The Reuters/Variety Cyber Summary
Wednesday, July 2
Edited by Steve Gorman (steve.gorman(at)reuters.com)
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... Top Stories ...
SOFTWARE.NET IN DEALS WITH NETSCAPE, MICROSOFT
LEGISLATION ON DIGITAL COPYRIGHT TREATIES EXPECTED SOON
... Missing Links ...
MICROSOFT SUES RESELLERS OVER ALLEGED PIRACY OF NT
APPLE SHARES FALL TO 12-YEAR LOW, ANALYSTS CITE EROSION
SWEDISH INTERNET AGENCY CLAIMS HOAX POL POT STORY
... Net Soup ...
BENELUX GETS FIRST INTERNET BOOK, MUSIC STORE
ZIFF-DAVIS NAMES SHEER AS PRESIDENT OF U.S. UNIT
BRITISH FIRMS STILL FAIRLY NEW TO INTERNET
SEAGATE ACQUIRES STORAGE STARTUP QUINTA
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SOFTWARE.NET IN DEALS WITH NETSCAPE, MICROSOFT
By Samuel Perry
PALO ALTO, Calif. (Reuter) - An Internet startup backed by Microsoft co-founder Paul Allen said Wednesday it has landed electronic distribution deals with both Microsoft Corp. and its Web software rival, Netscape Communications Corp.
The software.net subsidiary of the private San Jose company CyberSource Corp. said the deals hinge on its ability to distribute software directly over the Net and its goal of being a neutral party between the competing companies.
"We like to remain Switzerland here, partner with everyone and let them slug it out," said Kendall Fargo, software.net's director of sales and marketing.
The deal with Microsoft involves what the company said was the Internet's largest electronic software distribution deal, providing $50 million of Microsoft products to be delivered to two U.S. Department of Defense agencies over a five-year term.
The two agencies, the Defence Logistics Agency (DLA) and the Department of Defense Procurement Agency, will save more than $30 million in packaging, shipping, installation and maintenance costs, software.net said.
The deal involves sending software packages, upgrades and updates to as many as 70,000 U.S. employees a year, including selected Microsoft products such as Windows 95 and NT, Office, Project, Publisher, Visual Basic, Internet information Server, Internet Explorer and Backoffice.
In a separate deal inked with Netscape, the company said it will join Netscape in a co-branded online service to provide Internet-based electronic distribution and sales of software from key Netscape developers.
The service, to be dubbed the "Netscape Software Depot by software.net," is currently due to be available by mid- August and will also offer a one-stop shop for free software, known as shareware, and for Netscape plug-ins.
Initial software publishers participating in the electronic distribution service include Borland International, Corel Corp., Verity Inc. and private companies Elemental Software and Vital Signs.
LEGISLATION ON DIGITAL COPYRIGHT TREATIES EXPECTED SOON
WASHINGTON (Reuter) - Commerce Secretary William Daley said Wednesday the administration expects to send legislation to Congress soon that would implement two international treaties that update copyright laws for the digital age.
"I would hope that in a very short period we will have legislation to put forward," Daley told reporters.
The treaties agreed to by the United Nations' World Intellectual Property Organisation (WIPO) in December have to be ratified by the Senate, and implementing legislation has to be passed by both the Senate and the House of Representatives.
Daley said it was important that the United States act on the treaties that update international copyright laws to take account of new digital technologies before the end of the year.
"Until we act we can't expect others to," Daley said.
He acknowledged that there was a brewing controversy between Internet service providers that do not want to be held liable for third-party transmissions of pirated material and copyright owners who want their works protected.
"There is a great controversy of content-versus-liability issue that has to be addressed," Daley said.
He said the legislation was one of the department's most immediate challenges in trying to carry out President Bill Clinton's proposals announced on Tuesday to promote commerce in cyberspace.
Daley heads to Germany next week to attend a European conference on global information technologies being held in Bonn.
He said the United States will participate only as an observer but that he will have a chance to outline Clinton's vision of cyberspace commerce largely unfettered by government regulation and taxes.
