The browser war is back on.

This time, Microsoft’s opponent is Google, a familiar foe.

Today Google released a free Web browser called Chrome that the company said would challenge Microsoft’s Internet Explorer, as well as the Firefox browser.

The browser is a universal doorway to the Internet, and the use of Internet software and services is rapidly growing. Increasingly, the browser is also the doorway to the Web on cellphones and other mobile devices, widening the utility of the Web and Web advertising. Google, analysts say, cannot let Microsoft’s dominant share of the browser market go without a direct challenge.

Google already competes with Microsoft in online search and Internet advertising. They both make operating software for cellphones. Google is increasingly competing with Microsoft head-on in software that handles basic productivity like word processing, spreadsheet, presentation and e-mail programs. Google has Web-based software in these markets that are low-cost or free alternatives to Microsoft’s lucrative desktop software.

Despite the frequent clashes with Microsoft — including the role Google played in thwarting an attempted acquisition of Yahoo — Google has come out on top only in search and search advertising. But Google does not have to win the browser war. Strategically, opening yet another front against Microsoft forces it to divert resources to defend franchises.

Now, Chrome heightens the rivalry and marks a shift for Google, which has strongly backed Firefox, the open-source browser that has gained about a fifth of the market against the dominant Internet Explorer.

Google’s browser project has been under way for more than a year, a person close to the company said.

In a brief statement, Microsoft welcomed the new entry and expressed confidence that people would prefer Explorer, which is on every Windows PC sold.

“The browser landscape is highly competitive,” said Dean Hachamovitch, general manager of the Internet Explorer group. “But people will choose Internet Explorer 8 for the way it puts the services they want right at their fingertips, respects their personal choices about how they want to browse and, more than any other browsing technology, puts them in control of their personal data online.”

Google has clashed with Microsoft before, saying it had designed IE to gain ground in search, a market where Google is the runaway leader.



After Microsoft introduced IE 7 in 2006, Google complained that the browser’s search box favored Microsoft’s search service. Microsoft responded and made modifications, and a federal judge overseeing the antitrust consent decree against Microsoft determined that the browser design was not anticompetitive.

The first round of the browser wars in the 1990s led to a sweeping federal antitrust suit against Microsoft for the tactics it used to stifle competition from the commercial pioneer in browsing software, Netscape Communications. A federal appeals court ruled in 2001 that Microsoft had repeatedly violated the nation’s antitrust laws. Microsoft later reached a settlement with the Bush administration, which included some sanctions but left the company free to bundle browsing software with Windows, which runs more than 90 percent of all personal computers.

Microsoft recently stepped up its own browser development efforts, given the increasing importance of the browser and signs that Firefox is nibbling at its lead. Microsoft released a new version, IE8, last week to generally favorable reviews.

Microsoft still holds 73 percent of the browser market, according to Net Applications, a research firm. The market share for Firefox has climbed to 19 percent, while Apple’s Safari has 6 percent.

Chrome also puts Google in competition with an ally, the Mozilla Corporation, which manages the Firefox project. Just last week, Google renewed its deal with Mozilla. Under the arrangement, Google Search is the home page for Firefox and Google is its default search bar, and Google makes substantial payments to Mozilla. The agreement runs through November 2011, and will continue.

Google’s cooperation with Mozilla, however friendly, meant that it was ceding control of the Internet’s vital gateway technology — and the dominant supplier of that technology is its archrival, Microsoft.

Given the increasing importance of the browser and its widening competition with Microsoft, Google’s entry into the market is not surprising, said John Lilly, chief executive of Mozilla.

“It would be more surprising to me if Google didn’t do something in the browser space,” Mr. Lilly said. “After all, Google is 100 percent on the Web.”

Google’s move, he said, would put “more competitive pressure on us to keep coming up with great browser technology. But having more smart people competing to improve browser technology and the user experience is a good thing.”



Mr. Lilly also noted that Mozilla, while a private company, is entirely owned by the Mozilla Foundation. The browser project was begun to provide an alternative to Microsoft’s browser. “The mission of Mozilla is to keep the Web open, a pure public benefit,” he said. “Others have other motivations and Google’s move also serves to highlight our position in the marketplace.”

Chrome will be available to download in a test, or beta, version on Tuesday, Google announced on its Web site Monday afternoon. The browser will run on Windows. Google is also working on Chrome versions for Apple’s Macintosh, as well as Linux, an open source operating system.

In a curious twist, Google made its online announcement after its plans appeared as a digital “comic book” that was posted by Google Blogoscoped, a Web site that tracks the Internet search giant.

According to Google’s Web site post, by Sundar Pichai, an engineering director and vice president for product management, Chrome is designed for speed and ease of use.

But the other design goal, it seems, was to make sure Google could control how well the growing range of Web-based software it is developing will perform, instead of having to run on a Microsoft browser.

“Under the hood,” Mr. Pichai wrote, “we were able to build the foundation of a browser that runs today’s complex Web applications much better.”

Later, he wrote, “we improved speed and responsiveness across the board. We also built a more powerful JavaScript engine, V8, to power the next generation of Web applications that aren’t even possible in today’s browsers.”

Chrome is based on an open-source rendering engine, WebKit, and an open-source version of Google’s Gears technology. Chrome will also be able to run in a privacy mode, InCognito, so that no information about a person’s browsing is collected. With IE8 last week, Microsoft added a privacy mode of browsing, called InPrivate.

The privacy features, analysts note, could undercut the Internet advertising business of Google, but also Microsoft, Yahoo and others that depend on ads aimed at users based on their browsing behavior. But it is unclear, analysts say, how large a share of users will opt for the privacy browsing mode and give up the convenience of having a browser store sites recently visited in tabbed settings for easy navigation.

Internet Traffic Begins to Bypass the U.S.

The era of the American Internet is ending.

Invented by American computer scientists during the 1970s, the Internet has been embraced around the globe. During the network’s first three decades, most Internet traffic flowed through the United States. In many cases, data sent between two locations within a given country also passed through the United States.

Engineers who help run the Internet said that it would have been impossible for the United States to maintain its hegemony over the long run because of the very nature of the Internet; it has no central point of control.

And now, the balance of power is shifting. Data is increasingly flowing around the United States, which may have intelligence and conceivably military consequences.

American intelligence officials have warned about this shift. “Because of the nature of global telecommunications, we are playing with a tremendous home-field advantage, and we need to exploit that edge,” Michael V. Hayden, the director of the Central Intelligence Agency, testified before the Senate Judiciary Committee in 2006. “We also need to protect that edge, and we need to protect those who provide it to us.”

Indeed, Internet industry executives and government officials have acknowledged that Internet traffic passing through the switching equipment of companies based in the United States has proved a distinct advantage for American intelligence agencies. In December 2005, The New York Times reported that the National Security Agency had established a program with the cooperation of American telecommunications firms that included the interception of foreign Internet communications.

Some Internet technologists and privacy advocates say those actions and other government policies may be hastening the shift in Canadian and European traffic away from the United States.

“Since passage of the Patriot Act, many companies based outside of the United States have been reluctant to store client information in the U.S.,” said Marc Rotenberg, executive director of the Electronic Privacy Information Center in Washington. “There is an ongoing concern that U.S. intelligence agencies will gather this information without legal process. There is particular sensitivity about access to financial information as well as communications and Internet traffic that goes through U.S. switches.”

But economics also plays a role. Almost all nations see data networks as essential to economic development. “It’s no different than any other infrastructure that a country needs,” said K C Claffy, a research scientist at the Cooperative Association for Internet Data Analysis in San Diego. “You wouldn’t want someone owning your roads either.”

Indeed, more countries are becoming aware of how their dependence on other countries for their Internet traffic makes them vulnerable. Because of tariffs, pricing anomalies and even corporate cultures, Internet providers will often not exchange data with their local competitors. They prefer instead to send and receive traffic with larger international Internet service providers.

This leads to odd routing arrangements, referred to as tromboning, in which traffic between two cites in one country will flow through other nations. In January, when a cable was cut in the Mediterranean, Egyptian Internet traffic was nearly paralyzed because it was not being shared by local I.S.P.’s but instead was routed through European operators.

The issue was driven home this month when hackers attacked and immobilized several Georgian government Web sites during the country’s fighting with Russia. Most of Georgia’s access to the global network flowed through Russia and Turkey. A third route through an undersea cable linking Georgia to Bulgaria is scheduled for completion in September.

Ms. Claffy said that the shift away from the United States was not limited to developing countries. The Japanese “are on a rampage to build out across India and China so they have alternative routes and so they don’t have to route through the U.S.”

Andrew M. Odlyzko, a professor at the University of Minnesota who tracks the growth of the global Internet, added, “We discovered the Internet, but we couldn’t keep it a secret.” While the United States carried 70 percent of the world’s Internet traffic a decade ago, he estimates that portion has fallen to about 25 percent.

Internet technologists say that the global data network that was once a competitive advantage for the United States is now increasingly outside the control of American companies. They decided not to invest in lower-cost optical fiber lines, which have rapidly become a commodity business.

