Gregarius » BetaNews.Com » juillet 31, 2009

By Tim Conneally, Betanews

Firefox total downloads: millions

Firefox has hit its milestone billionth download of all time. To celebrate the occasion, Mozilla will be launching onebillionplusyou.com on Monday, a hub for information about the achievement, and a place for Firefox users to show their love for the browser by uploading pictures of themselves representing Firefox across the globe (though they'll have a tough time beating this guy.)

Firefox 1.0 launched in November 2004 as the secure, open source alternative to market dominating Internet Explorer, which held nearly 90% market share at the time. One year later, Firefox had already attained 10% browser share. Since mid 2008, Firefox has held nearly 30% of the market, while Internet Explorer has dropped to around 60%.

Last year, Mozilla aimed at setting a world record for downloads with the release of Firefox 3.0. and set it with more than 8 million downloads in 24 hours.

By Angela Gunn, Betanews

A British hacker who broke into 97 military and NASA computer systems -- looking, he claims, for evidence about UFOs -- will be tried in America, where if convicted he may face a sentence of up to 70 years. Gary McKinnon has been appealing in the British judicial system to avoid extradition to these shores.

Mr. McKinnon doesn't deny that he hacked into the computers in 2001-02, but has stated that he wasn't attempting to compromise US security but to find secret information on unidentified flying objects -- a particular obsession for the 43-year-old man, who has been diagnosed with Asperger's syndrome. He asked instead for trial in the UK, stating that trial and incarceration in the US could be highly debilitating due to his condition.

Mr. McKinnon's activities began in February of 2001 and continued until March of the following year, when he was first questioned by law-enforcement officials about his hacking efforts. Several of his incursions caused significant trouble, including a hack that knocked several hundred computers at a naval station in New Jersey offline immediately after 9/11. A New Jersey district court issued a warrant for Mr. McKinnon in October of 2002, and extradition efforts began in late 2004. In February of this year, UK officials announced that they would not pursue charges against Mr. McKinnon in Britain.

The Free Gary web site, which has ben the locus of much of the anti-extradition effort, was offline as of Friday morning. Meanwhile, Janis Sharp, Mr. McKinnon's mother, is reported to have made a personal appeal to President Obama to intercede.

A poll of 550 IT professionals conducted over the past two months by Sophos, the anti-malware firm, finds that 71% of those asked do not think that Mr. McKinnon should be extradited. That's up from just 52% three years ago.

By Angela Gunn, Betanews

A Michigan teen has filed suit in Seattle against Amazon, maker of the Kindle eReader, for deleting a copy of 1984 on which he was keeping notes for his AP English coursework. Justin Gawronski is suing in order to impress on Amazon the importance of not simply deleting purchased texts -- whatever their copyright or licensing status.

The suit, which seeks class-action status for those affected by the deletion several weeks ago, also names Antoine J. Bruguier, a Kindle owner from Milpitas, California. KamberEdelson is the Chicago-based legal team handling the suit.

Readers who purchased the disputed copies of Animal Farm and 1984 were given refunds by Amazon, and after several days of outrage they also got an apology from CEO Jeff Bezos, who called his company's handling of the problem "stupid, thoughtless, and painfully out of line with our principles."

But apologies don't feed the bulldog -- or, in this case, Mr. Gawronski's teacher, who's expecting multiple written reports on the text from students. Mr. Gawronski had been reading and, as he went along, dropping a note into the text where something caught his eye. His notes were not deleted, but with the text to which they referred gone, they're not particularly useful now.

By Angela Gunn, Betanews

Thursday was a far more lively day in the Joel Tenenbaum copyright infringement case, as the defendant admitted that he had downloaded -- and that he had not been forthright in his written discovery responses about having done so. Mr. Tenenbaum also took responsibility for uploading and downloading from multiple peer-to-peer services, confirmed that he'd listened to all 30 now-no-longer-contested songs (nuking his own legal team's earlier assertion that some of the 30 might have been spoofed files), and suggested that his mom -- a lawyer -- might have given him some shaky advice on how to answer RIAA fact-finding efforts.

