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HP's Wrath, Baidu's Greed and Other Deadly Sins

HP's Wrath, Baidu's Greed and Other Deadly Sins

HP shows its angrier side in the "Vista Capable" case ... Baidu's greed gets the best of it ... Jerry Yang steps down as Yahoo CEO ... Microsoft takes a shot at antivirus vendors ... Sun lays off 6,000 ... Adobe eyes smartphones for Flash, and more.

By ECT News Staff E-Commerce Times ECT News Network
11/21/08 10:45 AM PT

TV shows like "The Hills" focus on the petty squabbles that go on in the world of spoiled, vapid socialites. I can't think of a program that gets into the catfights that go on in the IT world, and I don't know whether there'd really be a huge audience for something like that, but they do happen, and court documents in an ongoing lawsuit have revealed some juicy tidbits.

The class-action suit concerns the promises made by some PC makers that their computers -- even some really weak-kneed models -- could shoulder the weight of Microsoft's latest operating system, Vista. Some of them couldn't support all of its features, but they were still advertised as "Vista Capable."

Here's what an HP exec had to say to a Microsoft exec in an e-mail: "You have demonstrated a complete lack of commitment to HP as a strategic partner and cost us a lot of money in the process. Your credibility is severely damaged in my organization."


Listen to the podcast (15:10 minutes).

That's a pretty harsh thing to say, considering that it's a written message from a high-ranking player in one powerful firm to a counterpart of equal stature in another. So, why the furor? Well, HP spent a lot to beef up certain lines of laptops in order to meet the Vista Capable standards Microsoft had announced prior to Vista's launch.

Then Microsoft apparently turned around and lowered those standards to allow certain Intel chips to qualify. That may have saved Intel some money, but it left HP in the lurch. Oh yeah, and it also ended up ticking off a lot of customers who bought computers with Intel chips, thinking they could handle Vista -- then ended up being hobbled by it.

HP may be burned by Microsoft's behavior, but the two will probably just have to get over it. They need each other too much.

Reputation Wreckage

The U.S. has its Google, and China has its Baidu. Like Google, Baidu has been riding high until recently, but its plummeting stock prices have nothing to do with a tanking economy.

What happened? Looks like Baidu got greedy and engaged in some questionable business practices.

First there were reports that Baidu blocked negative information about a company called "Sanlu" in exchange for advertising sales. Sanlu happens to be the company that's allegedly responsible for the contaminated milk that killed four infants and sickened thousands. Now it comes out that Baidu also sold promotional links to unlicensed medical sites that made uncorroborated claims about the products they sold.

China's official TV network made that allegation. Baidu's reputation is in the dumpster, and that could mean more Chinese will start turning to the company with the 'don't be evil' motto.

Stepping Down

Jerry Yang might just be the best thing that ever happened to Microsoft. Yeah, I said it. Seriously, though, it makes a twisted kind of sense.

Yang made his glorious return to the Yahoo throne in early 2007 after the firing of Terry Semel. A little more than a year later, Microsoft came along and offered a premium price -- $33 a share -- to buy Yahoo. Yang resisted mightily. He sought an advertising partnership with Google. He tried to buy AOL, for crying out loud.

Eventually, Microsoft walked away. Yang continued to go after AOL but that didn't go anywhere. He struck the Google partnership, but then -- thanks in no small part to the lobbying efforts of those guys in Redmond -- regulators decided that a Yahoo-Google advertising conglomerate would be a bad idea. Google decided to dump the deal. Yang decided to lay off a bunch of employees, and ultimately himself.

Now, Yahoo's worth about $9 a share, Yahoo is practically begging to be bought, and Microsoft is probably happy it dodged a bullet.

See? Yang's been pretty good for Microsoft.

Back Atcha

You know how security software vendors love to bust Microsoft's chops and persuade anyone who uses any of its software that they better get Symantec or McAfee or whatever to protect them?

Well, Microsoft has decided it's had enough of that, and it's going to give them a bit of competition. A good bit of competition, in fact, since the other guys sell their anti-malware protection, and Microsoft is going to give it away for free.

Microsoft isn't brand new to the security business -- it's been selling its OneCare service for 50 dollars a year. Some time next year, though, users will be able to get Microsoft's comprehensive protection against viruses, malware and spyware for absolutely nothing. Which, by then, may be what those security companies' stocks are worth.

First Cut Is the Deepest

The economic downturn has come home to roost in Silicon Valley, striking one of the industry's bellwether companies, Sun Microsystems, which announced it will lay off 6,000 employees to stay afloat.

This will cost Sun in the short term -- the company has set aside $600 million to cover the costs of the job cuts. "It's expensive to lay people off," said Andrew Reichman, a senior analyst at Forrester Research.

Perhaps, but it's obviously more expensive to keep them around. The company will save $800 million a year by sending out the pink slips. Sun will reorganize its software division and merge some operations. It plans to focus on its open source software offerings, which are pretty much all it's got left.

Flash in a Phone

Despite what you might have heard Steve Jobs say, Adobe's Flash is not crap. It's also not coming to the iPhone any time soon, so don't get your hopes up. But Adobe pulled out all the stops at its MAX 2008 conference in San Francisco to prove that Flash is worthy -- not only good enough for mobile devices, but also good enough to fight off a threat from Microsoft's competing Silverlight media format.

For starters, Adobe trumpeted its deal with ARM to develop chips that are instantly compatible with Flash, paving the way for its move into the mobile side of life.