That lack of investment mirrors a pattern that has taken place elsewhere in the high-technology industry, from semiconductors to personal computers.

The risk, Internet technologists say, is that upstarts like China and India are making larger investments in next-generation Internet technology that is likely to be crucial in determining the future of the network, with investment, innovation and profits going first to overseas companies.

“Whether it’s a good or a bad thing depends on where you stand,” said Vint Cerf, a computer scientist who is Google’s Internet evangelist and who, with Robert Kahn, devised the original Internet routing protocols in the early 1970s. “Suppose the Internet was entirely confined to the U.S., which it once was? That wasn’t helpful.”

International networks that carry data into and out of the United States are still being expanded at a sharp rate, but the Internet infrastructure in many other regions of the world is growing even more quickly.

While there has been some concern over a looming Internet traffic jam because of the rise in Internet use worldwide, the congestion is generally not on the Internet’s main trunk lines, but on neighborhood switches, routers and the wires into a house.

As Internet traffic moves offshore, it may complicate the task of American intelligence gathering agencies, but would not make Internet surveillance impossible.

“We’re probably in one of those situations where things get a little bit harder,” said John Arquilla, a professor at the Naval Postgraduate School in Monterey, Calif., who said the United States had invested far too little in collecting intelligence via the Internet. “We’ve given terrorists a free ride in cyberspace,” he said.

Others say the eclipse of the United States as the central point in cyberspace is one of many indicators that the world is becoming a more level playing field both economically and politically.

“This is one of many dimensions on which we’ll have to adjust to a reduction in American ability to dictate terms of core interests of ours,” said Yochai Benkler, co-director of the Berkman Center for Internet and Society at Harvard. “We are, by comparison, militarily weaker, economically poorer and technologically less unique than we were then. We are still a very big player, but not in control.”

China, for instance, surpassed the United States in the number of Internet users in June. Over all, Asia now has 578.5 million, or 39.5 percent, of the world’s Internet users, although only 15.3 percent of the Asian population is connected to the Internet, according to Internet World Stats, a market research organization.

By contrast, there were about 237 million Internet users in North America and the growth has nearly peaked; penetration of the Internet in the region has reached about 71 percent.

The increasing role of new competitors has shown up in data collected annually by Renesys, a firm in Manchester, N.H., that monitors the connections between Internet providers. The Renesys rankings of Internet connections, an indirect measure of growth, show that the big winners in the last three years have been the Italian Internet provider Tiscali, China Telecom and the Japanese telecommunications operator KDDI.

Firms that have slipped in the rankings have all been American: Verizon, Savvis, AT&T, Qwest, Cogent and AboveNet.

“The U.S. telecommunications firms haven’t invested,” said Earl Zmijewski, vice president and general manager for Internet data services at Renesys. “The rest of the world has caught up. I don’t see the AT&T’s and Sprints making the investments because they see Internet service as a commodity.”

Goodbye, Passwords. You Aren’t a Good Defense.

The best password is a long, nonsensical string of letters and numbers and punctuation marks, a combination never put together before. Some admirable people actually do memorize random strings of characters for their passwords and replace them with other random strings every couple of months.

Then there’s the rest of us, selecting the short, the familiar and the easiest to remember. And holding onto it forever.

I once felt ashamed about failing to follow best practices for password selection — but no more. Computer security experts say that choosing hard-to-guess passwords ultimately brings little security protection. Passwords won’t keep us safe from identity theft, no matter how clever we are in choosing them.

That would be the case even if we had done a better job of listening to instructions. Surveys show that we’ve remained stubbornly fond of perennial favorites like “password,” “123456” and “LetMeIn.” The underlying problem, however, isn’t their simplicity. It’s the log-on procedure itself, in which we land on a Web page, which may or may not be what it says it is, and type in a string of characters to authenticate our identity (or have our password manager insert the expected string on our behalf).

This procedure — which now seems perfectly natural because we’ve been trained to repeat it so much — is a bad idea, one that no security expert whom I reached would defend.

Password-based log-ons are susceptible to being compromised in any number of ways. Consider a single threat, that posed by phishers who trick us into clicking to a site designed to mimic a legitimate one in order to harvest our log-on information. Once we’ve been suckered at one site and our password purloined, it can be tried at other sites.

The solution urged by the experts is to abandon passwords — and to move to a fundamentally different model, one in which humans play little or no part in logging on. Instead, machines have a cryptographically encoded conversation to establish both parties’ authenticity, using digital keys that we, as users, have no need to see.

In short, we need a log-on system that relies on cryptography, not mnemonics.

As users, we would replace passwords with so-called information cards, icons on our screen that we select with a click to log on to a Web site. The click starts a handshake between machines that relies on hard-to-crack cryptographic code. The necessary software for creating information cards is on only about 20 percent of PCs, though that’s up from 10 percent a year ago. Windows Vista machines are equipped by default, but Windows XP, Mac and Linux machines require downloads.

And that’s only half the battle: Web site hosts must also be persuaded to adopt information-card technology for sign-ons.

We won’t make much progress on information cards in the near future, however, because of wasted energy and attention devoted to a large distraction, the OpenID initiative. OpenID promotes “Single Sign-On”: with it, logging on to one OpenID Web site with one password will grant entrance during that session to all Web sites that accept

OpenID credentials.

OpenID offers, at best, a little convenience, and ignores the security vulnerability inherent in the process of typing a password into someone else’s Web site. Nevertheless, every few months another brand-name company announces that it has become the newest OpenID signatory. Representatives of Google, I.B.M., Microsoft and Yahoo are on

OpenID’s guiding board of corporations. Last month, when MySpace announced that it would support the standard, the nonprofit foundation

OpenID.net boasted that the number of “OpenID enabled users” had passed 500 million and that “it’s clear the momentum is only just starting to pick up.”

Support for OpenID is conspicuously limited, however. Each of the big powers supposedly backing OpenID is glad to create an OpenID identity for visitors, which can be used at its site, but it isn’t willing to rely upon the OpenID credentials issued by others. You can’t use Microsoft-issued OpenID at Yahoo, nor Yahoo’s at Microsoft.

Why not? Because the companies see the many ways that the password-based log-on process, handled elsewhere, could be compromised. They do not want to take on the liability for mischief originating at someone else’s site.

When I asked Scott Kveton, chairman of the OpenID Foundation’s community board, about criticism of OpenID, he said candidly, “Passwords, we know, are totally broken.” He said new security options, such as software that works with OpenID that installs within the browser, are being offered. When it comes to security, he said, "there is no silver bullet, and there never will be.”

Kim Cameron, Microsoft’s chief architect of identity, is an enthusiastic advocate of information cards, which are not only vastly more secure than a password-based security system, but are also customizable, permitting users to limit what information is released to particular sites. “I don’t like Single Sign-On,” Mr. Cameron said. “I don’t believe in Single Sign-On.”

Microsoft and Google are among the six founding companies of the Information Card Foundation, formed to promote adoption of the card technology. The presence of PayPal, which is owned by eBay, in the group is the most significant: PayPal, with its direct access to our checking accounts, will naturally be inclined to be conservative. If it becomes convinced that these cards are more secure than passwords, we should listen.

BUT perhaps information cards in certain situations are convenient to a fault, permitting anyone who happens by a PC that is momentarily unattended in an office setting to click quickly through a sign-on at a Web site holding sensitive information. This need not pose a problem, however.

“Users on shared systems can easily set up a simple PIN code to protect any card from use by other users,” Mr. Cameron said.

The PIN doesn’t return us to the Web password mess: it never leaves our machine and can’t be seen by phishers.

Unlearning the habit of typing a password into a box on a Web page will take a long while, but it’s needed for our own protection. Logging on to a site should entail a cryptographic conversation between machines, saving us from inadvertently giving away the keys.

No more relying on our old companion “LetMeIn.”

Major Internet security flaw also affects e-mail

A newly discovered flaw in the Internet's core infrastructure not only permits hackers to force people to visit Web sites they didn't want to, it also allows them to intercept e-mail messages, the researcher who discovered the bug said Wednesday.

Considering the silent nature of the attack and the sensitive nature of a lot of electronic correspondence, the potential for damage from this second security flaw is high. But there's no evidence yet that this method of targeting e-mail has been used in a successful attack.

Dan Kaminsky of Seattle-based security consultant IOActive Inc. exposed a giant vulnerability in the Internet's design that, in one case, allowed hackers to reroute some computer users in Texas to a fake Google.com site loaded with automated advertisement-clicking programs, a scam to generate profits for the hackers from those clicks.

The flaw wasn't in the site itself, it was in the back-end machines responsible for guiding computers to that site.

The vulnerability Kaminsky found is especially insidious because it allows criminals to tamper with machines whose reliability and trustworthiness is critical for the Internet to function properly.

Kaminsky, who spoke Wednesday at the Black Hat hacker conference in Las Vegas, has given few details publicly about the vulnerability he found in the Domain Name System (DNS), a network of servers used to connect computers to Web sites.

