The week in review: At last, Transmeta

The deliberately reclusive company described plans to manufacture small, low-voltage chips that work with specialized software to "clone" Intel processors. The technology consumes comparatively little power, leading executives to promise laptop computers that run an entire day on one battery. But while Transmeta's technical achievement is one thing, winning customers is another.

Crusoe
Transmeta's intentions for taking on giant Intel emerged in patents as early as 1998, but further details had been scant.

This week, the Santa Clara, Calif., manufacturer unveiled two chips that utilize special "code-morphing" software which intercepts instructions for Intel chips and translates them into instructions for Transmeta chips. The Crusoe line's 3120, now in production, is intended for handheld devices for connecting to the Internet; the newer 5400 will be used for lightweight laptops.

Such emulation has been tried before with sluggish results, but Transmeta stores translated instructions in special memory so they can be reused quickly. Thus the 667-MHz 5400 chip performs comparably to a 500-MHz Pentium III, though Transmeta expects better performance soon.

In addition, Transmeta, which employs Linux leader Linus Torvalds, will give computer makers "Mobile Linux," a version of the software designed for small handheld devices.

Industry observers flocked to the debut, but with the veil of secrecy pierced, attention focused on who will buy the chips. Transmeta announced no customers, claiming that it wanted to keep the stage to itself, but analysts intepreted that as a sign Transmeta's technology might not be as great as the company was boasting. S3 allayed that concern the next day, however, saying it would use Transmeta chips in new Web pads.

Two days earlier, Intel released its first notebook processors containing eagerly awaited energy-saving technology. The first "SpeedStep" Pentium IIIs also run at speeds up to 650 MHz, a 150-MHz boost over current notebook chips and a significant move toward narrowing the performance gap between desktop and notebook systems.

Jeeves
Ask Jeeves is evaluating a variety of options to address the large quantity of sex- and pornography-related queries submitted to its service, considering plans for separate, sexually themed search results, possibly under the auspices of a different character, Web site and brand altogether. But while such a move might be financially tempting, Ask Jeeves may risk undermining the wholesome image of its butler character.

RealNetworks plans to use once-fashionable push technology to launch a free music delivery service later this year, integrating BackWeb's so-called Polite Push technology with its RealJukebox. The deal represents a potential comeback for push, which failed to catch on as expected because of corporate concerns it would slow networks.

Oregon State University students connecting to the Net through the school's network were blocked from using Napster, software that enables online users to trade audio tracks encoded in the popular MP3 format directly from their PCs. Northwestern and others have followed suit. School officials cited bandwidth scarcity--the software was said to be "hogging" 5 percent of all OSU traffic--but Napster has also come under fire in a lawsuit filed by the Recording Industry Association of America, which charges it helps foster a black market for illegal copies of digital music.

Having complained for years about the lack of competition in the domain registration business, many would-be Net entrepreneurs are discovering the hard way that competition and choices alone do not guarantee better service or greater accountability. Many of the recent problems are minor and can be traced simply to the heavy demand for domain names sparked by speculators hoping to sell coveted names for a tidy profit. But some have found themselves vulnerable thanks to policies that seemingly protect domain name registrars at the expense of consumers.

Low profile
Hewlett-Packard has been quietly shipping consumer PCs incorporating AMD's Athlon processor to some retail outlets, and will likely begin to sell them on the Web by early March. AMD has now persuaded four out of the top five PC makers to manufacture Athlon consumer systems. Dell remains the holdout.

Intel lodged another complaint against Via Technologies, this time asking a government agency to bar the Taiwanese manufacturer from importing products into the United States. The chip giant has filed a number of lawsuits against Via in the aftermath of a soured 1998 licensing deal, once seen as a way for the company to deflect the attention of the Federal Trade Commission, then investigating the company.

Memory designer Rambus filed a lawsuit against Hitachi for patent infringement, a move that could end up spreading across wide segments of the semiconductor industry. Rambus also has opened licensing negotiations with other manufacturers. The company's broad claim could cover any firm that made widely used SDRAM memory, or products that "interface" with computer memory, during the past 10 years--including Samsung, IBM and Intel.

