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The week in review: Email under siege

Corporations scramble to cope with a new data-destroying virus that forces the shutdown of email systems nationwide.

Corporations scrambled to cope with a new data-destroying virus that forced the shutdown of email systems nationwide.

The virus, called Worm.ExploreZip or Troj_Explore.Zip, hit companies such as Boeing and PricewaterhouseCoopers particularly hard, while others, such as Microsoft, were able to disarm the virus before it could cause significant damage.

How the email worm works
The worm uses Mail Application Programming Interface (MAPI) commands and Microsoft Outlook on Windows systems to propagate itself. In some ways, it is the sequel to the Melissa virus, which struck in March.

Worm.ExploreZip spreads from computer to computer by taking advantage of automation features available to people using Microsoft email software on Windows machines. Although the new virus doesn't spread as fast as Melissa, it causes more damage, according to antivirus experts, deleting Microsoft Word, Excel, and Powerpoint document files, among others.

In the wake of the attack, the FBI began investigating the case as a possible crime. (See CNET Topic Center on antivirus software.)

Disney's magical Net kingdom?
Walt Disney said it is in talks to buy the 57 percent of Infoseek that it doesn't already own and may combine the Internet search directory with its own online properties. In addition, the media giant is exploring its options to partner the Go Network, its joint venture with Infoseek, with an Internet service provider to drive new users to the portal.

On the same day Disney disclosed it is in talks with Infoseek, the company shook up the management of its Buena Vista Internet Group, replacing chairman Jake Winebaum with another executive, Steve Wadsworth, who was named president.

More management shuffling
In other management shakeups, GeoCities chief executive Tom Evans resigned on the heels of Yahoo's completing its acquisition of the community site, and America Online appointed Jim Martin as president and general manager of its newly acquired Netcenter portal to replace Mike Homer, who is on sabbatical.

In addition, John Ludwig, a vice president leading Microsoft's MSN Access group, confirmed that he has taken an extended leave of absence.

Microsoft's moves
The judge in the Microsoft antitrust trial turned to security issues, asking a government expert witness whether building a Web browser into the Windows operating system increased the risk of penetration by a virus. Microsoft has argued that a browser integrated into the operating system offers advantages to consumers.

Microsoft also is squaring off with Sun Microsystems over competing software standards in the telecommunications arena. The telco market--a roughly $500 billion opportunity for computer software, hardware, and services providers, according to experts--is evolving toward a more "open" model for software developers.

Shiny new Windows
Microsoft's first upgrade to its flagship Windows 98 operating system went on sale, intensifying the race against Apple Computer for new personal-computer users. Windows 98 Second Edition is designed to be faster, simpler, and easier to use for Internet activities such as email and chat, said Microsoft product manager Mike Nichols.

IBM will debut powerful Windows-Intel servers later this month designed to bring this line closer to Unix servers in performance and reliability. The machines, which can use eight processors, offer roughly a doubling of the horsepower currently available in mainstream Intel-based servers.

Next week, IBM will unveil a mini-notebook to compete with compact notebooks from Sony and Toshiba. The Windows 95 notebook will weigh around three pounds and be in the same class as the Sony Vaio Z505 notebook, according to sources close to IBM.

Big Blue's IBM Global Services unit inked a five-year, $112 million outsourcing deal to support all of the core information technology systems for Ames department stores, one of the nation's largest regional discount retailers. IBM Global has struck outsourcing deals with several prominent retailers in the last few months.

Access wars
GTE and America Online are expected to organize a high-profile demonstration next week to prove that giving Internet service providers access to cable networks is both possible and practical. The effort is designed to undercut arguments from AT&T and other cable companies that claim allowing ISPs to use their cable networks is technically infeasible, according to sources.

AOL has more challenges to mount on the horizon, as the entry of telcos, the promise of widespread broadband access by cable, and a potential proliferation of free Internet service providers threatens the company's dominance of the U.S. Internet market. A Merrill Lynch analyst warned that while AOL continues to demonstrate impressive growth, it will have a tough time living up to expectations.

The industry giants are not the only ones stirring things up. In a grassroots effort, frustrated cable service customers in Fremont, California, southeast of San Francisco, are spearheading a campaign for the first Internet bill of rights.

And in Virginia, a fire has been lit under the local ISP community, which says the state's plans to sell discounted high-speed Internet access to the business sector would undercut its business on the taxpayer's dime.

Free Net abroad
Free Net access in Europe is booming. Dell Computer said it would offer free Internet service in Europe under the DellNet name, becoming the first major PC vendor to offer such a service in Europe.

British retailer Dixons confirmed plans to cash in on its Internet service provider Freeserve via a partial flotation, giving a boost to Europe's portfolio of online stocks. And Irish telecommunications firm Ocean launched free Internet access that it said will help Ireland's drive to be a leader in e-commerce.

A consortium of blue-chip credit card and computer companies Monday is slated to announce the latest industrywide effort to make paying for online purchases easier for consumers. The companies, which include Visa U.S.A., MasterCard, American Express, Microsoft, IBM, and Sun Microsystems, among others, are expected to unveil a plan to create a standard for electronic wallets--software that contains credit card numbers, e-cash, other forms of payment, and digital certificates.

In a move to guard its reputation, popular auction site eBay is quietly moving to limit its sellers' bragging rights when they move to rival auction sites by putting a leash on its feedback ratings. The company's reputation was not helped this week, however, when its site was hit by outages that disrupted service for hours.

Net music gets a boost
Sony Music licensed Digital On-Demand to deliver "much" of its content to retailers. Digital On-Demand operates a proprietary, high-speed network that allows for the delivery of digital content such as music, video, or games in a number of formats to retail locations. Virgin Megastores will be the first to enlist in the campaign.

Established media player Cox Interactive invested $45 million in MP3.com, taking a 10 percent stake in the company. The move was of fortuitous timing for MP3.com, which is planning an initial public stock offering.

Also of note
Outsourcing giant EDS is tackling complaints from an angry union, a long bureaucratic review, and increasingly intense public scrutiny after winning rights to negotiate the $1 billion government contract to upgrade and service nearly all of the state of Connecticut's computer systems?Oracle unveiled a new budgeting application for midsized businesses?Andersen Consulting pushed its e-commerce initiative into the limelight by launching a new global ad campaign?Application service provider USinternetworking struck a three-year Web hosting deal with Liberty Financial?The Federal Election Commission approved rules allowing it to match campaign contributions made over the Internet by credit card?In a case brought by the Church of Scientology, a Dutch court ruled that linking to a site that contains material that infringes someone's copyright also is an infringement?Nasdaq president Alfred Berkeley talked about tech market mayhem, and USA Networks CEO Barry Diller discussed Lycos and the Net?A unit of pharmaceutical giant Warner-Lambert is backing a diabetes-focused Web site created by online drugstore PlanetRx, stirring controversy over whether drug companies can provide objective medical information to consumers?A study finds that while women make up nearly half the online population, they are less likely than men to shop online.