He remained tightlipped so that Internet providers would have time to fix their machines. Many have done that, but others have delayed, leaving some people at risk.

Major vendors like Microsoft Corp., Cisco Systems Inc., Sun Microsystems Inc. and others have issued patches — software tweaks that cover the security hole and prevent affected machines from ingesting the bogus information hackers are trying to feed them.

“The industry has rallied like we've never seen the industry rally before,” Kaminsky said.

Kaminsky's talk Wednesday at the conference was packed, with people sitting on the floor of the main speaker's hall and overflowing out the back doors. His presentation instantly became one of the Black Hat conference's most anticipated after he announced July 8 that he'd found a major weakness in DNS, a critical part of the Internet's plumbing.

While some details leaked out early — security researchers accurately guessed parts of Kaminsky's discovery — he was able to keep a few juicy bits secret until the talk.

One of those was the susceptibility of many e-mail servers to the DNS vulnerability, an opening that gives criminals a way to plant themselves in the middle of the transmission from the sender to the recipient and redirect messages to their own servers, Kaminsky said.

The result: criminals have a way not only to comb through the contents of those messages, but also to gain access to other password-protected Web sites the victims belong to.

That's because most sites have a feature that allows members to retrieve their passwords by e-mail if they've forgotten them. If a criminal has access to the account where that message is sent, he can then begin snooping on the contents of that account, from e-mail, to banking, to retailer sites.

The thrust of the DNS flaw is that it allows hackers to attach bad information to packets flowing in and out of DNS servers so they change the directions they give to certain Web sites.

It's the equivalent of turning around a street sign to send drivers down the wrong street.

So someone who innocently types in the address of a legitimate Web site can be strong-armed instead into going to a malicious site under the criminal's control. Because the attack happens at the network level, and the browser believes it's visiting the legitimate site, the attack is nearly impossible for users to detect.

Many e-mail servers are vulnerable because they also handle DNS traffic, Kaminsky said. Even if they only handle internal inquiries, if they interact with external DNS servers, that's often enough to expose them to attack.

Hackers are thus able to manipulate the packets associated with e-mail traffic the same way they manipulate the packets associated with general Web traffic..

eBay Changes Compensation for Affiliate Program

eBay will compensate its affiliates for driving new users to the site based on the users' “expected lifetime value” as opposed to strictly by the quantity of new users they drive to eBay. Each affiliate will be placed in a quality tier at the end of each month based on historical traffic. The tiers will range from $1 to $50, and the higher the expected lifetime value of the customers an affiliate sends, the higher the tier the affiliate will receive.

The change only affects compensation for new user registrations (ACRUs). Payouts for revenue share will continue on the same volume-based tiers for both new and old users. Existing affiliates will remain in the old pricing system until November 1, 2008.

eBay said the new value-based pricing system of the Partner Network is part of its ongoing effort to reward its best marketing partners and promote trusted commerce on eBay.

Meanwhile, Amazon.com is running a promotion for its affiliates to promote its Prime shipping program. Associates can earn $12 for each new Amazon Prime Free Trial member referred through October 31, 2008.

Sun Microsystems Profit Falls 73% as Customers Cut Spending

Profit at Sun Microsystems, the computer server maker, declined 73 percent in the most recent quarter as slumping sales to big American companies and reorganization charges weighed on the server and software maker.

Willie Walsh, the chief executive of British Airways.

The company, based in Santa Clara, Calif., also revealed plans Friday to expand its stock buyback program by $1 billion, a sign that Sun believes its shares, which have fallen by 50 percent over the last nine months, are undervalued and poised to rebound.

Wall Street did not share that optimism.

Sun’s shares sank 12.3 percent, to $9.32, on the company’s worse-than-expected guidance, which indicated that the pressures that hurt Sun in the April-June period, its fourth quarter, are affecting the current quarter.

Sun said before the market opened that it expected a “slight” sales decline in its first quarter, which ends in September, and indicated it most likely would not turn a profit. Analysts surveyed by Thomson Financial were expecting flat sales and a profit of 11 cents a share in this quarter.

The Goldman Sachs analysts David Bailey and Min Park said in a note to clients that Sun’s results supply “another piece of evidence that the problems the company faces have no short-term fixes, and we would continue to avoid the shares.”

Sun blamed weakness in the American economy, which has caused some of its biggest customers to cut spending, and the sale of fewer higher-end servers, which carry better profit margins. Sun faces intense competition in that market from I.B.M. and Hewlett-Packard.

Sun earned $88 million, or 11 cents a share, in the quarter, compared with $329 million, or 36 cents a share, in the period a year ago.

Excluding one-time charges, Sun earned 35 cents a share.

Sales were $3.78 billion, down from $3.84 billion last year

New York Senate Teases Amazon Customers With Sales Tax Repeal Bill

Is New York State changing its mind about requiring online stores to collect sales tax on purchases made by state residents?

The last state budget included a novel legal interpretation that requires out-of-state online retailers to collect sales tax if they have any affiliates — including Web sites that send them business — with a physical presence in New York. The provision, which has been called the “Amazon Tax” because Amazon.com is by far the largest merchant to which it applies, became effective June 1.

On June 24, it turns out, the state Senate voted to repeal the tax collection rule. This was noticed by a publication of the National Retail Federation and a few marketing blogs.

It took me a bit of time on the phone to Albany to figure out what was going on. The legislature’s own computer system provided limited information on the bill (S8638). There was no sponsor listed for the bill, which was introduced on June 19, five days before it was passed. It now sits in the Assembly Ways and Means Committee, again with no sponsor listed.

Scott Reif, a spokesman for the Senate majority leader’s office, said the bill was written by the counsel to the Senate Rules Committee. That committee was controlled at the time by Joseph L. Bruno, who retired as majority leader shortly thereafter. I asked Mr. Reif why the Senate would reverse itself on the sales tax issue so soon after imposing it as part of the budget.

“The budget bill is a ‘take it or leave it’ vote,” he said. And some members wanted the chance to express their views on the sales tax separately. The repeal bill passed the Senate 44 to 18, with all the Republicans and some Democrats supporting it.

When I called over to the Assembly, I didn’t find much interest in the bill. Moreover, the regular legislative session is over for the year. On Tuesday night, Governor David A. Paterson called on the legislature to return next month to help fill a $26 billion budget gap. An Assembly spokeswoman said it is unlikely that the body will have time to take up the tax issue. And it’s hard to see why lawmakers trying to fill a huge budget hole would be eager to repeal a provision that brings in $50 million a year in revenue for the state.

An official in the Paterson administration, who spoke on the condition of anonymity, said he did not expect the sales tax repeal bill to pass the Assembly and he assumed that the governor would veto it if it did.

Reading the many comments we’ve gotten in response to our past coverage of this issue, there are a lot of people who object to New York State’s policy. Their best hope may well be the courts, which will rule on challenges to the law from Amazon.com and Overstock.com.

They certainly shouldn’t count on the legislature to reverse itself, the Senate vote notwithstanding.

AOL shutting 3 services to cut costs, focus on ads

AOL is shutting three data-storage services, including one of the Internet's earliest photo-sharing sites, as it seeks to cut costs and focus resources on its advertising opportunities.

AOL Pictures, the year-old media-sharing site BlueString and the online backup service Xdrive will likely shut down by year's end, though the company is looking to sell at least Xdrive, which AOL bought in 2005 for an undisclosed fee.

Company officials denied speculation Friday that the closures were meant to prime AOL for a sale. AOL parent Time Warner Inc. has been in continual discussions with both Yahoo Inc. and Microsoft Corp., though the talks have been preliminary.

“The decision to sunset these products is 100 percent part of a strategy that began last year to focus on the areas where we can win and to move away from products or features that are not contributing to our growth,” AOL spokeswoman Trish Primrose said.

AOL began taking a hard look at its portfolio following a 2006 decision to fully shift the company into an advertising business and pare down its legacy Internet access services.

AOL Pictures began in 1998 as You've Got Pictures and came at a time Internet users had few options to share their digital photos. Since then, services like Yahoo's Flickr and Google Inc.'s Picasa have emerged, joining offerings from Eastman Kodak Co. and others.

BlueString launched last year as a repository for other media files such as video and music as well, but it never gained much traction.

Nor did Xdrive, which offers 5 gigabytes of free storage for backing up files.

All three services suffered from the fact that while data-storage costs have come down, those costs still add up, and the services contribute relatively few opportunities to display advertising.

Transition details are still being worked out. AOL likely will give existing users a way to migrate files to a competing service. It also plans to let users order a DVD of files for a fee and give instructions for downloading copies of individual files. AOL plans to formally inform its users of the changes in September.

AOL said it has already shut down about 50 products, projects or brands since 2007, mostly older or little-used products like its AOL Communicator mail software.

In a July 14 memo to employees, Executive Vice President Kevin Conroy said the company now had an obligation to ensure that “every product makes a direct impact on our bottom line.”

“There was a time at AOL when the strength of our aggregate portfolio of products more than compensated for the weakness of an underperforming product,” Conroy said. “The realities of the industry and market shifts in online advertising no longer make that possible.”