Microsoft filed proposed "conclusions of law" in its landmark antitrust case, disputing court findings that strongly suggest the software maker violated U.S. law. The voluminous document countered a Dec. 6 government filing, which supported U.S. District Judge Thomas Penfield Jackson's earlier findings of fact. As expected, Microsoft argued that even if Jackson's findings are accepted, the government failed to satisfy the burden of proof necessary under antitrust law.

Never mind
Rhode Island state authorities are working with Oracle to fix computer problems that led to eight false police arrests last month as the state switched to a new system. Incorrect warrant information caused by bad data from an old system entered into the new one, according to officials.

Interactive services are a logical next step for large ad firms such as McCann-Erickson, Saatchi & Saatchi, Leo Burnett and Ogilvy & Mather, but to date their online success has been limited in part due to the focus and strength of an aggressive crop of interactive companies. Some observers predict fast-growing Net-focused companies will win the advertising race because they are more nimble, smaller and focused solely on the Web. Others contend advertising giants that built Fortune 500 company brands can use their war chests to buy what they lack in Web design, marketing and branding strategies.

A new crop of start-ups and their heavyweight financial backers are betting that the next wave in consumer e-commerce will have people trading their belongings without cash. "Swap sites" are pinning their hopes on the phenomenon that propelled eBay to ubiquity and profitability: people trying to get rid of more stuff than they need.

Some IBM customers took advantage of a too-good-to-be-true deal on the computer maker's Web site, ordering dozens of the company's laptops for $1 each. The machines typically sell for between $1,300 and $2,300. IBM blamed the discrepancy on a data error and said it can not honor the discounted price, but will offer free shipping.

Beyond.com chief executive Mark Breier resigned amid a restructuring that also includes laying off about 20 percent of the company's work force as the company shifts from business-to-consumer toward business-to-business markets. Analysts expect such tremors to become increasingly acute in 2000 as traditional retailers finally get their online houses in order.

Worthwhile
Apple made a quarterly operating profit of $178 million, or $1.00 per share, well beyond estimates of 89 cents per share and last year's per-share earnings of 78 cents. The positive surprise can be taken as another piece of evidence that the "new" Apple can execute on its promises even after such missteps as last quarter's supply problems.

Meanwhile, after two and a half years of working without salary, Steve Jobs received a bonus of options to purchase 10 million shares of Apple and a Gulfstream V airplane. The company has posted nine straight profitable quarters and seen its market capitalization rise to $16 billion from $2 billion, but only this month did Jobs become Apple's CEO on a full-time basis.

Excite@Home posted its first-ever profitable quarter, reporting pro forma income of $514,000, or zero cents a share, compared with a loss of $4.5 million, or 1 cent a share, for the same period a year ago. (Including one-time charges, the company reported a net loss of $723 million, or $1.93 a share, for the quarter.) Also, president and former Excite chief executive George Bell will take over as CEO, while Tom Jermoluk will continue as chairman of the board. The change in leadership comes after a tumultuous year for the broadband access and content company, which included conflicts over strategic direction, external regulatory pressures and slipping market share for its portal.

Early in the week, a steady stream of technology companies reported quarterly earnings that exceeded Wall Street expectations. On average, earnings for companies in the technology sector have grown 22 percent compared to year-ago levels, double expectations of 11 percent growth, a surprising figure given concerns sales would plummet as companies held off purchases to deal with the so-called millennium bug. America Online, AMD, Intel, Microsoft and Sun all beat the Street, though the party tailed off later on.

Also of note
December retail sales of personal digital assistants grew by a whopping 169 percent over the same month a year ago ... Compaq Computer is shelling out $123 million to Cabletron Systems to cancel a deal that required the giant PC maker to resell Cabletron's networking equipment ... Jim Barksdale's venture capital firm made an investment in digital photo-finishing start-up Ofoto, one of many rivals to former Netscape colleague Jim Clark's Shutterfly.com ... Excite@Home averted a Usenet "death penalty" by reducing an excessive amount of newsgroup postings emanating from spammers, but the threat failed to ignite an outcry from its customers, a symptom of the dwindling use of Usenet.