It was, in other words, defeat-- defeat to such a degree that the Joel Fights Back group blog run by the defense team is currently headed by a post titled "Joel FOUGHT back." In that post, Debbie Rosenbaum, one of the students who stuck with the case to its bitter end, writes that "Although we could not win this case, we are proud to have highlighted the abuses and the inefficiency with which the music industry burdens the court system."

Judge Nancy Gertner, considering a motion from the plaintiffs for a directed verdict in their favor (since, hey, the guy just admitted it), ruled that the jury will no longer be faced with debating whether Mr. Tenenbaum infringed the copyrights.

Instead, when the jury gets the case mid-morning on Friday -- the defense plans to call a computer scientist and Mr. Tenenbaum's mother, who might face some interesting questions about advice she might have given her boy -- they'll be looking at liability and willfulness, the two issues that will dictate the amount of damages to be awarded.

If there was any portion of Mr. Tenenbaum's testimony that didn't harm him today, it might be his expressed fondness for the artists whose music he shared, and his original perception of Napster as essentially a "giant library in front of you with all sorts of songs... It's all up there... It's like the Google of music." The legality of peer-to-peer sharing, he noted, "wasn't foremost in [his] mind" then.

His mental state might actually matter here. Though the defense team had hoped to instruct the jury to consider whether Mr. Tenenbaum meant to profit commercially by his actions, Judge Gertner will instruct the five men and five women to consider willful infringement that which is "committed with knowledge of or 'reckless disregard' for the plaintiffs' copyrights." It's not much to pin one's hopes to after a yearlong legal effort, but it's the difference between the minimum ($750/song) and maximum ($150,000/song) awards levels for damages -- but after Thursday's testimony, it's just about all Mr. Tenenbaum has left.

By Carmi Levy, Betanews

It's not nice to speak ill of the dead, even if they're very much alive and only dead in the business sense of the word. But it's super easy these days to look at Yahoo's co-founder and ex-CEO Jerry Yang and laugh out loud at how he squandered tens of billions of dollars --and his company's very future as an Internet powerhouse-- because he thought he knew better.

The short strokes of this week's Microsoft-Yahoo Internet search partnership must make Mr. Yang sick to his stomach: What Microsoft was willing to spend upwards of $45 billion for barely 18 months ago it has now won for…nothing. Sure, Microsoft didn't swallow the company whole. It's just a partnership, after all. But that matters little in a search market where the two players were doomed to an eternity of irrelevance if they didn't get together at some point. Living together, marriage, whatever we call it, Microsoft figured out a cheap way to gain access to a much larger search audience, and Yahoo had no choice but to sign the papers and move in.

Hail to yesterday's Goliath

That's what happens when you're an also-ran. And let's not mince words, Yahoo was and is an also-ran. While I admit 20% of the U.S. search market isn't shabby, the company is a mere shadow of the brash organization that in 1995 took a stab at categorizing the then-new-to-regular-folks Internet with its index-based approach to navigation. It may be hard to remember what life was like B.G. (Before Google) but Yahoo WAS search back then. And while a relatively static, category-based, manually updated index was doomed to fail the Internet changes too fast for something so inflexible. Yahoo, not Google, has the distinction of being the first verb of the commercial Internet era: Anyone remember "Do you Yahoo?"

Didn't think so.

So when Microsoft first came calling, first chatting amiably about hooking up in 2005 and then, a year ago February tabling the gigabuck offer that would trigger Mr. Yang's ultimate departure, Yahoo's first response should have been akin to the 30-something never-been-dated woman who still lives at home with her parents: Yes. When the market has slowly squeezed the life out of you and rendered you a distant second fiddle with no hope of imminent recovery, the last thing you should do when so many zeroes after the dollar sign are flashed in your face is respond with defiance.