Conroy said AOL saw greater opportunities in areas like its video search engine Truveo and its browser toolbar, which drives traffic to search.

The memo, obtained by The Associated Press, was published earlier on the blog TechCrunch.

Separately, AOL said it would rein in costs for its Weblogs unit, which runs specialty blogs such as Engadget and Autoblog. The blogs generally pay freelancers per post. Although the unit's budget has been increasing, so have the number of posts — such that costs have spiraled. The company is asking bloggers to post less often for now.

Former Adobe CEO Chizen named to Oracle board

Bruce R. Chizen, the former chief executive of Adobe Systems Inc., has been named to an expanded board of another software company, Oracle Corp.

Chizen, 52, who stepped down as Adobe CEO last year “to take a break” after 14 years at that company, will become the 13th member of an Oracle board that already includes its chief executive, Lawrence J. Ellison.

A blunt-speaking executive known for keeping Adobe's morale high, Chizen served as CEO for seven years as the company collected record profits.

Adobe's flagship software products include the widely used Photoshop for photo editing, Flash for Web animation and Acrobat for creating and reading files under its proprietary but ubiquitous Portable Document Format, or PDF.

Oracle makes database and business software and has broadened its product offering to cover nearly all industries and customer types by spending more than $35 billion in the past few years to buy smaller rivals.

Chizen's “extensive technology industry experience and customer-focused vision will be an asset to Oracle as we move forward with our goal to provide our customers with products and services that will help their businesses grow and prosper,” Oracle Chairman Jeffrey O. Henley said in a statement Thursday.

uBid to Launch Fixed-Price Ecommerce Site RedTag.com

Going head-to-head with Overstock.com, uBid.com Holdings will launch a new fixed-price commerce site, RedTag.com. The new site, set to launch on August 29, 2008, will offer consumers a money-back satisfaction guarantee and a fixed $1.95 ground shipping rate. uBid Holdings operates the B2C online auction site uBid.com.

uBid.com Holdings Executive Vice President of Account Management and Seller Solutions Timothy Takesue said, “We are delighted to offer a fixed price sales channel to our base of over 7,000 sellers as an additional asset recovery solution.”

Rival Overstock.com offers shipping for $2.95. It launched a C2C auction site in 2004.

http://www.ubid.com

http://www.redtag.com

Smaller PCs Cause Worry for Industry

The personal computer industry is poised to sell tens of millions of small, energy-efficient Internet-centric devices. Curiously, some of the biggest companies in the business consider this bad news.

In a tale of sales success breeding resentment, computer companies are wary of the new breed of computers because their low price could threaten PC makers’ already thin profit margins.

The new computers, often called netbooks, have scant onboard memory. They use energy-sipping computer chips. They are intended largely for surfing Web sites and checking e-mail. The price is small too, with some selling for as little as $300.

The companies that pioneered the category were small too, like Asus and Everex, both of Taiwan.

Despite their wariness of these slim machines, Dell and Acer, two of the biggest PC manufacturers, are not about to let the upstarts have this market to themselves. Hewlett-Packard, the world’s biggest PC maker, recently sidled into the market with a hybrid of a notebook and netbook that it calls the Mini-Note.

Several makers are taking the low-powered PCs one step further. In the coming months, they are expected to introduce “net-tops,” low-cost versions of desktop computers intended for Internet access.

A Silicon Valley start-up called CherryPal says it will challenge the idea that big onboard power is required to allow basic computing functions in the Internet age. On Monday it plans to introduce a $300 desktop PC that is the size of a paperback and uses two watts of power compared with the 100 watts of some desktops.

It wants to take advantage of the trend toward “cloud computing,” in which data is managed and stored in distant servers, not on the actual machine.

Industry analysts say that the emergence of this new class of low-cost, cloud-centric machines could threaten titans like Microsoft and Intel, or even H.P. and Dell, because the giants have built their companies on the notion that consumers want more power and functions built into their next computer.

Some of the big computer companies put a positive spin on the low-cost machines, saying they welcome new categories. But they would just as soon this niche did not take off, given the relatively low profit margins.

“When I talk to PC vendors, the No. 1 question I get is, how do I compete with these netbooks when what we really want to do is sell PCs that cost a lot more money?” said J. P. Gownder, an analyst with Forrester Research.

Even as some PC vendors are jumping into the fray, others say they are resisting. Fujitsu, one of the world’s top 10 personal computer makers, said that it believes the low-cost netbook trend is a dangerous one for the bottom line.

“We’re sitting on the sidelines not because we’re lazy. We’re sitting on the sidelines because even if this category takes off, and we get our piece of the pie, it doesn’t add up,” said Paul Moore, senior director of mobile product management for Fujitsu. “It’s a product that essentially has no margin.”

Stan Glasgow, chief executive of Sony Electronics, said, “We are not looking at competing with Asus.” But he said the company is investigating what consumers want in a second PC.

It is a market that caught the major computer companies — both hardware and software — by surprise after Asus, entered the market last year with the $300 Eee PC. The company thought the device would essentially appeal to the education market, or as a starter laptop for adolescents, but the interest has turned out to be broader.

With an emphasis not in on-board applications (like word processing), but Internet-based ones like Google Docs, the Linux-based Eee PC sold out its 350,000 global inventory. It has been in short supply ever since, said Jackie Hsu, president of the American division of Asus. Everex has sold around 20,000 of its CloudBook, which sells for about $350.

The sales are a veritable drop in the bucket compared with the 271 million desktop and laptop PCs shipped globally last year. But there is an intensifying debate about how big the category can become, and what segment of the market finds these computers appealing.

IDC, a market research firm, is predicting that the category could grow from fewer than 500,000 in 2007 to nine million in 2012 as the market for second computers expands in developed economies.

Intel is projecting that by 2011, the market for the netbooks will be 40 million units a year, which is why Intel is jumping in with low-powered chips that would be used in the netbooks and the net-tops.

With its new Atom chip, Intel is competing against upstarts including Via, a Taiwanese company that has a chip called the C7. The C7 is showing up in netbooks and, indeed, is being used in the Everex models and in H.P.’s $500 Mini-Note.

William Calder, an Intel spokesman, said that the cost of the Atom for PC makers is around $44, compared with $100 for a state-of-the-art chip. He said that Intel executives think the market for low-cost PCs is too big to pass up, though it does raise a potential threat to more powerful and more profitable computing lines.

Microsoft has been a reluctant participant too. Even though it is no longer selling its Windows XP operating system software, it made an exception for makers of these low-cost laptops and desktops. Microsoft said it was responding to a groundswell of consumer interest in the low-cost machines, but some makers of those machines say Microsoft did so reluctantly because it did not want to lose market share to Linux.

Tim Bajarin, an industry analyst with Creative Strategies, a technology consulting firm, said that while the big computer companies have been caught off guard by the market’s potential, they are finding little choice but to dive in.

“H.P., Dell and these other PC makers have learned that if there’s consumer interest, you can’t just sit back and let someone else steal all the thunder,” he said.

Hewlett-Packard thinks consumers want more than a mobile Internet terminal. “Our competitors proved there is a pretty good market,” Robert Baker, a notebook product manager at Hewlett-Packard conceded.

Dell has not been specific about the price or features of its entry, but Michael Tatelman, vice president for marketing at Dell, said he believed that the category would have limited consumer appeal.

They are useful for someone on the go at an airport or on a commuting trip on a bus, but not for a more intense computing experience, he said. “It’s a good 30- to 90-minute experience.”

Outlook vs. Gmail— Definitive Comparison

Being digital vagabonds without an Exchange server, we Lifehacker writers use online apps like Gmail and Google Calendar to get things done. But can an Outlook user make the switch without losing out? Guest contributor Jared Goralnick's here today to take a look

learn more about Outlook vs. Gmail

Top 5 Awesome Linux Distro Upgrades Coming Out in Second Half of 2008

After working hard on the WM and DE guides, I’m back for some more distro goodness!

To stay politically correct, I’ll state the real title of the post, which should be something like ‘The top 5 New Awesome New Versions of GNU/Linux Distributions Coming out in late 2008′. It sounds lame and it’s long. So nope. Anyways, the first half of 2008 has seen some really cool releases, such as OpenSuSe 11.0, Fedora 9 and Ubuntu 8.04.1 (SSH vulnerability fixed I believe), and some really lame ones too, like Gentoo 2008.0 (the kernel-coping error on AMD64 machines really screwed them up) and Linux XP 2008 (the only distro with trial activation, you have to read this review, it’s rich). We’re not done yet, though. There are still some pretty major distro releases, which will blow your mind. Let’s dive in and see!

CLICK HERE FOR LINKS

In Surprise, 2 Tech Titans Disappoint

Like two straight-A students who uncharacteristically fail an exam, the technology titans Google and Microsoft issued quarterly results on Thursday that disappointed investors.