Later, Adobe announced a deal with Major League Baseball, which had been using Silverlight on its Web sites. No more -- now it's Flash. For the user perspective it probably doesn't matter very much whether you've got Flash or Silverlight. As long as you've got the plug-in installed and the baseball bloopers start to flow, who really cares?

Big, Fast, Expensive

Solid state hard drives are tough, they're fast, they're energy efficient, and they're nowhere near cheap. If you want one these things as your laptop's embedded hard drive, you'll be paying big bucks. When you take a look at the kind of computer you could get for the same money if you went with a standard hard drive instead, the decision gets a little tricky.

But price isn't the only thing keeping SSDs out of notebooks. Size also matters, and for a while they've been pretty limited in that regard. Samsung just now started production on a 256-gigabyte SSD, which is big enough to run a respectable notebook computer.

But new frontiers in size also mean new frontiers in sticker price. Samsung isn't saying much about what its drive will cost computer makers, but Gartner's Joseph Unsworth estimated it could ring up somewhere in the $1,000 range.

Children Need Boundaries

Online advertisers are constantly trying to get their messages to the people most likely to respond, and all kinds of behavior-monitoring technologies have been developed toward that end. Some are legal, some are not, and some are waiting for a judge's verdict.

Privacy advocates and a company called NebuAd are duking it out in court over a relatively new tracking system called "deep packet inspection technology."

The class action also targets a slew of Internet service providers. The lawsuit claims that NebuAd and the ISPs violated the Electronic Communications Privacy Act, the Computer Fraud and Abuse Act, California's Invasion of Privacy Act and California's Computer Crime Law. The plaintiffs are essentially arguing that they didn't grant authority to NebuAd -- or their ISPs, for that matter -- to access their online transmissions.

Regardless of the outcome of this particular case, ISPs are getting jittery over snooping on their customers. Congress has taken an interest in the matter, and there's buzz about the other 'R' word -- regulation.

Parents Need Boundaries, Too

There's another court case in the news that involves the Computer Fraud and Abuse Act, but this one has nothing to do with online advertising. It's the criminal trial against Missouri mom Lori Drew.

Drew is the woman who set up a fake MySpace account for an imaginary boy named "Josh" and then lured 13-year-old Megan Meier into an online relationship with him. Drew did this because she suspected Megan was saying nasty things about her own daughter -- the two girls had previously been friends.

Eventually, Drew decided it was time for the fake boy to turn against Megan. She -- or an assistant she recruited -- sent messages like, "the world would be better off without you." Megan, who had suicidal tendencies that were known to Lori Drew, hung herself after the rejection.

Since no laws against cyber-bullying existed at the time, prosecutors eventually charged Drew with violating a computer fraud law written to protect against hackers, and experts are now debating the validity of that legal strategy. Several cyber-bullying laws are now on the books, but Drew can't be charged with violating a law that didn't exist when she did her deeds.

One revelation that came out of the opening statements in the case: At one point, Megan sent a note back to the imaginary Josh, saying, "you are the kind of boy a girl would kill herself over."

Psystar Smackdown

In some ways, the story of Psystar is the story of us all. We come into this world completely unprepared and ignorant of what to expect. We work and struggle to show the world that we're for real. Then we're trampled and broken by international corporations with teams of well-paid lawyers at their disposal.

If you want to give Psystar credit for anything, give it credit for having guts. It takes courage to accuse a company of monopolistic practices based on the fact that it's the only firm out there that sells its own products.

Months ago, Apple undertook the entirely expected move of attempting to legally squash the startup Psystar for selling white-box PCs with Apple's OS X preinstalled -- a violation of the operating system's user license.

In response, Psystar filed a countersuit claiming that Apple violated antitrust laws by tying its own operating system exclusively to its own hardware. The heart of the matter is whether OS X shares a relevant market with other operating systems like Windows and Linux -- in which case consumers have a choice -- or whether OS X is a market unto itself. According to U.S. District Judge William Alsup, "Whether products are part of the same or different markets under antitrust law depends on whether consumers view those products as reasonable substitutes for each other and would switch among them in response to changes in relative prices."

I'm aware that some Mac heads out there would rather compute by drawing in dirt with sticks than use Windows or Linux -- and vice versa -- but the court has concluded that, like it or not, they are reasonable alternatives, thus there's no monopoly.

Psystar has a little over two weeks to amend its counterclaim, but failing that, it looks as though the company may be set to go down in kind of the same style as Butch and Sundance. Unfortunately, glorious futility isn't as cool-looking in the courtroom as it is in cinematic freeze-frame.

Brain Envy

If you've ever wished you could think like a computer, take heart. Computers wish they could think like you.

Or, at least, computer scientists wish they could build a computer with a mind more like yours -- a mind capable of sensation, perception, action, cognition, emotion and interaction, that is. Computers aren't very good at integrating sight with hearing, touch, taste and smell, for example.

And computers are lost when it comes to context and ambiguity. And they're nowhere near as energy-efficient and architecturally streamlined as the human brain. Yet.

Through a grant provided by the government research agency DARPA, a team of scientists from IBM and five big-name U.S. universities are going to attempt to engineer a cognitive computer. They hope to go way beyond the artificial intelligence of today by reverse engineering the human brain and putting its particular brand of intelligence onto a chip.

Sarah Connor, take good care of John. We may be needing him.

Also in this week's podcast: Retailers bank on video games, speedy USB 3.0 debuts, Core i7 chip starts shipping.


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