005, Action Research Group has sold confidential phone records obtained using "false pretenses, fraudulent statements, fraudulent or stolen documents or other misrepresentations, including posing as an account holder or as an employee" of a phone company, the FTC said.

"The invasion of privacy and security from the unauthorized access to and sale of confidential customer phone records causes or is likely to cause substantial harm to consumers and the public, including, but not limited to, loss of privacy and endangering the health and safety of consumers," the FTC said in its complaint.

The DePantes and Action Research Group agreed to settle the FTC charges, the FTC said. Defendants Eye in the Sky, Selvage and Wagner received default judgments from the court. Attorneys for Action Research Group did not immediately respond to a request for comment.

The settlement and default judgments permanently prohibit the defendants from obtaining, marketing or selling customer phone records or consumers' personal information derived from those records. They also bar the defendants from pretexting or using others to pretext to obtain consumers' information.

The settlement order entered a judgment in the amount of $67,000 against the DePantes and Action Research Group, the estimated amount of ill-gotten gains the defendants earned from their pretexting schemes, the FTC said. That judgment was reduced to $3,000 based on their ability to pay.

In the default judgments, the court ordered Wagner to give up $428,085 in ill-gotten gains and Eye in the Sky and Selvage to give up $110,762.

Since 2006 the FTC has charged 16 people and their businesses with violating federal law by pretexting to obtain phone records. All of the defendants have been barred from pretexting and have been ordered to give up the money they made.

Cheer Up: Mobile Ad Invasion Stalls

PARIS (Reuters) - Advertising on mobile phones has enormous potential to become a significant platform for marketers, but any breakthrough is years away and major operators must work together to succeed, executives said.

Mobile operators increasingly see advertising as a powerful offering, given falling traditional voice revenue, as it allows brands to target consumers based on their location and at times of the day when they are otherwise hard to reach.

Executives from advertising and telecoms groups told the Reuters Technology, Media and Telecoms summit mobile advertising was inevitable and would become hard to resist.

But it was still at the experimental stage, and many brands and mobile operators were wary of alienating customers.

"It will be slow, it will take time but it will be there," Maurice Levy, chairman and chief executive of advertising group Publicis, told the summit in Paris.

"Why? Because it will be in the interest of the phone companies, consumers and advertisers. So it will be very difficult to resist."

Forecasts suggest the mobile ad market will generate revenue of $1 billion to $24 billion within the next 4 years.

Many operators are experimenting with plans and one service, Blyk, has signed 100,000 clients in the UK with its offer of some free calls and text messages in return for accepting ads.

"If you look at the long horizon, I think that advertising on mobile phones is going to be very, very significant, simply because there are going to be 5 billion mobile phones and they are always with you," Hamid Akhavan, the head of Germany's T-Mobile, said.

Stumbling Blocks

"There are people on this earth who in their life will never have a TV or a laptop but they will have a mobile phone. (So) thinking logically, there is no reason why mobile phones should not be the most powerful tool for advertisers."

All participants agreed there were many stumbling blocks.

Virgin Mobile USA told the Reuters summit in New York that it would use AOL's mobile advertising system exclusively to deliver banner ads to its customers who surf the Web on their phones. But they intended to approach the offering carefully.

"A cell phone is an intimate device," Chief Executive Dan Schulman said. "We pay a service provider to have that service and we don't want to be spammed, quite frankly."

French mobile operator SFR said there would be a market for mobile advertising and it had established a team to work on a business model, but said its customers would have to opt in.

"People will have to agree to take this service," Chief Executive Frank Esser said.

T-Mobile's Akhavan saw mobile advertising being held back by the large number of different phones and their capabilities, meaning the inventory space for advertising was very fragmented.

"By the time you say how many countries you cover and what your share of the market is, how many people have that kind of phone and how many of them are interested in Nike, you end up with an inventory of 6,000," he said.

"And are you going to go to Nike and waste their time over 6,000 potential customers?"

A cooperative model was likely the only way to succeed.

"So in Europe for instance all the big names have to work together, look at the inventory and try and figure out a way for us to share it in a very cooperative way and together go and pitch. That's the only way it is going to work," he said.

Akhavan said operators were starting to discuss this but that it was not a top priority.

Demand Remains for Smaller LCDs

Analysis: Combo units and midsize monitors still draw buyers' interest, even as LCD-makers push big-screen TVs.

TOKYO (Reuters) - Predicting what fickle consumers will buy has never been an exact science.

Liquid crystal display (LCD) makers had predicted shoppers would snap up the biggest flat TVs as prices came down, but are finding that it's the smaller models that are moving faster off the shelves.

Shrinking Interest

TV screens sized 32 inches or smaller and TV-viewing PC monitors are a cheaper way to replace bulky cathode-ray sets for many consumers in emerging markets, such as China, India and Russia, in time for the Beijing Olympic games.

A U.S. economic slowdown has curbed demand for larger, more expensive sets.

Makers had previously forecast premium 40-inch sets would be the main money-spinners and spent heavily in a race to build larger factories suited for bigger panels.

Now, makers with strength in small screens, such as Taiwan's AU Optronics Corp, and those with a focus in the Chinese market such as LG Display Co Ltd are in favor.

"As of now, 32-inch is almost one third of the market," Champ Shin, vice president in charge of TV screen sales at LG Display, told the Reuters Global Technology, Media and Telecoms Summit.

"Up to now most LCD makers had focused on large screens only. But the growth rate of larger screens seems to be a bit slow. And there's big demand for ... TVs using monitor panels or smaller TV panels."

LG Display is switching some of its TV panel capacity to computer screen production, building a new line for smaller panels and strengthening ties with Chinese TV makers.

The lead by small-size TVs will likely continue for the next few quarters as the U.S. economy stutters and the Chinese TV market takes off ahead of the Olympics.

32-inch TVs are the most popular model for those replacing conventional cathode-ray tubes, whose market size was around 100 million units in 2007, according to Lehman Brothers.

Dual Duty

High-definition monitors adopting the wider TV screen format are increasingly sold for TV viewing, as new technology such as broadband TV has blurred the line between monitors and TVs.

So-called moniTV sales could more than double in 2009 to top 50 million units, AU CEO H.B. Chen said at the Reuters Summit.

"All these monitors can still provide very good TV performance. MoniTVs are a new segment to grow," Chen said.

The entry-level 15-inch models are for students or emerging market consumers, while 19-inch is becoming a mainstream in the moniTV market, said Paul Peng, AU executive vice president.

But the popularity of the small-size TVs won't last long as TV makers are aggressively cutting prices, which soon will spur up demand for larger sets.

In North America, Samsung Electronics Co Ltd, Sony Corp, and Vizio are conducting a fierce price battle for market share in the slowing market.

After all, moniTVs are not the flagship product.

"Do you want to have that in your living room? I don't think so. Large-size TVs will still be king in the future," said Nigel Lee, a fund manager at Taiwan's National Investment Trust.

A looming panel oversupply in 2009 will only help make bigger TVs affordable sooner than expected.

After an industry-wide spending curb last year, new capacity from top makers such as Samsung and LG Display is set to hit the market early next year.

Analysts expect prices of 40-inch grade TVs to fall below $1,000 by the 2008 fourth quarter, boosting demand. Sony has lowered prices of its key LCD TV models by 30 percent in the second quarter, they say.

"40- and 42-inch TVs, along with the 32-inch model, will become the mainstream in the global market by 2010," said Jeff Kim, analyst at Hyundai Securities.

Nudge to Digital

The phase-out of analog broadcasting in the United States in early 2009 is also expected to speed up TV replacement demand.

"In the U.S., the sweet spot is quickly moving to 40 inches," Mike Splinter, CEO of Applied Materials Inc, told the Reuters Summit in New York.

"(TV size) is going to continue to move up for the next few generations. I don't know where the limit is."

Research firm iSuppli forecasts worldwide LCD TV sales volume to top 100 million this year and reach 194 million in 2012. LCD TV shipments were at 78.5 million units in 2007.

Does the US Need a New Broadband Policy?

Ken Hubbard worries that broadband speeds in the U.S. aren't adequate for the next wave of Web content.

Hubbard, president of networking startup InteliCloud Technology, said he's generally not a fan of large government programs, but it may be time for the U.S. Congress to look at ways to encourage roll out of faster broadband services.

Internet users are demanding more video and high-bandwidth applications, and high-definition video is on the way, said Hubbard, whose company is set to release a network appliance it dubs "network in a box." "The infrastructure is not strong enough to support the growth that needs to happen," he said. "[Broadband] has got to become ubiquitous."

Hubbard's concerns have been echoed by several groups in recent months. Groups calling for a wide-ranging U.S. broadband policy say the nation is falling behind others in key broadband statistics. One problem, however, is that the debate over broadband policy spills over into many issues, including concerns about a lack of competition and net neutrality.

In March 2004, President George Bush called for broadband to be universally available across the country by 2007 -- a goal that has not been reached. Bush's broadband policy also focuses on keeping Internet service free of taxes and deregulating broadband providers, initiatives that largely came from Congress or the U.S. Federal Communications Commission.

The call for a stronger broadband policy is far from unanimous. Broadband providers say they're spending billions of dollars a year to expand and improve their networks. And an FCC decision to deregulate telecom-based broadband providers, allowing them to stop sharing parts of their networks with competitors, is only three years old, others say.

Critics of the FCC's deregulation approach say it has eliminated most competition. But deregulation is "really bearing fruit" and should be given more time to work, said Bret Swanson, senior fellow at the conservative think tank, the Progress and Freedom Foundation (PFF).

In many cases, the debate about broadband policy gets wrapped up in related debates about net neutrality and broadband traffic management, Swanson added. While several groups have called for the FCC or Congress to prohibit broadband providers from blocking or slowing some Internet traffic, these net neutrality rules could limit legitimate traffic management techniques, causing network congestion, he said.

Passing net neutrality rules could "halt what is a very positive solution right now," he said. "The way a so-called new broadband policy is talked about seems to not be a step forward."

Some advocates of a new broadband policy also talk about the need for more competition, but because of the cost of building networks, a significant increase in competitors isn't likely, Swanson added. The U.S. may be better served focusing on two large, robust networks with wireless and satellite service filling in the holes, he said.

"You're never going to have dozens or hundreds of broadband providers to your home," he added.

Advocates of a broader national policy say broadband brings huge economic benefits to the U.S. -- a 7 percent increase in broadband adoption would create 2.4 million new jobs and have an annual economic impact of US$134 billion, according to a study released in February by Connected Nation, a nonprofit group focused on improving broadband adoption across the U.S.

Critics of current policies say the U.S. is behind several other countries in broadband adoption, and many rural areas have little or no access to broadband. In addition, U.S. broadband users pay more for broadband and have access to slower speeds than several other nations, they say.

U.S. broadband providers say they are rolling out faster broadband -- Verizon, AT&T and Qwest are all moving forward with fiber-based deployments. But Hubbard, whose company will aim its first product at providers of Internet-based services, doesn't see it happening fast enough to keep up with demand.

"To me, [the broadband] industry has had a shot at it, and they haven't done anything with it," he said.

Critics say Bush's universal broadband goal was largely unsuccessful, with many rural areas still without service or with little competition. The California State Broadband Task Force, in a January report, found that about 4 percent of the state's households, or 1,975 communities, didn't have access to broadband. About 1.4 million [m] California residents, more people than live in 11 other states, don't have broadband service, the report said.

The California report is one of several released in recent months calling for a more comprehensive broadband policy in the U.S. The California task force focused on several things the state could do to encourage broadband rollout, including issuing state bonds to finance broadband expansion, 10 percent or 20 percent tax breaks for providers building networks in rural areas, and lifting the spending cap on a rural telecommunications program already in place.

Educause, a group focused on the benefits of IT on higher education, took a broader approach when it issued its Blueprint for Big Broadband in January. Educause called for a $100 billion investment in broadband in the U.S., with the federal government, state governments and private industry each paying for a third of the costs. The federal government would pay about $8 billion a year for four years under the Educause plan.

The goal is 100M bps to 1G bps of broadband speed available to each U.S. resident and business, said Wendy Wigen, an Educause policy analyst. Educause wants "deployment with a big D, so to speak," she said. "When [government sources] quote 95 percent access ... it is for DSL or cable modem, which we feel is not sufficient for the Internet demand that is just around the corner."

Democratic presidential candidates Barack Obama and Hillary Clinton have both talked about the importance of broadband, Wigen noted.

But Robert Atkinson, president of tech-focused think tank the Information Technology and Innovation Foundation (ITIF), suggested that big government programs aren't likely to gain traction in the U.S. An ITIF report this month compared U.S. broadband policies to several other countries, and found that nations such as Japan and South Korea created mandates for broadband providers that would have little chance of approval in the U.S.

Japan required DSL (Digital Subscriber Line) providers to rent out their lines to competitors at low prices, a policy the U.S. has moved away from. South Korea basically required broadband providers to build out the networks nationwide, Atkinson said. Broadband providers in those countries are "in a different world," he said.

While environmental factors such as weather and population density can have a major effect on broadband adoption, government policies can also help with adoption and rollout, Atkinson said. Instead of major spending projects, which could face major opposition, the recent ITIF report called for the U.S. government to take several smaller steps to encourage broadband rollout.

The U.S. government should adopt more favorable tax policies, allowing broadband network operators to depreciate their investments in next-generation networks faster, the report said. The ITIF recommended that the government make more wireless spectrum available, expand and reform programs aimed at delivering telecom services to rural areas, fund state programs already working to expand broadband deployment, such as the Connected Nation program.

In addition, U.S. residents have to decide what they want: fast broadband or broadband competition, Atkinson said. Part of the problem with the debate about broadband in the U.S. is that many groups have conflicting goals, with many consumer groups pushing for more competition, he said.

More competition is "completely incompatible" with super fast speeds, he added. Building competing broadband networks is an inefficient way to get faster networks, Atkinson said.

"This is not the widget industry," he added. "Competition works well in the widget industry because the fixed costs are fairly low."

U.S. policies should instead focus on rollout and speed, Atkinson added. "The goal should be to get as much broadband to as many people as possible," he said.

Atkinson and Link Hoewing, assistant vice president of Internet and technology issues at Verizon, both see potential in the Connected Nation model, a program started in Kentucky that uses state and private funding to push broadband into areas that don't have it.

Several other states are trying to replicate the Kentucky model that has expanded broadband availability from 60 percent of households in the state to 95 percent of households since January 2004. Verizon and other providers are working with states to map unserved areas and expand coverage, Hoewing said.

In rural areas in other states, "we've got some work to do," he added.

Like the PFF's Swanson, Hoewing pointed to the current broadband policy -- the FCC's deregulation approach. The more government-centric approach in countries like Japan and South Korea wouldn't work in the U.S., he said.

Competition in the U.S. between telecom and cable companies are driving up speeds and driving down costs, he said. Broadband speeds in the U.S. are already competitive with many other counties, he added. "It's pretty evident competition is there," he said.

But for InteliCloud's Hubbard, the U.S. broadband industry is moving too slow, and it's time for the government to take a more proactive approach.

"I think they will get there, but it may be another 10 years to get there," he said. "We need to charge our slow growth into fast growth."

Broadband Policy: The Connected Nation Model

In recent debates over whether the U.S. should have a more comprehensive broadband policy, one group claims significant success: Connected Nation.

Connected Nation, which started as a state program called ConnectKentucky, uses mostly state and some federal and private funding to stimulate broadband roll out. The nonprofit group says it has expanded broadband availability in Kentucky from 60 percent of households to 95 percent of households since January 2004.

The not-so-secret sauce: Connected Nation works with local communities to identify demand for broadband then takes that information to broadband providers.

Other states are now working to replicate the Kentucky program, and a handful of bills in the U.S. Congress focus on giving states more authority to implement similar programs.

Each state will need to create its own broadband plan, and even different communities within a state will have different needs, said Brian Mefford, Connected Nation's CEO. "We're not trying to come up with a one-size-fits-all solution," he said. "It's just common sense to acknowledge that eastern Kentucky is very different in a number of respects from western Montana."