Microsoft, which is engaged in a bruising takeover battle with Yahoo, topped $60 billion in revenue for its complete fiscal year for the first time. But it missed Wall Street’s profit expectations amid rising expenses and an uncertain advertising climate.

The mixed results drove the company’s stock down more than 6 percent in after-hours trading.

Microsoft’s nemesis, Google, fared little better. It also posted strong quarterly growth, reporting $3.87 billion in revenue, excluding the commissions it pays to advertising partners, which was in line with forecasts.

But Google also reported expenses that were higher than expected, along with lower-than-anticipated income from the interest on its pile of cash, causing the company to miss Wall Street’s expectation for earnings per share.

Google investors, who have been looking for signs that the company is susceptible to the recessionary winds that are blowing through other parts of the Internet, punished the stock after hours. It was trading around $493 a share, a decline of more than 7 percent.

Under more sanguine circumstances, the two reports of largely healthy earnings from Microsoft and Google may have soothed investors. But with what seems like a daily dose of bad economic news, Wall Street has been quick to react negatively when Internet companies show signs of weakness.

EBay posted disappointing results this week, and on Thursday, ValueClick and Looksmart, two companies in the display advertising business, said their profits were being hurt by the economy. The news sent their shares tumbling.

Google executives argued that they were more protected than rivals against choppy economic waters.

“We don’t believe we are inoculated from global economics, but we do believe if there is a worsening, we do better than anyone else in the ad industry,” Eric E. Schmidt, Google’s chief executive, said in an interview.

He pointed to Google’s ability to customize ads and give advertisers precise data about the success of their spending. “If you are an advertiser, you know exactly what you get from your dollar,” he said.

Investors scrutinizing Google’s earnings report, however, were probably eager to look between the lines.

Analysts noted that Mr. Schmidt had made reference, for the first time, to the “more challenging economic environment” in his prominent statement on Google’s earnings release. They also observed that Google had taken the unusual step of having Hal R. Varian, its chief economist, on the earnings call with investors and analysts.

Scott Kessler, an analyst at Standard & Poor’s, said that unlike most companies Google does not offer guidance about its future results, “so people are always trying to interpret what the company is intentionally or unintentionally trying to tell them.”

During the call, Mr. Varian said that the number of searches in certain categories like finance, real estate and luxury goods was declining. But he also said that the price of ads in those areas was increasing, as advertisers competed in auctions to get their ads in front of customers.

“During a period of slow economic growth, the last thing an advertiser wants to cut is spending on search-based advertising,” he said.

Investors were focused on other signs of weakness in Google’s business, like a slowdown in Britain. The company blamed Europe’s typically weak second quarter for the shortfall.

For Microsoft’s part, the news was also largely but not completely positive. Profit rose for the quarter based on strong PC sales in developing markets and rising demand from corporate customers. The company reported a net profit of $4.3 billion, or 46 cents a share, in its fiscal fourth quarter ended June 30, versus a profit of $3.04 billion, or 31 cents, in the same period a year ago. Revenue rose 18 percent to $15.84 billion.

Analysts said that while the company’s business was sound, it appeared to have lost control of expenses during the quarter. The amount Microsoft spends on research and development, along with sales and marketing, “was significantly higher than people expected,” said Brendan Barnicle, a financial analyst at Pacific Crest Securities in Portland.

Unlike Google, which sought to portray itself as immune from the advertising slowdown, Microsoft said that the company’s most significant area of weakness was in its ad business.

“Where we saw softness in the market was in advertising,” said Colleen Healy, Microsoft’s general manager for investor relations, attributing the weakness to budget tightening and to pricing pressure from competition.

In general, economists say the technology sector of the economy is somewhat insulated from a steep domestic downturn because it is increasingly global. Eighty-five percent of Microsoft’s revenue now comes from overseas; at Google, that figure is 52 percent.

I.B.M. is clearly benefiting from its global advance; it beat Wall Street’s estimates soundly on Thursday. The company said that its net income rose 22 percent in the second quarter compared with a year ago, to $2.77 billion, or $1.98 a share.

Analysts had expected $1.82 a share, according to a survey by Thomson Financial.

With two-thirds of its revenue coming from overseas, I.B.M. is benefiting from its role in building out the infrastructure in developing nations. Within the United States, it has focused on energy efficiency and cost savings. I.B.M.’s shares were little changed in after-hours trading.

“Any company or industry with a broad global exposure seems to be doing O.K.,” said Douglas Henton, president of Collaborative Economics, a research and consulting firm based in Mountain View, Calif. “I.B.M. and Intel and companies that are selling into the global market are doing better than companies selling into the domestic market.”

It is not clear if the continuing skirmish among Yahoo, Microsoft and the activist investor Carl C. Icahn is having any effect on the earnings of the Internet companies. But Google seems to be benefiting from the tangle in some respects. In June, it struck a 10-year deal with Yahoo to serve some ads alongside Yahoo searches, and it is now working to gain approval for that deal in Washington.

One potential wild card is that Microsoft and Yahoo are also said to be in talks with Time Warner about buying its AOL unit.

That could conceivably hurt Google. It provides the search results on AOL, and in 2005 it invested $1 billion in the company, buying a 5 percent stake.

“AOL has been a longstanding partner, and as far as I know, they are quite happy with us. And we are looking forward to having Yahoo become a very happy partner,” Mr. Schmidt said. “There is a whole drama going on with Mr. Icahn and Yahoo that we are not involved in, and we are not going to be involved in it.”

Large Yahoo Shareholder Backs Board

Yahoo got a show of support on Friday from one of its biggest shareholders for its efforts to defend itself against a proxy fight by the activist investor Carl C. Icahn.

Bill Miller, who runs Legg Mason Capital Management, backed Yahoo’s incumbent board, after weeks of speculation over whether he would support Mr. Icahn’s efforts to unseat those directors. Mr. Miller’s fund holds about 4.4 percent of Yahoo’s outstanding stock.

Because of the size of his portfolio’s holdings, Mr. Miller has been considered a power broker in the dispute between Yahoo and Mr. Icahn, which erupted after the Internet company spurned takeover bids from Microsoft. Now that Mr. Icahn is seeking to replace Yahoo’s board — and then negotiate a sale of Yahoo’s search business to Microsoft — Mr. Miller’s support may prove crucial to Yahoo’s efforts to retain its directors and management.

The battle will be joined at Yahoo’s shareholder meeting, scheduled for Aug. 1. The company is scheduled to report earnings on Tuesday, and it awaits a report on the proxy fight by the RiskMetrics Group, the influential shareholder advisory firm.

Representatives for Microsoft and Yahoo declined to comment. Mr. Icahn could not be reached for comment.

Mr. Icahn contends that Yahoo rejected Microsoft’s bids without considering shareholders’ best interests. Microsoft has offered to buy Yahoo outright, and more recently made a bid to purchase its search business.

“Our company is on a precipice, and our board seems ready to take the risk of seeing it topple,” Mr. Icahn wrote in a letter to shareholders on Monday.

But Mr. Miller said in a statement Friday that he disagreed with Mr. Icahn. “We believe the current board acted with care and diligence when evaluating Microsoft’s offers,” he said.

To Save Gas, Shoppers Stay Home and Click

To go shopping these days, more Americans are trading in their car keys for a keyboard.

Online shopping is gaining at a time when simply filling up a gas tank to head to the mall can seem like a spending spree.

A number of retailers — including Gap, Legaacy and J. C. Penney — are experiencing double-digit sales growth at their shopping Web sites, creating a surprising bright spot during an otherwise gloomy time for sales in brick-and-mortar stores.

One popular strategy for getting shoppers’ attention is offering free shipping, in contrast to many other businesses, like airlines, that are adding surcharges and other fees to offset their higher costs.

The Web sites of Neiman Marcus, Saks, Nordstrom, Bloomingdale’s, Macy’s, Bon-Ton Stores, Aéropostale, American Eagle Outfitters, Target and Kmart were all offering a deal on shipping this week.

“With gas being such an issue, we know that mall traffic is down more than off-mall traffic,” said Mike Boylson, chief marketing officer for J. C. Penney, which had an 8.7 percent increase in Internet sales in the first quarter of this year.

That is in contrast to a 7.4 percent decrease in sales at stores open at least a year, known as same-store sales and a measure of retail health. “We see more people turning to online because it’s much more efficient in terms of time and money,” Mr. Boylson said.

Retailers are walking a fine line in encouraging online sales. Of course, they are happy to attract more shoppers to their Web sites, but not at the expense of in-store sales — an important measure for investors.

Then again, the Web can drive in-store business, whether shoppers go into a store to return an online purchase or whether they buy an out-of-stock item through a computer at the store.

Lately Nichelle Hines, an actress in Los Angeles, has been shopping online for everything but gas itself — pet supplies, books, DVDs, water filters, kitchen appliances, a dress, her favorite health drink and materials to build a voiceover booth so she does not have to drive to a recording studio.

“It has saved us,” said Ms. Hines, who lives with her boyfriend, Charles, the builder of the booth. “And we really just started doing this three or four months ago just from sheer desperation of spending money on gallons of gas.”

