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Week in review: Sony strikes again

Batteries from the electronics giant spur another recall, this time from Apple. Plus: Sony buys into video sharing.

Apple Computer became the latest company to be burned by Sony's batteries, but the company is also feeling heat over its portable-music strategy.

Because of a risk of fire, Apple is recalling 1.8 million batteries that use Sony's battery cell technology, which also was at the root of Dell's historic recall last week. The Mac maker's recall, while not as large as Dell's, affects users of its iBook G4 and PowerBook G4 laptop models sold between October 2003 and August 2006. Users are advised to remove the batteries immediately and store them in a safe place. Batteries in Apple's recall Apple said it has gotten nine reports of batteries overheating, including two cases in which users reported minor burns and property damage. However, it says no serious injuries have been reported.

An Apple representative said the company does not expect the recall to have a material financial impact on the company. The total cost of the Dell and Apple recalls could fall between 20 billion and 30 billion yen, or $172 million to $258 million, Sony said in a statement.

CNET News.com readers again reacted with scorn for Sony, but one reader did manage to find a silver lining in the recall.

"Actually, I'm kind of glad they're recalling them," one reader wrote in News.com's TalkBack forum. "After 2+ years of use, laptop batteries tend to have lost some of their charge, and this way, I can get some new ones!"

Sony and PC makers scrambled to reassure customers that the latest battery recall involving Apple Computer would be the last. Of course, that's exactly the same thing they said last week after Dell announced its recall.

Just about every major PC company uses Sony's battery cells in at least some of the notebooks they offer. However, Sony believes the battery cell problems are confined to Dell and Apple, a Sony spokesman said.

Meanwhile, Apple agreed to pay Creative Technology $100 million to settle their legal dispute over music player patents. The $100 million grants Apple a license to a Creative patent for the hierarchical user interface used in that company's Zen music players.

After months of hinting that it would be coming after rival music player companies, Creative sued Apple in May, claiming that the iPod maker was infringing on its patents. A week later, Apple countersued, claiming that Creative was infringing on Apple patents for user interfaces. As a result of the settlement, all legal disputes between the two companies related to the patent will disappear.

But there may be more trouble for Apple's music strategy. After years of cranking out hit iPod models, some wonder whether Apple has hit a wall. The company hasn't had a significant update to its product line this year, with the only change being the addition of a smaller-capacity, 1GB iPod Nano in February.

Analysts suggest that the market may be at a point where the company's next area of focus is less clear. One possibility is digital radio. So-called HD Radio offers digital content but, unlike satellite radio, is freely available without a subscription. Apple has also indicated that it may be trying to find new ways of melding the iPod with the cell phone.

On the record
Broadband provider Qwest Communications International said it made a mistake when one of its lawyers endorsed federal legislation requiring Internet providers to keep records of customers' behavior. Jennifer Mardosz, Qwest's corporate counsel and chief privacy officer, said in an interview with CNET News.com that she misspoke during a panel discussion organized by the Progress & Freedom Foundation in Aspen, Colo.

During the panel discussion, she said Qwest "absolutely" supports House of Representatives legislation sponsored by Rep. Diana DeGette mandating data retention. Mardosz said that instead of embracing data retention legislation, Qwest was skeptical of mandates from Congress. "There is no need for it, because companies are already doing the right thing," she said.

On another front in the privacy debate, AT&T has joined the fight to keep unauthorized data brokers from obtaining and selling its customers' calling records. The company's services division filed a lawsuit to block 25 unnamed "John Doe" defendants who have allegedly pretended to be customers to gain access to account information.

AT&T said the so-called data brokers had fraudulently obtained records for some 2,500 customers. AT&T says it believes the lawsuit will help the company identify the perpetrators through e-mail addresses and Internet Protocol addresses. Once it identifies the data brokers, the company plans to seek an injunction as well as a return of profits earned from selling customer information.

Meanwhile, two AOL employees have been fired, and AOL's chief technology officer resigned after the release of Web search data from thousands of AOL members prompted widespread criticism of the company. CTO Maureen Govern "has decided to leave AOL effective immediately," AOL Chief Executive Jon Miller wrote in an e-mail to employees.

The researcher responsible for the data being posted online and the researcher's supervisor, who reported to Govern, were fired, according a source close to the matter who asked not to be identified. In a separate e-mail to AOL employees, Miller said the company would create a task force to develop new best practices on privacy and will look at how long search and other data should be saved.

Net video plays
Sony, which has struggled to piece together a winning Web strategy, is paying $65 million for video-sharing site Grouper, the eighth-largest among the companies that host user-generated videos on their Web sites.

Online video is white-hot, and analysts have predicted that several big entertainment companies would begin shopping for video services that they could offer their audiences. All the entertainment moguls are said to want to duplicate the success that Rupert Murdoch's News Corp. has had with MySpace.com.

Through the purchase, Sony has helped establish a benchmark for other companies in the space and sent industry insiders speculating wildly about what market leader YouTube may be worth.

Sony's acquisition of Grouper, which owns less than 1 percent of the online video market, begs a rather obvious question about its far larger rival YouTube, which has 43 percent of the market: If a company were to buy YouTube tomorrow, what would it have to pay?

Amid the home videos of dancing teens and sporting events on YouTube, a well-crafted, 9-minute video makes a direct appeal to Americans to oust the Bush administration.

"People of America, we wish to share with you our thoughts on the events we experienced," says the narrator of "Iraq--the truth?" The narrator claims to represent those opposing the United States in Iraq. "Despite the madness we have endured, we see no harm in presenting you with the criminal nature of your newly elected emperor."

It's impossible to say for certain who created the video, but it's no doubt part of a growing and surprising trend at video-sharing sites. The democratization of online video through sites such as YouTube, Metacafe and Ogrish.com is allowing combatants on all sides of the ideological battlefield to make their version of events public.

Also of note
Microsoft released an updated version of an Internet Explorer patch to fix a serious security flaw introduced by the original version...Networking equipment maker Cisco Systems is spending $92 million to buy a small software start-up called Arroyo Video Solutions to ready itself for the new age of on-demand TV viewing...IBM made a resounding move into security by acquiring Internet Security Systems for $1.3 billion...An experimental feature planned for the German version of Wikipedia could eventually improve the quality of editing for the online encyclopedia and open its front page to public edits for the first time in years.