Some other groups have called for federal tax breaks for broadband providers and other incentives, but Connected Nation hasn't focused on those types of government programs. "We've seen a bigger impact when we can work locally to identify pent-up demand," Mefford said. "The greater motivating factor is when a [broadband] company realizes that there's an untapped market."

Broadband providers such as Verizon and AT&T have worked with Connected Nation, and the model has found support from other groups, including the Information Technology and Innovation Foundation (ITIF), a tech-focused think tank.

But Connected Nation has drawn its share of criticism as well. ConnectKentucky had close ties with BellSouth, now part of AT&T, and has lobbied for telecom deregulation and tax breaks for large telecom carriers, said Art Brodsky, communications director for Public Knowledge, a digital rights advocacy group and frequent critic of large carriers.

ConnectKentucky also received funding from AT&T, Brodsky said.

"They're good at telling a story," Brodsky added. "But they're pushing an agenda that benefits carriers."

Mefford acknowledges that ConnectKentucky has worked closely with broadband providers, but the focus was on rolling out service, he said. "We did that for pragmatic reasons, if nothing else," he added.

While ConnectKentucky has relationships with large providers, it has worked with a range of providers, down to the "smallest wireless ISPs," Mefford said. In an effort to map broadband service across the state, ConnectKentucky worked with more than 80 ISPs (Internet service providers), he said. Less than 1 percent of the group's funding came from AT&T, he added.

Brodsky raised several other questions about Connected Nation in a January blog posting.

One of his points: While Kentuckians may have more access to broadband, many aren't buying it. At the beginning of 2007, less than 33 percent of Kentucky postal addresses subscribed to broadband, ranking the state 46th in broadband penetration across the U.S., according to a report from the Leichtman Research Group.

In June 2007, about 53 percent of all U.S. households subscribed to broadband service, according to Leichtman.

Mefford acknowledged that the U.S. needs to focus more on driving broadband adoption. "We have to be just as intently focused on the demand side as on the supply side," Mefford said. "It's not a 'Field of Dreams' proposition. That demand side of the proposition is practically universally overlooked."

In research Connected Nation has done, many U.S. consumers don't see the value proposition for broadband, Mefford said. For example, in Tennessee, 30 percent of residents who don't subscribe to broadband service have children at home. "You can make a compelling case that, in fact, for their children remain competitive, they do need a computer at home that's broadband-enabled," he said.

In February, Connected Nation released a study saying a 7 percent increase in broadband adoption in the U.S. would have an annual economic impact of US$134 billion, including wages and savings in commuting and health-care costs.

"We don't get any impact just because somebody runs a line or makes a wireless signal available," Mefford said. "There's no economic or social benefit that happens just because that investment is made. The impact occurs when people make the decision to adopt."

ITIF President Robert Atkinson suggested that there may be a government role for promoting broadband with consumers. The U.S. government should support digital literacy efforts, and it should focus more effort on improving e-government, telework and e-learning programs, he said.

Several other countries have taken aggressive steps to drive broadband demand, Atkinson noted. Sweden has given tax breaks to employers that give computers to employees. South Korea has allowed residents to lease computers through the postal service and has given free computers to low-income residents, he said.

"Korea just said, 'We are going to have everyone digitally literate,'" Atkinson said.

But while groups such as the ITIF and Connected Nation have focused on delivering faster broadband to U.S. consumers, many don't want to pay for the extra speed, said independent telecom analyst Jeff Kagan.

"We are seeing all sorts of super-fast Internet connections for higher monthly fees," Kagan said recently. "Faster is better, but if you have to pay extra for a faster connection many customers would prefer a slower connection at a lower cost."

Most consumers don't need more than a 3M-bps (bits per second) connection even as broadband providers are rolling out connections up to 20M bps, Kagan added. "There are times when faster is needed, like when you download a movie or other large file, but the vast majority of use is at a much slower speed and customers don't even realize it," he said. "There is no reason for the average customer to think they need the fastest connection and have to pay for it."

Broadband: How the US Stacks up

Groups calling for a more robust broadband policy in the U.S. say the county has fallen behind in several key statistics.

Many groups have expressed concern that the U.S. continues to fall behind other nations in broadband adoption. The Organisation for Economic Cooperation and Development (OECD) ranked the U.S. 15th among its 30 member nations in broadband adoption per capita as of December.

Some commentators have questioned the OECD numbers, saying the organization's recent reports don't take factors such as population density and even weather into account.

Still, critics of the current U.S. broadband policy have pointed to other problems in addition to adoption: Many rural areas lack access to broadband, and there's little competition among broadband providers even in some suburban and urban areas.

In addition, U.S. broadband users have slower speeds and pay higher prices than consumers in several other countries.

The broadband speeds in the U.S., compared to the other industrialized countries in the OECD, are just as concerning as the lack of adoption, some critics say. The average download speed among consumer broadband services in the U.S. is 8.9M bps (bits per second), according to the OECD, slower than average speeds in 18 other OECD countries.

Japan's average download speed is more than 10 times faster, at 93.7M bps, while France's is 44.2M bps and South Korea's is 43.3M bps. Average download speeds in Sweden, New Zealand, Italy, Portugal, Finland and Australia are above 12M bps, according to the OECD.

In addition, U.S. broadband customers pay more than customers in 17 other OECD nations, according to a report released this month by the Information Technology and Innovation Foundation (ITIF), a tech-focused think tank.

U.S. customers pay US$2.83 per each megabit per second of service, on a monthly basis, for the lowest advertised price in the country; while Japanese customers pay $0.13. Customers in South Korea, Finland, France and Sweden all pay less than $0.43 per megabit per second on a monthly basis, the report says.

Developers: Facebook Redesign Risky but Needed

Facebook's major overhaul of its core member profile pages is a risky but necessary move for the world's second-largest online social network, according to several developers of popular applications for the site.

The move is risky because Facebook will alter the user interface significantly, which can clash against people's natural resistance to change and prompt them to complain.

In addition, for some developers, particularly those new to the platform, the new profile design may limit the visibility of their applications, affecting their ability to build a user base.

"The redesign seems an overall step forward, but it will definitely have speed bumps from an actual implementation standpoint," said Tim O'Shaughnessy, cofounder and CEO of Hungry Machine.

However, with the explosive growth in members and in applications on Facebook, the average member profile interface has become very cluttered, a situation that harms end users and developers alike.

"Facebook is a social [networking] operating system, and the profile is your entry point and your desktop. The utility of that [desktop] interface becomes less and less useful to the end user as it gets more and more cluttered," said Shervin Pishevar, cofounder and CEO of Social Gaming Network (SGN). Thus, taking a bold step to clean up the member profile interface is a logical and natural enhancement for Facebook to make, he said.

Facebook has been talking about its redesign for a while, but this week provided concrete details about its plans, which are aimed at retaining the layout's orderly and clean look, a differentiator from competitors like MySpace.

At the heart of the redesign is the redistribution of profile content into different tabs, so that users can better organize components such as the activity feed, photos, personal information and applications. In addition, the activity feed tab will feature a new authoring control panel for creating and posting content called the Publisher Box. Moreover, the profile will have at the top a new horizontal navigation line with drop-down menus for its core features.

"The three main goals we have for this are: to make the profiles simple and clean; to give users control; and to let them emphasize the most recent and relevant content. This is what we've come up with as the best way to accomplish those goals," said Facebook's Mark Slee, the product manager of the new design.

Of course, any user interface change of this magnitude entails dangers, especially when it will affect about 70 million end users and thousands of application developers. Facebook has experienced backlash from changes in the past, such as the initial versions of its activity feed feature and Beacon advertising program, both of which were criticized for being too intrusive on people's privacy.

"It's a pretty significant redesign, so users will definitely have an adjustment period," O'Shaughnessy said. "People are generally opposed to change, so there'll be a pretty reasonable amount of consternation from users just because it's different."

This is why O'Shaughnessy has been surprised that Facebook is opting to roll out all the changes at once, as opposed to doing it more gradually, since the latter approach might lessen the impact on end users. "It's always a risk to roll out a really big change all at once," he said.

Yet, Slee is confident that the change won't be traumatic for end users, since Facebook has been actively communicating the changes and plans via a Facebook group. Facebook also plans to have a time during which end users will be able to toggle back and forth between the old and new layout, before the change is finalized at some point in June, Slee said.

From the application developer perspective, the redesign will also have significant effects, O'Shaughnessy said. "The applications aren't present nearly as much as they were before," he said, alluding to the fact that the new design groups applications into a separate tab.

Although users will be able to create tabs for individual applications and the new top-level navigation includes a drop-down list of applications, "there's definitely the capability for apps to be less discoverable," O'Shaughnessy said. "For newer developers especially, that'll be really hard."

Not that O'Shaughnessy worries about being affected by this. Hungry Machine began launching its applications in mid-2007, shortly after Facebook opened its platform to external developers, and they have gained very good traction and popularity, and are generating a healthy revenue stream.

However, Facebook argues that the new design will be good for developers, not only because applications can get their own tabs, but because users will be able to add application controls to the Publisher Box. "All applications will be able to tie right into that. We think that's a huge opportunity for developers," Slee said.

Meanwhile, having an entire tab devoted to applications will let developers "build a rich and deep experience that can take advantage of more space than has ever been provided in the profile," Slee said, adding that Facebook is opening a "sandbox" for developers to get acquainted with the profile changes.

Boris Silver, cofounder and CEO of Sport Interactiva, a developer of sport-themed games, also believes that end users are likely to recoil at first and that visibility for applications in general will be diminished, but believes the changes will ultimately be for the better, particularly for companies like his whose applications are firmly established on Facebook. "It'll give room to high quality and useful applications that people value most to rise up," Silver said.

Pishevar holds a similar view, saying that the changes will benefit applications that are genuinely engaging and of high quality, and not those that try to succeed via in-your-face, aggressive self-promotion tactics, something Facebook has been trying to discourage among developers.

"The apps shouldn't be reliant on real estate on a profile page to thrive. There was tremendous benefits early on in the platform from having that real estate, but it also made it probably too easy to get users without actually investing real resources into making quality, highly engaging applications," Pishevar said.

Despite the possible bumps in the road, the developers interviewed agreed that, as far as the actual redesign is concerned, Facebook is hitting the right notes. "I'm pretty high on the design itself. It's smoother, more efficient, more clear," O'Shaughnessy said.

Yahoo Postpones Board Meeting, Director Resigns

Facing a battle for its board, Yahoo on Thursday pushed back its annual meeting until the end of July and announced the resignation of a board member.

The annual meeting, during which the entire board is up for re-election, had been scheduled for July 3. Yahoo did not yet set a particular date for the annual meeting but said that it will be around the end of July.

Billionaire investor Carl Icahn has been scooping up Yahoo shares and has told the company he is nominating 10 candidates to replace the entire board. He has said that in doing so he hopes to reignite talks with Microsoft, which recently pulled its acquisition bid for Yahoo.

The postponement of the board meeting probably means Yahoo needs more time to work out a deal with Microsoft, said Karsten Weide, an analyst at IDC. He believes Microsoft ultimately will buy Yahoo, even though the software giant removed its offer and has said it is working on another type of transaction with the company.

In addition to the change in the annual meeting, Yahoo said Edward Kozel resigned from the board. In a filing with the U.S. Securities and Exchange Commission, Yahoo said Kozel had planned to leave the board in February but decided to stay on following the acquisition proposal from Microsoft.

As a result of his resignation, Yahoo has reduced the size of its board to nine directors, it said.

While Kozel said he is resigning in order to spend more time with his family, he probably has another reason, Weide said. "What it means is there is dissent," he said. Kozel may not have agreed with the board's refusal to make a deal with Microsoft and he may be worried about lawsuits charging the board with failing to do its duty, Weide said.

Yahoo appointed Kozel to the board in 2000. He had spent 11 years at Cisco, including as chief technology officer, and also served on Cisco's board. Kozel also previously worked at Boeing and McDonnell Douglas and as managing partner at Open Range Ventures, a private venture capital company.

Microsoft announced its US$44.6 billion cash-and-stock bid for Yahoo on Feb. 1 but abandoned it three months later, after Yahoo initially spurned the offer. Microsoft was interested in a deal with Yahoo as a way to boost its lagging search business, although since it pulled its offer, the company has said that it can gain more market share through internal innovations.

China Shows off Olympic Tech...sort of

An exhibition of technology being used in the Beijing Olympics opened here Wednesday, with mixed results in demonstrating one of the Games' themes of "Hi-tech Olympics."

Although presented in English as "Hi-tech Olympics" (the Games' other two themes are "Green Olympics" and "People's Olympics"), in Chinese it appears literally as "Technology Olympics." As such, its translation may be raising expectations for the use of IT at the Beijing Games, even though few if any new technologies or innovations will be implemented.

"Green Olympics" has come to the forefront among the three themes, and even the technology being used seems to be aimed at addressing environmental concerns such as "zero emissions in the immediate Olympic Park area" and holding a "basically carbon-neutral Olympic Games," as stated by Science and Technology Minister Wan Gang at a news conference two weeks ago.

The Science and Technology Olympics Exhibition is as much a propaganda exercise as it is vendor showcase. Some vendors -- all of whom are official Olympic sponsors -- had representatives on hand to answer questions about their products, but branding was downplayed.

On display were Samsung TD-SCDMA (Time Division-Synchronous Code Division Multiple Access) mobile phones, making use of China's limited, domestic 3G (third generation telephony) service that will be available to 15,000 users during the Olympics. In three tries, the handset failed to connect with China Mobile's mINFO2008 3G content system. "Well, it's a little slow," said the booth representative. When asked if 3G wasn't supposed to be faster than GPRS (General Packet Radio Service), which is widely available in China, she said, "yes." "Where's the Samsung guy?" she asked her two colleagues. However, the handset maker's representative was not located.

One service not previously mentioned in relation to the Olympics is PTT (Push-To-Talk), which allows mobile handsets to function like walkie-talkies. A China Mobile representative said that PTT-enabled handsets would be available in China shortly. He declined to identify brands that would be available, although he said that as an official Olympic sponsor, Samsung handsets would likely be used during the Games. He also said the service could be available in China later this year, but that it would be aimed at groups such as conference organizers. "There's no need for the service on a person-to-person basis," he said, despite significant uptake of the service for just that purpose in the U.S. and other markets.

Also on display were traffic control systems, including a taxi tracking system to provide real-time road conditions to monitors. Although it did not confirm earlier figures of 15,000 vehicles, a chart showed that a taxi's tracker will use GPS to send the car's location and speed to a central traffic control room. Other systems can then be used to try to improve flow, such as automatically switching or holding traffic lights.

The exhibition runs through May 25 at the Beijing International Exhibition Center.

HyLighter Helps Groups Collaborate on Documents

Collaborating with other members of your team to create and modify documents is a common business need. But what's the best way to handle this task? A new online document collaboration service called HyLighter lets you use color coding to highlight annotations, which the service tracks separately from the original document.

Products designed to address the needs of people who collaborate on documents have been around for awhile. One familiar example is Microsoft Word's Track Changes capability; introduced several years ago, this feature lets users mark up a Word document with comments and suggested changes that other collaborators can accept or reject.

Many well-known Web services provide highly flexible document collaboration options, including access to shared documents. Microsoft Office Live and WebEx WebOffice, for example, let you upload documents to a private online site for sharing, reviewing, and modifying. Basecamp provides an online Writeboard for document collaboration, as well as simple project management services.

HyLighter, currently in beta testing, specializes exclusively in document collaboration. It delivers benefits unavailable in more-generic online sharing services--most notably an intuitive color-coding scheme that highlights areas of concern to the business team.

HyLighter tracks comments and suggested changes separately so they don't obscure the original document. In fact, you can't change the document itself within HyLighter, which might make it unsuitable for some users. But in situations where tracking collaborators' concerns is important, it can be quite handy.

HyLighter is a work in progress, so I wouldn't recommend relying on it exclusively when you're working with important documents; be prepared to use something else if you run into diificulties with it. For example, the service says that it supports documents in Word, PDF, and HTML formats, but some PDFs that I uploaded to the service did not render completely faithfully. (HyLighter acknowledges that some multicolumn PDFs with embedded graphics, such as the one in the screen shot shown above left, may not display properly.)