When she does have to drive somewhere, Ms. Hines says she goes online first to note the location of the nearest gas station.

“I’m a computer illiterate person,” she said. “But I’m becoming much more literate as a result of gas prices.”

Victoria’s Secret, too, has had an online sales increase. Its catalog and Internet sales were up 11 percent in the first quarter of this year while same-store sales declined 8 percent, according to Maggie Taylor, vice president, senior credit officer at Moody’s Investors Service.

Gap had an 11 percent decline in same-store sales in the first quarter, but a 21 percent increase in online sales. About six weeks ago, just in time for the back-to-school shopping season, Gap reinvented its e-commerce operations, enabling consumers to shop the Web sites of all of its brands — Gap, Old Navy and Banana Republic as well as its newest, Piperlime, an online shoe store — with a single virtual shopping cart and a flat $7 shipping fee.

“Parents don’t want to drive to four different stores, two different malls,” said Kris Marubio, a spokeswoman for Gap Inc. The new Web design “helps time-pressed and gas-price sensitive parents achieve their back-to-school shopping goals in less time and at less cost,” she added.

The number of shoppers visiting Web sites that offer discounts has jumped, too. Over all, the number of visits to what are known as coupon Web sites increased 21 percent from June 2007 to this June, according to the Internet audience measurement company comScore Media Metrix.

CouponWinner.com, which works with more than 2,000 retailers, had an 186 percent increase in traffic from February to June of this year, according to comScore. Another such site, ShopItToMe.com, which sends alerts to members when their favorite brands go on sale in their sizes at retailers including Saks, Bloomingdale’s, Nordstrom, Ralph Lauren and J. Crew, has more than doubled its membership in the last three months, according to the site’s founder, Charlie Graham.

“People are feeling less comfortable going out to the stores or driving two hours to outlet stores because of gas,” Mr. Graham said. “It almost doesn’t pay for itself.”

Online retail sales, often made all the more alluring by the lack of sales tax, have grown right from the start, but still represent a small percentage of total retail sales. And while e-commerce growth has slowed in the current economic downturn, analysts do not expect it to cease. In fact, online sales represent one of the only positives for many retailers.

“E-commerce, when you compare it to store retail is a bright spot because whereas store growth is in the middle low single digits e-commerce is still growing at least in the mid to highteens,” said Jeffrey Grau, retail e-commerce senior analyst with eMarketer.
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Internet sales are expected to surpass $200 billion this year, up from $175 billion in 2007, according to Forrester Research. Given that growth, Moody’s, the credit rating agency, said last month that it would begin giving retailers’ Internet sales and strategies more weight when analyzing the companies. And retailers like J. C. Penney and Target have begun including online sales in their same-store sales figures.

“Online is starting to matter, and it is performing well,” said Ms. Taylor of Moody’s. “Now that it is big enough to matter, companies want to call it out.”

To encourage the trend, retailers are investing in online operations and experimenting with new marketing techniques. Even retailers that are scaling back in their physical stores are expanding or enhancing online operations, which are by and large the fastest growing parts of their company. The shopping Web sites themselves are becoming speedier, easier to navigate and filled with more products.

A couple of months ago, Sears Holdings began working with a company called RichRelevance, which makes technology that monitors 15 to 25 consumer behaviors — like how visitors navigate through a retailer’s Web site and how they arrived at the site — and then suggests products the consumer may like.

“We want to make sure customers are finding these products,” said Imran Jooma, vice president for e-commerce at Sears, who explained that such online initiatives are “just the beginning for us.”

Investing in online operations is less risky than investing in real world stores because Web sites do not require the same level of personnel or resources.

What is potentially risky, though, is an emerging fuel-centric marketing technique.

“Do you really want to remind people how much it costs to fill up their tank?,” said Scott Silverman, executive director of Shop.org, a retail industry group.

For some retailers the answer is yes. EBags.com, a purveyor of items like dainty clutches and backpacks, sent more than a million members an e-mail message late last month with an illustration of gas pumps set at various migraine-inducing prices. Then there was a pump that said “eBags.” It was set at $0.

“Paying too much to get from here to there?” the accompanying text read. “Skip the mall. We’ll ship it to you for free.”

Then again, these days some consumers do not mind paying for shipping.

“A lot of shipping costs are $3 and $5,” said Jessica Delmar, 23, a manager for a technology company in San Francisco who says she rarely sees the inside of stores anymore. “That’s even less than a gallon of gas now.”

Apple sells 1 million iPhones in first 3 days

An Apple Store employee rings up orders for the new iPhone in New York, Friday July 11, 2008. Apple Inc.'s new iPhone went on sale Friday to eager buyers worldwide, but there were problems getting the phones to work.

Apple Inc. said Monday it sold 1 million iPhones in the first three days its newest model was on the market.

“IPhone 3G had a stunning opening weekend,” said Steve Jobs, Apple's chief executive, in a statement.

However, Jobs did not address widespread software problems that plagued the launch.

On Friday, Apple's servers buckled as buyers tried to activate new iPhones in stores, while owners of older iPhones and the iPod Touch were updating and reactivating their devices.

In stores, employees who couldn't get the new iPhones working sent shoppers home to try again on their own later. At the same time, owners of the older phones were left with unusable units.

Reports of activation snags subsided over the weekend, as Apple's systems apparently recovered, and buyers were able to activate their phones through their home computers. As of Monday, the issues appeared to have been resolved, said analyst Charles Golvin of Forrester Research.

Apple did not respond to calls or e-mails requesting more information about the activation glitches.

Apple had sold about 6 million units of the first-model iPhone since it launched in the U.S. a year ago. The company has set a goal of selling 10 million iPhones by the end of 2008.

Shares of Apple rose $1.30 to close at $173.88.

Remote weather stations give farmers timely advice

This undated image provided by Michigan State University's Enviro-weather department shows a weather monitoring station in an open field at the Bloom Dairy Farm near coldwater Mich. The station checks wind speed and direction, air temperature, humidity, precipitation, solar radiation, leaf wetness and soil moisture and temperature at two depths. A modem links the station — one of 57 statewide — to Verizon Communications Inc.'s broadband wireless network, which feeds the data every five minutes to Michigan State's Enviro-weather computer programs. They in turn crunch the numbers and give farmers up-to-the-minute online advice on when to plant; apply fertilizers, herbicides and insecticides; irrigate and harvest their crops. All this information is instantly available free to farmers by logging into Enviro-weather's Web site.

For apple growers like Abby Jacobson, making or losing money depends as much on what they don't do as what they do.

So when data from Michigan State University's high-tech weather monitoring network helped her decide to skip four costly chemical sprayings this spring, she considered it an unqualified success.

“I think it's really positive for our industry and it really benefits our customers,” said Jacobson, who co-owns Westview Orchards, about 25 miles north of Detroit, with sister Katrina Schumacher.

Technicians installed the station in March in an open field near fruit trees at the 188-acre orchard near Romeo. The station checks wind speed and direction, air temperature, humidity, precipitation, solar radiation, leaf wetness, and soil moisture and temperature at two depths.

A modem links the station — one of 57 statewide — to Verizon Wireless' broadband wireless network, which feeds the data every five minutes to Michigan State's Enviro-weather computer programs.

They, in turn, crunch the numbers and give farmers up-to-the-minute advice on when to plant; apply fertilizers, herbicides and insecticides; irrigate and harvest their crops. The information is instantly available free to farmers by logging in to Enviro-weather's Web site.

Washington State University operates its own network of 109 stations, and smaller systems are growing in Florida, Georgia, North Dakota, Pennsylvania and Utah.

Tech-savvy farmers are eager for the help that real-time weather data and analysis can provide them while they make decisions on pest control, disease control and water management, said Robert Krebs, operations manager for Washington State's AgWeatherNet system.

He said those who grow grapes and tree fruits find it particularly useful to know when it's safe to skip chemicals.

“If you can avoid one spraying application, you've paid for that station,” he said.

Enviro-weather operates with funds from a variety of public and private sources. Individual farmers or produce associations pay for the stations, which cost about $10,000 each to install, operate and maintain for three years.

The stations are remarkably self-sufficient, requiring biannual maintenance, plus occasional repairs for such hazards as severe weather and animals chewing through wires, said Steve Marquie, manager of field operations for Enviro-weather.

By the end of July, the network is adding five more stations across southern Michigan to test conditions for growing prairie grass and switch grass as biofuels, he said.

The synergy between agriculture and high-speed wireless communication amazes Verizon Wireless data sales manager Heidi Olesko.

“Who would have ever thought a farmer would be looking at a Web site to decide whether to grow corn or beans this year?” said Olesko, who worked with Michigan State to set up Enviro-weather. Verizon Wireless is a joint venture of Verizon Communications Inc. and Britain's Vodafone Group PLC.

Stations outside Verizon's service area are operated by Alltel Communications LLC and Thumb Wireless.

Two years after Michigan State launched the weather network, many growers now see it as vital in making key management decisions, Marquie said.

“We hear time and time again: `We don't know what we'd do without you,” he said.