Yahoo had no options in 2005. It had even fewer in 2008, and it had none earlier this week when current CEO Carol Bartz finally did the deed. That Yahoo had no choice is obvious. That it took so long for it to personally and corporately reach that conclusion cost countless shareholders vast amounts of money, and thousands of employees their jobs. Any company that so ignores doing the right thing in favor of a CEO's need to project hubris deserves to die, so it was good to see Yang's successor pull some salvation out of an otherwise unmitigated disaster.

Abandoning a dead brand image

Kudos to Ms. Bartz for doing the right thing for Yahoo's remaining shareholders and remaining employees and, frankly, for anyone who still uses the company's mostly second-rate online services. Like AOL before it, Yahoo had long since slipped from the public consciousness as an innovative leader. Allow me to use e-mail loyalty as an analogy: If people with gmail.com e-mail addresses are somewhat more tech savvy power users of Google's leading edge Web services and hotmail.com users are mostly kids and mobile-addicted teenagers, Yahoo users were --and presumably still are-- the older folks who couldn't be bothered to switch to something better or hipper. This kind of brand awareness is not how future business success is created, and Ms. Bartz finally admitted it as such in signing the partnership deal.

Thanks to this long-overdue change of direction at Yahoo, the search -- and more importantly, search-based advertising-- market looks markedly different than it did at this time last week. Sure, no one without three shots of Tequila in him could claim that adding Microsoft's 8% share of the U.S. search market to Yahoo's 20% share will cause Google, with 65%, to run for the hills. When you own almost two-thirds of any market alongside near-bulletproof brand ubiquity and end-user entrenchment, it'll take more than a zero-dollar partnership by your two closest and much weaker competitors to knock you off your throne.

Forget the percentages for a sec

But this is a case where psychology matters more than numbers. Where the market previously had only one viable alternative for most online advertisers - if they didn't go with Google, they often didn't advertise at all-- it now has two. As the combined entity approaches 30% market share, it's suddenly large enough to attract the attention of advertisers interested in exploring whether there are other cost effective ways to reach consumers through search. Up until now, there weren't. But something shifted below the landscape when Yahoo said yes, and we now finally have a horse race.

And a race of any kind is good for everyone. It encourages real competition by putting the heat on market leaders to maintain high levels of innovation and, more critically, keep things fair on a pricing and customer service front. I'd never accuse Google of being anticompetitive (that's the European Union's job, apparently) or customer service challenged. But it's easy to conclude that the incentive to play more nicely with everyone else in the playground just increased by an order of magnitude.

Which brings me to Microsoft. The legacy operating system and productivity app vendor that so many wrote off as unable to transition into the Internet economy managed to prove them wrong with a search product (Bing) that continues to impress. The Yahoo deal now exposes Bing to an audience 2.5 times its original size and opens up another lucrative revenue stream for Microsoft, which kinda matters while the rest of us debate the future of those legacy categories it's dominated for so long.

Google's already questioned the deal (big surprise) and antitrust regulators will doubtless get their shot. But for the first time in years, search is fun again. Game on, and thanks, Microsoft, for being so persistent despite Yahoo's ongoing stupidity.

Carmi Levy is a Canadian-based independent technology analyst and journalist still trying to live down his past life leading help desks and managing projects for large financial services organizations. He comments extensively in a wide range of media, and works closely with clients to help them leverage technology and social media tools and processes to drive their business.

By Angela Gunn, Betanews

January's Consumer Electronics Show books up fast, as would-be congregants know well. But it seems that one potential attendee is still not committed as we roll into August -- interesting, since the world already knows what the fellow won't be attending in early 2010.

The erstwhile guest is Steve Jobs, of course, and with Apple already declining to take part in MacWorld next January, speculation has been rampant that Apple and its rock-star CEO would make the jaunt to Vegas. That speculation seemed to be strengthened by a post by Ben Charny for the Wall Street Journal, which claimed that Mr. Jobs would be not just attending but speaking.