On the other hand, Word documents displayed flawlessly. HyLighter says that it plans to support annotation on graphics, audio, and video files eventually.

How HyLighter Works

HyLighter recognizes two types of users: the originator of the document, and the invitee--the person whom the originator asks to participate in the collaboration. Short animated tutorials on HyLighter's site explain both user roles in greater detail.

The originator starts the process by signing up for the service and uploading a document. I ran into a minor problem the first time I tried to sign up: I didn't receive an acknowledgement via e-mail. But on a second attempt the following day, I was successful.

Once logged in, you'll see a spare interface. Across the top are menu options for accessing documents you originate and documents you have been invited to collaborate on. A right-side pane contains links for changing your profile and for importing documents that you want to work on in HyLighter.

Importing documents is straightforward. You provide a document title, locate the file on your PC, assign it a copyright status (secure, pending, or not applicable) selected from a drop-down menu, enter a description if you wish, and list the e-mail addresses of the people you want to invite as collaborators.

Each invitee receives an e-mail message requesting input on the document. Before working on a document, the invitee must set up a HyLighter account.

Comments, Not Changes

After uploading a document from your PC to the online service (which takes a few seconds), you can start annotating it.

HyLighter's color bars resemble real-world highlights applied with colored marker pens: They don't obscure the text. Yellow bars highlight passages where you've made a comment, blue ones indicate comments from others, and green ones signal areas of common concern. Darker shades of blue or green appear when collaborators show especially strong interest in a segment--for example, when several participants leave comments about the same text.

Comments appear in a pane to the right of the document. Each comment appears under its author's name, and clicking a small box-shaped icon to the right of the author's name turns the relevant highlighting red. Other small icons let you replace, add to, or remove comments.

When you add or replace comments, a simple text-editing box appears, offering some common formatting options such as for boldface and italics. You can insert links to Web sites or data on an external server--videos from YouTube, for example--but you can't upload the external data into HyLighter itself.

Buttons located above the comments column make additional document-wide functions available. One lets you create a G-note--a general comment that isn't linked to any particular area of the document. A Compare button lets you designate whose comments you view--your own, say, or only those of colleagues.

Once the collaboration is complete, you can press an Export button to export the document and comments into an HTML file, seemingly limiting the service's usefulness. (HyLighter plans to include support for export to RTF, PDF, and possibly Word formats in the future.)

In the mean time, HyLighter's help file suggests a workaround that uses the Easy View button: Click it to generate a narrower window in which the highlighted document appears in the upper pane and the comments in the lower pane. Unless you have a very small display, you'll have enough room to open your document creation app (Word, for example) in a second narrow window alongside the Easy View window; then you can make the changes manually. Obviously, this isn't an efficient way to work.

Is HyLighter Worth It?

I like the way that HyLighter separates the comments from the document. Most Web-based collaboration tools modify the document itself, and as a result, when many users are involved, the intention and tone of the original text can get lost.

If only one or two people are reviewing your document, however, the danger of drowning in comments may be very small. Meanwhile, the extra work of transferring comments and changes to the original document may loom as a major drawback.

HyLighter is free to use during its beta period, and the service shows real promise. If you need to collaborate on documents, I recommend that you try it out to see whether it suits your style.

Once the final version of HyLighter appears, it will be available as an application that users can install on their server, as well as being a hosted service. Pricing has not been set.

Secure Your Network

Key UTM Features Explained

Unlike standard firewall routers, UTM appliances vary widely in their features and capabilities--and for the most part, you get what you pay for. Here are the major features to look for when choosing a network security package for your small business.

Antivirus, Antispyware, and Antiphishing Tools

By stopping viruses and malware at the Internet gateway, you can reduce the burden on individual computers and prevent most threats from reaching your network. Antivirus tools also provide a second layer of protection beyond your individual PCs' virus checkers, which frustrated users may disable and negligent users may update too infrequently. Gateway checkers can't find every piece of malware, however, because they lack the horsepower needed to emulate the programs on each computer. Thus you should retain the virus and spyware tools on each PC.

It's also worth finding out the brand of virus or malware checker that the UTM appliances you are considering use. Some devices work with their own software, but most rely on third-party tools from companies such as McAfee, Kaspersky, or even ClamAV (the open-source option). You should make sure that ongoing support will be available.

Content and Keyword Filtering

With content and keyword filtering, you can block access to specific IP addresses, domains, and URLs by invoking the vendor's database of inappropriate Web sites and keywords in various categories, as well as by adding or subtracting your own. Content filtering isn't just for porn. You could block Web mail sites, for example, or video-streaming services. You can use filtering on outgoing data as well as incoming data, so you could prevent people within your network from sending explicit e-mail or instant messages. Check to confirm that the UTM appliances you're considering have the content-filtering capabilities you need.

Spam Filtering

A few UTM appliances have antispam filters, but most offer it only as an extra-cost option (if at all). Because spam filtering can have a major effect on firewall throughput, many IT experts prefer to use a separate spam filter at the mail server. Your ISP probably can perform this task at little or no extra charge if you use its e-mail services. If you run your own e-mail server behind your firewall, UTM appliance-based spam filtering may be appropriate.

Intrusion Detection and Prevention

Intrusion detection goes beyond the simple packet header inspection that all firewalls perform, actually examining the packets' contents as well. Together with deep-packet inspection, intrusion detection and prevention systems use ever-evolving rules and behavioral algorithms to block suspected attacks, much as antivirus software does.

Data-Leakage Prevention

Less commonly available--but important to some small businesses--is data-leakage prevention. "Data leakage" refers to the loss of proprietary information and documents from the network via e-mail, e-mail attachments, instant messaging, Web site uploads, and so on. Law and medical offices especially need to prevent transmittal of client or patient data; they can be sued if such information leaks out.

DLP software uses content filtering or simply blocks e-mail attachments and file transfers. You may be able to simulate DLP by using regular content and port filtering tools, but you'll need to anticipate some of the ways data can leak, and some expertise in security configuration is extremely valuable. A security consultant can be a big help here.

Gateway Throughput

One of the first specs you'll see on any UTM appliance datasheet is firewall performance or throughput, expressed in mbps (megabits per second). These numbers can provide a rough guide to performance, but they may not factor in the impact of the UTM tools you use--from intrusion detection to antivirus to content filtering--which can reduce throughput by up to 50 percent, though some gateways handle the hit better than others due to speedier processors or more efficient software. Antispam filters usually have the heaviest impact on throughput.

Most vendors have try-before-you-buy programs, so take advantage of these arrangements to ensure that the UTM appliance you ultimately select has the features you need and doesn't bog down under your network's loads. When you count the number of users on your network, remember to include peripheral network devices such as NASs, printers, and PDAs, since they may count toward the "recommended" user load.

Access Control and Authentication

To prevent unauthorized users from accessing your LAN, most UTM appliances support one or more authentication schemes, such as Windows Active Directory, LDAP, RADIUS, or an internal user database. They also provide MAC address filtering to prevent unregistered devices from accessing your LAN; unfortunately, MAC addresses are easy to spoof.

WAN Failover/Redundancy

One very important difference between standard firewall routers and many UTM appliances is the presence on the latter of a second (and sometimes even a third) WAN port. In case of an outage, you could balance the network load between two regular connections--say, one DSL and one cable. You can set one up as the primary, with the second kicking in only during an outage, or you can divide loads on a round-robin or percentage basis. This is a great way to establish outage protection without investing in an expensive T1 line (and the accompanying service-level guarantees).

VPN Gateway

For secure connections between offices, during business travel, or in support of telecommuting, virtual private network support is a must-have feature. Most UTM appliances can serve as VPN gateways for incoming connections. Remote users can connect to the gateway and can access LAN resources securely over an encrypted tunnel.

Wireless Security

Most small businesses want Wi-Fi network access, so wireless security features in a UTM appliance are very important. Some appliances have a built-in wireless router, enabling them to run Wi-Fi traffic through the same strong filters that they use for Internet traffic. Others let you use third-party Wi-Fi access points to create special security zones for wireless networks.

Annual Subscription Fees

Normally to get the various UTM filtering capabilities above and beyond those of a basic firewall (including antivirus, antispyware, content filtering, intrusion detection, and spam checking) you must pay for an annual subscription. Though you can use the hardware without a subscription, you'll lose most of the appliance's security value if you adopt that approach. So before choosing a UTM appliance, investigate the annual subscription price for virus definitions and software/firmware updates, and find out whether costs go up as the number of users does. Some vendoes use a sliding scale of this type, while others don't.

Also, check to see whether the initial purchase price includes the cost of the first year's subscription. Since subscriptions may run to $500 or more, having to pay separately for the first year is a significant factor. You'll want to compare the total cost of ownership--for both equipment and annual maintenance--over the number of years you expect to own the appliance. Another variable is installation fees, if you'll be hiring a consultant.

That's a quick review of the key features of UTM appliances, but you may want to consider other features as well, such as support for VoIP services (which may be adversely affected by filtering tools), the ability to set up zones governed by different security levels (say, a public zone and a private zone), dynamic DNS support, printer sharing, and monitoring and reporting tools that proactively provide crucial information (such as WAN outages or peak load times) in a form that even a part-time IT person can understand and act on.

Sub-$1000 UTM Appliances

All of the UTM appliances listed below provide the basics--a business-class VPN firewall router with antivirus and antispyware protection, intrusion detection, content filtering, and monitoring tools--and many have additional areas of special strength or extra features. Most bundle an initial one-year subscription for antivirus and antispyware updates. Recommended network capacities range from 8 to 25 users, but all of these vendors offer higher-end models for larger businesses as well.

The entry level SonicWall TZ 180, Fortinet FortiGate-50B, and D-Link NetDefend DFL-CPG310 cost less than $500 and can be set up by a non-IT professional. Even so, it's a good idea to hire a security expert, if possible, to set things up properly. A network is only as secure as its weakest point, which usually isn't the router.

Moving up the UTM scale, the Check Point UTM-1 Edge Appliance, the Secure Computing SnapGear SG580, and the ZyXel ZyWall 5 UTM cost around $500 to $700; and the Calyptix AccessEnforcer AE500, the eSoft InstaGate 404e, and the Juniper Networks Secure Services Gateway 5 run all the way up to $1000. The extra money pays for enterprise-class features, more software options (for which you'll need to buy annual renewals), and the ability to scale up to more users without buying new hardware. The InstaGate 404e, for example, offers modular e-mail and Web "ThreatPaks" that cover far more than basic antivirus tools do, while the Juniper SSG5 amounts to a branch-office version of the company's enterprise security system.

In-House Spy Software Becomes Big Business

LONDON/BOSTON (Reuters) - If you work for a bank, a computer may be reading your e-mail, listening to your phone calls or analyzing chat conversations as you type.

Even banking workers used to the idea of surveillance might balk at the thought of a computer doing the job.

But there are strong prospects for the software niche, as banks try to keep a much closer eye on staff in the wake of scandals such as Jerome Kerviel's rogue trading at Societe Generale, or the aggressive rumor-mill that undermined banks including HBOS and Bear Stearns.

"With the credit crisis and so on, people started to be much more careful," said Ruggero Contu, principal research analyst at information technology consultants Gartner.

Big Business

Known collectively as e-discovery, these technologies are booming despite a slowdown in other areas. Gartner forecasts the segment will generate $760.5 million in revenues this year, up from $524.5 million in 2007.

The systems to record and monitor employee activity can help companies collect huge amounts of internal information -- which they may increasingly need in the face of lawsuits spawned by the subprime crisis, or to meet rising regulatory demands.

U.S. politicians are demanding tougher rules in the wake of the collapse of the once red-hot housing market, while the 2002 Sarbanes-Oxley Act on corporate accounting and investor protection has already spawned hefty legal requirements.

"The overall tech base is under pressure on the back of the credit crunch but there are a few niches, for example the e-discovery space, which may benefit from the regulation," said Josep Bori, technology sector analyst at Deutsche Bank.

Banks are cutting non-essential spending and laying off staff to make up for losses and a slump in business. But spending on e-discovery bucks the trend.

"The one and only area where delays or cancellations are not happening is the regulatory and compliance. There's no way to avoid compliance," said Stephane Gregoire, a product management director at Brussels-headquartered FRSGlobal, which supplies regulatory reporting tools to top banks.

Walls Have Eyes

An obvious potential winner identified by Deutsche among others is Anglo-American Autonomy Corp Plc, founded by Cambridge University researcher Mike Lynch. He said it was an Autonomy system that detected that mails created by Kerviel to support what he was saying had not been sent.

The company, with forecast revenue of more than $480 million this year according to analysts polled by Reuters Estimates, sells search technology that can understand e-mail, text, voice and video data. The stock has outperformed the FTSE index by more than 50 percent over the past year.

"The effect of the subprime crisis appears now to be a positive for our business," said Lynch. "This is all being driven by trading scandals and by the sharpening of requests from regulators."

Many companies maintain the right to monitor an employee's electronic correspondence using company property: in Britain, for instance, this is allowed if staff are informed and "the benefits outweigh the risks to individuals' privacy," according to the British Information Commissioner's Office.

The problems the software can help resolve can be costly.

Kerviel was blamed for a 4.9 billion euros ($7.7 billion) loss at Societe Generale. In March over 3 billion pounds ($6 billion) was wiped off the value of British bank HBOS in less than an hour after some traders spread false rumors it had problems. Bear Stearns ended up being taken over.

Credit Suisse blamed a handful of traders for a multi-billion dollar loss, saying they had deliberately mispriced complex credit products.

Such mishaps, including wrong-footed bets on high-risk home loans, have put internal security and data management high on banks' agendas.

"Subprime brought that to a head," said David Paris from the financial markets consulting unit of IBM. "Rather than saying 'strategically we need to go in that direction but don't want to invest now', (companies say) 'oh gosh, we need to do that'."

Message Monitors

Kailash Ambwani, CEO of FaceTime Communications, a privately held U.S. company whose software helps companies monitor instant messaging traffic and whose customers include many major banks, said SocGen had boosted interest in FaceTime's technology.

In February, he was recalled to New York from a ski holiday in Lake Tahoe to pitch to executives of two top banks which weren't yet customers: "We had been talking to them, and what this event did was to cause an acceleration in the process."

Another U.S.-based instant messaging specialist also reports fresh interest. Akonix technology archives and monitors instant messaging conversations in real time, sending alerts on certain key words or names or number combinations.

The company says it has in the past six months gained two new clients, which are among the top three or five U.S. brokerages.

"It's not new regulations that have caused an up-pick in interest, it really is incidents like Societe Generale ... where communications were used to do illegal activities," Akonix's head of marketing Don Montgomery said.

And the industry is also attracting some employees who have first-hand knowledge of how to beat the system. French software company LCA said in April it had hired none less than the former SocGen trader Kerviel.

Does Icahn Have a Backup Plan?

Billionaire investor Carl Icahn's proxy fight for Yahoo is aimed at reigniting merger talks between the Internet company and Microsoft, but he may have to prepare a backup plan in case Microsoft is unwilling to return to the bargaining table.

After Microsoft walked away from its US$44.6 billion bid to acquire Yahoo, the company has been clear, publicly at least, about moving on, and executives said they are not interested in purchasing Yahoo anymore.

"It's not clear that Microsoft is still at the [bargaining] table," said Ned May, an analyst with Outsell. "That's a bit of a problem."

If Icahn can't woo Microsoft back as a Yahoo suitor, he may end up in the position of being the director of a company that no one wants to buy. And as Icahn has never seemed very interested in actually running someone else's business, this would put him in a rather risky situation.

Having made his $14.5 billion fortune by taking calculated risks, however, it's likely Icahn is preparing himself for the worst-case scenario. A source close to the billionaire investor said he may be consulting with IAC/InteractiveCorp CEO Barry Diller as he mounts his proxy battle for Yahoo.