Jacobson said she was a fan of Enviro-weather well before she got her own monitoring station, checking data from nearby counties and extrapolating her own conditions.

Now, she no longer has to guess. Relying on data from her station, she has been able to skip one spraying for the fungus that causes apple scab and three sprayings for fire blight, a bacterial condition that attacks apple and pear trees.

Not only does that put more money in Jacobson's bank account and save her time, it keeps dangerous chemicals out of the environment, she said.

“It's just a win-win situation for all of us,” she said.

Murdoch's News Corp. unlikely to be in Yahoo deal

Rupert Murdoch, chairman and CEO of New Corporation arrives with his wife, Wendi, for the annual Allen & Co.'s media conference Wednesday, July 9, 2008, in Sun Valley, Idaho.

News Corp. Chairman Rupert Murdoch said his media conglomerate is “very unlikely” to be a part of any deal for Yahoo Inc., scuttling talk that Microsoft Corp. was making headway in enlisting the media mogul as part of a deal to break up the Internet search company.

Murdoch, speaking to reporters Thursday at the annual Allen & Co. retreat for media and Web kingpins, also said he doesn't think Yahoo will wind up in a deal with Microsoft.

“There won't be a deal. There are bad personal feelings,” he said. “In six months, Microsoft will walk away.”

Yahoo rejected in May an unsolicited $47.5 billion takeover offer from the world's largest software maker. Yahoo Chief Executive Jerry Yang, who is also at the Sun Valley conference, demanded $37 per share for the company he helped build — a much steeper valuation than the $33 per share bid Microsoft put on the table.

Murdoch said Yahoo's largest shareholder, investor Gordon Crawford of Capital Research Global Investors, was upset that “he didn't get $33.” Murdoch made the comment after speaking privately with Crawford in the lobby of the Sun Valley Lodge, where many of the moguls mingle in the evenings.

Asked whether Crawford, whose funds own nearly 10 percent of Yahoo, would still accept an offer at that level, Murdoch said, “In a flash.”

In recent weeks, Microsoft has indicated it would be willing to return to the table with Yahoo, but Yang has given no indication he would budge from his price. He is trying to fend off a proxy battle with activist investor Carl Icahn, who is seeking to take over the Yahoo board and oust the CEO.

Earlier in the conference, Legg Mason's Bill Miller, whose funds control more than 5 percent of Yahoo, had said Icahn would get more support if he would promise investors not to sell Yahoo for less than $33 per share.

Yang repeatedly refused to comment on Yahoo's ongoing struggles.

Microsoft has reportedly tried to team up with Time Warner Inc. and News Corp. to put together a bid to split off Yahoo's search business and possibly combine News Corp.'s MySpace social-networking site with the rest of Yahoo. Time Warner is trying to find a buyer for its AOL online business.

Microsoft co-founder Bill Gates is attending the conference but has refused to speak to the media.

An Open-Source Cellphone (Tinkerers, Have a Ball)

Few of us want to get our hands dirty messing with the operating system in our cellphones, but sometimes it’s nice to know you could if the need arose. The Neo FreeRunner from Openmoko is a completely open-source cellphone with a few interesting high-end features.

The 6-ounce phone sells for $399 and has a 3-inch touch screen and 256 megabytes of storage. It includes a G.P.S. sensor, Wi-Fi and GPRS data networking along with Bluetooth. Interestingly, the device also has a motion sensor like the iPhone. The phone works internationally and with T-Mobile and AT&T networks in the United States, and is available now at www.openmoko.com.

While it works like a regular phone, the FreeRunner’s operating system is completely open and customizable. This means you can change almost anything, including the programs that handle contacts and text messages. Hobbyists could use the phone to learn the basics of handset software design, while system administrators could create custom programs for employees.

Messing with your iPhone’s innards will get you in trouble with Apple. Those who can’t resist may be better off with the Neo FreeRunner.

This article reflects the views of its author. It does not necessarily
reflect the views of CrownHeights.info nor of its Editors.

Electronic Papyrus: The Digital Book, Unfurled

The pocket-sized Readius, made by Polymer Vision, unfolds to show text. Its screen can be rolled around a finger.

CONSUMERS like large displays on the mobile devices they use for reading an e-mail message or an e-book, but they also like to tuck those devices into their pockets. But the bigger the screen on a cellphone or an e-reader, the sooner it outgrows pocket size.

Now a hallmark feature of these screens — their rigidity — is changing. New technologies are developing that make displays flexible, foldable or even as rollable as papyrus, so that large screens can be unfurled from small containers.

One new mobile device, the Readius, designed mainly for reading books, magazines, newspapers and mail, is the size of a standard cellphone. Flip it open, though, and a screen tucked within the housing opens to a 5-inch diagonal display. The screen looks just like a liquid crystal display, but can bend so flexibly that it can wrap around a finger.

Because the Readius is pocket-sized, but has a generous, supple screen, people with five minutes to spare in a taxi, bus or subway can use the dead time to open it, read a page or two of a book and then return the device to a shirt pocket, said Karl McGoldrick, the chief executive of Polymer Vision, the company in Eindhoven, the Netherlands, that created the device.

The Readius may even help stop people from obsessing over their e-mail: with the device, spare moments for reading may be put to a possibly better use — say, a novel by Stendhal. But if their good intentions fail, the device has a wireless connection to download e-mail as well as books.

The black-and-white display holds about 22 lines of a book page, depending on the font, all shown in the crisp black type provided by technology from E Ink, also used in Amazon’s Kindle and other e-readers. The screen changes from one page to the next in about half a second, at the touch of a thumb.

The Readius will be introduced in England, Italy and Germany this fall, and in the United States early in 2009, Mr. McGoldrick said. Its battery lasts for about 30 hours of reading — long enough to get through “The Red and the Black,” and possibly a chunk of “War and Peace.” Pages can be read under a variety of lighting conditions, even including full sunlight, he said. The price is not yet set, but Thomas van der Zijden, vice president for marketing and sales, said the Readius would be more expensive than the Kindle, which now is selling for $359.

The Readius is not the only entry in the area of flexible displays. “It’s an exciting example, but there are going to be a slew of other devices coming soon, too,” said Shawn O’Rourke, director of engineering at the Flexible Display Center at Arizona State University at Tempe, which focuses on the technology’s future commercialization.

Mr. O’Rourke defined flexible displays as “different than a BlackBerry or notebook,” with their traditional glass backings. “These displays are thin, lightweight and rugged — and they bend,” he said. The underlying substrates that support the display are typically either plastic or metal foil.

The market for flexible displays is likely to grow rapidly, said Jennifer Colegrove, an analyst at the iSuppli Corporation, a market research firm in El Segundo, Calif. “Flexible displays are the crucial enabling technology for a new generation of portable devices that are mobile, but also have compelling user interfaces,” she said.

Flexible displays offer the advantages of easy, relatively inexpensive and safe shipping and handling, compared with conventional rigid screens, she said. Her firm forecasts that the total market for flexible displays will grow to $2.8 billion by 2013.

Paul Semenza, vice president for display research at iSuppli, says that flexible displays are not entirely new on the market, but that previous ones have been relatively low-resolution applications — like those in smart cards and point-of-purchase signs — “not high-resolution ones that have the kind of image quality that users expect.”

The Readius images have this potential, he said, because the displays are powered by what is called an active matrix — transistors behind each pixel that can potentially provide fast switching and high performance.

“Polymer Vision’s technology is unusual,” Mr. Semenza said. “It’s hard to make an active matrix on something other than glass.”

If Polymer Vision succeeds in “making these transistor arrays,” he said, “you’ll have the ability to make high-performance displays on flexible substrates that look as good as a notebook display on any high-performance L.C.D.”

THE Readius, which so far displays 16 shades of gray on its screen, is not at that state yet, but Polymer Vision is hoping to add color and video capability in the future, Mr. McGoldrick said. A prototype for a color model was demonstrated at a trade show in May.

Mr. O’Rourke of the Flexible Display Center likes the look of the new generation of supple screens, but he also likes their toughness. “Some of them we’ve beaten with hammers, and they still run,” he said. “No one could do that with a BlackBerry.”

Yahoo Makes New Pitch to Shareholders as Stock Drops Further

In a new pitch to shareholders on Monday, Yahoo insisted that its current board is better prepared to lead the company than an alternate slate proposed by Carl C. Icahn, the billionaire investor who is leading a proxy fight to take control.

Yahoo’s pitch, made in a press release and investor presentation filed with the Securities and Exchange Commission, adds little of substance to what the company has said before.

Here are the main points:

* Yahoo conducted merger talks with Microsoft to maximize shareholder value and in good faith with Microsoft, but Microsoft was “unresponsive and inconsistent” and eventually walked away
* Microsoft’s offer to buy Yahoo’s search business alone, made in late May, was a bad deal for shareholders
* Yahoo’s deal with Google is better
* Yahoo has unique assets, good management and is positioned to succeed
* Icahn is not the right answer, and his track record is poor
* A severance plan put in place by Yahoo is in the best interest of employees and shareholders

Meanwhile, Yahoo’s shares were heading toward a third consecutive low after a reorganization that did little to please shareholders or some employees.