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MICROSOFT SUES RESELLERS OVER ALLEGED PIRACY OF NT
SEATTLE (Reuter) - Microsoft Corp. said Wednesday it filed suit against two Arizona companies, charging they sold illegal copies of the software giant's networking products.
Microsoft said the lawsuits, filed in U.S. District Court in Tucson, were part of a new crackdown against piracy of the company's high-end Windows NT and BackOffice products for business networks.
"As the popularity of our BackOffice Suite of products is growing, so is piracy, unfortunately," said Claire O'Donnell, a Microsoft spokeswoman.
Microsoft charges that Tucson reseller Computers Under Retail loaded a counterfeit copy of Microsoft's Windows NT Server operating system on three machines at a fictitious business set up by an undercover investigator hired by the company.
The second lawsuit charges that Tucson reseller Future Information Design installed unauthorized copies of Windows NT Server and two workstations on a network operated by a Microsoft undercover investigator.
Microsoft said it previously had warned the reseller about unauthorized software sales.
Executives of the two resellers could not be reached for comment.
APPLE SHARES FALL TO 12-YEAR LOW, ANALYSTS CITE EROSION
CUPERTINO, Calif. (Reuter) - Apple Computer Inc. stock slid to a fresh 12-year low as investors continued to fret over erosion of market share and a key clone maker's plans to start shipping PC-compatibles, analysts said.
Apple shares slid 1/8 to 13-1/16 on Wednesday, the second straight 12-year low for the shares, according to the analysts, one of whom said the stock was weighed down by a flurry of continued adverse news.
"The biggest is Power Computing is going public and switching to Intel," said one of the analysts, citing the clone maker's Securities and Exchange Commission filing stating it plans to enter the market for Personal computers compatible with Intel chips early next year.
The documents said Power Computing has sub-licensed the Macintosh OS from International Business Machines Corp. (IBM.N) at more favorable terms than its deal with Apple, although it is still negotiating with Apple to use the Macintosh OS.
On Monday, Microsoft Corp. Chairman Bill Gates said Apple remains a significant force in the schools, although Microsoft's Windows operating system is making inroads.
Apple has fallen on hard times, with its share of the personal computing market falling as low as the five percent range. Compaq Computer Corp. also this week announced an alliance with four software companies, including Apple's own Claris Corp., to sell its PCs to the school market.
The announcement preceeded the height of the school buying season during the summer months.
SWEDISH INTERNET AGENCY CLAIMS HOAX POL POT STORY
STOCKHOLM, Sweden (Reuter) - A Swedish Internet marketing agency Wednesday claimed responsibility for a hoax news report that claimed Khmer Rouge guerrilla leader Pol Pot had arrived in Sweden seeking political asylum.
Swedish officials were baffled by the Web site report, and the Russian news agency Itar-Tass disclaimed all responsibility, saying it knew nothing about the story.
But the mystery was solved when the Stockholm-based Internet marketing company Komintern owned up.
"It was an artistic experiment and aimed at learning something about the net and how the media work together," Komintern's managing director Oscar Swartz told Reuters.
"It shows that people who know how the net works and know something about media can use it in many ways. Also you can't believe everything on the net."
The home page, claiming to be part of the Tass.Net organization, published a story about Pol Pot arriving at Stockholm's Arlanda airport Monday afternoon seeking political asylum in Sweden.
The page contained video footage of a small man concealed in a hat and long jacket, being accompanied by two men on their way out of the airport.
Swartz said the footage was filmed at the airptort last weekend and the page put together and sent out on the net late Monday.
"We are a bit surprised about all the fuss it created," Swartz said.
Reuters spotted the story on the net and, after making checks in the relevant world capitals, simply reported the Itar-Tass disclaimer.
Pol Pot, the man held responsible for the death of more than 1 million Cambodians during his 1975-79 "Killing Fields" rule, has not been seen in public since late 1979 and his whereabouts are not definitely known.
There have been recent reports that he was captured by his own former Khmer Rouge supporters in Cambodia.