One possible topic of the talks could be a plan to sell off parts of Yahoo to IAC, which owns Ask.com, a competitor to Yahoo's search engine.

IAC has faced its own troubles of late as it prepares to split itself into five pieces, and could be bolstered by acquiring Yahoo's advertising network and users.

However, it's unlikely that IAC, with a market cap of $6.6 billion, could afford such a deal, although it's clear Diller is interested in expanding his company's media properties, however far-flung they may end up being. On Thursday, IAC's Ask.com announced plans to buy Lexico Publishing Group, the owner of Dictionary.com, Thesaurus.com and Reference.com.

It wouldn't be surprising if Icahn also was speaking with other executives to prepare himself for the event that Microsoft won't return to negotiate a deal. News Corp. has been rumored as a potential suitor now that Microsoft is out of the picture; however, on a May 8 conference call, executives said the company is not in talks to purchase Yahoo at this time.

News Corp. did not reply to a request for comment on Thursday.

One analyst noted that "cash is pretty tight these days," which might make it risky for any company to invest in Yahoo if Microsoft won't bite.

Moreover, "Yahoo worked pretty hard to find other suitors to counter Microsoft, and were apparently unsuccessful in lining those up," said the analyst, who asked not to be named. If no one besides Microsoft came forward during the two months it haggled with Yahoo over a price, it's unlikely anyone would be willing to buy the company now, he said.

A multimedia deal between Icahn and Diller is not unprecedented. Two years ago, the two billionaires were rumored to be interested in joining forces to link up pieces of IAC and Time Warner, in which Icahn is an investor. However, nothing concrete ever materialized.

Right now it seems Yahoo investors will be supportive of Icahn's proxy battle, even as Microsoft remains silent. IDC analyst Caroline Dangson pointed out that Yahoo shares rose 5 percent after his proxy fight was unveiled, indicating some support for the plan.

Indeed, Paulson and Co., an investment firm that holds 50 million shares of Yahoo, came out in favor of Icahn's proxy fight on Thursday in an e-mailed statement, but said it hopes the end result will be a deal with Microsoft, not Icahn taking over the company.

Other major shareholders that had expressed ire over Yahoo's not accepting Microsoft's offer and are likely to support Icahn's proxy fight are Capital Research, which owns 16 percent of Yahoo, and Legg Mason, which owns 7 percent.

Shareholders will get to officially weigh in on Icahn's proposed new board at an annual stockholder meeting July 3. Unless Microsoft and Yahoo iron out a deal by then, Icahn may walk out of the meeting the proud new leader of a $38 billion Internet company.

James Niccolai in San Francisco and Juan Carlos Perez in Miami contributed to this report.

Google's Mac Efforts Begin to Bear Fruit

Amit Singh thought something was missing from OS X. The Google engineer--and author of Mac OS X Internals--took a look at what the Mac operating system didn't have that Linux and Solaris did.

"One thing stood out," Singh said. "There was no easy way to do file systems." So Singh decided to create one, even though he worked for Google's search team at the time and wasn't part of the company's Mac development efforts.

The reaction of his bosses to this use of company time? Go for it.

Singh's project, which became the open-source file-system utility MacFUSE, is just one of the many employee-driven efforts that go on within the walls of the search-engine and text-advertising giant all the time. Google calls it "20-percent time," encouraging its engineers to pursue other Google-related interests for up to 20 percent of their work hours--even if that interest has little to do with their regular duties at the search and software company.

Efforts such as 20-percent projects by engineers like Singh are par for the course at Google, a company that sees encouraging employees to pursue subjects they find interesting as a critical part of its own development goals.

"A lot of things that happen at Google are based on empowering people to come up with ideas and pursue them if [those ideas are] good," said Sundar Pichai, Google's director of product management.

Many 20-percent projects have wound up becoming major Google products: both Google News and Gmail, for instance, started that way. Among the Mac-specific efforts that began as 20-percent projects are Notifier, which offers Gmail and Google Calendar notifications, and the Google Mac Developer Playground, an online collection of open-source Mac projects created at Google.

From sideline to mainstream

These days Google's offerings for Mac users include everything from a desktop search tool to a 3-D mapping tool to a suite of Web-based office productivity apps. In between, you'll also find a 3-D modeling program and add-ons for the Firefox Web browser.

But Google's Mac offerings weren't always so vast. The company has stepped up its Mac efforts in the past couple of years, as a result of a strategic push from executives as well as prodding from Mac-using Google employees.

Google Docs gives users access to online tools such as a word processor and spreadsheet app, though support for the Safari browser has been spotty.

Google's corporate philosophy is to make information as accessible and useful as possible. Still, "as a company, when you're starting out, you have to make hard tradeoffs," Pichai explains, and for Google, that meant initially building desktop products that worked on Microsoft Windows.

But Mac-using Google employees were working hard in the background to expand the company's products onto the platform they loved. When Karen Grunberg, now a product manager for Google's client software on the Mac, first joined Google, she found the limited portfolio of Mac products to be "very ungoogley"--a term you'll hear around the Google campus in Mountain View, Calif., to describe something that doesn't measure up to the company's way of doing things.

"In the beginning, Mac developers did a lot of ad hoc work," Grunberg said. And although there's been an official Mac development team in place since the fall of 2005, that spirit continues. "Across the company, a lot of people are doing some sort of Mac development."

That attitude has made it "easy to recruit" a Mac team for Google, Pichai said, since the company can draw on the talents of employees already working on Mac projects as part of their 20-percent time.

However, Google keeps the exact size of its Mac development team under wraps. Company executives declined to say just how many employees make up its Mac efforts, instead pointing to the frequency of Mac product launches--from zero to six in the past few years--as a sign of its commitment to the platform.

Talent, freedom, and perks

One of the recruits to the Mac team was Singh, the engineer who developed MacFUSE as an open-source project and now works as an engineering manager on the Mac team. His experiences on that project--"the easiest open-source release ever," he says--have been mirrored on the Mac team, largely because of the atmosphere created at Google. Engineers are not only given the time and freedom to pursue projects, they also have the assurance that good ideas will be embraced by the company's higher-ups.

"There's intellectual freedom here. That's the bottom line," Singh said. "They don't stifle you here."

And that may be the one of the biggest benefits Google offers, on a campus full of Silicon Valley-style perks. Amenities include an on-site doctor's office and gym, a place where employees can drop their cars off for an oil change, and wireless-Internet-equipped commute shuttles. The Mountain View campus boasts 18 cafés, each with their own culinary focus, and all free to Google employees.

But talking to employees, you get the impression that the real perk is the massive talent pool that Google has assembled. The inventor of Python works at Google, Singh notes, as do prime movers behind the creation of both UTF-8 and Unix. And at a company that stresses collaboration and accessibility, it's easy enough to schedule time on someone's calendar--using Google Calendar, of course--to drop in and chat, Grunberg said.

"We have some of the brightest people in the world here," Grunberg added. "Putting them in the same room is exciting to watch."

Embracing Mac OS X

That spirit of collaboration has been key to helping the Mac team establish itself at Google. Besides the challenge of bringing the Mac versions of applications in line with their Windows counterparts, the Mac team also had to consider issues that are particular to the Mac OS--or, taking "existing products and getting the same experience while maintaining the standard Mac users expect," as engineering director Marc Pawliger puts it.

Take Google Desktop, the company's desktop search application. Google programmers had to consider OS X's own built-in search technology, Spotlight, and how Google Desktop would work with it. In the end, Google positioned its desktop search utility as a companion to Spotlight, giving Mac users the ability to search content from Web pages they've visited and Gmail accounts in addition to desktop files.

Google programmers also worked on ways to preserve common actions for users on different platforms. On the Windows version of Google Desktop, users summon the Quick Search Box feature by press the Control button twice; for the Mac version, pressing the Command key twice does the trick.

Google built an uploader that allows Mac users to share photos online via its Picasa Web Album offering--an example of how the company tailored one of its products for the Mac platform.

"There really is a push here to say how do we balance the parity of experience across platforms with the need for users to get their work done," Pawliger said.

Or take the case of Google's Picasa, a Windows program that finds, organizes, and shares photos. Since that product mirrors much of the functionality of Apple's iPhoto, there would seem to be little incentive for Google to create a Mac version. Yet, rather than ignore the platform, Google built a photo uploader that works with iPhoto--another 20-percent project--to allow Mac users to connect iPhoto to the Picasa Web Album feature for sharing photos online.

Not that there isn't work to be done on the Mac platform. The online Google Docs productivity apps offer only spotty support for Safari, OS X's built-in Web browser. And Google Gears, an open-source effort to let Web apps work on the desktop isn't compatible with Safari at all.

A Google spokesperson responded to questions about the reason for the compatibility issues with Safari and how Google plans on addressing them by noting the company's commitment to making its applications available across different platforms. "We want to provide great products and services to the tens of millions of Mac users around the world, because it's the right thing to do, and because Mac users inside and outside of Google demand it," the spokesperson said. "As part of our ongoing commitment to innovation, Google constantly tests new tools, features and interfaces to improve our Mac feature offering and provide additional benefit to our users who use the Mac platform."

Moving toward cross-platform development

As Google's Mac offerings become broader, its Mac development team can put more emphasis on cross-platform collaboration. In many ways, Pichai says, the Mac team is "helping lead development" with the contributions it's making to Google products.

"There's been huge progress since I've been at the company," Grunberg agreed. "We've been working a lot harder at making sure products are developed in tandem" for both platforms.

As work continues on its Web-based apps, Google is turning an eye toward other areas where it can apply its information-management focus. Mobile platforms will certainly be a key part of Google's future, with the iPhone taking center stage. The company is also looking at ways to bridge the gap between Web-based applications and the desktop, largely through Google Gears. Google has announced plans to let users of its online word processor view and edit documents offline.

Whatever direction the company pursues, expect Google's Mac team to be in the thick of things. "Now comes the time to really experiment on the platform," Pawliger said. "Now is the time to find opportunities, whether they're on the Mac platform or elsewhere."

Elude Your ISP's BitTorrent Blockade

More and more Internet service providers are blocking traffic to the peer-to-peer file-sharing service. Find out whether you've been targeted, and learn how to get around the restrictions.

I'm a fan of live music and a patron of online communities such as eTree.org, where music junkies swap copyright-free music. So I was stung when I recently tried to download a live recording of a Dave Matthews concert only to discover that my BitTorrent client was dead in the water.

My system and Net connection checked out fine, so paranoia immediately set in: Was my Internet service provider, RCN, blocking BitTorrent? I called RCN and the tech I spoke to confirmed my suspicions, telling me that the ISP had added BitTorrent to its list of prohibited programs because many people use the software to download copyrighted material. The fact that the concert I was trying to download was copyright-free didn't sway him.

Later I called RCN's press department as a reporter, and the story changed. The ISP's spokesperson told me that the customer support rep I had talked to earlier misspoke. RCN has never intentionally blocked peer-to-peer traffic, the spokesperson said, and it supports the principles behind Net neutrality. Within 24 hours, my bandwidth-related problems with BitTorrent vanished.

Of course, most people can't call their ISP and (honestly) identify themselves as professional journalists. But that doesn't mean you have no recourse if your ISP starts blocking your file-sharing activities. A number of tips and tools can help you determine whether you're facing a BitTorrent blockade and, if so, help you get around it.

Vuze, a company that makes peer-to-peer software and uses the platform to distribute content, published a study in April in which it concluded that all U.S. broadband providers--including AT&T, Cablevision Systems, Charter Communications, Comcast, Cox Communications, Qwest, Time Warner Cable, and Verizon--disrupt peer-to-peer traffic. Vuze asserted that these ISPs regularly send "false reset" messages to the Vuze software with the aim of slowing file transfers.

AT&T has flatly denied this claim. Subsequently, Vuze has softened its charge against ISPs, stating that "Our data collection was credible and transparent, but not conclusive," in the words of Jay Monahan, Vuze general counsel.

Other ISPs have acknowledged imposing some limitations on peer-to-peer traffic. Comcast first denied but now admits to interrupting access to file-sharing programs such as BitTorrent. Comcast executive vVice president David L. Cohen explained at a Federal Communications Commission hearing last February that disrupting BitTorrent traffic was a reasonable method of traffic management during busy usage periods.

Time Warner Cable spokesperson Alex Dudley says that his company takes reasonable steps to manage its network, including limiting bandwidth to applications such as peer-to-peer software.

Torrent to a Trickle

If you suspect that your ISP is blocking your BitTorrent traffic, call your ISP and ask whether you're being blocked. But don't trust that you'll get a straight answer.

A Road Runner customer and BitTorrent user from Bar Harbor, Maine is a good example. This user (who asked that his name not be used for fear that his ISP would treat him unfairly) called Road Runner's tech support when his BitTorrent download speeds dropped to a sluggish 8 kilobits per second. When he asked what was going on, a support rep reprimanded him for using BitTorrent software and accused him of downloading copyright-protected music. At the same time, the tech said he couldn't comment on bandwidth management issues.

"I was baffled by the entire exchange," the Road Runner customer said, noting that he was not trying to download copyright-protected content. "I pay a monthly fee for Internet access. I shouldn't be limited to watching YouTube videos, browsing the Web, and checking my e-mail." (Road Runner's parent company, Time Warner Cable, says that it does not block peer-to-peer traffic to BitTorrent, but that it does manage its network in ways that would keep BitTorrent traffic in check.)

If your ISP's support reps won't tell you what's going on, look at the company's terms-of-service agreement (most are available online). Here again, though, you may find the answer unsatisfactory. Some ISPs couch their bandwidth management practices in vague policy statements that are difficult to decipher. Others such as Verizon and DSL Extreme are unambiguous: They don't mess with BitTorrent traffic.

If your ISP won't come clean about its BitTorrent bandwidth policy, you can try any of a handful of ways to test whether your BitTorrent traffic is being throttled.

One method is to test your own connection speed. BitTorrent download speeds for popular files with many sources should be in the same ballpark as your bandwidth speeds in benchmark test results.

A popular Web-based tool, Glasnost, claims to be able to check whether your ISP is meddling with your BitTorrent traffic. The tool, created by the Max Planck Institute for Software Systems, requires no download; performing the test takes about 4 to 7 minutes.

For diehard techies who are willing to tinker, the Electronic Frontier Foundation developed a tool called Pcapdiff that tests whether your ISP is disrupting BitTorrent traffic.

Last, the makers of the BitTorrent client Vuze have created a plug-in for their peer-to-peer file swapping client. Downloading and running it on your PC won't help you determine whether your ISP is meddling with BitTorrent traffic--but it will help Vuze, which uses the data to lobby the FCC to prohibit limitations on BitTorrent.

Evasion of the Bit Snatchers

If you discover or strongly suspect that your ISP is slowing your BitTorrent traffic, you can try several countermeasures, none of them a sure bet. One of these techniques may work for one ISP but not for another.

First, try using encryption to cloak your peer-to-peer traffic. Most clients such as BitComet, BitTorrent, uTorrent, and Vuze, support in-client encryption. Turning this feature on makes it much harder, though not impossible, for your ISP to detect that you're using peer-to-peer software. Here's how to proceed.

BitComet: Go to the Options menu, choose Preferences, Advanced, Connection, and select Protocol encryption.

BitTorrent and uTorrent: Go to the Preferences panel and select the BitTorrent tab. Choose Protocol encryption and select enabled.

Vuze: First you must change your user profile from the default beginner mode to advanced. Go to the Tools drop-down menu, open the Configuration Wizard, and select advanced. Next return to the Tools drop down menu and select Options, Connection, Transport Encryption. Check Require encrypted transport, go to the Minimum encryption drop-down menu, and select RC4 encryption.

A second method of evading an ISP's throttling practices is to change the way the BitTorrent protocol acts. This method may work against ISPs that try to throttle speeds based on a standard set of BitTorrent configurations.

Troubleshooting your BitTorrent client's protocol settings can be tricky. To reconfigure your software, refer to the instructions provided by the publisher of the BitTorrent client you're using. One simple yet effective way to experiment with alternate BitTorrent protocol configurations is to simply try a different BitTorrent client. Different clients use different default protocols, and one may perform better on your ISP's network.