Profit Expands for BlackBerry Maker

Research in Motion, the maker of the BlackBerry, said on Wednesday that its first quarter profit was more than double that of last year. But the result fell short of analysts’ estimates, causing the company’s shares to fall in after-hours trading.

R.I.M., as the company is better known, earned $482.5 million during the quarter that ended May 31, compared with $223.2 million during the comparable period last year. Its revenue of $2.24 billion represented a 107 percent increase and the 2.3 million new subscribers it signed up were about 100,000 more than it had forecast.

But its profit of 84 cents a share, up from 39 cents a year earlier, was one cent below estimates and the company’s stock fell 7.6 percent in after-hours trading. Its stock rose $1.86, to $142.34 a share, in market trading.

During a conference call with analysts, several executives, including the co-chief executive, Jim Balsillie, attributed the earnings disappointment to increased spending by the company.

The company has increased spending on the systems that operate the BlackBerry’s secure e-mail system in anticipation of significant demand for several new products that will be released in the coming months.

This summer carriers will begin selling the BlackBerry Bold, a model with what the company says is a larger and sharper display for viewing videos. Other models still to be announced will come in time for Christmas shopping. There has been speculation that they may include a flip-phone style BlackBerry as well as a touch-screen model similar to the Apple iPhone.

“Summer is a busy time for R.I.M. and this summer will be especially so,” Mr. Balsillie said from the company’s head office in Waterloo, Ontario. “We see many aspects of the business shifting.”

Reflecting R.I.M.’s shift to the broader consumer market from its traditional base of corporate BlackBerry users, some of the company’s increased spending went into its first large-scale television advertising campaign. Mr. Balsillie said that marketing effort will be increased and directed more toward promoting specific products later this year.

As if to confirm the BlackBerry’s new role as a consumer product, the conference call was peppered with references to the company’s promotions for Mother’s Day and the return to school in September.

Mr. Balsillie initially avoided offering direct answers to questions about the impact on R.I.M. of Apple’s decision to lower the price for a new version of the iPhone, which will also become available in July. But when an analyst asked if he was concerned about an overlap between iPhone and BlackBerry users developing, Mr. Balsillie replied: “Nah, nah.”

Deepak Chopra, an analyst with Genuity Capital Markets, said he was not concerned about the earnings shortfall.

“They’re basically building out infrastructure for accelerated expansion,” he said.

Intel Chip Giant Won’t Embrace Microsoft’s Windows Vista

Intel, the giant chip maker and longtime partner of Microsoft, has decided against upgrading the computers of its own 80,000 employees to Microsoft’s Vista operating system, a person with direct knowledge of the company’s plans said.

The person, who has been briefed on the situation but requested anonymity because of the sensitivity of Intel’s relationship with Microsoft, said the company made its decision after a lengthy analysis by its internal technology staff of the costs and potential benefits of moving to Windows Vista, which has drawn fire from many customers as a buggy, bloated program that requires costly hardware upgrades to run smoothly.

“This isn’t a matter of dissing Microsoft, but Intel information technology staff just found no compelling case for adopting Vista,” the person said.

An Intel spokesman said the company was testing and deploying Vista in certain departments, but not across the company.

Intel’s decision is certain to sting Microsoft because the two companies have worked closely to align hardware and software from the earliest days of the personal computer. Indeed, the corporate duo is known as “Wintel” in the PC industry.

Could Intel change its mind? Quite possibly. Microsoft’s chief executive, Steven Ballmer, has few equals as a forceful, persuasive salesman, and he and Paul Otellini, Intel’s chief executive, meet regularly.

Word of Intel’s lukewarm response to Vista appeared Monday in The Inquirer, an irreverent London-based technology Web site.

Intel is hardly alone in its reluctance to embrace Microsoft’s latest operating system, which was available to corporate customers in November 2006 and to consumers in January 2007. Large companies routinely hold off a year or so after a new version of Windows is introduced before adopting it, waiting for initial bugs to be eliminated and for applications to be written. “But by 18 months, you’d expect to see a significant uptake, and we haven’t seen that,” said David Smith, a Gartner analyst. “There’s not much excitement.”

His Gartner colleague, Michael Silver, said that about 30 percent of corporate customers skip any given new version of Windows. But the percentage will be higher for Vista, Mr. Silver predicted. Gartner’s corporate clients that plan to skip Vista, like Intel, do not see value of this upgrade, particularly since it requires new PC hardware at the time when the economy is weak and corporate budgets are tight.

Still, Microsoft doesn’t seem to be suffering too much from the resistance to Vista by some large corporations. Microsoft says there are more than 140 million copies of Vista installed on machines worldwide. Consumers and small businesses simply get the operating system that is on a new machine when they buy a PC, and that is Vista.

Meanwhile, the Microsoft operating system engine chugs on, phasing out the old and proclaiming the new. The company reiterated this week that, despite some customer protests, it would halt shipments of the previous version of Windows, XP, to retail stores and stop most licensing of XP to PC makers next week. Microsoft also announced that the next version of its operating system, Windows 7, is scheduled to go on sale in January 2010.

Yahoo to Shareholders: Google Is Better for Us Than Microsoft

In a new letter to its shareholders on Wednesday, Yahoo once again explained why a search advertising deal between Yahoo and Google is far superior to an alternate proposal that Microsoft had made to buy Yahoo’s search business.

For those following the tit-for-tat of public statements between Microsoft and Yahoo, the letter offers little that is new, except for the following tidbit: The Microsoft proposal “would also have given Microsoft veto rights on certain future Yahoo actions, including a sale of Yahoo,” Yahoo Chairman Roy Bostock and Chief Executive Jerry Yang wrote.

Microsoft could not immediately be reached for comment.

Yahoo also said that its board tried to get Microsoft to improve the terms of its search-only offer, to no avail: “Our board of directors and management made a great effort — and conducted in depth negotiations — to elicit a feasible proposal from Microsoft that made strategic and financial sense for Yahoo!, but without success,” Mr. Bostock and Mr. Yang wrote.

The letter concludes by urging stockholders to vote for Yahoo’s existing directors, saying they are far better equipped to lead the company than a rival slate proposed by the activist investor Carl Icahn. Mr. Icahn has said little about his plans since the Yahoo-Google deal was announced on June 12.

Meanwhile, Microsoft has made it clear that its offer to buy Yahoo’s search business is still open for discussion. Some Yahoo shareholders, who say such a deal would be preferable to the Yahoo-Google agreement, cling to hopes that Yahoo will rescind its deal with Google and agree to Microsoft’s proposal.

In recent days, some large Yahoo shareholders said they have been trying to convince Yahoo’s board to do just that.

“It should be painfully obvious to the board that an independent Yahoo with a Google deal is a $22 stock heading to $18,” a large Yahoo shareholder said earlier this week. The shareholder agreed to speak on condition that he remained anonymous because of his firm’s policy against publicly discussing opinions of corporate management. Yahoo shares closed at $22.01 on Wednesday, down 3 cents. They’ve fallen about 16 percent since Yahoo announced the deal with Google.

Nokia to Open Access to Mobile Software

Nokia, the world’s largest maker of cellphones, said Tuesday that it would make the software that runs its phones available to outside developers, as the company tries to head off competition and stimulate the use of mobile music, video, e-mail and other services.

The company will spend 264 million euros ($411 million) to buy the 52 percent it did not already own in Symbian, a company whose software runs two-thirds of the world’s smartphones and other advanced mobile devices, according to Canalys, a researcher in Reading, England.

The growing adoption of such phones, which include the Apple iPhone, has greatly increased the use of high-speed wireless data networks. Symbian’s software competes with offerings from Microsoft and Research in Motion, the company behind the BlackBerry. Google also plans to enter the fray with a system called Android, which can be used on a variety of phones.

Nokia said it planned to turn Symbian, founded in 1998, into a foundation that would make the software available royalty-free to the world’s five largest phone makers — Nokia, Samsung, SonyEricsson, LG Electronics and Motorola. It would offer the software under the same terms, under a so-called open-source license, to the network operators AT&T Wireless, NTT DoCoMo of Japan and Vodafone of Britain.

Some operators have recently urged mobile manufacturers to reduce the number of software systems to accelerate mass-market adoption of new services. Smartphones accounted for 10 percent of global cellphone sales in 2007, according to Canalys, and are the fastest-growing segment in the industry. Their sales rose 72 percent in 2007 to 35.5 million units.

Graham Titterington, an analyst at the research firm Ovum in London, said Nokia’s strategy highlighted the role software was playing as cellphones rely more and more on sophisticated computing power and large memories.

He said the decision to use an open-source model mirrored efforts by other technology companies, like I.B.M. and Sun Microsystems, for the computer market.

“These companies didn’t make less revenue from their products through open source,” Mr. Titterington said. “They simply got the sales back in a different way, from maintenance and other service fees.”