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Week in review: Intel, AMD chips go supersonic

"One-gig" chips, multibillion-dollar e-commerce deals and Microsoft's desire to play around in the gaming market were some of this week's leading stories.

Advanced Micro Devices and Intel each surpassed a landmark with the introduction of 1-GHz processors, but supply problems may crop up.

Having raced to unveil the high-speed PC chips, the duo may struggle to furnish computer makers. Both companies have recently suffered manufacturing problems at the top end of their product lines, and both skipped over 900-MHz chips to get to the breakthrough "clock speed," an unusual step.

The need for speed
AMD trumped Intel by introducing its 1-GHz Athlon on Monday, two days before the 1-GHz Pentium III chip debuted.

Two weeks ago, 1-GHz chips weren't expected until the middle of the year. Not surprisingly, both companies admit that production remains limited. Strong demand therefore could create shortages, as has recently happened with top-speed PC processors.

Intel's processor performs slightly better than its rival because of integrated "cache" memory and superior interaction with Microsoft's DirectX software, widely used with multimedia elements, according to recognized testing sites. The gap should close in the next few months.

Leading PC makers split in endorsing the new chips: Compaq and Gateway are offering Athlon-based systems, while Dell, Hewlett-Packard and IBM are backing Intel. Expensive systems incorporating the 1-GHz chips are principally aimed at computer game players.

AMD's stock rocketed past its all-time high on the news, falling some but remaining in record territory at the end of the week. The company's shares have climbed sharply since the Athlon's introduction last fall.

TV goes supersonic
Some 12 broadcasting heavyweights reaching 80 percent of U.S. homes--including the Tribune Company, Gannett, Cox, Post-Newsweek Stations and the E.W. Scripps Company--aligned with a little-known start-up to provide fast, wireless Net services to PCs. The iBlast service, to launch in 2001 in select markets, provides software, video and information products on PCs via airwaves reserved for the transmission of digital TV.

Faced with declining viewers and increased operating costs, television broadcasters are thinking less about digital TV as a medium for sitcoms and game shows and more about using it for beaming Web content.

Microsoft described a game console with built-in high-speed Internet access and e-commerce capabilities that could well supplant the PC. Despite rumors it would include an AMD chip, Intel processors will power the system. The X-Box will compete directly against Sony's PlayStation 2, Nintendo's Dolphin and Sega's Dreamcast in the lucrative gaming market, heavily populated by teenagers and computer programmers.

Worldwide PC shipments in 1999 grew 23 percent over the previous year and 24 percent in the United States. But the glory days of 40 percent growth are likely over.

Services shakeout
Cap Gemini is on the verge of breaking into the competitive U.S. market after agreeing to a joint venture with networking equipment leader Cisco to build a network design and consulting subsidiary. The European consulting firm also is preparing an e-commerce alliance with Sun Microsystems and last week sealed an $11 billion deal for Ernst & Young's 18,000-employee consulting unit. Cap Gemini has eyed America since the early 1990s but has struggled competing against domestic services giants.

IBM took equity stakes in i2 Technologies and Ariba in an effort to expand its services via strategic alliances. Analysts said the move likely will solidify these firms as leading players in the business-to-business market. Meanwhile, General Electric is creating two units to enter the same burgeoning market, counting on its experience in creating so-called electronic data interchange (EDI) services for more than 15 years.

American Express plans to team with business software maker Ariba to develop an online payment processing system for the growing number of business exchanges on the Internet. Although marketplaces that connect suppliers and customers have given birth to a new way of doing business, the payment process still requires customers to wait on verification and approval, slowing the entire transaction.

PeopleSoft unveiled its application service provider strategy with a slew of technology partners and an executive management team snagged from rival Oracle, claiming it already has a large group of customers. The enterprise resource planning software maker has lagged behind rivals Oracle, SAP and J.D. Edwards but counts some 11 partnerships with "pure-play" ASPs such as Corio that have been hosting and managing PeopleSoft's software since November 1998.

Mergers on again, off again
Security software maker VeriSign agreed to acquire Network Solutions in an ambitious move aimed at vastly expanding its offerings. Analysts were unsure of the wisdom of a $21 billion stock deal for the leading domain name registrar.

Qwest Communications apparently ended talks with a "major telecommunications company," rumored to be Deutsche Telekom, because of the demands of current merger partner US West, which is afraid of being left at the altar after last summer's dramatic courtship. It's unclear whether the latest developments signal a true end to the discussions or the latest negotiating tactic to get all parties to agree to terms.

E-commerce in your in-box
Home furnishing retailer IKEA is recruiting friends of friends to get the word out about its new store opening in the San Francisco Bay area, offering discounts to people who send 10 friends an online postcard announcing the opening. The promotion could be risky: Sending unsolicited ads through email, or "spamming," has long been a controversial practice in the Web community, even if it involves friends.

Chief executive Jeff Bezos called for patent reform in a letter posted on the company's Web site, responding to widespread criticism of Amazon's patenting of some of its Web site features. The retailer, which doesn't plan to relent, holds rights to its 1-Click ordering tool and its affiliates program and has sued rivals who have adopted the commonly used features. Third-party critics argue that not only are the features obvious, but Amazon's enforcement of patents for them could harm Net commerce.

Shares of cable Net access leader Excite@Home traded at their lowest point in the past year before recovering. The weakness, reflecting a steady slide that began last April, runs counter to the industry-wide excitement over all things broadband and a series of steps Excite@Home has taken to explain its sometimes murky strategy.

Politics and the party line
Panel members of the Advisory Commission on Electronic Commerce submitted their latest proposals in preparation for a Dallas meeting beginning March 20, amending recommendations. The new proposals indicate the panel is even less sure of itself than previously thought. To promote e-commerce, one group advocates banning all Internet-related taxes. But another, afraid of losing revenues and having to cut state and local spending, proposes modifying current laws to allow levies on Net sales and other online activities.

The rapid growth of the business-to-business market is raising concerns about the potential need for government regulation, an issue that could lead to bitter disputes over control of the multibillion-dollar industry. Industry analysts and at least one member of Congress are already debating whether the Federal Trade Commission should establish some form of oversight of business-to-business marketplaces. Those in favor of regulation argue that the expected size of the market requires some guidelines be established to prevent collusion or other anti-competitive practices. However, any oversight legislation is expected to meet with resistance from the technology industry, which has vociferously opposed government regulation.

Arizona's momentous first day of online voting drew tens of thousands of new voters but also frustrated an untold number of others who encountered computer glitches. Older versions of Netscape Navigator infested with Y2K-related bugs and busy lines to the Net were to blame, according to election officials.

Also of note
Between 200,000 and 400,000 Dell notebook computers sold last year contain defective memory, the PC maker acknowledged…A pricing war has broken out among Britain's leading Internet service providers…Microsoft boosted salaries of its Silicon Valley employees by 15 percent to stem turnover and increase staffing, the first time it has offered regional cost-of-living raises…AT&T's wireless division president is resigning to join a start-up just weeks before a pending public offering…CNET chief executive Halsey Minor is stepping down, the latest in a series of executive departures this year…The Nasdaq closed above 5,000 for the first time, a short time after surpassing the 4,000 mark.