The default communications port used by BitTorrent traffic is 6881. ISPs know this and watch that port like a hawk. If an ISP throttles or blocks BitTorrent traffic traveling through this port, your file-sharing speeds will plummet.

To elude ISP throttling, BitTorrent clients enable you to switch the port or port range that your computer uses for BitTorrent traffic. Some BitTorrent clients will automatically attempt to configure your firewall or router to allow traffic to pass through the new port; with others you may have to open ports on your router manually. The excellent Port Forward site will step you through the process of tweaking your router to permit incoming connections.

One more-advanced method of obfuscating your BitTorrent traffic involves using an encrypted tunnel that, as the name suggests, shields from your ISP the type of data you are sending and receiving.

Free services such as The Onion Router (TOR) and I2P are designed for sending anonymous and encrypted messages, but some people have adapted them to use BitTorrent connections. The Vuze client has built-in support for routing your traffic through TOR and I2P.

For about $5 a month, commercial virtual private network providers such as Relakks and SecureIX can help you prevent your ISP from identifying BitTorrent traffic. In marketing its service, SecureIX promises that it will "disable P2P throttling." The company offers a free tier of service with a bandwidth limit set to 256 kbps.

But ISPs are catching on to these advanced encryption techniques, reportedly clamping down and throttling encrypted tunnels despite being unsure that the encrypted data is BitTorrent traffic. The most extreme method an ISP may use to manage peer-to-peer traffic is to block anything that appears to be BitTorrent traffic, encrypted or not. If that happens to you, you must either switch ISPs or stop using BitTorrent software.

Future Mixed for File Sharers

If you hope that the federal government will enshrine a "right to download" any time soon, you're likely to be disappointed. Nevertheless, technical changes are in the works that could make using peer-to-peer apps easier, albeit more expensive.

Groups such as the Electronic Frontier Foundation and Vuze, a peer-to-peer software company, have asked the Federal Communications Commission to force ISPs to disclose any discriminatory network management practices they engage in. But the FCC has stated that it probably won't adopt any new regulations forcing ISPs to disclose or desist from any slowing practices, because it feels current laws are strong enough. Though the FCC has criticized Comcast for slowing peer-to-peer traffic, FCC chairman Kevin Martin seems most irked by the fact that Comcast and other ISPs aren't up-front about how, when, and whether they do it.

A new, advanced peer-to-peer technology known as P4P could help both ISPs and file swappers. Verizon and Comcast have expressed interest in Proactive Network Provider Participation, which reportedly can boost the delivery speeds of file transfers using the BitTorrent protocol by as much as 600 percent while simultaneously making it easier for ISPs to manage their bandwidth. Verizon ran tests using P4P earlier this year, and Comcast says that it will test the technology on its network in June. As yet, no ISP has announced that it will use P4P on its networks.

According to Pando Networks, which has tested P4P technology and is a member of the P4P Working group, the protocol permits smarter routing of peer-to-peer traffic by sending requests for a specific file within an ISP's own network first, before connecting to another ISP's network. This approach reduces bandwidth costs incurred by ISPs for connecting to a third-party network, and it allows ISPs to manage their bandwidth more efficiently. Essentially, the closer a file is, the less bandwidth the ISP needs to expend in downloading it.

There may be a catch, however. Since ISPs will ultimately be the ones to deploy P4P technology, they will decide which applications can use the technology. If an ISP believes that an app is generally used for illegal downloads, it may block its connection to the P4P network. At the same time, Comcast is pledging to become "protocol agnostic" by the end of 2008. According to Comcast's Sena Fitzmaurice, senior director of corporate communication and government affairs, being "protocol agnostic" is not quite the same as embracing Net neutrality. Rather, being "protocol agnostic" is a pledge to treat all protocols the same. Comcast could still slow BitTorrent traffic, but it would have to treat other traffic, such as bandwidth dedicated to YouTube videos, equally.

The change may still leave heavy file sharers singing the blues. According to Fitzmaurice, being "protocol agnostic" means that ISPs would stop managing specific types of traffic and instead would begin managing individual users. So people who download five high-def movies a day using BitTorrent (or a download service such as iTunes) are likely to be singled out as bandwidth hogs and "managed"--perhaps by having their Internet speeds slowed during times of heavy demand. Light users of BitTorrent, meanwhile, would see relatively speedy downloads.

It's too early to say what Comcast's usage limits might be, Fitzmaurice says. Industry experts anticipate that Comcast and any other ISP that adopts the protocol-agnostic pledge may impose monthly bandwidth consumption caps on users. Terms-of-service agreements would outline enforcement policies, which might include paying a penalty if you download or upload too much content. Time Warner Cable is currently testing a service plan that enforces overage charges in Texas. In Canada, bandwidth caps are a fact of life for many broadband customers.

Vertica Moves BI Database to Amazon's Cloud

Database maker Vertica Systems is moving its technology to Amazon's Elastic Compute Cloud infrastructure (EC2), hoping to score customers who want a hosted, pay-as-you-go model for data warehousing and BI (business intelligence), the company announced Monday.

Vertica's database organizes data by columns, as opposed to rows. The company and others that make columnar databases, such as Sybase and ParAccel, contend the approach is faster and better for BI-related queries because only the desired columns -- such as a customer's name or location -- can be read without having to parse through an entire table, saving bandwidth.

The company also sells the database for on-premises use and in appliance form.

It sees a market for the on-demand offering due to a number of scenarios. For example, a company might want to conduct a BI project that will only last a fixed period of time, such as revising its pricing based on competitive and market data, said Andy Ellicott, senior director of marketing.

Hedge funds, which test their trading algorithms against large sets of historical stock market data, are another potential use case, because while such entities manage vast amounts of money, they seek to maintain the lowest possible overhead, which a cloud-based approach can provide, he said.

It is also hoping to sell to SaaS (software as a service) companies that focus on analytics.

One such vendor, Sonian, has been beta-testing the on-demand version.

"Everything is working out really well," said Sonian's chief technology officer, Greg Arnette. "We don't want to be in the plumbing business any more, managing pipes and [storage area networks]. We don't have to become experts on the Vertica database," he added.

The Dedham, Massachusetts, company started out as a hosted e-mail archiving provider, but is working on a service that will provide analysis of a company's stored content.

Sonian is still handling the task of loading data into Vertica, "but they're providing the expertise on configuring the database, optimizing it, that kind of stuff," he said.

Vertica's move is "very interesting" and positions it "as one of the front-runners in the race to bring data warehousing into the cloud," said Forrester analyst James Kobielus in an e-mail message on Friday.

Amazon's architecture also sets up Vertica "both for the midmarket (which generally doesn't use the most scalable premises-based [data warehousing] platforms) and for the surge requirements of the most demanding, high-end enterprise DW, predictive analytics and data mining jobs," Kobielus added.

The on-demand offering is priced on a usage basis, beginning at US$2,000 per month for managing 500 gigabytes of data. This compares to about $150,000 for a typical on-premises installation, according to the company.

Install Windows XP SP3 Right

Plus: Step on Vista and IE bugs; block QuickTime and Flash Player risks.

Still on Windows XP? Me too. So we'll both want to be sure to install Windows XP Service Pack 3 (SP3), which should be available from Microsoft by the time you read this.

SP3 will come via Automatic Updates, and like most service packs, it focuses on must-have bug fixes. Unlike SP2, which included big changes with the Windows Security Center, this third pack adds new functionality only for enterprise networks.

You might remember that XP SP1 was an installation nightmare for quite a few people. Good thing Microsoft does too. So, as it did two months ago when it released Vista SP1, Redmond is providing free technical support for XP Home users (or call 866/234-6020) to help you get XP SP3 installed and running. And if you're not using Automatic Updates, look for SP3 at the Microsoft Download Center.

Summer Brings Out the Bugs

Meanwhile, summer is here, and the bugs are out in full force. Microsoft, Apple, and Adobe all have a long list of creepy crawlies to stomp out.

Microsoft recently released four critical security patches--two for Windows and two for IE--that together fix five nasty holes. All could hand over control of your PC to a misanthropic hacker.

Four of these holes affect virtually every currently supported version of Windows, including Windows 2000 SP4 through Vista with SP1 installed, as well as IE 6 and 7. What's more, hackers already have proof-of-concept code, often an attack precursor, up online.

Like most attacks these days, all you need to do is click open a rogue file attachment--the security firm SecurityTracker says it would be an HTML file with an unregistered MIME type--or view a booby-trapped Web page to get nailed. So if you haven't already received the patches via auto updates, you can garner more details and links to manually download them.

Flash and QuickTime Holes

Adobe's Flash Player has its own share of bug tussles this month. Flash Player 9.0.124.0 (the latest version) fixes seven bad security holes, any one of which could hand over your data or open the door to a 'bot' infection. An attack­er would strike when you view a malicious Flash media (.swf) file, which could happen if you simply visit a site. Get more information and links to the downloads.

Not to be outdone, Apple has a bushel of fixes that close 12 security glitches (10 of them critical) in QuickTime. The holes entail the usual risk of losing control of your PC if you break the "be careful where you click" rule and open a poisoned file attachment or click a link to visit a Web page with malicious code.

Security researcher Secunia rates the QuickTime patches as "highly critical"--one step below its "abandon all hope, ye who enter here," worst-case rating.

Apple's patch updates the media player to the fixed version 7.4.5, and is available for Mac OS X as well as Windows operating systems. Find the download and more information.

Together, these Flash and QuickTime bugs showcase why it's important to click yes on those annoying 'update available' pop-ups to get security patches for all your software. Yes, it's aggravating when Apple abuses the process by pushing out new software (Safari) along with updates. But remember this: Adobe estimates that Flash sits on something like 95 percent of all PCs in use today. That makes it a nice, juicy target for hackers.

Powerset Unveils Test Version of Google-killer

The public will get its first chance Monday to test a search engine from start-up Powerset that eschews conventional keyword technology and instead is designed to understand the meaning of Web pages.

As such, Powerset's search engine holds the promise of fundamentally changing people's expectations for search engines by, in theory, offering a smarter, more efficient experience.

However, Powerset's beta version, while delivering impressive results, has a limited scope and index, leaving unanswered questions about its ability to work its magic at the massive scale of Google's keyword-based search engine.

"We're changing the way information is searched by doing a much deeper analysis of the pages we index," said Scott Prevost, Powerset's product director.

Keyword engines treat pages as word bags, indexing their content without grasping its meaning, he said. Meanwhile, Powerset's engine, applying technology developed in-house as well as licensed from Xerox's PARC subsidiary, creates a semantic representation by parsing each sentence and extracting its meaning. "Meaning is what we index," he said.

In an interview in October with IDG News Service, Marissa Mayer, Google's vice president of Search Products & User Experience, acknowledged that the company's search engine should -- and will -- overcome its keyword dependence in time.

"People should be able to ask questions and we should understand their meaning, or they should be able to talk about things at a conceptual level. We see a lot of concept-based questions -- not about what words will appear on the page but more like 'what is this about?'. A lot of people will turn to things like the semantic Web as a possible answer to that," she said.

But she added that Google's search engine acts smart thanks to the humongous amount of data it crunches. "With a lot of data, you ultimately see things that seem intelligent even though they're done through brute force," she said. As examples, she cited a query like "GM," which the engine interprets as "General Motors" but if the query is "GM foods," it delivers results for "genetically-modified foods." "Because we're processing so much data, we have a lot of context around things like acronyms. Suddenly, the search engine seems smart, like it achieved that semantic understanding, but it hasn't really," she said.

For now, Powerset's index is very limited, consisting only of millions of pages from Wikipedia and Metaweb Technologies' Freebase, a Web-based structured database of information. However, Prevost vows that the index will begin growing within a month after its launch and eventually rival in size those of Google, Yahoo and others. "Our technology fully scales," he said.

Still, it's impressive to see Powerset's search engine in action and the promise it holds. Instead of returning the proverbial 10 blue links for search results, Powerset can do more, such as assembling a collection of facts related to the query, as well as summarize the found information. It can also provide direct answers to factual questions.

Because the content from Wikipedia and Freebase can be re-published, Powerset can remain relevant after a user clicks on over to a search result, by providing an outline to navigate through the page and a summary of facts. This, of course, isn't something that Powerset could do with copyrighted content, but the company will seek partnerships with publishers to obtain permission, Prevost said. "We think it'll be a situation where publishers will want their content to be served up in this way," he said.

Industry analyst Greg Sterling of Sterling Market Intelligence calls Powerset's capabilities "impressive" and particularly likes its search results interface. "What they've created is both a better search engine for Wikipedia and a massive 'proof of concept' for their algorithm and technology," he said in an e-mail interview.

Now Powerset has to prove that its search engine can scale and deliver against an index of billions upon billions of Web pages and serving millions of concurrent end users. "There's certainly potential there to build a better mousetrap, it would appear. But bringing what Powerset has done for Wikipedia to the entire Internet seems an enormous challenge that will take both time and lots of additional resources," Sterling said.

Prevost acknowledges that to do this type of deep processing takes a lot of computational power, although once indexed, retrieving pages' information doesn't pose any special challenge.

Powerset also faces the challenges of a start-up technology company, such as generating revenue and going through growing pains. The company has already had some management upheaval, announcing in November the departure of co-founder and Chief Operating Officer Steve Newcomb and its search for a CEO, as co-founder Barney Pell gave up that post to become chief technology officer. "The CEO search is still in process, but we have a strong internal management structure and board of directors," he said.

Prevost said the company's investors are committed to the company and to seeing that it has the resources necessary to scale up the search engine to the level of those with indexes of 20 billion pages.

Powerset's business model is based on advertising, although the search engine will not serve up ads from the beginning. "There's a lot of cool stuff we can do in the ad space by matching the meaning of queries to the relevance of ads, but that's much more longer term," he said.

The search engine will be limited to Web search at first, although Powerset has contemplated adding specialty engines for things like images and video later, as well as targeting verticals such as health, product reviews and travel, he said.

"We've only shown the tip of the iceberg in language analysis," he said.

Vendors Bicker Over Green Networking Crown

3Com has been challenged in its claim of leading the market in making its networking gear more energy efficient.

The company based its claim on a report by US analyst firm In-Stat; however, a rival has charged that 3Com only counted its role in enterprise-class large switches and may actually lag behind in greening the key market for small and midsized Ethernet switches.

According to the report, Green Networking Equipment: Who Leads and Who Lags, LAN switches from 3Com are up to 60 percent more energy efficient than those from its competitors. 3Com added that its newest products are also up to 78 percent more efficient than its previous ones.

The advantage comes from having a more up-to-date product range, argued Steve Johnson, 3Com's UK channel manager. "The acquisition of H3C gave us the opportunity to refresh our entire enterprise LAN portfolio with products that were designed with power in mind," he said.

In-Stat analyst Victoria Fodale said that the report took vendors' published specifications, and calculated how many Gbit/s of backplane capacity their switches claimed per Watt consumed.

"We found significant differences in energy consumption among apparently similar networking products," she said. "One Ethernet port can consume more than ten times as much as another."

According to the report, the energy efficiency leaders included 3Com, Force10 and Netgear, while vendors such as Cisco, Foundry, HP ProCurve and Nortel were towards the bottom of the rankings.

However, by focusing on campus switches the report passed over the huge volume of Ethernet ports sold into smaller organizations, according to Chris Davies, the UK general manager of D-Link.

"Manufacturers also rate their products differently," which makes them hard to compare, he said. He claimed that while everyone is working on energy efficiency, only D-Link has implemented specific power-saving technologies, such as powering-off unused ports and compensating for cable length.

I'm delighted another manufacturer is bringing Green onto the agenda," he added. "But product for product, I estimate we're saving up to 50 percent compared with 3Com."

Fodale acknowledged that the report's methodology "was pretty simple", and said it would be improved in future reports. She said that the most important thing was that it had got vendors and users alike talking about the issue of energy efficiency.

She noted that at the moment, power efficiency "hinges on the components - are they using standard components or proprietary components? Off-the-shelf silicon has progressed faster than proprietary, but big enterprise vendors such as Cisco and HP ProCurve tend to use proprietary ASICs for differentiation."