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BENELUX GETS FIRST INTERNET BOOK, MUSIC STORE
BRUSSELS, Belgium (Reuter) - Remember the Internet being compared to a library with all the books on the floor?
Azur.be, a Dutch/Flemish company, allows computer users to neatly search its virtual shelves of more than 300,000 book and music titles at its online store -- the first of its kind in the Benelux -- and to order with a couple clicks of the mouse.
Web surfers can find at the site (http://www.azur.be) approximately 100,000 books in Dutch, 140,000 books in English and 62,000 modern music CDs.
Video tapes and clasical music CDs should be available in the near future, as well as English and French versions of the site now in Dutch, Azur.be said.
Azur.be also offers a virtual shopping basket where clients can stock articles they want to buy. Shoppers can decide to add to the the basket or to drop the items selected.
ZIFF-DAVIS NAMES SHEER AS PRESIDENT OF U.S. UNIT
NEW YORK (Reuter) - Ziff-Davis said Wednesday it named Claude Sheer, a 17-year company veteran, to be president of its U.S. publications unit.
Sheer replaces Ronni Sonnenberg, who will retire at the end of the year.
Ziff-Davis publishes about 20 computer magazines, including PC Magazine, Computer Shopper and PC Week as well as MacUser and MacWeek.
According to industry estimates, Ziff-Davis publications in the United States posted total revenues of about $1.15 billion in 1996.
According to one industry estimate, U.S. ad revenues in are up 12.9 percent year-to-date through May.
Sonnenberg, a 20-year veteran of Ziff-Davis, has been president of the U.S. unit since March 1996.
Ziff-Davis, a unit of Softbank Corp., also said Jeffrey Ballowe, president of the company's interactive media and development group, will retire at the end of the year.
BRITISH FIRMS STILL FAIRLY NEW TO INTERNET
LONDON (Reuter) - British financial firms are still fairly new to the Internet, most having had access for only about a year, a Reuters survey published Wednesday showed.
But access is expected to rise, with 82 percent seeing the Internet becoming a significant business tool in five years.
Only 22 of 125 respondents to the survey, carried out over the past six weeks, saw the Internet as of little significance or insignificant.
The poll also showed intranets, or internally linked computer networks exclusive to a set group of people, are spreading among British companies.
So far, only 32 of 112 firms said they had intranets, but 40 said they expected to have an internal system within the next two years. Most planned to launch one within a year.
"There is vast potential for intranets, rather more than the Internet," said Adrian Thomas, data processing manager at Danesfield Securities Ltd.
Reuters polled British firms and foreign-owned companies with a representation in Britain for their views on the Internet. Just less than half the firms, which had a median size of 50 employees, came from the finance, banking and investment fields.
Other groups represented include commodities firms, insurers, building societies, market makers, funds, stock brokers, analytical firms, venture capitalists, ship brokers, bond credit rating agencies and syndicate managers.
SEAGATE ACQUIRES STORAGE STARTUP QUINTA
PALO ALTO, Calif. (Reuter) - Seagate Technology Inc. said Wednesday it will acquire Quinta Corp., a 15-month old developer of high-capacity computer storage technology, in a deal analysts value at up to roughly $350 million.
Seagate, which has a minority stake in Quinta, said the startup's other shareholders will receive a total of $230 million in cash and be eligible for further payments of up to $95 million linked to development and production milestones.
The move sets a high premium on the abilities of a quietly assembled team of world-ranking engineers in the competitive disk drive market to create breakthrough technologies that could lead to a leap forward in storage technology.
Quinta CEO Steven Kitrosser said the company has developed such a breakthrough technology, which he predicted will enable storage of three to five times as much data on the same space as conventional disk drive technologies in coming years.
The company's so-called optically assisted Winchester (OAW) technology was developed by a group of top-level engineers who now comprise 55 of the 70 employees of Quinta, based in nearby San Jose, Calif.
Seagate, based in Scotts Valley, Calif., is the world's largest disk drive maker.
Seagate said it entered into the deal to meet an anticipated increase in demand for affordable, high-capacity online storage.
Reuters/Variety