Pandemonium! The Apple head has of course been asked repeatedly over the years, but in the true Cupertino fashion has often not even bothered to respond to the invitation, let alone committed to attending. What might have happened to change his mind?

Nothing, it turns out. The WSJ blog post in question became distinctly top-heavy with corrections as the story unfolded -- Mr. Jobs has been asked but has not yet responded; moreover, Apple itself may or may not be exhibiting, despite this year's addition of the 12,000-square-foot iLounge, which will feature developers for the iPhone and iPod lines.

It's rather late in the CES process for a major player such as Apple to insert itself in that process, by the way; Ryan Kim at the San Francisco Chronicle asked Gary Shapiro, the head of CEA (the organization that runs CES), and Mr. Shapiro said that the only available spaces at this point would be rather small -- less than a few thousand square feet.

An ugly reporting misfire, to be sure, but the comments below the piece from angry, disappointed readers indicate that the Apple fan contingent was sorely let down by the news and, as they will, chose to share with the world the pain caused by their spiritual wedgie (sample quote: "this kind of journalism turns [the WSJ] into a gossip site more on the level with Perez Hilton").

But cheer up, Macolytes. The currently scheduled CES keynoters, Microsoft's Steve Ballmer and Intel's Paul Otellini, attract hideous lines to attend their talks, and we're used to those two; the queue for a Jobs keynote would have had to start convening right about... now.

By Joe Wilcox, Betanews

Microsoft CEO Steve Ballmer gave a little more information to financial analysts than perhaps he planned. There are two versions of his slide presentation -- one with a slide he didn't present this morning. I downloaded the PowerPoint file, and then noticed it had disappeared from Microsoft's investor website. That was so Microsoft could remove the errant, and quite revealing, slide.

The slide is surprising counter-commentary to Ballmer's opening presentation. He spent much of the early portion of his talk explaining why Microsoft cut the search deal with Yahoo, and why the costs were minimal to both companies. He told financial analysts:

"Economics is where people get even more confused. What happened? What happened? Nothing got bought. Nothing got sold. People expected something to get bought. Nothing got sold yesterday, and nothing got bought yesterday. But, the partnership in and of itself creates economic value. And not just on the future promise, not just on the future promise of improved product, improved share, and improved revenue, it creates an immediate opportunity, essentially, for synergy."

But the slide explains: "We will lose money in first 2 years ($300m total), then start making decent return ($400m steady)."

The slide reveals some information "context -- not for disclosure" that can be seen below. Microsoft expects $600 million to $700 million transition costs, with as much as $200 million in fiscal 2010, which ends June 30. The non-disclosure column breaks down the costs by category.

Click for Full Slide

I won't do analysis on the content today. While Microsoft probably wouldn't want the information released, it's not a disastrous disclosure. I suspect financial analysts will gain more from the disclosure than, say, competitor Google.

Caveat: The slide is working from assumptions that may or may not be true as Microsoft and Yahoo begin to merge search operations. Losses could be considerably less -- or even more.

I believe that Seattle Times reporter Brier Dudley was first to post the slide.

By Tim Conneally, Betanews

Mozilla is counting down as Firefox rapidly approaches its billionth download of all time.

Firefox 1.0 launched in November 2004 as the secure, open source alternative to market dominating Internet Explorer, which held nearly 90% market share at the time. One year later, Firefox had already attained 10% browser share. Since mid 2008, Firefox has held nearly 30% of the market, while Internet Explorer has dropped to around 60%.

Last year, Mozilla aimed at setting a world record for downloads with the release of Firefox 3.0. and set it with more than 8 million downloads in 24 hours.

Today, Firefox is hovering around 20 downloads per second, and has less than a million downloads to go before it hits the billion marker.

If people continue to download at their current rate, Firefox will pass a billion downloads in just over 12 hours.