Some ASICs are still being made on 130nm manufacturing processes, she noted, but merchant chip suppliers such as Broadcom have moved fast to 65nm, producing smaller chips that consume less power.

3Com's Johnson added that technology can help organizations reduce their carbon footprint in more ways than simply making the hardware more energy efficient. For example, 3Com's OSN (open services networking) initiative allows third-party applications which would otherwise need their own hardware to run on its routers.

"OSN can reduce the number of stand-alone appliances and the amount of rack-space and cooling needed," he said. "There is also the innovation that enables customers to change behavior, such as using collaborative technology to reduce business travel."

Read Bryan Betts' related blogpost, where he asks if Carbon is now the Hoover of the environment.

FBI Worried as DoD Sold Counterfeit Networking Gear

The U.S. Federal Bureau of Investigation is taking the issue of counterfeit Cisco equipment very seriously, according to a leaked FBI presentation that underscores problems in the Cisco supply chain.

The presentation gives an overview of the FBI Cyber Division's effort to crack down on counterfeit network hardware, the FBI said Friday in a statement. "It was never intended for broad distribution across the Internet."

In late February the FBI broke up a counterfeit distribution network, seizing an estimated US$3.5 million worth of components manufactured in China. This two-year FBI effort, called Operation Cisco Raider, involved 15 investigations run out of nine FBI field offices.

According to the FBI presentation, the fake Cisco routers, switches and cards were sold to the U.S. Navy, the U.S. Marine Corps., the U.S. Air Force, the U.S. Federal Aviation Administration, and even the FBI itself.

One slide refers to the problem as a "critical infrastructure threat."

The U.S. Department of Defense is taking the issue seriously. Since 2007, the Defense Advanced Research Projects Agency has funded a program called Trust in IC, which does research in this area.

Last month, researcher Samuel King demonstrated how it was possible to alter a computer chip to give attackers virtually undetectable back-door access to a computer system.

King, an assistant professor in the University of Illinois at Urbana-Champaign's computer science department, has argued that by tampering with equipment, spies could open up a back door to sensitive military systems.

In an interview on Friday, he said the slides show that this is clearly something that has the FBI worried.

The Department of Defense is concerned, too. In 2005 its Science Board cited concerns over just such an attack in a report.

Cisco believes the counterfeiting is being done to make money. The company investigates and tests counterfeit equipment it finds and has never found a "back door" in any counterfeit hardware or software, said spokesman John Noh. "Cisco is working with law enforcement agencies around the world on this issue."

The company monitors its channel partners and will take action, including termination of a contract, if it finds a partner selling counterfeit equipment, he said. "Cisco Brand Protection coordinates and collaborates with our sales organizations, including government sales, across the world, and it's a very tight integration."

The best way for channel partners and customers to avoid counterfeit products is to buy only from authorized channel partners and distributors, Noh said. They have the right to demand written proof that a seller is authorized.

The FBI doesn't seem satisfied with this advice, however. According to the presentation, Cisco's gold and silver partners have purchased counterfeit equipment and sold it to the government and defense contractors.

Security researcher King believes that the government is better off focusing on detection rather than trying to secure the IT supply chain, because there are strong economic incentives to keep it open and flexible -- even if this means there may be security problems. "There are so many good reasons for this global supply chain; I just think there's no way we can secure it."

Microsoft to Limit Capabilities of Cheap Laptops

Microsoft is launching a program to promote the use of its Windows OS in ultra low-cost PCs, one effect of which will be to limit the hardware capabilities of this type of device, IDG News Service has learned.

Microsoft plans to offer PC makers steep discounts on Windows XP Home Edition to encourage them to use that OS instead of Linux on ultra low-cost PCs (ULPCs). To be eligible, however, the PC vendors that make ULPCs must limit screen sizes to 10.2 inches and hard drives to 80G bytes, and they cannot offer touch-screen PCs.

The program is outlined in confidential documents that Microsoft sent to PC makers last month, and which were obtained by IDG News Service. The goal apparently is to limit the hardware capabilities of ULPCs so that they don't eat into the market for mainstream PCs running Windows Vista, something both Microsoft and the PC vendors would want to avoid.

Imposing the limitations solves a number of problems for the PC industry, said industry analyst Roger Kay, president of EndPoint Technologies Associates. "It allows PC makers to offer a low-cost alternative, and it prevents eroding of pricing and margins in the mainstream OS market," he said.

Microsoft declined to comment on the documents. "We don't speak publicly about our agreements with [PC makers]," the company said in a statement via its public relations agency.

ULPCs are an emerging class of laptops that carry low price tags -- about $250 to $500. Early examples include the Asus Eee PC and One Laptop Per Child's XO machine. The systems already have limited hardware configurations. Microsoft's program appears designed to ensure that distinction is maintained and to prevent ULPCs from cannibalizing sales of higher-end systems, Kay said.

Twenty or more other designs are expected to enter the market over the next six months, and Microsoft expects 10 million to 13 million of the devices to sell this year, according to the documents. IDC's forecast is more modest: On Thursday it said it expects ULPC sales to hit 9 million units by 2012, up from 500,00 last year.

Microsoft notes that the OSes under consideration for the devices include Windows and Linux. Some PC makers have expressed a preference for Linux because it helps them keep down the cost of the devices.

Microsoft says PC makers are keen to enter the market but want to keep ULPCs as a distinct category from "value" and mainstream PCs. The company's new program, scheduled to launch by the end of June, is designed to help make that happen.

Microsoft plans to charge PC makers US$26 for Windows XP Home Edition for ULPCs sold in emerging markets such as China and India, and $32 for those sold in developed markets, the documents show. PC makers who are eligible for its Market Development Agreement, however, can get a discount of as much as $10 off those prices, the documents say.

That's where the hardware limits come in. Besides limits on the screens and hard drives, to be eligible, the systems can have no more than 1G byte of RAM and a single-core processor running at no more than 1GHz. The program makes an allowance for some chips, including Via Technologies' C7-M processors, which run between 1.0GHz and 1.6GHz, and Intel's upcoming Atom N270.

By offering Windows XP Home Edition at bargain prices, Microsoft hopes to secure its place in the ULPC market and reduce the use of Linux, according to an official at one PC maker, who asked not to be identified because he was not authorized to discuss the program.

"[Low-cost PC makers] have made some good inroads with open-source, and Microsoft wants to put a stop to it," the official said.

The official did not seem opposed to the program. It should stimulate more competition between Windows and Linux in the ULPC market, and it could invigorate sales because consumers who want an easy-to-use PC are likely to prefer Windows, the official said.

Microsoft has said it plans to stop selling new Windows XP licenses after June 30, but it has made exceptions, including for the use of XP Home in ULPCs.

Turn to Path Styler Pro for Logos, Title Graphics

Creating fancy logos, title graphics and stylized type generally requires a lot of work. And depending on whether you use Adobe Illustrator or Photoshop, you're probably going to end up with layer upon layer of gradients, strokes and bevels.

Thankfully, Path Styler Pro 1.5 solves all those problems no matter which program you use, producing high-quality graphics with a noticeable ease of use. And by "ease of use," I don't mean "limited capabilities"--Path Styler Pro offers so much customization, it's difficult for me to narrow down just what I would cover in a brief overview.

Path Styler Pro is available as a US$99 plugin for Illustrator or Photoshop; a combo version costing $129 includes a bonus plugin called Fill Styler (more on that below). Both the Illustrator and Photoshop versions are virtually identical--everything I say below applies to both versions of the plugin unless otherwise noted.

Whether you are designing for print or the web, Path Styler Pro is resolution-independent, at least for users of the Illustrator version. This means Path Styler will automatically re-render the effects when scaling objects or the resolution of the artwork changes, offering maximum flexibility in your workflow. Print designers not only get crisp, clear raster images, but Path Styler Pro also preserves spot colors and creates beautiful images shaded with a single spot color and black in Illustrator CS3.

Path Styler's interface is clean, and simple to figure out. I was customizing graphics in just a few minutes, with little fussing around. The major controls are all located in the left-hand side of the window that fills your screen, with each control offering pop-up tool tips to let you know what they do if the labels aren't self explanatory. The tools displayed change depending on the effects you've selected and the layer of the effect you're working with. In the screenshot above, the metallic border and the green fill can be fully customized independently. A large preview window sits on the right side, with a few preview navigation buttons and the presets menu sitting below.

A large collection of preset effects sits at the heart of Path Styler Pro. Once you select an effect, you begin adjusting the bevel's size, depth, contour and shape. One isn't enough, so go ahead and add multiple bevels if you wish--each can have its own style and customization. You also have the ability to adjust the corner joints to mitered, rounded or beveled. Change the color and smoothness while you're at it. Most of the tools use simple sliders.

Path Styler Pro lets you choose from a number of different styles and options for creating logos and title graphics.

Once you get the bevels to your liking, you can then move on to customizing the fill type, known as Material. Several presets are available such as plastic, metal, glass, and solid, among others. You can adjust the color, opacity, and edge-falloff style and contour of the material fill; you can also add bump and procedural maps to add a little texture and reflectivity to your artwork. Don't forget to adjust the directional lighting of the fill gradients.

You can also create reflective materials with the reflection tool and use procedural maps for a wide range of colorful environments. Finally, you can choose from directional, omni, and tube lights, adjusting their color, direction, and intensity. You can get some incredibly realistic-looking artwork with a little dabbling around here--and you should take the time to do so. Path Styler Pro is infinitely customizable, making it one of those plugins you just have to play around with to get a feel for all that you can do.

Once you get all your adjustments made, you can save them as presets for future use.

The two versions of Path Styler Pro differ in what you can apply the effects to and whether you can retain the editability of the objects to which you apply those effects. As the name implies, Path Styler Pro works on paths. For Illustrator, the plugin is a Live Effect, so you can simply apply effects to any object you can draw or type without converting to outlines first. With the Photoshop version however, you're required to manually create a working path from the object or type before applying the effects. To do so, make sure the Paths button is selected in Photoshop's Control Bar; then create a path using either the Shape or Path tool. While this extra step means that you can resize the artwork without worry of image degradation, it also means a little extra work.

As I stated earlier, the combo version comes with Fill Styler, a Photoshop-only plugin, which allows you to simply apply certain preset fills to an object. Because this is a fill-only plugin, you do not need to create a path first. You simply apply the filter to any selection. Most of the customizing ability from Path Styler are available in Fill Styler, with the notable exceptions of beveling and lighting.

Both plugins work with the CS3, CS2, and CS editions of Photoshop and Illustrator. On my 2.66GHZ Dual-Core Mac Pro with 3GB RAM running OS X 10.5.2, both versions ran smooth as silk with the CS3 apps, offering near instant previews of my effects. You will experience a slight slowdown once you click OK and the filter applies the effects, but it's directly related to the size of your document, so for most print and Web designers, that's only a matter of a few seconds.

AMD Must Rebuild Momentum, Despite Customer Loyalty

Advanced Micro Devices must work hard to rebuild its momentum in the Asian server market, even though the chip maker managed to retain many customers in the face of repeated delays of its Quad-Core Opteron processor.

"There was no wholesale shift to Intel," said Tony Parkinson, vice president and general manager of industry-standard servers at Hewlett-Packard Asia-Pacific. "The AMD guys are very loyal."

That's good news for AMD, but Asian shipments of AMD-based servers still did not grow as fast as the overall market in recent quarters, according to Rajnish Arora, director of enterprise server and workstation research at IDC Asia-Pacific. "That's a sign they're not doing too well. Usually, If someone is doing well they are growing faster than the market," he said.

Server industry sources confirmed that assessment, indicating sales of Opteron-based servers dropped off sharply during the first quarter of 2008.

While IDC has yet to release data for the first quarter of 2008, it found that AMD steadily lost market share through the second half of last year. AMD's share of the Asian x86-server market peaked during the second quarter of 2007, with 9.9 percent of the market, before falling to 8.1 percent during the fourth quarter. That decline was largely due to rising shipments of Intel's quad-core Xeon 5300 processors, also known as Clovertown, Arora said.

Things may soon change.

With the Quad-Core Opteron delays now firmly behind it, AMD has a chance to regain its footing in the server market. HP, one of AMD's biggest customers, recently refreshed its server line with new systems based on the Quad-Core Opteron, including an eight-processor system that will ship this month. Dell has also started selling Quad-Core Opteron servers and other companies will soon follow suit.

In a best-case scenario for AMD, pent-up demand for Opteron-based systems would result in higher sales during the second and third quarters of 2008, as customers finally purchase long-awaited server upgrades. "That could be possible, but there are no numbers available to support that," Arora said.

AMD must now work hard to rebuild the momentum it lost amidst repeated delays of the Quad-Core Opteron. "They have to start all over again," Arora said, calling the delays a "lost opportunity."

The chip maker must move quickly. Earlier this week, AMD said in a court filing that it doesn't have enough market share to survive, requiring roughly double its current share "to operate long-term as a sustainable business."

Rebuilding lost momentum won't be easy, but AMD's latest chips should draw attention from many customers. However, the delayed release of the Quad-Core Opteron means the chip must compete against more powerful Intel chips than it would have faced without the delays. These more powerful Intel processors include the quad-core Xeon 7300, known as Tigerton, for servers with four or more chips and the quad-core Xeon 5400, called Harpertown, for single and two-way systems.

And Intel has more powerful chips up its sleeve. Later this year, Intel will ship Dunnington, a six-core successor to the Xeon 7300, and the company is expected to ship an octal-core chip next year.

As part of its efforts to regain its footing, AMD revamped its processor roadmap Tuesday. The company scratched the octal-core Montreal chip due next year, and replaced it with a six-core chip called Istanbul, which is scheduled to arrive in late 2009. Istanbul will be followed in the first half of 2010 by a 12-core chip called Magny-Cours.

The next server chip that AMD is scheduled to release is Shanghai, a version of the current processor that is made using a 45-nanometer manufacturing process instead of a 65-nanometer process. Shanghai is now sampling and is expected to ship in commercial volumes later this year.

Mozilla: Firefox Plugin Shipped With Malicious Code

Mozilla warned Wednesday that a malicious program inserted adware code into a Firefox plugin that has been downloaded thousands of times over the past three months.

Because of a virus infection, the Vietnamese language pack for Firefox 2 was polluted with adware, Mozilla security chief Window Snyder said in a blog posting. "Everyone who downloaded the most recent Vietnamese language pack since February 18, 2008 got an infected copy," she wrote. "Mozilla does virus scans at upload time but the virus scanner did not catch this issue until several months after the upload."

Mozilla is now going to add additional scans of its software to prevent this kind of thing from happening in the future, she said.

The Xorer Trojan

The malware in the language pack is from the Xorer Trojan, according to discussion on Mozilla's Bugzilla developer Web site, which indicates that Mozilla developers first discovered the issue on Tuesday.

"I think it (happened) just because the author's local network was infected with the virus, so it modified HTML files," wrote developer Hai-Nam Nguyen. "The infected code just display(s) annoying banner but it can't propagate."

Mozilla missed the code during its initial scan because antivirus vendors had not yet added detection for Xorer into their products, Snyder said in an interview. Antivirus vendor Panda Security first detected Xorer on Feb. 28, 10 days after the infected plugin was published.

Firefox developers have now scanned all of their plugins. The Vietnamese language pack is the only one that had this kind of code, she said.

The open-source browser maker does not know how many people were infected with the adware, but the plugin was downloaded more than 1,200 times in the past week and has been downloaded 16,667 times since November.

Disable Plug-In

On Wednesday afternoon, the Web page for the plugin was off-line as Mozilla scrambled to come up with a new, adware-free version of the language pack. In the meantime, users of the software should disable the plugin, Snyder said.

Xorer added a script to the Vietnamese language pack's HTML files that would have taken Firefox users to adware servers as they were surfing the Internet, Snyder said.

Snyder did not know exactly how the adware code was added, but she said that this kind of problem could affect any software provider -- open source or not. "In most software development environments the developers aren't kept in a dark cave," she said. "They browse the Web or take those laptops to a coffee shop "

"It's just a fact of life," she added.

