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Tech Industry

The week in revew: Investors get a brief breather

Positive financial news from many technology giants this week helped to soothe investors' jittery nerves as the markets dove and then rebounded late in the week.

Positive financial news from many technology giants this week helped to soothe investors' jittery nerves as the markets dove and then rebounded late in the week.

Intel beat lowered earnings expectations and offered cautionary statements about future revenue growth. Regardless, the chipmaker rebounded following the news, as did many other tech stocks whose values had been depressed recently.

Technology giant IBM reported third-quarter earnings in line with expectations, although revenue fell below expectations. Sales rose 3 percent to $21.8 billion, while analysts had predicted sales growth of 6 percent or more. Analysts said that the revenue numbers show that IBM still has a ways to go to recover sales momentum after three difficult quarters.

Although Windows 2000 is not taking off as quickly as some expected it would, Microsoft leaped past earnings estimates on the strength of operating system sales, profits from investments and curtailed spending.

Apple Computer posted earnings that fell short of lowered expectations and said it will have another disappointing quarter as it tries to burn off excess inventory. Apple also announced a hiring freeze and is keeping a close eye on costs. The company said it has about eight weeks' worth of inventory in the hands of distributors and retailers and will look to cut that to five weeks' worth over the quarter.

To dispel the earnings funk, chief executive Steve Jobs said the company has no shortage of new products in the pipeline. Jobs promised that Apple will offer a lower-priced Cube next year and narrow the "megahertz gap" with Intel-based PCs by delivering PowerMacs with faster G4 processors over the next six months.

Internet giant America Online reported quarterly earnings that slightly beat Wall Street expectations and announced the nationwide launch of its interactive television service. The Internet bellwether, which is in the process of merging with Time Warner, will introduce new versions of its services in the coming month, including AOL 6.0, the latest software for accessing its online services.

Handspring posted a narrower-than-expected quarterly loss and predicted that sales in the current quarter will top its earlier estimates. Separately, shares of eBay jumped almost 15 percent after hours after the online auction giant said third-quarter revenues rose 94 percent.

Sun Microsystems beat analyst expectations by a nickel, reporting net income of 30 cents per share on revenue of $5 billion in financial results inadvertently posted hours early. The company, benefiting from strong sales of servers among both Internet companies and traditional companies moving to embrace the Internet, reported net income of $510 million, an 85 percent increase over the same period the year before.

Sing along
Web music service MP3.com agreed to a preliminary three-year, $30 million licensing agreement with the National Music Publishers' Association's subsidiary, The Harry Fox Agency. If approved by publishers, the license would give MP3.com the use of more than 1 million musical works for its My.MP3.com music storage service. The agreement also would settle a lawsuit filed by the association in March against MP3.com, alleging copyright infringement of its works.

Digital media company Loudeye Technologies entered a licensing agreement with Warner Music Group to digitally store and encode its U.S. catalog of audio and music video titles, marking its second deal with a Big Five record label in less than a month. By partnering with Loudeye and other digital media companies, the labels hope to streamline the process of converting content into formats that can be sold online.

MP3Board.com, which is being sued by the record industry for allegedly linking to unauthorized copies of music files online, has seen part of its myriad associate lawsuits bundled together in New York. A U.S. district judge ordered that MP3Board's case against several individual labels be dismissed in a California courtroom since an identical case was ongoing in New York.

Go go gadget!
3Com lifted the curtain on Audrey, a countertop appliance designed to give gadget-happy families a quick way to surf the Web and send email. The Net appliance comes with an 8-inch touch screen and is the first in the "Ergo" family of devices. The $499 Net appliance offers email access, a calendar, an address book, and a knob for dialing between several preset Web sites.

Handspring and watchmaker Citizen are tinkering with a prototype add-on for the Visor handheld that would allow people to copy information from their device onto a second, credit card-sized organizer. The yet-to-be-named unit is basically an LCD display with a small amount of memory that plugs into the Springboard expansion slot and downloads information, such as an address book, from the Visor.

Separately, Handspring unveiled two new handheld computers--including its first device with a color display--as part of its continuing battle against market leader Palm. The handheld company said the $499 Visor Prism can display more than 65,000 colors. The other device, the Visor Platinum, runs 50 percent faster than the Visor Deluxe, its previous top-of-the-line product. The Visor Platinum costs $299.

Candidates on the Net
Gore and Bush each promised to use the Net to solve some of the nation's ills. Farmers, Gore said, could take part in "Internet-based activities" as an extra source of income in tough times. The most interesting discussion came when a member of the audience asked the candidates if a deal could be struck with Hollywood to stem the flow of pornographic images and foul language in movies, music and other forms of entertainment.

Both candidates also have had a chance to sound off on the thorny issue of Napster and online copyright laws. In a question posted on the Rolling Cyber Debate, a reader asked the two major presidential candidates their views on file sharing and intellectual property protections. Gore expressed his concern for artists' rights, while Bush said the issue raises "thorny questions" about online content and creativity.

Locked out of the televised presidential debates, Green Party candidate Ralph Nader appeared to be staging a lone boycott of the only other game in town: the Internet. Supporters of a wider debate forum that would include fringe party candidates such as Nader and Pat Buchanan are taking to the Net in protest. Nader, however, is the only candidate absent from this new forum.

Not the original plan
Red Gorilla shut down its site and turned over its current customers to another application service provider. The privately held company is an ASP that manages Web-based and wireless applications such as its time tracking and expense application, Gorilla Time.

Venture capital firm Idealab postponed its plans to sell shares to the public, the latest evidence that investor demand for such stocks has withered dramatically in the past six months. Recent market jitters have been especially painful for Internet incubators, as many are trading at or near 52-week lows.

Separately, beauty e-tailer Eve.com closed its doors, according to a posting on its Web site. Eve.com's financers have included Idealab. Citing an issue of "capital availability," the company plans to lay off most of its 164 workers.

Also of note
In the last few weeks, the wireless market has been hit with earnings warnings, customer shortfalls, plummeting stock prices and delayed initial public stock offerings...The Internet Home Alliance, formed by Cisco Systems, Best Buy, General Motors, Panasonic, Sun Microsystems and others, will expound on the benefits to consumers of connecting their computers and other electronic devices to the Net...CMGI-owned search engine AltaVista said that its chief executive, Rod Schrock, resigned to spend more time with his family...eBay is in talks with major networks to develop a TV show that will "involve some form of auction-style bidding."