Firefox total downloads: millions

By Joe Wilcox, Betanews

Stephen Elop and Bob Muglia delivered two of the more difficult presentations during Microsoft's annual Financial Analyst Meeting. Elop runs the Business division, which had been a consistent performer until fiscal fourth quarter, when revenue fell 13 percent year over year. Server and Tools did better, but still took a revenue hit in fourth quarter.

The two divisions share several important attributes, and the businesses are highly entwined. With the 2003 release cycle, Microsoft started aggressively increasing integration along the vertical applications stack between Office and server software. The integration creates sales pull for Office and newer server software, like SharePoint Server. I leave out Exchange Server, since Microsoft long ago established applications stack integration with Outlook.

This vertical integration also relates to sales changes that Microsoft announced in May 2001 but didn't fully bring to market until summer 2002: Annuity licensing. Under annuity licensing, businesses pay Microsoft upfront annually under two- or three-year contracts. Microsoft had long sold software under volume-licensing contracts, but the change added what the company calls "Software Assurance," and upgrade pricing included with the contract price. (Enterprise Agreement had been this way, but not other licensing plans.)

Together, annuity licensing changes and increased integration along the vertical stack changed how businesses bought desktop software, particularly. As revealed at FAM today, for both divisions, annuity contracts contribute about 60 percent of revenue.

The contractual commitments are important to Microsoft:

• The contracts are like money in the bank; they're assured sales.
• Customers are less likely to switch to competing products, seeing as how they've already paid Microsoft.
• Annuity licensing smoothes out Microsoft revenue, so there are fewer highs and lows between product releases.
• Microsoft revenue is somewhat cushioned against economic slowdowns, since customers already have paid or committed to pay Microsoft.

Not surprisingly, this last benefit has proved really important to Microsoft during the global session. "We are cushioned somewhat" by annuity licensing, Muglia, Server and Tools president, told financial analysts this afternoon."What you have in essence is a shock absorber to the business."

For Server and Tools, annuity licensing potentially averted sales disaster. Muglia noted that at the start of fiscal 2009, IDC predicted 6 percent server hardware growth. But starting in October, server sales plummeted, stabilizing at about a 15 percent year-over-year decline at the close of fiscal 2009, on June 30.

Microsoft's Client division is by comparison hugely exposed to declining hardware sales. OEMs account for about 80 percent of Windows sales. By comparison, for Server and Tools, "40 percent of revenue is of a transactional nature," Muglia said.

Muglia asserted that during the recession Microsoft server software sales continued to exceed industry hardware growth, and that "our annuity sales have remained fairly strong during this period."

By comparison, Business division absorbed more pain during the recession so far. In fiscal fourth quarter, Business revenue and income fell 13 percent and 16 percent, respectively, year over year. By comparison, Server and Tools revenue and income declined by 6 percent and 1 percent, respectively.

Elop was clear and concise about the Business division's problems, which really started after the late-September stock market crash. Elop explained how the Business division derives its revenue:

• Annuity licensing -- 60 percent
• Non-annuity sales -- 20 percent
• Consumer -- 20 percent

Slowing PC sales hit both consumer and non-annuity revenue. Non-annuity sales are to businesses, such as boxed copies of Office. Consumer revenue declined about 30 percent during fiscal 2009 and non-annuity by about 35 percent, Elop said. By comparison, annuity licensing increased 5 percent.

What Elop didn't say, but other Microsoft executives have explained during earnings conference calls with financial analysts: Many customers renewing annuity contracts are doing so at lower levels, because of downsizing and layoffs.

Strangely, the econolypse has exposed a weakness in Microsoft's annuity contract strategy -- and one likely to come around only under the rare economic crunch. The annuity licensing strategy assumes growth, that customers will renew contracts and at higher levels. That's true, as long as there aren't massive layoffs.

Both divisional presidents expressed optimism for the future, but warned second half 2009 would still prove to be challenging.