Other vendors have been hit with similar problems. In late 2006 Apple shipped Video iPods that contained the RavMonE.exe virus. And late last year, retailer Best Buy shipped digital picture frames that contained malware.

Although some might say Mozilla's incident underscores the risks of open-source software development, this type of issue could crop up at a company like Microsoft too, said Eric Schultze, chief technology officer at Shavlik Technologies. "Most products that ship today include HTML files in them," he said via instant message. "Any one of them could suffer from this."

Mozilla was already doing the right thing scanning their code before upload, Schultze said. "But it shows the need to have tight security on developer systems."

New Computer Will Not Boot

Whether you're a novice or an expert PC technician, we've all had an experience when a new PC would not boot. There's no worse feeling than pushing the power button on the front of a new machine an hearing absolutely nothing. This article will focus on some of the common problems with new builds and help to reduce the computer troubleshooting time when diagnosing problems with your new computer.

Take A Quick Visual Of The Computer

You should have already done this before trying to power up the PC, but a lot of novice PC builders will skip this step in anticipation of powering up their new machine. This step may save you time and money. First, triple check to make sure the CPU is sitting flat on the motherboard socket. It's probably hard to tell because of the heat sink, but if the entire CPU and heat sink combo looks skewed, then chances are it's not installed properly. Next, go over the IDE cables and the thin wires running from the power and reset switches to the motherboard. While the IDE cables are keyed, it's quite possible to get those case wires backwards or completely. Lastly give the PC a little shake. Make sure an errant screw didn't fall behind the motherboard during the install. This could blow the motherboard or cause the system to go to ground.

Computer Hardware Troubleshooting

When a new PC will not boot, a good place to start is the power supply. Is the machine getting power? If there is no fan activity at the rear of the power supply, then the power supply isn't working. First, check the wall socket and power strip to make sure power is actually being supplied to the computer. If there is power to the outlet, confirm that the | / O lever in the back is set to |. Then confirm that the voltage is set to 110V in the USA or 220V in countries that require that setting. If you have a voltmeter, you might want to consider testing the power supply. Refer to the pin out chart for the correct power supply voltages .

Troubleshooting Video Cards

If the system powers up, but you get nothing on the screen, the video card may be the culprit. First, confirm the video cable is secured to the video card's output. If the motherboard has built in video, and you're using a PCI-E or AGP card, make sure the cable is secured to the correct port. Also, check for bent pins on the connector and confirm the monitor works and the brightness controls are set correctly. Do you hear any beeps? If so, refer to our BIOS beep code chart . It's always a good idea to reseat the RAM and video card when you get the "No Signal Displayed" message on the monitor.

Dead Motherboard or CPU

Improper installation of the motherboard and CPU can cause instant failure. We like to install the CPU and RAM modules on the motherboard before installing the motherboard in the case this is because it sometimes requires some effort to get the heat sink seated properly on the CPU. The CPU itself should slide effortlessly into place and lock without any problems with the lever. If you require resistance when installing the CPU, make sure the CPU's pins are properly aligned to the socket on the motherboard. Apply the correct amount of thermal grease or tape as recommended by the manufacturer, then install the heat sink. The heat sink should rest flatly on top of the CPU.

As for the motherboard, refer to the manual about each of the connections to the case. A common problem area are the standoffs between the case and motherboard, and the connection of the thin wires from the power and reset switches to the motherboard.

BIOS BEEP Codes

You will often receive a BIOS beep code when there is a hardware issue with the PC. You should determine the BIOS residing on the motherboard by physically looking for the BIOS chip on the motherboard. Look for something like AMI-BIOS, AWARD BIOS or PHOENIX. Refer to our BIOS Beep Code Chart when diagnosing beep code errors. This will often lead you quickly to the source of the hardware problem.

AMD Must Double Processor Market Share to Survive

Advanced Micro Devices needs to more than double its share of the microprocessor market to survive, according to a brief filed by the company's lawyers in its antitrust lawsuit against Intel.

At the end of 2007, AMD had 13 percent of the processor market, "less than half of what it requires to operate long-term as a sustainable business," the brief said, explaining that Intel's alleged efforts to shut the company out of the processor business had largely succeeded.

"Measured on a revenue share basis, AMD made little progress growing its slice of the pie," it said.

The argument that Intel's alleged anti-competitive behavior has so hurt AMD that its future is in jeopardy is crucial to the company's claims for relief, including damages. But the claims could further spook corporate customers already wary of the company's financial troubles.

Companies generally make computer purchasing decisions with a long-term view and plan to use and purchase similar systems for many years to come. Fresh concerns about AMD's long-term sustainability coupled with existing worries about the company's fiscal health -- weakened by the delayed release of its Quad-Core Opteron processor and mounting long-term debt-- could lead CIOs to consider computers based on Intel's chips instead.

"It will push them in the other direction," said Rajnish Arora, director of enterprise server and workstation research at IDC Asia-Pacific.

AMD's brief was heavily redacted by the court and details of Intel's alleged anti-competitive behavior and its relationship with major computer makers were largely blacked out. But the general thrust of AMD's argument was clear: Intel allegedly paid computer makers to rely exclusively, or almost exclusively, on its chips.

The effect of these and other alleged tactics employed by Intel outweighed gains that AMD made with its successful line of Opteron server chips, which came out in 2003.

"That AMD gained some share and revenue is immaterial. It gained sufficiently less share and sufficiently less revenue so as to suffer a critical diminishment of its innovation roadmap," the brief said.

AMD's concerns about its future are legitimate, IDC's Arora said, underscoring the capital intensive nature and short product cycles of the processor business. "They are going to be challenged. They need to grow the business and scale it up," he said.

The key for AMD is to generate strong end user demand for its processors, which will in turn mean more computer makers will sell systems based on its chips. "It's all driven by customer demand," Arora said.

Yahoo Faces Shareholder Ire Over Failed Microsoft Bid

Two public pension funds from the city of Detroit plan to expand a complaint against Yahoo CEO Jerry Yang and other members of Yahoo's board of directors, saying they failed to act in the best interest of shareholders in rejecting Microsoft's bid to buy Yahoo.

Their original lawsuits were filed separately on March 5 over what the pension funds deemed an unreasonable attempt by Yahoo's management team to thwart an acquisition by Microsoft that would have paid shareholders a 62 percent premium over Yahoo's pre-bid stock price. The lawsuits have been combined into a general class-action lawsuit, and lawyers representing the pension funds say they will seek damages for the loss of shareholder value allegedly caused by Yahoo management over the failure of the bid this weekend.

The actions taken by Yahoo's CEO this past weekend confirm that the company's board of directors pursued all manner of value-destructive third-party deals to fight off Microsoft's bid, lawyers representing the Police & Fire Retirement System of the City of Detroit and the General Retirement System of the City of Detroit said in a statement Monday.

Those actions constitute a breach of fiduciary duty, they allege.

Microsoft announced its original $44.6 billion acquisition bid on Feb. 1, sending Yahoo shares up as high as $29.83 each on the day, a huge increase from $19.18 before the offer. Yahoo first rejected the bid on Feb. 11, but did enter talks with Microsoft. In the end, the deal fell apart despite a sweetened offer of $33 per share from Microsoft.

Yahoo shares fell 15 percent on Monday to $24.37, after dropping to as low as $22.97 earlier in the day.

Yahoo appears to have sought several alternatives to the Microsoft deal, including reportedly trying a tie-up with Google on its search advertising business. Lawyers for the pension funds, Bernstein Litowitz Berger & Grossman LLP, say attempts at such deals show that Yang never negotiated with Microsoft in good faith.

Yahoo did a two-week test run of Google ads in April, but hasn't disclosed the results.

Microsoft and Yahoo: Now What?

Microsoft's three-month courtship of Yahoo has ended but it changed both companies forever and neither can expect to return to the way they were.

Microsoft and Yahoo will need to deliver on promises, address questions, reassess and adjust plans and deal with challenges that grew from and during the attempted acquisition.

"The key thing is that both companies are going to have to articulate very clearly what their strategies going forward will be," said Forrester Research analyst Charlene Li in a phone interview.

Yahoo has the most to prove and deliver upon, while facing a more uncertain future.

"For Yahoo, this is a situation of 'Be careful what you wish for,'" said industry analyst Greg Sterling of Sterling Market Intelligence in a phone interview. "Yahoo's directors and management very strongly indicated that they wanted to remain independent and now they get that opportunity."

First order of business for Yahoo will be to monitor its stock, which got a boost after the acquisition bid and now faces a possibly negative reaction from financial markets.

If the stock gets clobbered in the coming days and doesn't rebound, Yahoo could find itself an acquisition target again from other suitors, and possibly under less favorable conditions and terms.

Even if the stock holds up, it's still very likely that Yahoo will be pelted with a flurry of lawsuits from shareholders that feel the company didn't look out for their best interests when rejecting Microsoft's offer.

In addition, Yahoo will have to hustle to deliver on all the ambitious plans and promises it made these past three months, and prove that it can indeed turn its ship around as an independent company.

Financial analyst Clayton Moran from Stanford Group Company is pessimistic about Wall Street's reaction to Yahoo and about the company's ability to significantly improve its financial situation.

"Yahoo has missed an opportunity. We expect the stock to drop materially," he said in an e-mail interview.

Moran doesn't believe that in the coming 12 to 18 months Yahoo's stock will reach the $37 per share value that the company wanted Microsoft to offer and over which negotiations eventually broke down.

"Yahoo's best alternative was to sell to Microsoft. As an independent company, Yahoo has lost market share and struggled to grow cash flow. We suspect these trends will remain intact for the foreseeable future," Moran said.

Beyond the potential financial turmoil, Yahoo will need to follow through on the many lofty projects it has kicked off, such as its new AMP advertising management platform and its Yahoo Open Strategy (YOS) for letting outside developers create applications across its network of sites and services.

"Yahoo has some very ambitious plans they have announced these past three months and now they have to deliver and start fulfilling the promise some of these projects represent," Sterling said.

"The onus is on Yahoo to explain why it's worth $37 per share and in particular to articulate very quickly what its strategy is, now that it's been given this reprieve," Li said.

It's also unclear how wise it will be of Yahoo to outsource a significant portion of its search advertising business to Google, a deal that, if completed, may be announced as early as next week, according to a source close to Yahoo.

"While Yahoo may pursue a Google search partnership as a way to appease shareholders through enhanced cash flow, we believe such a deal would face intense anti-trust scrutiny. In addition, it would cede control of search to Google," Moran said.

Li isn't convinced that the deal's short-term financial boost will justify passing up the long-term advantage of being able to integrate search into its overall ad strategy. "That's going to be interesting to watch," she said.

Microsoft also has its own set of challenges created by its bid. For starters, it needs to explain how it plans to boost its Internet unit now that the bid collapsed, after outlining many reasons why it needed Yahoo to do it, she said.

This would be a good time for Microsoft to change course and stop vowing to catch Google in search advertising. "That game is over and Google won," Li said.

However, by focusing on unifying display advertising, such as banner ads, with search advertising in a single platform, Microsoft, as well as Yahoo, could compete more effectively against Google, whose display advertising business is very small, she said. The synergy between search and display ads can make both formats significantly more effective and valuable to advertisers, Li said.

While Google has said that it will make significant progress in display ads now that it owns DoubleClick, Li isn't so sure. "Google doesn't have a good feel for the display ad market, which is an old network of agencies and creative types and media people who all know each other from ages ago," she said. "Yahoo and Microsoft really had to earn their way into that space over the past decade."

Since it obviously has the cash, Microsoft should go shopping for other companies that could give it some of the products, services and innovative technology it was hoping to get from Yahoo, said Gartner analyst Allen Weiner. "I'm looking for Microsoft to get aggressive with a buying spree," he said in a phone interview.

In an April 25 report, Moran and his colleague Kevin Buttigieg [cq] listed some companies that, if the Yahoo acquisition failed, might make sense for Microsoft to consider acquiring: Time Warner's AOL, News Corp.'s Fox Interactive (which includes MySpace), ValueClick, CNet and Facebook.

For his part, Weiner thinks we might see Microsoft pursue an acquisition of a video platform provider like Brightcove and ExtendMedia, and an online presence company to complement its strong webmail and IM services like Twitter.

But whatever it does, Microsoft should take some concrete steps to move on in the public eye. "I think Microsoft should do something quickly to show the world that Yahoo bid wasn't a setback," Weiner said.

Military Computer Contractor Convicted on ID Theft Charges

A former U.S. military contractor has pleaded guilty to exceeding authorized access to a computer and aggravated identity theft after he was accused of selling names and Social Security numbers of 17,000 military employees, the U.S. Department of Justice said.

Randall Craig, 41, of Houston, pleaded guilty Friday to both counts of an indictment returned in April by a grand jury in U.S. District Court for the Southern District of Texas. Craig acknowledged selling information contained in a military database to a person he believed to represent a foreign government, according to the U.S. Attorney's Office for the Southern District of Texas and the U.S. Federal Bureau of Investigation.

The person who purchased the names and Social Security numbers from Craig was an undercover FBI agent, they said.

Craig worked as a private computer contractor at the Marine Corps Reserve Center in San Antonio, Texas, in September 2007, and he had access to personal information of U.S. Marines in the center's database, the DOJ said.

On Feb. 6, Craig met with someone he believed to be a representative of a foreign government at the Houston airport to discuss the sale of a thumb drive containing the information Craig had obtained from the military database, the DOJ said. Craig sold the thumb drive for US$500, the agency said.

"Our personal identification information is readily available to those who have a legitimate use for it as well as those who do not, such as Mr. Craig," U.S. Attorney Don DeGabrielle said in a statement. "Because he sought to profit from this identity theft, we moved swiftly and justly -- as we will in all such cases -- to protect our military heroes and to protect everyone in the conduct of their personal affairs."

A forensic examination conducted by the Naval Criminal Investigative Service determined the data was from the Marine Corps Reserve Center where Craig worked, the DOJ said. The thumb drive contained personal information of 17,000 people assigned to the Battalion of the U.S. Marine Corps in San Antonio, the DOJ said. The investigation found that none of the information obtained by Craig was sold to others or otherwise compromised.

At a Feb. 22 meeting with the FBI undercover agent, Craig said he had made efforts to contact other foreign countries in an attempt to offer his services, the DOJ said. The undercover agent and Craig discussed future contact, using cell phones and e-mail.

The conviction for exceeding authorized access to a computer for financial gain carries a maximum sentence of five years in prison. Aggravated identity theft carries a mandatory two year-sentence that must be served consecutive to any sentence imposed for the charge of exceeding authorized access. Both counts also include maximum fines of $250,000.

IBM to Build Apps Marketplace for SMBs

IBM is trying to rally support for an online applications marketplace for small and mid-sized businesses that it plans to launch later this year.

On Thursday, it outlined plans to create the Global Applications Marketplace, where small businesses will be able to browse and purchase applications from potentially thousands of ISVs (independent software vendors) around the world, which local IBM channel partners will then install and manage for them.

IBM optimistically compared the marketplace to Amazon.com, because customers will be able to read reviews of products written by other customers. It will also be like iTunes, in the sense that it will be tied to the vendor's hardware: customers who use the marketplace will have to have an IBM server, just as iTunes customers need an iPod.

The goal is to make it easier for companies with small or nonexistent IT departments to adopt new software and services to help run their businesses. For IBM and its partners it's a way to generate more business from companies with up to 500 employees, a market largely untapped by IBM thus far.

The initiative, also called the Blue Business Platform, was announced Thursday at IBM's Business Partner Leadership Conference in Los Angeles, where IBM pitched the idea to resellers and ISVs. Competitors will include Microsoft's Small Business Center, Salesforce.com and, eventually, SAP's Business ByDesign.

