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The week in review: The HP challenge

With a bloody merger battle behind it, Hewlett-Packard may hope that the worst is over. But it looks as if there will be fighting at the newly combined company again soon.

With a bloody merger battle behind it, Hewlett-Packard may hope that the worst is over. But as competition mounts, it looks as if there will be fighting at the newly combined company again soon.

CEO Carly Fiorina and new company President Michael Capellas--formerly Compaq Computer CEO--declared at a company event that the new HP will strive to be No. 1 in a variety of markets, but added that the competitive environment is becoming much more challenging. To succeed, HP will have to continue to invest heavily in research and development, Fiorina said, dedicating $4 billion a year. Simultaneously, operating expenses will have to drop to 15 percent to 17 percent of revenue, "and not 30 to 40 percent of sales," she said.

HP told customers in a letter that it was "eager" to prove itself and confirmed more details about its product strategy and the composition of new business groups. For example, HP will become the company's overall brand name and will be used for all products and services. The company will keep both HP Pavilion and Compaq Presario consumer desktop PC lines. It will also keep both consumer notebook lines, which carry the same brand names.

And with its acquisition of Compaq and the consolidation of the two companies' product lines, the new HP has jumped a few places in the handheld rankings and is now firmly in the No. 2 spot, behind Palm.

HP wasn't the only technology company this week closing chapters on plans and products. Apple Computer CEO Steve Jobs delivered an elegy for Mac OS 9 at Apple's annual worldwide developer conference, while promising that Apple would ship the next major upgrade to OS X--including handwriting recognition--by the end of the summer.

The new version, code-named Jaguar, will feature a handwriting technology, dubbed Inkwell, that lets Mac users enter text using a pen in any program that accepts text. Jaguar will also offer improvements to Apple's Finder, such as built-in search, and new Unix tools. Features designed to make Macs work more easily in Windows networks will also be included, such as support for built-in virtual private networking.

Bugs that keep biting
Microsoft issued a security alert after discovering a weak spot in its popular MSN Messenger service that could be exploited by hackers. The alert said that the vulnerability affected MSN Messenger's chat feature, which allows multiple messenger users to exchange text messages in a separate ActiveX-based window.

Hackers can exploit the vulnerability to impose a buffer-overflow attack, which allows potentially harmful programs to be executed on a victim's computer that could delete files or cripple the system's security. To plug the vulnerability, people must download an updated version of MSN Messenger or Exchange Instant Messenger. They can also download an updated version of MSN Chat control from its chat Web site.

Hackers say a similar problem plagues AOL's Instant Messenger application, leaving users vulnerable to a new way to exploit a previously known flaw. The glitch's latest incarnation could have been just as dangerous as the previous version, opening the way for malicious AIM users to execute any program on a vulnerable user's computer, said Matt Conover, a hacker with a security research group known as "w00w00."

After being notified by w00w00, AOL Time Warner fixed the problem by again applying a filter to its instant messaging servers, Conover said.

The Klez worm, which made a strong comeback last month in the form of the Klez.h variant, is now helping revive the Chernobyl virus. A virus known as W95.CIH.1049, a slight variation of the W95.CIH bug--dubbed the Chernobyl virus when it began spreading four years ago--has been detected in recent infections of the Klez worm. The main difference with the new virus is that it's set to activate on Aug. 2 of every year, as opposed to the April 26 attack date of the original Chernobyl.

Who are you?
In what will be an unprecedented move, eBay next month will require sellers of airline tickets, lodging and vacation packages to undergo a rigorous review process to continue doing business on the auction site. The company has also issued new guidelines on who is eligible to sell travel products.

Under the guidelines, someone selling lodging on eBay must be either an employee of a company that offers lodging or must own the property. Auctioneers of airline tickets and vacation packages must also work for a travel company.

eBay also plans to authenticate its auction sellers under a deal with VeriSign. The service will access databases of phone numbers, addresses and credit reports to verify that sellers are who they say they are.

VeriSign will compare their registration information with address and telephone data from the U.S. Postal Service and phone books. The second tier of the authentication service will be used with sellers who offer high-value goods. Such sellers will be asked to answer "out of wallet questions," meaning that they couldn't be answered by simply looking at a credit card or a driver's license.

People who provide false data when registering a domain name on the Web could be thrown into jail for up to five years if a recently introduced bill becomes law. The bill targets Internet address registration procedures that make it easier for Web site publishers to stay anonymous.

Bogus information has long been included in some domain name registries, making it difficult for law enforcement officials and others to track down people who own Web sites through lists such as Whois, a database for the .com, .net and .org domains that contains contact information of people who register Web sites.

Movie time
The next installment in the "Star Wars" saga is about to open, and some die-hard fans began camping out weeks in advance to get tickets to the show. But many others have chosen a different route: buying movie tickets online.

In many cases, online ticket sites such as Fandango.com, AOL's Moviefone.com and MovieTickets.com are tapped into the same ticketing systems as local box offices, meaning that moviegoers are just as likely to get tickets online as offline. And the advantage is, of course, that they don't have to stand in line to get them.

The idea is definitely catching on. The new "Spider-Man" movie cast its Web over movie theaters last weekend, wrapping up record-breaking online ticket sales. Fans flocked online to purchase tickets to see the film, which has earned $114 million since its May 3 release. In the weeks leading up to the film's debut, Fandango.com said online ticket sales on its site grossed up to $3 million.

AOL's Moviefone declined to provide specific figures, but a company representative said the site sold "hundreds of thousands of tickets," adding that the success put "Spider-Man" in Moviefone's top-five ticket sellers of all time. Movietickets.com also declined to give detailed figures, but said online ticket sales for "Spider-Man" were the "highest weekend total ever" in the company's two-year history.

Online ticket sales are taking off, but are we any closer to watching a movie via the Net? Streaming media companies aim to make Web video as seamless as television, but recent advances in technology may fall short of solving deeper problems with data delivery over the Internet.

In the past few months, Microsoft, RealNetworks and Apple have announced improvements to their streaming media systems that herald the end of cutouts and congestion in Net delivery of audio and video, or what's known as buffering. The advances are contingent on high-speed connections that allow viewers to take advantage of excess capacity, a solution that masks underlying delivery problems without fixing them. Even with these enhancements, analysts say, Internet video has a long way to go to match TV quality.

Also of note
Shares of Cisco Systems jumped following better-than-expected third-quarter earnings results, which were dubbed a "home run" by CEO John Chambers...IBM has surpassed Oracle as the leading seller of database-management software, according to a new study...A bill introduced in Congress would make it a federal crime to sell or rent violent video games to minors...An environmental research group says that 130 million cell phones--totaling about 65,000 tons--will be thrown away every year in the United States by the year 2005...IBM is likely to implement layoffs as soon as this month and may also trim unprofitable businesses as a way to cut costs...A federal judge denied a motion to dismiss criminal charges against a Russian software company accused of selling a product designed to break anti-copying technology.

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