Small businesses will be able to search for applications at the marketplace and enter parameters like the number of employees they have. The system will spit back recommendations, including any IBM infrastructure software that might be appropriate. When the customer decides on an order, IBM sends it to a local reseller who will deploy and manage the software, said Matthew Friedman, vice president of marketing for IBM's Business Systems Division

Success will depend on getting buy-in from ISVs and resellers. To take part, ISVs will have to adopt a set of APIs (application programming interfaces) that allow them to list their software on the marketplace. Other APIs will support remote management capabilities, like the ability to add and remove users or deliver patches, and also allow for integration with other applications and services.

A reseller could connect an application to Amazon's S3 hosted storage service, for example, but only if Amazon chooses to adopt the APIs, Friedman said. Longer term, IBM plans to release other APIs that allow for integration at the data level, allowing resellers to set up business processes, he said.

Only about 10 ISVs have implemented the APIs today, Friedman said, but IBM expects to get many more. Vendors that signalled support Thursday include CFXWorks, which provides credit card processing for retailers; Cincom, which offers a business intelligence product; and InterNetworX, which sells enterprise resource planning software.

IBM expects most of the applications to be installed on premise, the model used by 90 percent of SMBs today, Friedman said, although some software will be offered as a service. The resellers will also be able to incorporate online backup services, he said. The remote management will usually be provided by the reseller.

IBM is setting up hundreds of "innovation centers" around the world where ISVs can go to add the APIs to their software. It is emphasizing the big role that partners will play, although in some cases customers will be able to download and install software themselves, Friedman said. Most customers will want the specialized help that local resellers can provide, he said.

Alienating resellers is the main risk for IBM, said Dan Olds, principal analyst at Gabriel Consulting Group, in Beaverton, Oregon. Smaller resellers with little software expertise will benefit the most, he said, but bigger resellers may feel threatened that customers can now figure out what software they need online.

As a small business owner himself, Olds said the service sounds useful. "There are places you can search for applications, like Google, but you don't really get all those choices in one place," he said.

For companies with less than 50 employees IBM will offer Lotus Foundations Start. It's a package of IBM's Lotus and Domino software that comes pre-installed on a server and is supposed to provide for all a small company's collaboration needs, including email, security, directory services, backup and recovery.

The product was unveiled at IBM's Lotusphere conference in January. It will be generally available by the end of June, priced starting from about $1,500, Friedman said. It will be the first of other "appliance servers" that IBM plans to release. IBM said it can be set up in 30 minutes and has "self managing" features to make it easy for small companies to use.

Big vendors have been trying for years to tap the SMB market, but have often struggled to meet the individual needs of small companies or come up with a viable business model. IBM said the global market is worth $500 billion, and called it its "largest opportunity for growth."

Microsoft Hit With Patent Suit Over RoundTable

A company that develops cameras that produce 360-degree videos is suing Microsoft for alleged patent infringement in its RoundTable conferencing product.

In a filing this week with the U.S. District Court for the Northern District of California, FullView asks the court to require Microsoft to stop selling RoundTable and to award FullView triple damages.

FullView's patent, which builds on other patent applications dating back to 1995, covers a camera system that combines the fields of view of several cameras to form a continuous 360-degree view.

According to FullView, Microsoft became aware of the relevant patent or predecessor patents in 2003, before the patent was actually awarded to FullView in March 2004. Microsoft in fact cites the patent, number 6,700,711, in a patent application it filed in 2002.

RoundTable is a video and teleconferencing device that Microsoft released late last year. It has a camera that captures videos of people who may be sitting around a conference table. Remote participants in the conference can see videos of everyone in the room, and the software displays video of whichever person happens to be speaking.

A spokeswoman with Microsoft's external public relations firm said that Microsoft has not been served with the suit and so has no comment on it.

Bruce Wecker, a lawyer with Hosie Rice, the firm representing FullView, said he couldn't reveal whether Microsoft and FullView discussed licensing the patent. He also declined to explain the exact technology behind FullView's camera technology that the company alleges Microsoft is infringing.

FullView's president, Vic Nalwa, devised the original FullView camera in 1995 while he worked for Bell Labs. He co-founded FullView with Lucent Technologies in 2000.

One notable FullView customer is David Bowie. In 1999 he hosted a webcast for subscribers of his Internet service in which he was seen interviewed and rehearsing a song. Still shots from the event are posted on FullView's Web site.

Adobe Establishes Open Screen Project for Flash, AIR

Adobe launched a new community development project on Thursday aimed at using its Flash and AIR (Adobe Integrated Runtime) technologies to create a consistent application interface across all devices -- whether they are smartphones, PCs or set-top boxes.

The Open Screen Project is aimed at bringing digital content providers, device manufacturers, service providers and developers together to provide a user experience for both Web-based content, using Flash, and client-side applications, using AIR, across the myriad devices people use to connect to the Web, said Adobe CTO Kevin Lynch.

Flash is Adobe's runtime and player for delivering rich media on Web sites, while AIR is a desktop runtime that allows people to bring applications coded for the Web to the desktop to run locally.

Lynch noted that because of the complexities of developing applications for different hardware form factors, neither Web-based applications nor ones that are downloaded to a device and run locally are guaranteed to have the same look and feel or render in the same way -- or even run at all.

"If you look at the current experience, content doesn't work reliably; you can't easily install applications, you can't get applications on a device," he said.

Indeed, while both the Java and Flash runtimes have allowed Web applications to run on myriad handheld devices, neither has so far allowed for a seamless transfer between formats of applications. Smartphones, which are increasingly becoming the norm for mobile-phone users, in particular are a largely untapped territory for Flash, Lynch said.

Adobe's Flash technology, for example, is currently not able to run on Apple's iPhone; Web sites running Flash will not render on the iPhone's Safari browser. Adobe is working to bring Flash to the iPhone, Lynch said, and the Open Screen Project should help with this effort.

Flash is currently on 500 million mobile devices via the Flash Lite technology and should be on 1 billion devices by 2009, Lynch said, but the Open Screen Project wants to take that one step further. The company wants to create one Flash and one AIR runtime that can run across PCs and other smaller form-factor devices that are beginning to replace PCs as people's primary way to access the Web.

One of the specific problems Adobe wants to solve with the Open Screen Project is the ability to automatically update software on devices over the air so people using them will have the latest versions of the Flash player and AIR. Lynch noted that Flash has used the automatic update model successfully to bring the Flash player to Web users. "That update to Flash Player 9 -- 61 percent of the PCs connected to the Web had the update in less than three months," he said.

Bringing that same ability to devices would be a boon for bringing a consistent user experience through Flash and AIR on devices, but only cooperation between people creating the devices, and application and content providers, can facilitate this because of the complexity of developing the technology, Lynch said. "It's really important to ... keep the runtime [on devices] fresh," he said. "We can't do that alone."

So far, for the Open Screen Project, the company has signed on carrier partners NTT DoCoMo of Japan and Chunghwa Telecom of Taiwan; smartphone and handset manufacturers such as Nokia, Sony Ericsson, Samsung, Motorola, LG and Toshiba; component providers ARM, Intel and Marvell; and content providers MTV and NBC Universal.

Adobe is not just promoting the Open Screen Project outside of the company; it has unified its mobile and desktop Flash and AIR development teams internally so they are working on one consistent platform for all devices, Lynch said.

"The mobile teams and desktop engineering are now together in a group I'm leading called the Experience and Technology Organization," Lynch said. He added that achieving the goal of the group and the Open Screen Project will be no small task, but the company is embracing the challenge.

In the meantime, to facilitate more third-party adoption of Flash on devices, Adobe has removed the licensing restrictions for proprietary media formats used with Flash -- Shockwave Flash (SWF) and Flash Video (FLV) -- so developers can now create their own third-party Flash players.

Lynch said Adobe will still try to offer the industry's best Flash player, but it wanted to give other people free access to the formats to reach its goal for the Open Screen Project. "We're removing that restriction to increase the confidence of people in the industry adopting Flash as the core format across devices," he said.

AIR is currently available in its 1.0 version, while Flash's latest available version is Flash 9. Adobe does not have a time frame for the next major releases of its runtimes yet, but it expects the first fruits of the Open Screen Project to appear in them, Lynch said.

HP Researchers Build Intelligent Memory

Researchers at Hewlett-Packard have developed a working unit of a memory circuit that has existed in theory for 37 years, which could ultimately replace RAM and make computers more intelligent by tracking data it has retained.

The technology, called memristor, could allow computers to make decisions by understanding past patterns of data it has collected, similar to human brains collecting and understanding a series of events.

For example, a memristor circuit could be capable of telling a microwave the heating time for different food types based on the information it has collected over time, said Stanley Williams, senior fellow at HP.

A memristor circuit requires lower voltage and less time to turn on than competitive memory like DRAM and flash, Williams said. "Because it [uses] less voltage and less time, of course, it uses much less power," Williams said. Denser cells also allow memristor circuits to store more data than flash memory.

Through prototypes, HP is trying to show circuit designers what memristor is capable of doing. "What we have done is confirmed a concept for a new electronic device that was originally proposed nearly 40 years ago," Williams said.

Memristor is the fourth fundamental circuit element, joining the other three -- resistor, capacitor and inductor -- that had been known for 150 years, Williams said. The element has properties that cannot be duplicated by any combination of the other three elements, Williams said.

"It is as fundamental to electronic engineering as a chemical element is to chemistry or an electron is to physics," Williams said.

In a 1971 academic paper, Leon Chua, a mathematician and professor at the University of California at Berkeley, wrote that memristor would have properties similar to a synapse in a brain. The synapse makes connections between two neurons, and the more often a signal is sent to a synapse, the stronger the synapse gets.

"That is a very different type of behavior than anything that had been observed before in circuit elements," Williams said.

HP is not going to reproduce all the functions of a brain in memristor, but the company is trying to build a relatively simple computing machine that operates on a different principle from today's computers, Williams said.

The scientists created the memory by applying a charge on a circuit with blocks of titanium dioxide. The actual resistance of the memristor changes depending on the amount of current flowing through the circuit, Williams said. When the current is turned off, the memory retains the information it has acquired.

Although the concept of memristor has existed for a while, the memory prototype is an academic device that will first work its way to academia. It could hit the commercial semiconductor market in five years, Williams said.

Montage 1.4

Once upon a time, it was enough for a screenwriting program to simply format dialogue, magically inserting MOREs and CONTINUEDs where needed. But today, when even the most rudimentary word processor can meet 90 percent of script formatting needs, specialized screenwriting applications must deliver more. Mariner Software's Montage 1.4 takes an approach to writing that's refreshingly different than what you get from industry-dominating competitors like Final Draft. Nontraditional features like integrated research tools and scene filtering by keyword or scene status offer intriguing workflow possibilities.

Thankfully, the most recent incarnations of Montage have largely banished the bugs that plagued early releases. I'm impressed by Mariner Software's speedy customer support and eagerness to engage users in building future features. Moreover, version 1.4 is a free upgrade for all current users.

Targeted more to the independent screenwriter writing "on spec" than to the studio script doctor, Montage 1.4 delivers a fully integrated set of flexible tools designed to help bring a screenplay from idea to sale--all within a single, elegantly organized program.

For most writers, character bios, research notes, treatments, and outlines are written long before double-clicking a screenwriting software icon. Montage's easy-to-use outlining tools help you accomplish the bulk of this legwork and bundle it all together within one document file.

The application's Smart View feature, while not new to this version, is the creative tool you never realized you needed--and that you now won't be able to live without. Essentially, it allows you to tag all your scenes with metadata, and then display only scenes that meet your criteria. Say you're writing an ensemble film boasting a tangle of characters and plotlines. Tag your scenes as A-story, B-story, and C-story, and voilà; You have a quick and effective tool for managing your story's love interests and subplots.

Smart View also plays a major role in Montage's unique approach to rewriting. Historically, rewriting has required extensive use of the Save As... command. The headache of this approach comes when you decide you like an old version better and find yourself wading through dozens of drafts, cutting and pasting to salvage scrapped scenes. In Montage, a writer can create several versions of a scene, all contained within a single file. Rendering a final script is then as easy as tagging the chosen scene versions as final and creating an appropriate Smart View filter.

But Montage is more than an intelligent interface. A Hollywood screenwriting legend once said, "The easiest thing to do on earth is not to write." Montage helps procrastinating scribes escape the temptations of toolbars and the wiles of widgets with one of my favorite features--full-screen mode. Simple and effective, this customizable white-text-on-blue-background view helps you plow through that first draft relatively distraction-free.

Indie filmmakers eager to begin shooting their Montage masterpieces will also welcome much needed features like the ability to add scene numbers. Montage 1.4 can also export your script in EP Scheduling software's Scheduling Exchange (.sex) format for use with popular film production scheduling programs.

Importing an existing Final Draft screenplay into Montage is a breeze, and very little format cleanup is required. You can now export screenplays to the .fdr format as well. But don't mistake Montage's ability to import and export to Final Draft format as a tool for cross-program collaboration. Final Draft revision marks and ScriptNotes disappear on import, and repeated file transfers from one program to the other can produce undesired artifacts.

My biggest frustration with Montage is the lack of WYSIWYG pagination, an absolute necessity for screenwriting software. For better or worse, studio readers judge pacing by page count. It's frustrating when you brutally edit your romantic comedy down to a lean 110 pages only to have Montage's MOREs and CONTINUEDs tack on another five pages upon printing. Sure, you can turn off such dialogue formatting options and preview pagination by printing to a PDF document first. But given Montage's overall programmatic elegance, the clunky workflow here is disappointing.

Lest we forget, the real purpose of a screenplay isn't just to make a writer rich. First and foremost, a screenplay is a blueprint for making a feature film. Despite significant strides in recent updates, when it comes to dealing with the arcane version control requirements of working with a "locked" production script, Montage still isn't quite ready for prime time.

And professional writers will find vital features, like support for revision marks and A-B pages, conspicuously absent. Of course, you can always export your script to Final Draft to finish the job, but that defeats the purpose. For Montage to gain a toehold among working screenwriters (yes, they do exist), these shortcomings must be addressed.

Mariner Software acknowledges Montage's current limitations and plan to address them with the release of version 2.0 in the upcoming year.

Macworld's buying advice

If you're looking to get that million-dollar spec script out of your head and onto the page, Montage 1.4's intuitive interface, streamlined outlining approach, and powerful editing tools could be just what the director ordered. And, if you use a previous Montage version, upgrading is a no-brainer, and free of charge. But if you've already landed that TV deal and need a tool for tackling production rewrites, you may be better off waiting for the sequel.

Report: Microsoft Board Meets Over Yahoo Bid

Microsoft's board is meeting on Wednesday to decide how to proceed in the company's bid to acquire Yahoo, The Wall Street Journal reported.

Quoting anonymous sources, The Journal reported that the meeting could yield a concrete announcement.

Microsoft's next move is something that all parties with a stake in the deal have been waiting for since Yahoo failed to agree to a deal by Saturday, the deadline Microsoft had set three weeks earlier.

Many observers had expected a reaction from Microsoft first thing Monday morning, but as the silence stretched into Wednesday afternoon, the media speculation mill has gone into overdrive.

The major stumbling block in the negotiations has been the price, which Microsoft is willing to increase to up to US$33 per share, but not to the $35 to $37 range that major Yahoo shareholders, management and board members want, The Journal reported. Microsoft's original cash-and-stock offer, made on Feb. 1 and valued at $44.6 billion at the time, stood at $29.12 as of Tuesday's market close, the paper said.

This week, Microsoft CEO Steve Ballmer has been personally lobbying big Yahoo shareholders so they, in turn, will pressure the board to accept Microsoft's bid, since Microsoft would prefer not to have to launch a hostile takeover, The Journal reported.

In the meantime, Yahoo and Time Warner have continued exploring the possibility of Yahoo merging with AOL in exchange for a 20 percent stake in Yahoo for Time Warner, The Journal reported.

In addition to attempting a hostile takeover, Microsoft has other options, such as raising its bid to a level agreeable to Yahoo's board or walking away, a possibility first floated by Ballmer last week.

Certainly, Microsoft expected the acquisition process, now nearing its third month, to flow much more smoothly and quickly, given the company's urgency to boost its Internet unit so it can better compete against Google and capitalize on the growth of the online advertising market.